This article applies to England, Wales and Scotland.
In brief: One reason part of an Employment Tribunal award may be held back is benefit recoupment. Where the statutory scheme applies, the judgment identifies a prescribed element linked to loss of earnings. That element is stayed while the relevant authority determines the amount to recover. The excess is not stayed by the recoupment rules.
Last updated: 29 July 2026
What Recoupment Is
The scheme prevents specified lost-earnings compensation from duplicating certain income-replacement benefits paid for the same period.
Relevant benefits can include Universal Credit, Jobseeker’s Allowance, income-related Employment and Support Allowance and Income Support. The regime includes section 16 of the Employment Tribunals Act 1996, the 1996 regulations as amended, and later Universal Credit provisions.
The Figures in the Judgment
| Figure | Meaning |
|---|---|
| Monetary award | Total covered award |
| Prescribed element | Amount attributed under the scheme to relevant loss |
| Prescribed period | Dates to which that element relates |
| Excess | Award above the prescribed element |
The prescribed element should not automatically be described as every penny of lost earnings between dismissal and hearing.
What Is Stayed
The prescribed element is stayed while recoupment operates. The excess is not stayed by those provisions, although another stay, reconsideration, appeal, insolvency or enforcement issue may affect payment.
How Much May Be Recovered
Recovery is generally limited by both the prescribed element and the amount of relevant benefit paid for the prescribed period. Any balance is payable to the claimant.
Timing
The regulations refer to 21 days after an oral announcement or nine days after the judgment is sent, whichever is later, and also permit service as soon as practicable afterwards. These periods should not be treated as a simple automatic cut-off.
Tax Is Separate
Tax and National Insurance depend on what each payment represents. Recoupment and tax are separate mechanisms.
What to Check
- Read the judgment’s monetary-award and recoupment section.
- Identify the prescribed element, period and excess.
- Check for a recoupment notice or another stay.
- Check whether the respondent is insolvent.
- Consider enforcement if a due amount remains unpaid.
Frequently Asked Questions
Is recoupment always why an award is short?
No. Tax, a stay, insolvency, delay or non-compliance may also explain it.
Does recoupment apply to injury-to-feelings compensation?
It does not ordinarily form part of the prescribed element.
Sources
- Employment Tribunals Act 1996, section 16 — https://www.legislation.gov.uk/ukpga/1996/17
- Recoupment Regulations 1996, as amended — https://www.legislation.gov.uk/uksi/1996/2349
- GOV.UK Employment Tribunals — https://www.gov.uk/employment-tribunals