UC TP:  decrease in earnings, 3 month rule

Hi all,

Seeking clarification on the rule relating to drop in earnings and TP: specifically if your first UC payment statement uses an earnings figure of above National Minimum Wage (NMW)for 15 hours per week (single) or 24 hours per week (couple), then you have three consecutive UC payments using earnings of below this figure, your transitional protection ends. 

For reference:

‘[F1Circumstances in which transitional protection ceases
56.—(1) A transitional capital disregard or a transitional element does not apply in any assessment period to which paragraph (2) or (4) applies, or in any subsequent assessment period.

Cessation of employment or sustained drop in earnings
(2) This paragraph applies to an assessment period if the following condition is met—

(a)in the case of a single claimant—
(i)it is the assessment period after the third consecutive assessment period in which the claimant’s earned income is less than the amount specified in regulation 99(6)(a) of the Universal Credit Regulations (“the single administrative threshold”), and
(ii)in the first assessment period of the award, the claimant’s earned income was equal to or more than that threshold’

https://www.legislation.gov.uk/uksi/2014/1230/regulation/56

The relevant earnings – does that include both that earned via PAYE and self-employment? 

Reg 56(2)(a)(i) UCTP Regs cross refers ‘the amount specified’ to reg 99(6) UC regs (AET).  Reg 99(6) excludes earnings that are not employed earnings. 

Reg 56(3) UCTP Regs exempts people with the MIF from the three month rule.  But what about those not GSE with SE earnings?

I hope that makes sense and thanks in advance. 

Emma

My understanding is that it would include s/e earnings, as the exclusion of Reg 99(6) is not applied here. The reference to Reg 99(6) is only to the level of the AET.

I wouldn’t say that those found to be GSE (and therefore subject to the MIF rules) are exempt from the three month rule. The three month rule will still apply where the claimant ends their s/e, or is no longer GSE and earns below the AET.
In fact, Reg 56(3) can bring more cases within scope of the three month rule: where the claimant is GSE then even if they are earning less than the AET, they will still be caught by the three month rule if they subsequently end their s/e.

Also, I would have thought that most people with s/e earnings in excess of the AET will be GSE. But, if you have a case where someone is not GSE but happens to have s/e income in excess of the AET in their first AP, then, yes, the three month rule will apply.