Help with UC disregards please - PIP Arrears and possible settlement payment

I would be very grateful for any help and advice on this as I'm really worried and unsure what to do next.

I currently receive UC, including the LCWRA element and housing costs, as well as enhanced-rate PIP for mobility and daily living.

In March 2026, I received approximately £18,000 of PIP arrears following a successful First-tier Tribunal appeal.

I am trying to establish if the PIP arrears may qualify for the extended capital disregard under Regulation 10A of the UC Regulations 2014, potentially lasting until termination of my current UC award. I believe there were multiple factual errors in the DWP decision to reject my PIP and award me 0 points which was eventually overturned at Tribunal.

The other issue is I am going through a disability discrimination case with my previous employer which is looking like it may reach a settlement which may include approximately £15000 of income (notice and holiday pay) and approximately £8000 in compensation.

I am particularly concerned that the settlement payments could result in a nil UC award and trigger the surplus earnings rules, potentially terminating my current award and affecting the capital disregard on my PIP arrears.

I would be very grateful for advice on:

Whether my PIP tribunal arrears qualify under Regulation 10A and how to establish this?
Whether the anticipated payments could terminate my current UC award.
Whether reopening UC within six months would preserve the arrears disregard and my protected LCWRA entitlement.
Any lawful steps that should be considered before the employer settlement is agreed and paid.

Hi Will1

The law on the topics you raise varies depending on which part of the UK you reside.
However you received the £18k in March and you are still in receipt of UC so what have they informed you of the period of disregard ?

David

Hi David, sorry for the late reply I couldn't find my post on the forum.

I am based in London. The PIP arrears was received in March and UC has continued, my understanding is that it has been disregarded for one year as default.

Please let me know any other information you need.

Many thanks for your help

Hi Will1

Yes as you say it is 12 months. See the regs below:

www.legislation.gov.uk/uksi/2013/376/schedule/10/paragraph/18
18.—(1) A payment received within the past 12 months by way of arrears of, or compensation for late payment of—

(a)universal credit;

(b)a benefit abolished by section 33 of the Act; or

(c)a social security benefit which is not included as unearned income under regulation 66(1)(a) or (b).

(2) “Social security benefit” means a benefit under any enactment relating to social security in any part of the United Kingdom [F1and includes armed forces independence payment under the Armed Forces and Reserve Forces (Compensation Scheme) Order 2011].

David

Thanks for your reply David,

Apologies for this late reply as I have been unwell.

I am also trying to work out if there is any possibility that the PIP arrears received may qualify for the extended capital disregard under Regulation 10A of the UC Regulations 2014, potentially lasting until termination of my current UC award. I believe there were multiple factual errors in the DWP decision to reject my PIP and award me 0 points initially and at mandatory reconsideration. I was eventually awarded enhanced living and enhanced mobility at Tribunal.

Hi Will1

There is a special provision for Benefits arrears of over £5000 as you have said and I think you should qualify for the disregard during the existence of your current continuous UC claim.
6.4 In respect of UC, this instrument provides that any benefit arrears or payment made to
compensate for arrears due to the non-payment of benefit, of £5,000 or more which
are received whilst a claimant is getting UC, or were received during an earlier award
of a legacy income-related benefit and the claimant migrated to UC within one month
of their earlier award ending, and would have been disregarded, or were disregarded,
in respect of the earlier award (as a result of official error or an error on a point of
law), will benefit from the extended disregard until their current UC award end.

www.legislation.gov.uk/uksi/2018/932/pdf...siem_20180932_en.pdf

David