Migration of mixed-age couples

New regs out:

- the Welfare Reform Act 2012 (Commencement No. 31 and Savings and Transitional Provisions) (Amendment) Order 2024 (SI.No.604/2024)

https://www.legislation.gov.uk/uksi/2024/604/made

And the main Regs as well!

https://www.legislation.gov.uk/uksi/2024/611/contents/made

I’ve just been looking at the new Regs:

1) This new disregard of notional pension income for 12 months. Won’t that normally be detrimental for claimants? Until now that notional income should have been taken into account when calculating the transitional element, and that wouldn’t have been limited to 12 months.
Of course there’ll be some people a bit better off in those initial 12 months under the new rule (mainly where their UC would otherwise have been higher than legacy entitlement, or where a change of circumstances or uprating happens), but many will be worse off in the long run.
Para. 5.19 of the Explanatory Memorandum seems to assume that everyone would have been worse off, and suggests DWP think the transitional element would’ve been calculated without accounting for any notional income.

2) the “indicative SPC amount” is calculated disregarding any WTC, making it higher. Surely that leads to the wrong result, as the existing entitlement to SPC will have been reduced by the WTC entitlement.
I do realise that there are not that many claimants on both SPC and WTC…

Charles - 03 June 2024 04:01 PM

I’ve just been looking at the new Regs:

1) This new disregard of notional pension income for 12 months. Won’t that normally be detrimental for claimants? Until now that notional income should have been taken into account when calculating the transitional element, and that wouldn’t have been limited to 12 months.
Of course there’ll be some people a bit better off in those initial 12 months under the new rule (mainly where their UC would otherwise have been higher than legacy entitlement, or where a change of circumstances or uprating happens), but many will be worse off in the long run.
Para. 5.19 of the Explanatory Memorandum seems to assume that everyone would have been worse off, and suggests DWP think the transitional element would’ve been calculated without accounting for any notional income.

2) the “indicative SPC amount” is calculated disregarding any WTC, making it higher. Surely that leads to the wrong result, as the existing entitlement to SPC will have been reduced by the WTC entitlement.
I do realise that there are not that many claimants on both SPC and WTC…

We are just working on updates for Revenuebenefits and have just had that exact discussion regarding point 1. Its not as generous as it first appears for the reason you say.

EDITED: On point 2 is it because when tax credits end, the SPC will increase because WTC will no longer be deducted, so you don’t need any TP to cover this?

I thought the second issue was that if this claimant was also due to get a smaller disabled child addition in PC than in CTC, say, then having an inflated indicative SPC amount will correspondingly reduce their transitional addition, and they’ll end up worse off?

Not an issue for those not on PC to start with, as they’ll get migrated to UC, so it’s presumably going to be very low numbers. But I don’t really understand the point of doing it this way, unless I’m missing something obvious.

Thanks both.

Yes, as Jon says, the indicative SPC amount being higher will reduce any Transitional Additional Amount.
It’s true the actual SPC entitlement will also increase due to WTC ending, but that will only be from after migration day, and it is entitlement on migration day which is used for the calculation.

I agree it’ll be very low numbers. I’ve certainly never come across someone on both WTC and SPC. The Explanatory Memorandum also states that “almost all” of the 1,400 claimants who are on both TCs and SPC are in receipt of CTC (not WTC).