Universal Credit and fluctuating earnings

lost in Granite - 07 October 2016 04:15 PM

My confusion stems from the belief that awards of UC continue for a period of six assessment periods of nil entitlement before the need to reapply.

For the moment you’re correct (for around say 95% of potential UC claimants.) That six month rule applies only in the ‘live service’ areas but not in the ‘full service’ (It’s part of reg 6 of the UC, etc Claims and Payment regs which is abolished in the full service areas.).  So eventually everyone will have to make a new claim (*) after any nil entitlement assessment period. 

* IIRC correctly DWP have said that reclaims will be ‘‘streamlined’ in these cases but I’m still not clear exactly what that means.

I dealt with a case yesterday where the client is weekly paid 16 hrs £115.20pw -  paid cash, v small employer and not on RTI system.

She is on UC.  She has some 4-week months and some 5-week months, so her UC award will vary.  Her UC for the last 4 months is all wrongly calculated.  She has been muddling along for 4 months trying to report her earnings and running up tel bills of £20 per month just on 0345 number.  Finally last week UC helpline gave her the helpful advice that if she rings on the last day of her assessment period to report her pay during the MAP, then her UC can be correctly calculated.

Then I tried to work out C Tax Reduction. Bit difficult to do it on paper in client’s house, and had to come back and get my head round it.  CTR will need to see every single UC award letter as evidence and will need to reassess every time UC amount changes, which will lead to a new bill being issued, and no-one likes to receives lots of those.  We can average the CTax so she can actually make a payment plan.

Luckily she is not going to have to reclaim as per those examples in the UC team’s leaflet.

Thank goodness they’ve simplified the benefit system eh?

SarahJBatty - 07 October 2016 04:43 PM

I dealt with a case yesterday where the client is weekly paid 16 hrs £115.20pw -  paid cash, v small employer and not on RTI system.

She is on UC.  She has some 4-week months and some 5-week months, so her UC award will vary.  Her UC for the last 4 months is all wrongly calculated.  She has been muddling along for 4 months trying to report her earnings and running up tel bills of £20 per month just on 0345 number.  Finally last week UC helpline gave her the helpful advice that if she rings on the last day of her assessment period to report her pay during the MAP, then her UC can be correctly calculated.

Then I tried to work out C Tax Reduction. Bit difficult to do it on paper in client’s house, and had to come back and get my head round it.  CTR will need to see every single UC award letter as evidence and will need to reassess every time UC amount changes, which will lead to a new bill being issued, and no-one likes to receives lots of those.  We can average the CTax so she can actually make a payment plan.

Luckily she is not going to have to reclaim as per those examples in the UC team’s leaflet.

Thank goodness they’ve simplified the benefit system eh?

God help her when she’s called in and told that she’s not working enough and she’ll need to start work searching for more hours and/or money…..

Thanks for replying so quickly.  I have questions, most of which can wait till next week, but let me begin with just one, if a person re-applies does that change their assessment period?

SarahJBatty - 07 October 2016 04:43 PM

...
Then I tried to work out C Tax Reduction. Bit difficult to do it on paper in client’s house, and had to come back and get my head round it.  CTR will need to see every single UC award letter as evidence and will need to reassess every time UC amount changes, which will lead to a new bill being issued, and no-one likes to receives lots of those….

The UC/CTR interface is a bit like a head transplant - you can see the join and the results aren’t always pretty.

A few LAs are starting to introduce tolerance figures ( on UC max amount and/or UC award) and not reassessing CTR where the change is less than a certain amount.

lost in Granite - 07 October 2016 04:55 PM

Thanks for replying so quickly.  I have questions, most of which can wait till next week, but let me begin with just one, if a person re-applies does that change their assessment period?

Not usually - as long as they continue to meet the basic UC conditions (right age, in GB, not a student, claimant commitment accepted) then I think the AP would normally align if they claim again within six months. (See Reg 21(3C) UC Regs)

Jon Blackwell - 08 October 2016 09:58 AM

lost in Granite - 07 October 2016 04:55 PM

Thanks for replying so quickly.  I have questions, most of which can wait till next week, but let me begin with just one, if a person re-applies does that change their assessment period?

Not usually - as long as they continue to meet the basic UC conditions (right age, in GB, not a student, claimant commitment accepted) then I think the AP would normally align if they claim again within six months. (See Reg 21(3C) UC Regs)

I asked someone in the DWP this (for a full/digital service area), and they had no idea. It got added to a list of action points for them to check so I can update at some point

I was asked by a colleague since this is a closing down of an old claim and the making of a new claim would persons affected lose any transitional protection they may have?

lost in Granite - 11 October 2016 03:28 PM

I was asked by a colleague since this is a closing down of an old claim and the making of a new claim would persons affected lose any transitional protection they may have?

we’re a long way away from any transitional protection in UC.

lost in Granite - 11 October 2016 03:28 PM

I was asked by a colleague since this is a closing down of an old claim and the making of a new claim would persons affected lose any transitional protection they may have?

For managed-migration transitional protection, the answer is “Maybe.”.

It would be very harsh for weekly-paid or (4-weekly paid workers) to lose their TP just because they have 5xweekly (or 2x4-weekly) paydays in an AP but until we have the regs for managed-migration transitional protection (which are still missing after all these years) there’s no saying for certain.

It was suggested in the 2015 Budget that there may be separate form of transitional protection against the 2-child rule and/or removal of family element on a non-managed migration (ie CoC) move to UC.

(See : http://www.rightsnet.org.uk/forums/viewreply/43344/ )

Again there’s no regs covering that sort of transitional protection so we don’t know how it will work.
 

Jon Blackwell - 08 October 2016 09:56 AM

The UC/CTR interface is a bit like a head transplant - you can see the join and the results aren’t always pretty.

A few LAs are starting to introduce tolerance figures ( on UC max amount and/or UC award) and not reassessing CTR where the change is less than a certain amount.

Thanks for this info Jon I will find out whether any of our local LAs are looking at this.  I did find the 4 weeks/5weeks drop down in QBC which was very useful.

This from the heady days of December 2012 suggests that transitional protection would not necessarily be lost immediately after a change of hours / earnings - but would not survive the end of an award.

6. When will Transitional Protection end? As stated, we believe it is correct to cushion claimants who are affected by a change that the DWP is making when the claimant has had no changes in circumstance.  However,  it   is   appropriate   to   end   this   protection   when   circumstances underlying an award are no longer recognisable as those on which the legacy calculation was made.

Once Transitional Protection has ended it will not be applied to any future awards.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181344/ucpbn-transitional-protection.pdf/

The fundamental issue is, in my opinion, that transitional protection does require to a significant degree as clear transition from one steady-state “old” benefit to a “new” steady-state benefit. With the huge variations between the various versions of UC that continue to operate and the complete lack of clarity regards moving backwards and forwards between legacy benefits and UC in whatever format it is in a particular case, I really struggle to see how any kind of rational TP can emerge from this omni-shambles.

Jon Blackwell - 07 October 2016 04:24 PM

That six month rule applies only in the ‘live service’ areas but not in the ‘full service’ (It’s part of reg 6 of the UC, etc Claims and Payment regs which is abolished in the full service areas.).  So eventually everyone will have to make a new claim (*) after any nil entitlement assessment period.

There are just no* words.

* Acceptable

Regarding abolition of the 6 month rule for Full Service areas, where someone has to make a new claim after any nil entitlement assessment period.

The UC Digital Service Amendment Regs provide for part-month payments where someone doesn’t make their new claim within 7 days, enabling them to resume their previous assessment period but not benefit from payment for the whole of the month ( Reg 3) - and a complicated apportionment calculation ensues ....

Is this still up to date for Full Service ... or has this since been amended??

http://www.legislation.gov.uk/uksi/2014/2887/regulation/3

My concern on the 6 month rule and having to reapply within 7 days is for those on, for example, zero hours contracts possibly paid weekly, and whose earnings fluctuate so that one month they have entitlement to universal credit and the next month they don’t. How are they supposed to assess the point at which they need to reapply - they probably won’t be sure what their earnings are till they get a pay slip and even then may not know which pay belongs in which assessment period if the dates are close, and also not know exactly what their nil entitlement to UC figure is (that is, the point at which their earnings take them out of UC) and so when they have come back down below it.

I don’t really understand why under the digital service you need to reapply - if the real time information links on earnings are still live surely the UC system will know what their earnings are in each assessment period and could calculate accordingly.

Can anyone give me any enlightenment??

Edit: I’ve had a look at the regulation 22A which is inserted by the regulations you quote Sarah - that seems to refer to reapplying where there has been ‘loss of employment’. Does that mean then there is no need to reapply if you remain in employment but your earnings fluctuate so that you go in and out of UC entitlement. I’ve emailed the UC contact we have through stakeholders but welcome any other views…

Exactly Daphne, and I have no enlightenment ....

See the ADM which covers the Digital Service amendments.  The example they give is a scenario where someone’s contract ends and the reason for their lateness in reclaiming is that they concentrate on trying to find another job!!!!  So you are penalised for doing what they actually want you to do .....

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/482483/adm26-14.pdf

Could someone please tell me this is a joke.

Daphne - 14 October 2016 02:39 PM

if the real time information links on earnings are still live

I think that may be the important point.  The bulk transfer of earnings, tax, tax credits etc through RTI to DWP and from there into the different benefits system and to ATLAS is big and complex.  Some major chunks, like the self-employed and those outside the PAYE system are completely missing.

That data is being used for a number of purposes, not just for UC earnings.  It’s being used for data matching and anti-fraud systems.  That means that it’s not just data for claimants that’s being transferred.  It must be getting bulk information and then matching people, NI and earnings against claimants to see whether they should be there.

But ... that will be a very different process to UC.  It’s really unlikely that UC is running a system which looks at every earner and decides whether they are a UC claimant or potential claimant - possible though that might be, it’s unlikely that DWP are picking up on unclaimed benefits and awarding them.  There are also some DP issues of course.

It seems likely therefore that the UC system must be ‘asking’ the RTI system for the data that it needs for ‘live’ claims. If that means that it’s asking for earnings figures for claims that are out of payment and then making them live again then that would mean that it’s. effectively, running some variant on the 6 months process, for all areas.

Daphne - 14 October 2016 02:39 PM

Edit: I’ve had a look at the regulation 22A which is inserted by the regulations you quote Sarah - that seems to refer to reapplying where there has been ‘loss of employment’. Does that mean then there is no need to reapply if you remain in employment but your earnings fluctuate so that you go in and out of UC entitlement. I’ve emailed the UC contact we have through stakeholders but welcome any other views…

Yes it does I noticed that, and wondered what constitutes ‘loss of employment’ when you are on a zero hours or similar casualised employment situation.  Let us know the response!

This is the reply I have received from UC -

Claimants in a Full Service area who have zero hours contracts do not have to make a claim for Universal Credit within 7 days (as per regulation 22A of the Universal Credit Regulations 2013) of a drop in their earnings, even if this drop reduces their earnings to zero. This is because they are still treated as employed for as long as they are engaged by their employer i.e. they have not become unemployed and ceased paid work. As a result if a claimant’s hours reduce (even to zero for the whole assessment period) they can make a claim for Universal Credit at any point during that assessment period and:
·      return to the same assessment period as their previous claim – as long as they:
·    have had a previous award of Universal Credit i.e. a payment of Universal Credit;
·    have made a new claim within 6 assessment periods of their previous Universal Credit award ending;
·    have continued to meet the basic entitlement conditions for Universal Credit (other than accepting a claimant commitment or temporary absence from GB that would be disregarded); and
·    are not excluded from entitlement to Universal Credit by regulation 19 of the Universal Credit Regulations 2013 e.g. were not a prisoner.
·    be paid Universal Credit for the whole of that assessment period (if they are entitled to it) minus any earnings or other deductions they have.

We tell Claimants when their award ends. We also tell them that they will have to make a new claim to benefit if their earnings drop or they have another change of circumstances, that could result in them becoming entitled to Universal Credit again.

they seem to be saying you do still need to reapply but not within 7 days?

Has anyone heard anything more about ‘streamlining’ or a rapid reclaim for UC? We have a client where it seems holiday pay took them out of UC by a few pence, and they have to reapply from scratch.

edit: and the client reports that JCP are giving a different monthly assessment date, in which case there will be a couple of weeks gap.

Attached is a UC letter (full service area), issued following someone floating off UC due to excess earnings. It says that the previous digital service 6-month auto-restart rule no longer applies.

It also says that if you don’t reclaim UC within 7 days of your employment ending, then your first UC payment may be reduced.

Isn’t that rather dangerous advice? Some people may get a final payment from their employer in those 7 days, and would in fact have been better off slightly delaying their new UC claim.

As I understand it, if the new claim is within 6 months of the previous one ending it automatically links to the old one and has the same assessment period and I don’t think you can avoid that so if there is a payment still to come from your employer that will be taken into account for the assessment period it relates to whenever you do the claim. If you fail to notify within 7 days then the amount of the first payment you would be due can be reduced according to the number of days late you are as set out in reg 22 of the UC Regs so you just lose more money.

Edit - just seen your post above and see you say they’re not being given the same assessment date but I think they should be under reg 21(3C)

Ah, thanks Daphne, that makes more sense.

In this case the client understands from JCP that the assessment period will be different, but we haven’t confirmed that.

was just in edit to above post while you posted! - reg 21 (3C) says should be same assessment period

This is Neil Couling telling the Sottish Parliament Social Security Committee about reclaiming within 6 months:

“It has not been discontinued; we just have a different way of doing it. Technically, in one sense, it could be argued that, in the full service offering, a claim is open for 14 months. All that we do is ask the claimant, if they come back to us, to click a button that says, “Reclaim—none of my data has changed”, and we stand the claim back up.

At present, with the live service, we say that we will keep the claim open for six months if the claimant comes back to us, but they actually have to go through the claiming process again. The full service is actually better, I think. However, we have singularly failed to explain that to the SFHA and a number of other organisations so that they understand it.

In my defence, we have been busy building the system, which has been quite a big task. Explaining and building at the same time while the system is evolving around us is quite tricky. Nonetheless, I have said to the team that we need to get better at explaining things, such as the point about implied consent, because we have a slightly better story to tell than the initial reactions would suggest.

In the full service, there are no waiting days to serve and claimants do not need to verify their identification again. We keep them on the same payment cycle, too. I think that the process is slightly better, but at present I am failing to explain that to the SFHA and others. That is my fault, and I need to do better.”

Official report here: https://shar.es/1O0oSb 

I confess I have no idea how the 14 months fits with the Regs (although I have thought particularly hard about that). Any ideas?

The Explanatory Memo for SI 2014/2887 describes Reg 22A as an incentive to re-claim quickly, as early application of conditionality makes finding another job quickly more likely. Looks like it probably wasn’t written by the same person as the ADM guidance Sarah refers to…

Jon

Daphne - 12 January 2017 01:42 PM

was just in edit to above post while you posted! - reg 21 (3C) says should be same assessment period

Following up on the case I mentioned above, from what we can make out, it seems that if you float off Live UC and then have to reclaim Full UC, your previous claim is invisible and you are not put back on the same assessment schedule.

EDIT: oops, getting my live and digital mixed up.