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LMI qualifying period

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Elliot Kent
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I have a case where a gentleman claimed UC at the end of his job last August. He enquired about a Loan for Mortgage Interest (LMI) and was told that they would look at it after nine months had passed.

In February, and for reasons which have not been explained, he received a payment from his ex-employer of £20.65 which the DWP have taken as earned income.

The DWP have now (belatedly) considered whether he can have LMI and they have decided that he can’t. They say that in order to qualify, he must have a nine-month period in which he receives no earned income at all. They have said that the payment of earned income effectively “resets” the qualifying period and they will look at it again 9 months after the AP in which that payment was received.

Is this correct?

[ Edited: 13 Sep 2018 at 05:49 pm by Elliot Kent ]
stevemac
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Hi Elliot -  my understanding is that a client only has to have a UC entitlement for the 9 months QP and am unaware of any specific reg that states this QP ends and will re-start if any work done during these 9 months - methinks a challenge to UC is in order asking they detail the reg they rely on !


Elliot Kent
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Thanks Steve - that was what I was thinking but I have the DWP, the client’s MP and e.g. the Money Advice Service’s website telling me that I’m wrong.

As I see it, reg 2 sets the QP as nine APs from the start of the claim.

Reg 8 says that the loan starts from the day after the QP.

Regs 9 and 3(4) say that the loan either won’t be paid or ceases to be paid if the claimant has any earned income. But I read that as “forward looking”.

There’s nothing in the regs on the subject of earned income during the QP - I suspect that they could have written the regs in terms that the QP is 9 APs during which a loan would have been payable. But they didn’t as far as I can see.

Interested if anyone has any other thoughts.

MickD
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Looks like they are trying to read UC Regs Sch 5 reg 5 into the LMI regulations and it’s just not there.

Gareth Morgan
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Was he actually entitled to Universal Credit without housing costs, or is it only the loan?

Elliot Kent
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Gareth Morgan - 14 September 2018 04:39 PM

Was he actually entitled to Universal Credit without housing costs, or is it only the loan?

Yes, UC is his only income.

Elliot Kent
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MickD - 14 September 2018 01:52 PM

Looks like they are trying to read UC Regs Sch 5 reg 5 into the LMI regulations and it’s just not there.

Thanks Mick - I can definitely see that. I think that they certainly could have adopted that definition of a QP under the LMI Regs… but they didn’t.

[ Edited: 15 Sep 2018 at 10:17 am by Elliot Kent ]
Glenys
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Hi Elliot, Did you take this one to appeal? Just wondering what the outcome was? Thanks

ClairemHodgson
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did you ever, in fact, ask employer what the £20 was for anyway?

Elliot Kent
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Sorry but for various reasons, I don’t have any update on this.

LJF
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hi what is the latest on this? any update? thanks

Elliot Kent
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As indicated to other correspondents almost two years ago, there is no update and never will be as the case is long closed.

I still think that my interpretation is correct and nothing has happened to persuade me otherwise. It is a shame I could not take this one forward.

LJF
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thanks - no worries
strange this point has never been clarified through appeals/JR as to whether earnings during the 9 month waiting period do reset the clock or not?
do you know of any official updates/guidance?

Stainsby
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I recently took a similar case to Tribunal

I have attached a redacted version of my written submission and the Tribunal’s (similarly redacted) decision notice

Any comments on my “Johnson” arguments will be gratefully received

[ Edited: 9 Apr 2021 at 08:23 pm by Stainsby ]

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LJF
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Thanks so much. So tribunal accepted earnings during the 9 month waiting period for Mortgage Interest loan do not restart the clock. But they do for service charges help?

What should we do as a result of this in getting dwp to change their guidance which states that any earnings do reset the clock for LMI?

Elliot Kent
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I’m pleased that someone was able to run the LMI argument successfully! I really regretted that I couldn’t take this one forward…

It struck me that the DWP had lazily assumed that the “re-setting” rule operated for LMI as it had for SMI and nobody at DWP seemed to have actually read the regs. It is great work getting the DTJ to accept as much.

Stainsby - 08 April 2021 05:28 PM

Any comments on my “Johnson” arguments will be gratefully received

Well you did ask… I hope taken in the right spirit.

I think that the judge’s decision is entirely correct.

The submission elides the concepts of irrationality and discrimination. Secondary legislation which is irrational may be unlawful in a common law public law sense but it does not invoke the jurisdiction from RR because that arises from the Human Rights Act. So even if the Tribunal were satisfied that the legislation were common law irrational, it would not have a jurisdiction to do anything about it. If you wanted to persuade the tribunal to invoke the RR jurisdiction through irrationality, you would need to run the subsidiary argument that - having established that he legislation was irrational - it was unlawful and therefore there was a breach of Article 1 of Protocol 1 of the ECHR in that the appellant’s property rights were being interfered with otherwise than in accordance with law. There are a dozen potential complications - but the argument, I think, would need to follow the structure irrationality -> unlawfulness -> A1P1 breach -> HRA remedies.

The submission states that in Johnson, reg 54 was found to be discriminatory but this is not true. It was argued that reg 54 was discriminatory but the argument was parked because the claimants succeeded on common law irrationality which was enough to win the JR but would not have been enough to win at FtT. It has not been established conclusively that the Johnson situation is an instance of discrimination (let alone unlawful i.e. unjustified indirect discrimination).

The submission raises the idea that the regulation in question is discriminatory but it is necessary to identify a status against whom the discrimination arises. In Johnson, the claimants sought to cast the status net in terms of “women” or “parent” but neither would be options in this case without some sort of statistical evidence. The case law on what amounts to a status group who are capable of being discriminated against is complex. There was a fairly ambitious tertiary argument in Johnson that “being a person paid monthly wages on a non-fixed monthly date” was a status, but your case requires you to go further than that and say that “people who have employers who pay them small amounts of money very late” is a status. Then of course there is the question of whether any discrimination is justified on the basis of the need to have a bright line rule - it is hard to see how you can draw out any point of principle as to when it is okay to treat a payment as re-setting the housing costs clock, and when the payment is too small or too late such that it should be ignored.

That is not to say it would be impossible for some sort of human rights based argument to succeed on this issue. But if it is to succeed, it would be necessary to spell out far more clearly the logic of the argument rather than relying on Johnson, which ultimately does very little to help your case.