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Forum Home  →  Discussion  →  Universal credit migration  →  Thread

Zero-earnings rule - further waiting period

simon_derbyshire
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Welfare Benefits - Derbyshire County Council

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Client’s loan for mortgage interest payments ceased due to earning a small amount from temporary work which has now ceased. DWP says he has to wait a further 9 months for any further loan payments - surely not!?

No decision notice issued (surprise!) I’m struggling to find guidance/regs on this - any ideas?
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Daphne
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Unfortunately there are no linking rules in UC so that is correct - any earnings and you not only lose LMI for that month but for the next 9 months too :(

It’s hard to point to regs as there is isn’t a reg that says no linking rules - it’s just not there!

F4041 in the ADM - https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/702970/admf4.pdf - confirms and points to UC Regs Schedule 5 para 5(3)

[ Edited: 4 Oct 2018 at 03:11 pm by Daphne ]
simon_derbyshire
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This will be why I’m struggling to find any guidance on it. Wow!
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Daphne
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Just edited and added a bit of guidance above!

Elliot Kent
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Daphne - 04 October 2018 03:08 PM

F4041 in the ADM - https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/702970/admf4.pdf - confirms and points to UC Regs Schedule 5 para 5(3)

Those are the regs for the UC Housing Costs Element though - the same rules don’t necessarily apply for LMI.

What appears from the LMI Regs is:

1) There is to be a “qualifying period” which will (normally) last for the first 9 months of the UC claim (definition under reg 2)
2) Loan payments can be offered to a claimant who has a liability for mortgage costs and no earned income (reg 3)
3) Where loan payments are offered and accepted and a charge is executed, they can be paid (reg 5)
4) The loan payments (normally) begin on the day after the end of the qualifying period (reg 8)
5) The loan payments continue indefinitely but are terminated inter alia if the claimant ceases to be eligible for an offer on the basis of earned income (reg 9)

It’s unclear what is supposed to happen if someone’s loan terminates under reg 9 because of earned income but then they want to claim again in the future now that they don’t have earned income (and so satisfy the conditions to be offered a loan under reg 3).

I don’t see how it is possible that they could need to serve the qualifying period again - because the qualifying period is defined only by reference to the start of the claim (c.f. the rules for SMI under the UC Regs).. Even if the loan payments have been terminated, the claim has continued through the whole period so the qualifying period condition is still met.

I am sure there is someone here who knows more about this than me.

 

Daphne
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oh yes - good point and sorry for the confusion…

And I agree with you Elliot - the qualifying period only seems to require that you’ve been entitled to UC for 9 months and not further requirement - so continues to meet that even if LMI stopped for a period.

MickD
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Judy Scott
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Given government repeated claims that there is no cliff edge in Universal Credit and that people who are in receipt of Universal Credit and LMI are not warned of the risk of losing their home should they earn so much as £1 - there is a strong case for a lobby to either change this rule or insist that claimants are notified.

Welfare Rights Advisers seem to be resigned to the latest scandalous iniquities that come to light. Where is your fighting spirit folks?

Surely CPAG, CAB or Disability Benefits Consortium should be picking this up and making strong representations to Ministers?

Judy Scott

Stuart
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Written answer from Justin Tomlinson on resetting SMI loan 39 week wait after receiving any earnings -

‘We operate a zero earnings rule for Universal Credit in Support for Mortgage Interest (SMI). Receiving any earned income during the wait period or during receipt of SMI loan payments will mean that the claimant will not receive loan payments. The zero earnings rule requires claimants to satisfy a waiting period of nine consecutive Universal Credit assessment periods with no earned income before the claimants can receive loan payments.

In addition to this we also work closely with UK Finance and Lenders to impress upon them importance of forbearance in the wait periods for SMI support.’

Elliot Kent
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I note that the Written Answer does not descend to the level of explaining where the legislation permits that approach.

LJF
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hi - any update on this ? whats the current position ?