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Topic: Termination payment counted towards income for Tier 1 Visa?  (Read 1641 times)

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Termination payment counted towards income for Tier 1 Visa?
« on: April 25, 2009, 02:46:20 PM »
Hi,

I was wondering if a Termination Payment given as part of a Compromise Agreement can count towards my income for a Tier 1 (General) visa application?  The amount is stated in the agreement, and it isn't taxed, if that makes any difference.  I thought I read in the guidance notes that redundancy payments can't count, but I wasn't sure if this was different. 

Sorry if this question has been asked before and I just missed it, thanks in advance!!


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Re: Termination payment counted towards income for Tier 1 Visa?
« Reply #1 on: April 25, 2009, 04:09:28 PM »
Sound like no as it is not part of earnings.  But does it feature in your payslip?

Vicky


Re: Termination payment counted towards income for Tier 1 Visa?
« Reply #2 on: April 25, 2009, 06:50:25 PM »
Thanks for your reply.  I'm not sure how they are going to do it yet- I think they are giving it to me separate from payroll though, so it probably wouldn't be mentioned on a payslip.  It is equivalent to about 6 weeks of my salary tax-free, so I'm just trying to work out if it would be better to ask them to put it though payroll then I could count it towards my income for my visa but pay tax on it, or get it tax-free and have more money. 

If I apply in late June/early July when I was planning to (I haven't met the 3 month maintenance requirement yet), and am approved I'll be fine.  But, if for some reason I'm not approved and have to reapply, I'm just afraid that I wouldn't have earned enough in 12 of the last 15 months by the time I reapply and that extra money will give me some breathing space. 


Re: Termination payment counted towards income for Tier 1 Visa?
« Reply #3 on: April 26, 2009, 01:08:51 AM »
A bit of possible good luck for you...

This extract from an email sent from UKBA's Operational Policy & Process Improvement (Employment Team) last September says in part...

My reply of 10 September was based on an understanding of the policy intention behind the exclusions.  It has become clear that the Rules and guidance do not reflect the policy intent.  The intention was that no redundancy payments at all should count as earnings - though pay in lieu of notice should.  We will need to amend the Rules and guidance to give effect to this at the next update.   In the meantime, as our position is not currently clear, we will accept redundancy payments as 'earnings' for points-scoring under Tier 1 (General) until the next rules change and guidance update.

... other stuff...

On the particular point regarding bonus payments, these are made as remuneration for work undertaken during the preceding period, and as such they can be considered to be earnings.  This is as opposed to redundancy payments, which can objectively be considered to be compensatory payments, rather than remuneration for work undertaken. 

... more stuff about other things...

Given that the rules and guidance are not clear on this point at present, and they do suggest that other types of redundancy may be acceptable as earnings, we will accept non-statutory redundancy payments as earnings, until such a time as the rules and guidance are updated to reflect our policy position.  The update is likely to take place in November.

... more stuff about bonus payments and other forms of earnings...

... more blah blah blah...

This means it is either explicitly dealt with in the policy (since November is 5 months ago), or the reading is still in the pipeline.  Or they can't make the reading because the topic is in dispute.  Or they just plain want to be vague on the point.  Double-check the policy first, if it's not in the policy, then use the above as a guideline. 

Take to mind that since it's vague to begin with, that it may work against you as well...

« Last Edit: April 26, 2009, 01:12:01 AM by garry »


Re: Termination payment counted towards income for Tier 1 Visa?
« Reply #4 on: April 26, 2009, 02:17:09 PM »
Thank you so much for the info, Garry!! Hopefully if I do need to count it as part of my income, it would fit under one of the categories you described.  Hopefully my visa will be approved in July though, so I won't need to even use it at all!! Thanks again. 


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Re: Termination payment counted towards income for Tier 1 Visa?
« Reply #5 on: April 27, 2009, 08:50:04 AM »
The problem we have found with redundancy payments is that there is usually only one source of evidence for the payment, in the form of the bank statement.


Vicky


Re: Termination payment counted towards income for Tier 1 Visa?
« Reply #6 on: April 27, 2009, 07:19:11 PM »
Ah right, thanks for that Victoria.  My payslips are just on plain A4 paper, without a letterhead or anything, so I was going to get my work to give me a letter on letter-headed paper listing the individual gross and net amounts of each paycheque, and then I have my bank statements as well.  If it turned out that I needed to use the termination payment, is there any way I could include that in the list of payments from my employer even though it won't be taxed??


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Re: Termination payment counted towards income for Tier 1 Visa?
« Reply #7 on: April 27, 2009, 07:32:14 PM »
I think it is going to depend how the letter is worded.  I still think this is not earned income.

Vicky


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