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Transitional Element for Tax Credit-only claimants
Hi all
Forgot to share but we published a briefing on calculating the Transitional Element for Tax Credit-only claimants in December - available here - https://www.housingsystems.co.uk/News/Briefings
Obviously we’re still(!!) waiting for some answers from the DWP but the briefing covers everything we know so far.
Thanks Rachel
It’s now quite some time since DWP were told about this problem at the August stakeholder meeting.
Well it was discussed at length in the meeting today but I think without resolution - anyone else who was there please do chip in…
It’s surprising that we’re unable to get answers given that paying the correct transitional protection was identified by DWP as a key task for starting managed migration: https://www.gov.uk/government/publications/completing-the-move-to-universal-credit/completing-the-move-to-universal-credit—2#move-to-uc-strategy
I see that PAC have an inquiry with a call for evidence: https://committees.parliament.uk/work/8152/progress-in-implementing-universal-credit/
Rachel that briefing is amazing. So useful and helpful about all aspects. Well done to all involved and thanks for sharing.
It is excellent Rachel - really comprehensive - thank you!
Let’s hope the TP answers from the DWP don’t necessitate a huge rewrite ;)
It’s surprising that we’re unable to get answers given that paying the correct transitional protection was identified by DWP as a key task for starting managed migration: https://www.gov.uk/government/publications/completing-the-move-to-universal-credit/completing-the-move-to-universal-credit—2#move-to-uc-strategy
Is it really surprising, though? I can’t decide* whether they are trying to maintain an air of mystery or whether it’s just that they don’t have the answers.
But back to the point of this post:
Thank you Housing Systems for an excellent resource. Managed migration cases are just starting here so this is extremely timely and welcome.
*Probably in the same way that Owen is surprised.
Neil Couling said on Twitter today that the guidance for advisers is basically ready, and has been shared with a few welfare rights advisers for checking.
Anyone on here had sight of it?
Asked some follow-up questions on the ‘guidance’ released a couple weeks ago and (finally) got a response. Copied the full response below but main take aways -
- inclusion of the Carer Element in Indicative UC Amount entirely based on whether the claimant declares themselves a carer
- if a claimant has reported a change in expected income to HMRC, they’ll send this figure to the DWP even if they’re not using it to calculate TCs due to the £2,500 disregard (contradicts Regs? Not sure how an adviser finds out if an income has been reported but isn’t being used by HMRC?)
- claimants not entitled to a TE due to separation, could get the TSDPE (although response on this is a bit concerning because it suggests they could miss out on other MM TP (eg if individual savings above £16,000) even though the Regs don’t exclude them) - have asked for clarification!
You asked:
Carers
This contradicts information given in previous stakeholder meetings – as I think is evidenced by the questions asked on this topic. Please can you clarify whether this is a change in policy or if it is what has always been happening. Additionally, this seems to contradict the DWPs policy of like-for-like (i.e., it seems contradictory to not include a HCE even if they declare rent but to declare a Carer Element based on the UC claim).
Our Response:
The TP calculation is based on the difference of entitlement between legacy and UC the day prior to the UC claim date. It does not include any benefit for which UC is not replacing such as carers allowance, therefore does not include any element for which a legacy benefit was not in payment. However, the eligibility criteria for the UC Carer’s Element differs from that for the Carer’s Premium in legacy benefits. Carer’s Allowance is not a migrating benefit. Where a claimant qualifies for a Carer’s Element it will be included in the Indicative Award.
You asked:
The document states that a Carer Element will be included in the IUCA if the claimant declares themselves as a carer on their UC claim and adds no qualifiers to this (e.g., and they are receiving Carer’s Allowance). What if a claimant is receiving Carer’s Allowance / is on Income Support as a carer but misses that question on their form? What is the specific approach to including a Carer Element in the IUCA?
Our Response:
In any application for UC, in order for claimants to get the carers element, we rely on claimants telling us that they are caring. The UC form is designed to be as straightforward as possible and we don’t expect people miss the question by accident, but if this did happen, and a claimant notified us of caring at a later stage we could amend the award and the indicative award accordingly.
If the claimant fails to declare that they care for someone on their initial UC declaration, then they subsequently declare via a change of circumstances that they have been a carer from their UC claim date, their TE will be recalculated.
You asked:
Income
Someone from HMRC previously said at a stakeholder meeting that HMRC always send PY income. This was echoed by HMRC in response to an FOI. This guidance directly contradicts that so please clarify the approach.
Our Response:
We do not hold information on FOI requests made to HMRC. HMRC cannot predict actual income for the current year, therefore they are likely to use the previous year’s income. The exception to this is where a tax credit customer has provided HMRC with an estimate of what they believe their current year income will be. In these circumstances HMRC will provide DWP the estimated current year income to determine TP (although they won’t use this figure to calculate tax credits where it is less than a £2500 increase on the previous year).
You asked:
The document implies that a claimant who is manage migrated can never receive a Transitional SDP Element. However, the Regs (sh2(7)) only exclude them from receiving a TSDPE if they are entitled to a Transitional Element. It is possible that a claimant receives a Migration Notice and claims before their final deadline but is not entitled to a Transitional Element (e.g., because they separate from their partner before claiming UC). The UC system should be set up to recognise this and check entitlement to the TSDPE if there’s no entitlement to the TE – again, the approach to this should be clarified and I am surprised that this was not raised by anyone reviewing the document.
Our Response:
If the claimant has been managed migrated and isn’t entitled to TE due to a separation, they will still be considered for a transitional SDP element. If there is a change to a benefit unit such as a split from a partner, then a claimant will no longer be considered a claimant moving under managed migration. The normal UC journey will then apply, including assessment of Transitional Protection for SDP.
Also - we’ve updated our briefing to account for this ‘guidance’ and the response. Available here - https://www.housingsystems.co.uk/News/Briefings
Thanks to everyone who gave feedback on the first version, especially Charles and Will who helped improve it!
- if a claimant has reported a change in expected income to HMRC, they’ll send this figure to the DWP even if they’re not using it to calculate TCs due to the £2,500 disregard (contradicts Regs? Not sure how an adviser finds out if an income has been reported but isn’t being used by HMRC?)
Thanks Rachel for this whole post, really useful.
Just on this quoted point: This is not an issue. It works in practice, and accords with the Regs.
What they mean is that if the CY estimate is within £2.5k, HMRC use the PY income in the award calculation. However, HMRC still hold the CY figure, and will still send that CY figure to DWP, and the CY estimate will still be on the latest award notice sent by HMRC to the claimant.
Basically, when someone provides an estimate to HMRC for CY income, the HMRC computer system will take the new figures, and will automatically compare it to the PY figures, and use the appropriate figure.
You should be able to see all of this in practice if you look at the sample screenshots I once sent you.
If the claimant fails to declare that they care for someone on their initial UC declaration, then they subsequently declare via a change of circumstances that they have been a carer from their UC claim date, their TE will be recalculated.
Is this legally correct? I suppose it may be, based on Reg. 62(a)(i) or (ii).
(i) is probably more in point, because is a claimant “required to report” that they are a carer when they apply for UC?
What about if the caring genuinely starts during the first AP. Will they really still calculate the TE without the Carer Element?
I have a different question about the Carer Element and the TE which I would welcome thoughts on:
If there is a joint claim and a member of the couple is, say, caring for one of the children, and then at some point during the UC claim (from AP2 or later), they swap the carer around. Will the TE be eroded?
I think I’m correct to assume though that if the person being cared for changes, but there is no break in entitlement to the Carer Element, then that won’t erode the TE.
If there is a joint claim and a member of the couple is, say, caring for one of the children, and then at some point during the UC claim (from AP2 or later), they swap the carer around. Will the TE be eroded?
I think I’m correct to assume though that if the person being cared for changes, but there is no break in entitlement to the Carer Element, then that won’t erode the TE.
I agree, there’s no change in the elements to trigger erosion.
If there is a joint claim and a member of the couple is, say, caring for one of the children, and then at some point during the UC claim (from AP2 or later), they swap the carer around. Will the TE be eroded?
I think I’m correct to assume though that if the person being cared for changes, but there is no break in entitlement to the Carer Element, then that won’t erode the TE.
I agree, there’s no change in the elements to trigger erosion.
I wasn’t so clear in my post. The two paragraphs of my post which you’ve quoted refer to different scenarios.
The first is where the CARER changes. The second is where the disabled person being CARED FOR changes.
Are you saying there is no change in both scenarios?
I think that if there’s no change which causes TP to stop under Reg. 56, no migration day errors and no relevant increases in the assessment period then there’s no reason for erosion under 55(2). The maximum UC will be the same on the last day of the AP.
I think that if there’s no change which causes TP to stop under Reg. 56, no migration day errors and no relevant increases in the assessment period then there’s no reason for erosion under 55(2). The maximum UC will be the same on the last day of the AP.
Right. I’m hoping that’s right!
My worry is that DWP may say that a new Carer Element has been added, and that can’t be cancelled by the loss of the partner’s Carer Element.
I’d argue that 55(4) doesn’t bite. The elements are not assigned to an individual and the element and the amount haven’t changed.
I’m not so sure. It seems perverse to erode the transitional amount for this reason but I can see DWP saying this is no different from a case where a claimant switches from being a carer to having LCWRA.
Reg 55 refers to any of the amounts included under ss9-12 “including any of those amounts that is included for the first time”.
Section 12 says an award is to include such “amounts” for particular needs and circumstances as may be prescribed including “the fact that a claimant [singular] has regular and substantial caring responsibilities for a severely disabled person”.
Reg 29(1) says an award is to include “an amount” if “a claimant” has regular and substantial caring responsibilities, while para (2) says “an award is to include the carer element for both joint claimants if they both qualify for it”.
The table in Reg 36 provides a single amount and says nothing about couples versus single claimants.
I can well imagine DWP saying that the amount has ceased to be included for Claimant A and has been included for the first time for Claimant B. They will says that the language of s12 and the Regs is that a carer element is awarded for an individual claimant and UC(TP) Reg 55 is not looking at the sum of the elements, it is looking at each of them individually.