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Universal Credit draft regulations 41

Judy Scott
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Judy Scott Consultancy

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Help!!
Could anyone explain the meaning of reg 41 in plain language?

When an assessment may be carried out

41.—(1) The Secretary of State may carry out an assessment under this Part where—
(a) it falls to be determined for the first time whether a claimant has limited capability for
work or for work and work-related activity; or
(b) there has been a previous determination and the Secretary of State wishes to determine
whether there has been a relevant change of circumstances in relation to the claimant’s
physical or mental condition or whether that determination was made in ignorance of,
or was based on a mistake as to, some material fact,
but subject to paragraphs (2) to (4).

(2) If the claimant has weekly earnings that are equal to or exceed the relevant threshold, the
Secretary of State may not carry out an assessment under this Part unless—
(a) the claimant is entitled to attendance allowance, disability living allowance or personal
independence payment; or
(b) the assessment is for the purposes of reviewing a previous determination that a
claimant has limited capability for work or for work and work-related activity that was
made on the basis of an assessment under this Part or under Part 4 or 5 of the ESA
Regulations,and, in a case where no assessment may be carried out by virtue of this paragraph, the claimant is to be treated as not having limited capability for work unless they are treated as having limited capability for work or for work and work-related activity by virtue of regulation 39(6) or 40(5).

(3) The relevant threshold for the purposes of paragraph (2) is the amount that a person would
be paid at the hourly rate set out in regulation 11 of the National Minimum Wage Regulations
1999(a) for 16 hours a week.

(4) If it has previously been determined on the basis of an assessment under this Part or under
Part 4 or 5 of the ESA Regulations that the claimant does not have limited capability for work, no
further assessment is to be carried out unless there is evidence to suggest that—
(a) the determination was made in ignorance of, or was based on a mistake as to, some
material fact; or
(b) there has been a relevant change of circumstances in relation to the claimant’s physical
or mental condition.

Jane OP
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The National Autistic Society, Welfare Rights, Nottingham

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Hi,

I’ll have a go – this is what sense I made of it, would be interested to know if I’ve got it right!

In UC there are only two possible additions due to disability/ sickness etc – they are the LCW and the LCWRA elements.

To get either you have to undergo the WCA. Reg 41 determines who can have a WCA.

Reg 41 says that if you are earning the equivalent of the 16 x the nat min wage per week (currently £99.04), you can’t have an assessment, unless you are also getting PIP / DLA/ AA. or it’s a review of a previous WCA.

So the consequence is that if you have a disability and work (earning more than about £99 per week) you have to be getting DLA/PIP/AA before you are even allowed to have a WCA, and you have to have a WCA to have a chance of getting one of the two elements that can be paid on the basis of disability.

Jane

Judy Scott
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Jane - thank you
If you have got this fiendish rule right then it raises the question of the person who is already in receipt of Universal Credit with a LCW element who earns more than £99.04 in a week (or would their earnings be calculated as averaged over a calendar month?).

Would they risk having an early WCA review of entitlement? Or do we not know?

Any views out there?

Judy Scott

Gareth Morgan
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The various threshold figures effectively replace the current hours rules in a lot of UC when, for example, deciding whether someone is in ‘full-time work’.  Earning more than their individual threshold amount, for example, removes a claimant from many conditionality conditions.  How long someone works is not relevant, only the earnings level matters.  It’s possible therefore to work for a small number of hours at a high rate of pay and escape conditionality requirements.

In this case the view is, presumably, that earnings over the £99.23 a week figure will demonstrate that there is not a limited capability for work, because the claimant is working. 

The LCW and LCWRA elements are just that, they’re a WCA and not directly related to disability benefits in the way the current premiums are.

What 41(2)(a) does is to introduce an element of recognition of disability benefit receipt into the award for those people who have demonstrated that they have the capability to work because of their earnings.  It brings in to play Sch. 8 and Sch. 9 to decide if people are to be *treated* as having LCW or LCWRA.

Andrew Dutton
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Welfare rights service - Derbyshire County Council

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My mind is moving at a very, very slow pace today. Is this a painfully-expressed equivalent of Permitted Work?

Judy Scott
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If you have a look at the Universal Credit draft regulations page 19/20 Reg 22 you will see that a Work Allowance replaces the earning disregard. No more special Permitted Work rules in Universal Credit for people with a LCW.

Thanks to Jane and Gareth for explaining Reg 41.

stevejohnson
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Walthamstow CAB

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Reg 41(2) deals with people who are working and THEN want to be considered as sick - the earnings threshold is clearly relevant, along with the business of DLA/PIP acting as a gateway to permit a WCA assessment.

Not so sure about those already sick who THEN want to work. Where does it say in Reg 41 that earning at or above threshold will then be toxic to those with pre-established sick status? I am struggling with this.

Comments?

Steve

Judy Scott
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The following is a reply that a member of the DWP Universal Credit Policy team sent me (after I had posted my query on Rightsnet) I think this reply is quite clear. Judy Scott

For someone who is already receiving UC, and has been found to have Limited Capability for Work (LCW) or Limited Capability for Work Related Activity (LCWRA), they will be called for a further WCA when the review is due, whether or not they are working and whether or not they are receiving earnings in excess of the relevant threshold ie. 16 hrs x National Minimum Wage hourly rate.

Therefore, if a UC claimant who is eligible for the LCW element in Universal Credit starts work - regardless of the hours they work / wage - this will continue and considered again at their scheduled WCA review.
If the person is not receiving Universal Credit and they are working, they can apply for UC and at the same time apply for the LCW element, or if a UC claimant is already working and wants to now apply for the LCW element we will consider whether we should refer the claimant to a WCA to assess eligibility for the LCW element.  If their earnings exceed the threshold (16hours xNMW), the WCA will only be conducted if they also receive AA, DLA or PIP. 

It may also be helpful to bear in mind that for people who were previously receiving UC which included an LCW or LCWRA element, Reg 28 makes extra provision. If they re-claim UC within 6 months of a previous UC award which had ended because their income or capital was too high, on re-claiming UC they qualify for the LCW or LCWRA element from the date the UC award commences without having to wait the 3 month relevant period. For those who had already been found to have LCW or LCWRA but whose award did not include the LCW or LCWRA element because they had only waited part of the 3 month relevant period before they went off UC due to their income/capital, they will qualify for the LCW element or LCWRA element once the last day of the original 3 month relevant period has been reached. This means that a claimant with LCW may try work as their LCW/LCWRA status and position in the relevant determination period is protected for 6 months.

In summary:

To get the LCW or LCWRA element in UC, a claimant either has to:

·    have been found to have limited capably for work through a WCA assessment; or

·    be treated as being LCW on one of the relevant grounds.


If a claimant tells us about a medical condition affecting their ability to work when they are already working and earning over the threshold (16x NMW) we will only refer them to a WCA to assess whether they are entitled to the LCW/LCWRA element if they are entitled to AA, DLA or PIP.

If they have already been found to have LCW/LCWRA on an assessment before they start earning over the threshold, they will continue to receive the element until any review WCA finds them no longer to have limited capability for work.

stevejohnson
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Judy,

That is very clear - thank you.

Should a person already on UC with LCW/LCWRA element who later starts work notify DWP that have started work? The somewhat relaxed tone of the DWP reply almost suggests no - just wait until the next WCA. If thats right but the subsequent WCA decides you are no longer sick (possibly informed by the latter day working activity), should a claimant then fear an overpayment (and possibly a civil penalty)?

I would appreciate your view.

Steve

Gareth Morgan
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They shouldn’t need to inform the DWP.  The HMRC RTI is supposed to take care of that unless they’re self-employed.

stevejohnson
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Hi Gareth,

Is your point that earning below 16 x NMW renders the work irrelevant to LCW status (subject to views taken at the next WCA)?

My question was whether starting work was a change that had to be reported anyway, irrespective of pay levels. Don’t current rules say you are supposed to report anything that might affect entitlement, unless permitted work rules retail otherwise? I can imagine certain DMs (and their ATOS colleagues) becoming interested in any working capacity whilst on UC. I would worry about advising a sick client on UC that they do not have to report working, if they earn below 16 x NMW, but perhaps I worry too much!

Steve

Gareth Morgan
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My point is that earnings are meant to be declared by employers to HMRC and they pass the information on net earnings to DWP.  No duty to inform DWP of changes in earnings.

stevejohnson
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I get the RTI earnings side of things. More interested in the duties of claimants or otherwise to report changes (behaviour, not income) that might affect entitlement. My question is, does a person on UC with a sickness element have to report the fact they have started working, from the point of view of the possible loss of LCW status because of the behaviour of working?

On the RTI/earned income aspect, there may be no requirement to report earnings changes, but there is also 100% overpayment recovery power if a non-report by the claimant is undermined by an RTI cock up.