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Employment tribunals - is your compensatory award below the cap and will any welfare benefits you've received reduce it?

This advice applies to England

When you've calculated how much your compensatory award might be, you need to work out if it falls below the maximum amount of compensation that a tribunal can pay out. This is called the compensation cap.

You also need to work out whether your award might be reduced because you've received welfare benefits since you were dismissed.

This page looks at the compensation cap limits and how any welfare benefits you've been getting might reduce your compensatory award.

What is the compensation cap for tribunal awards for unfair dismissal?

There's a cap on compensatory awards for unfair dismissal of £80,541. This means that if your gross pay for a year is higher than this amount, a tribunal can't award you more than £80,541.

If you earn less than £80,541, there's also a cap on the amount you can be awarded. The limit is one year's gross pay. A tribunal can't award you more than this, regardless of how much you've worked out your claim to be worth.

These limits apply if you were dismissed on or after 6 April 2017.

If you were dismissed on or after 6 April 2016, the compensation cap is £78,962.

Have you been getting any welfare benefits since you were dismissed?

If you've been getting welfare benefits since you were dismissed, this may affect your compensatory award.

If your claim goes to a tribunal hearing

If you win your tribunal claim, the amount you've received in welfare benefits between the date of your dismissal and the date of the tribunal hearing will be deducted from your compensatory award. These benefits are:

  • Jobseeker's Allowance
  • income-related Employment and Support Allowance
  • Income Support.

The tribunal will order your employer to pay all your compensation. However, your employer will also get a recoupment notice from the Department for Work and Pensions (DWP) ordering them to repay the amount that you've received in benefits. After they've repaid the DWP, your employer will pay you the amount that's left. This can take some time to sort out.

If your claim doesn't go to a tribunal hearing

If you reach a settlement with your employer before the tribunal hearing, some benefits you've received since being dismissed won't be deducted from your compensation payment. These benefits are:

  • Jobseeker's Allowance
  • income-related Employment and Support Allowance
  • Income Support.

Welfare benefits which don't affect your compensatory award

Any Housing Benefit or payments you've received to help pay your Council Tax won't affect your compensatory award.

Any welfare benefits you've received after the date of the tribunal hearing won't affect your compensatory award.

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