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Termination of Employment

Stainsby
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Welfare rights adviser - Plumstead Community Law Centre

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Have a client currently getting SSP topped up by UC ( has limited capability for work related activity)

He gets his housing costs paid by HB as temporary accommodation provided by the Council

His employer is seeking to dismiss him on capability grounds and the proposed severance package consists of

£6000 ex gratia payment
£2030 accrued holiday pay (less PAYE)
£9425 payment in lieu of notice (less PAYE)

I am trying to get my head around the capital/earnings dichotomy as my clinet gets both UC and HB

For UC the holiday pay and payment in lieu is added together in one assesment period and the ex gratia payment is capital that could be disregarded

For HB the accrued holiday pay is capital (employment was interrupted by sickness)  along with the ex gratia payment and the payment in lieu of notice is earnings taken into account over the notice period.

I hae advised that my client to claim new style ESA .  That would possibly leave HB as the only means tested benefit, but then we have the issue of income metamorphosing into capital if it has not been spent at the end of the perios to which it relates and the other matter of whether he can stay on HB if he is rehoused in permananent accommodation (his earnings might be temporarily too high to qualify to HB)

Can anyone solve this conundrum?

Prisca
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benefits section (training & accuracy) Bristol city council

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His UC claim has a 6 month window of non entitlement before it dies - whether he receives a payment or not, he is still a UC claimant in thaqt time
If his UC is out of payment for 6 months, then his claim ends and he would have to make a fresh UC claim ( rather than reviving the original)
The holiday pay and pay in Lieu will put him over the limit for a month and may then be “surplus” earnings carried over into the next month - but i would have thought that by month 3 he will be back in UC payment territory, albeit that any ESA he gets will reduce his UC £ for £.


With the HB, he can get that while he is temp accommodation. If his income is too high to qualify for a while, it may need a new claim ( if still in the temp accomm) or it may be a closed period supersession, depending on when the LA are advised of the changes and how long it takes them to action it

UC passports him to full HB in the temp accommodation, so when that stops HB will use the pay in lieu (as per their regs, it should be apportioned for the period it covers ( presumably 12 weeks notice?) and not covering just the one month UC treat is as covering. ( you may need to remind them of this, as they are likely to see the figures UC used for 1 month and assume the same, so you will need to evidence to them it PILON and the notice period it covers)

He would need to be still getting HB at the temp accommodation AND NOT be a uc claimant in order for a change of address to “normal” accommodation be accepted for HB. If he is in his 6 month window of no payments, he is still a UC customer and the HB change in circs claim wouldn’t be accepted (unless he was moving to supported/specified accommodation)

If he is still a UC customer when he moves in “standard” accommodation,  then he wont be able to claim HB and would need to claim his housing costs as part of his updated UC claim.

 

Ianb
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Prisca - 24 June 2022 02:51 PM

His UC claim has a 6 month window of non entitlement before it dies - whether he receives a payment or not, he is still a UC claimant in that time

I have lost track of what is happening on that. Originally a claim could be closed after one month of nil entitlement which meant that a claimant wanting to work through surplus earnings needed to make a rapid reclaim to reactivate the claim. There was then a relaxation during the pandemic (which of course all know is now over!). Are you saying that claims are still being kept open for six months of nil entitlement?

[ Edited: 24 Jun 2022 at 03:16 pm by Ianb ]
past caring
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Obviously, this depends on the length of time over which the pay in lieu of notice is taken into account (i.e. how much that works out as in weekly terms) but given the generally higher levels of rent in temporary accommodation, it’s conceivable that even if he’s knocked out of UC entitlement, he won’t be knocked out of HB entitlement, or at least not entirely. If he moves to permanent accommodation within the same borough as the temp accommodation and he’s still getting HB on that temp accommodation, that isn’t a new claim? And if he’s not in receipt of UC at that point…...

Prisca
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I FOUND THIS ON THE UNDERSTANDING uc WEBSITE, WHICH I TOOK TO MEAN THE 6 MONTH WINDIOW STILL APPLIED…  BUT IT IS A BIT AMBIGUOUS….

Closing your claim because of earnings
If your earnings are high enough to receive no Universal Credit payment in a month, your Universal Credit claim will be closed.

If your Universal Credit has stopped for another reason during the 6 months since you last payment stopped, you’ll need to re-apply for Universal Credit by logging into your online account and confirming that the details you gave before are still correct.

In both of the above cases you will still keep your original payment dates.

If it is more than 6 months after your last Universal Credit payment you will need to make a completely new application.

If your Universal Credit payment includes an amount for housing that is paid straight to your landlord, it’s possible that you may not receive any money from Universal Credit but your landlord continues to receive money towards your rent. In these circumstances your Universal Credit claim remains open.
If your earnings are high enough to receive no Universal Credit payment in a month, your Universal Credit claim will be closed.

If your Universal Credit has stopped for another reason during the 6 months since you last payment stopped, you’ll need to re-apply for Universal Credit by logging into your online account and confirming that the details you gave before are still correct.

In both of the above cases you will still keep your original payment dates.

If it is more than 6 months after your last Universal Credit payment you will need to make a completely new application.

Ianb
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All of which is as I understood it.

See https://data.parliament.uk/DepositedPapers/Files/DEP2022-0452/028-Claim_closure_V18.0.pd indicates that in most cases the Service should automatically close claims after a period with nil entitlement.

However we know that DWP stopped closing claims after one month during 2020/2021 and I don’t know what current practice is.

Stainsby
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Dis a bit more research and according to ask CPAG,  Regulation 32A of the UC (Claims and Payments) Regs remains in force

Cross referenced it on legisaltion.gov.uk

https://www.legislation.gov.uk/uksi/2013/380/regulation/32A

This should mean that my client should go back onto UC without having to make a new claim once surplus earnings are exhausted

Ianb
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Stainsby - 28 June 2022 01:11 PM

This should mean that my client should go back onto UC without having to make a new claim once surplus earnings are exhausted

He hasn’t come off UC if the claim hasn’t been closed. He is still on UC but the earnings taken into account mean there is no entitlement to be paid.

Note too that the regulation referred permits the SoS to keep the claim open, it doesn’t require them to do so. That brings us back to the question of what current practice is.

[ Edited: 28 Jun 2022 at 08:20 pm by Ianb ]
HB Anorak
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I would say that he has, as a matter of law, ceased to be entitled to UC immediately and his HB should be assessed as if he is a regular non-UC punter in respect of any period where he does not have at least 1p of UC entitlement.

Keeping his online account open is an administrative measure to facilitate the smooth operation of UC Reg 21(3C) and C&P Reg 32A.

A person is only passported to max HB if they are “on” UC.  That is defined by Reg 2(3B) as follows:

For the purposes of these Regulations, a person (“P”) is on universal credit on any day in respect of which P is entitled to universal credit (whether it is in payment or not).

“Entitled to” in turn leads us to the WRA 2012: a person is “entitled to” UC if (inter alia) they meet the financial conditions: s3.  Section 5 sets out the financial conditions which say that there must be an amount payable which is no less than the prescribed minimum.  The prescribed minimum is 1p per month - UC Reg 17.  That means the claimant is not “on” UC for HB purposes unless they are entitled to at least 1p a month of UC.

Charles
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I agree with Peter.

I would just add that the claims treated as made by C&P Reg 32A would presumably cause his HB to terminate if he were to leave the temporary accommodation under Reg 8 of the Transitional Regs.

I don’t know whether it would be possible to ‘stop’ the SoS from treating him as making a claim (using a similar logic to that used for how claimants can terminate entitlement to benefit if they so wish). I’ve often wandered whether this would be possible in cases of surplus earnings where a new claim is disadvantageous (for example, where a claimant has 2 months of high earnings).

Ianb
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Thanks HB - happy to be corrected.

Timothy Seaside
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This is another one of those problems with how UC fits (or doesn’t) with HB. Strictly speaking nobody knows whether they are entitled to UC in an AP until the end of that AP. So HB have to either guess the future or wait until the UC payment before deciding on HB entitlement for any weeks where there might turn out to have been UC entitlement. If it turns out they are not entitled to UC in one AP then we have the added uncertainty of not knowing whether UC will treat a new claim as having been made in the following month.

Universal Credit: simplifying the benefits system for everyone.