disabled wtc and migration

if a client is getting the disability working element on tax credits at merge over through pip but don’t have a credits only claim of ESA will they have to apply for a credits only claim prior to the merge date to gain the lcw /lcwra if it has been a PIP only route on tax credits ? trying to maximise a worker before she merges over . i understand if she applies for the lcw/lcwra after she has merged it will erode her TP

her merge date is 28 march so already advised to request extension for the up rating she stands to lose on UC as her earnings are not enough for her AET without the lcw/lcwra

LCW wouldn’t erode her TP, as it isn’t an extra element of UC, just a work allowance. Having it in place at the start would reduce the TP though, as the work allowance would affect the initial calculation of the TE.

The addition of LCWRA would erode the TP, but having it in place at the start would also mean the TP is reduced (or nilled) from the start.

Hope someone can correct my pessimistic analysis - I’m by no means a specialist in LCW-related issues so what follows could be wrong.

You are thinking she can reduce her hours and go onto ESA or credits only for up to 28 weeks while remaining eligible for WTC, postpone the migration for long enough to have a support component or credits-only LCWRA in place before she claims UC, or at least before the end of the first AP?  Have I got that right?

Right, then as I understand it the credits-only route won’t work because this would be a new-style ESA claim and new-style ESA credits don’t count towards the UC “relevant period”.  Even if she has already established LCWRA before she claims UC, she would still have to serve out a relevant period before the LCWRA element kicks in if relying on credits-only.

Therefore she is going to need to be entitled to ESA, which will need to include a support component before the end of the first UC AP.  You are going to need a very long migration extension to achieve that - almost two months extra - even if she has sufficient NICs to get ESA in the first place.  To add to the complexity, the WCA probably wont have taken place before the migration deadline arrives so it’s all going to have to be adjusted retrospectively.

That’s my take, any better suggestions?

PS cross-posted with Charles, you’d be better off listening to Charles

Charles - 20 February 2024 11:02 AM

LCW wouldn’t erode her TP, as it isn’t an extra element of UC, just a work allowance. Having it in place at the start would reduce the TP though, as the work allowance would affect the initial calculation of the TE.

The addition of LCWRA would erode the TP, but having it in place at the start would also mean the TP is reduced (or nilled) from the start.

thank you