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Employment tribunals - discrimination - whether any welfare benefits you have received will reduce your award

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When working out how much compensation you should get for the financial loss you have suffered because of discrimination, you need to work out what your income would have been if you had not been discriminated against, and compare it with what your income actually was as a result of the discrimination. The difference between the two figures will give you your financial loss figure.

For example, if you gave up or lost your job as a result of the discrimination, you may have received benefits afterwards and/or at some point started a new job.

This document looks at how any welfare benefits you've received will affect the calculation of your compensation for discrimination.

There is no maximum cap on the amount of compensation that you can receive for discrimination.

How welfare benefits affect your claim for financial loss

If you've been getting certain welfare benefits since you were discriminated against, the Tribunal will take the amount you got off your claim for financial loss. This affects benefits you wouldn’t have got if you hadn’t been discriminated against. These include:

  • Jobseeker's Allowance
  • Employment and Support Allowance
  • Income Support
  • Carer's Allowance
  • Pension Credit
  • Statutory Maternity Pay
  • Universal Credit

For Universal Credit, the Tribunal will take into account the difference between:

  • the Universal Credit you actually got

  • any Universal Credit you would have got if you hadn’t been discriminated against

Welfare benefits which don’t affect your claim for financial loss

Some benefits won’t affect your claim for financial loss. These include:

  • Housing Benefit or any payments you've received to help you pay council tax
  • welfare benefits which don’t depend on your income - this includes Personal Independence Payment, Disability Living Allowance and Attendance Allowance.
  • Tax Credits.
  • welfare benefits you got before you were discriminated against or after the tribunal hearing.

Claiming unfair dismissal and discrimination at the same time

If you are claiming unfair dismissal and discrimination at the same time, and both claims succeed, the compensatory award for unfair dismissal and the compensation for financial loss because of the discrimination ‘overlap’, because they are both compensating you for the financial loss resulting from the dismissal which was also the act of discrimination. You do not get double the compensation, but instead you get one or the other.

The tribunal should order your employer to pay you your financial loss under the discrimination claim rather than the unfair dismissal claim, and you are entitled to ask it to do so. It is preferable to do this because:

  • there is no cap on the amount of compensation you can get for financial loss under a discrimination claim, but there is a cap on the compensatory award for unfair dismissal
  • the tribunal has the power to make more deductions, or reduce your compensation for more reasons, under the compensatory award for unfair dismissal than it does when assessing compensation for financial loss as a result of discrimination
  • if the compensation for financial loss is paid under the unfair dismissal claim, certain welfare benefits that you have received are ‘recouped’. This means that the tribunal orders your employer to pay back an amount equivalent to the benefits you have received to the Department for Work and Pensions (DWP). You will get the amount that is left after your employer has done so. The tribunal will tell the DWP that you have won your claim. The DWP will work out how much you have received in benefits and send your employer a request for this amount. This procedure can take time to complete
  • if the compensation is paid to you under the discrimination claim, you won’t get more money, but the tribunal will decide how much income you have received from welfare benefits, and take this into account when calculating your financial losses.

Next steps

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