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Defective UC claim but Tax Credits stopped anyway - no appealable decision: advice needed!

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David Hornell
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We have now received appeal papers in relation to HB being terminated following UC claim. It is submitted by SOS that termination notice was issued following ID verification appointment at local jobcentre. The termination notice is a computer generated document and all that is in the appeal papers is the HB decision. We are therefore unable ascertain how/when the SOS is satisfied the claimant meets the basic conditions of Section 4 a-d. Presumably they will argue this is done by the ID verification appointment and they have an email from Jobcentre confirming this. I anticipate they will argue para 9 of Judge Jacobs decision “all that was required was an explanation of the system that led to the stop notice being issued”.
If this were the case are local jobcentres authorised to carry out this function on behalf of SOS of ensuring the claimant meets the basic conditions of Section 4 a-d? Or are they verifying the ID which is then referred to a decision maker to make a determination that Section 4 a-d is satisfied ? A comparison can be made when the jobcentre staff refer cases for decisions on sanctions. Sch 2 UC Claims and Payments refers to the use of intermediaries is this what Jobcentre staff functions are ?
Any views ?

HB Anorak
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I don’t think there is going to be a formal determination that s4(1)(a) to (d) are satisfied - like a separate piece of paper or computer screen where someone officially certifies this to be the case, but falling short of a full UC decision.  Satisfaction of s4(1)(a) to (d), like any other constituent determination informing an outcome decision, is in the mind of the Secretary of State and inherent in the evidence.  There will come a point when the Secretary of State thinks to her corporate self “well, that all seems to be in order, don’t need to ask any more questions about age and GB residence and student status”, but I don’t think there is any formal record of that stage having been reached.  Ideally there would be a suite of forms, possibly having the serial numbers WRA4(HB), WRA4(IS) and WRA4(TC) where these items are ticked off and sent across to the appropriate legacy benefit office.  But there isn’t.

Therefore what you are going to have to do in your case is persuade the Tribunal to infer from the evidence that HB was terminated prematurely - the way pastcaring has described it.

Jon (CANY)
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In this Q+A from DWP many moons ago, they said that stop notices only come after verification:

1. What triggers DWP to send HMRC a ‘stop notice’? ls it someone making a claim for UC, once DWP are satisfied they have passed verification checks and basic conditions or once DWP are satisfied they have satisfied the basic and financial conditions? (or something else)

UCDS send an automated stop notice to HMRC advising them a claim has been made once the verification interview has taken place.

This clearly isn’t how it works in practice, stop notices are being issued in error without verification being done. But I wonder if DWP are still putting this out as their “explanation of the system that led to the notice being issued”.

Daphne
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HB Anorak - 09 October 2018 11:29 AM

This means that either:

1. No UC claimant can ever fail the R2R test after a legacy benefit stop notice has been issued, or
2. Judge Jacobs was given incorrect evidence about the point when a stop notice is issued.

So let’s keep an eye open for adverse R2R decisions accompanying legacy stop notices: a legal impossibility according to Judge Jacobs

At the stakeholders meeting yesterday we were told that all new claims are now linked to CIS system right at start and if that shows HB or TC in payment a stop notice is sent straight away. I pointed out that they wouldn’t have checked right to reside at this point and the answer was that that would only affect a few cases and it was better to act promptly with the others!

EKS_COTTON
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David Hornell - 07 November 2018 09:55 AM

We have now received appeal papers in relation to HB being terminated following UC claim. It is submitted by SOS that termination notice was issued following ID verification appointment at local jobcentre. The termination notice is a computer generated document and all that is in the appeal papers is the HB decision. We are therefore unable ascertain how/when the SOS is satisfied the claimant meets the basic conditions of Section 4 a-d. Presumably they will argue this is done by the ID verification appointment and they have an email from Jobcentre confirming this. I anticipate they will argue para 9 of Judge Jacobs decision “all that was required was an explanation of the system that led to the stop notice being issued”.
If this were the case are local jobcentres authorised to carry out this function on behalf of SOS of ensuring the claimant meets the basic conditions of Section 4 a-d? Or are they verifying the ID which is then referred to a decision maker to make a determination that Section 4 a-d is satisfied ? A comparison can be made when the jobcentre staff refer cases for decisions on sanctions. Sch 2 UC Claims and Payments refers to the use of intermediaries is this what Jobcentre staff functions are ?
Any views ?

Can I ask what the outcome of the case was David?

EKS_COTTON
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Having read over the appeal bundle and this discussion board, I am not clear where my client stands. Wondered if I could get some views on my client’s case.  The appeal hearing is less than a month away.

Brief summary of facts again: Couple claiming WTC and CTC.  Made a claim for UC in august 2018 thinking it was just the new housing benefit.  They did input all the correct details in the UC claim but they did hit the submit button.  The day after the claim they received their tax credit award letter for 2018-19.  They found out the TC had been stopped because they tried to log into their TC account and were prevented from doing so.  Not until 15th October did they receive a TC annual award review letter and declaration form (award from April 2018 to August 2018).  They completed and sent back the declaration form then we sent their final TC award letter to which they put a MR in (on the grounds that the TC should have stopped) and that was rejected so now they are appealing.

Re. their appeal grounds;
- They withdrew their UC claim on 16/10/18. The stop notice was issued on 12/08/18 (see copy attached).  The judge Jacobs decision (CTC/1276/2018) suggested that there may be room to argue no UC claim made if it is withdrawn before the stop notice is issued.  So I dint think that helps them

- The only argument we could try is that SofS could not have been satisfied that the couple met the basic conditions for UC when the stop notice was issued because other than partially completing the UC claim and pressing the submit claim button, they didn’t do anything else to verify or pursue their claim and later withdrew it.  However HMRC have argued in their appeal bundle that the judge Jacobs decision (CTC/1276/2018) shows that the production of a stop notice is itself enough evidence to show that the Sof S was satisfied.  (Funny how the stop notice could be produced for the appeal bundle but not via a subject access request I made for the claimants or a FOI request)

So the stop notice shows NIC, Full name and DOB.  Not whether in GB or receiving education or not.  But according the law it seems that doesn’t matter?

I am a bit lost now on what I can argue at appeal.  Any thoughts?

PS.  The couple haven’t made a claim for UC even though I went through this as an option.  He is self-employed and it is likely the MIF will be applied.  She is working part time and does not want to be subject to conditionality.

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EKS_COTTON
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Jon (CHDCA) - 03 January 2019 11:23 AM

In this Q+A from DWP many moons ago, they said that stop notices only come after verification:

1. What triggers DWP to send HMRC a ‘stop notice’? ls it someone making a claim for UC, once DWP are satisfied they have passed verification checks and basic conditions or once DWP are satisfied they have satisfied the basic and financial conditions? (or something else)

UCDS send an automated stop notice to HMRC advising them a claim has been made once the verification interview has taken place.

This clearly isn’t how it works in practice, stop notices are being issued in error without verification being done. But I wonder if DWP are still putting this out as their “explanation of the system that led to the notice being issued”.

Hi Jon - this might be useful in an appeal argument… can you remember exactly what the provenance of the document was?  where is came from, who answered the questions etc?

Jon (CANY)
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EKS_COTTON - 03 July 2019 12:50 PM
Jon (CHDCA) - 03 January 2019 11:23 AM

In this Q+A from DWP many moons ago, they said that stop notices only come after verification:

1. What triggers DWP to send HMRC a ‘stop notice’? ls it someone making a claim for UC, once DWP are satisfied they have passed verification checks and basic conditions or once DWP are satisfied they have satisfied the basic and financial conditions? (or something else)

UCDS send an automated stop notice to HMRC advising them a claim has been made once the verification interview has taken place.

This clearly isn’t how it works in practice, stop notices are being issued in error without verification being done. But I wonder if DWP are still putting this out as their “explanation of the system that led to the notice being issued”.

Hi Jon - this might be useful in an appeal argument… can you remember exactly what the provenance of the document was?  where is came from, who answered the questions etc?

It was attached by Daphne here (from “operational stakeholders”):
https://www.rightsnet.org.uk/forums/member8347587824572ahfgdfaygdsyfug/10975/viewreply/43227/

David Hornell
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Ecks - Appeal was lost as client had completed verification process .Tribunal indicated they may have made different decision if client had not completed the verification process.

EKS_COTTON
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Thanks so much David.  When you say verification process - what exactly does that entail?

Paul_Treloar_AgeUK
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EKS_COTTON - 04 July 2019 10:34 AM

Thanks so much David.  When you say verification process - what exactly does that entail?

Scroll down this page Emma, I think this is what it means under the “Verifying your identity” section.

Making a claim

David Hornell
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As Paul’s link outlines.
Our client had attended the initial jobcentre appointment and provided the verification required to satisfy Section 4 (1) a-d Welfare Reform Act 2012.

EKS_COTTON
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We now have an issue with verification and would appreciate your views.

Correct me if I am wrong; it seems like it may be possible to sat least advance an argument that that a stop notice from sent from DWP to HMRC is not valid if the UC claim has not been verified in person or online as reg 4(1)(a) to (d) is not satisfied until identification has taken place (which can be done online or in person) ? and so as long as a UC lciam was not made, the TC claim could be reinstated?

This is what I was thinking.

I showed the Verifying your identity section on the link cited to the claimants.  https://www.understandinguniversalcredit.gov.uk/making-a-claim/how-to-claim/

One thinks she did manage to verify ID online via one of the companies mentioned, the other thinks he didn’t manage it and has an email which says

Dear Mr X

You need to confirm your identity to complete your application for Universal Credit.
Sign in to your Universal Credit account by 18 August 2018 to do this.
If you miss this deadline you will have to start a new application.

From,
Universal Credit

So what does this mean for the argument in this case?  It was a couple claim to UC. 

The claimants are also wanting to make something of the fact that they withdrew the UC claim.  This happened a few days before they received their final tax credits letter. I dont think Judge Jacobs comments on withdrawing a claim help us at all

11. I have considered whether the withdrawal of the claim had retrospective
effect so that there never was a claim. I am not aware of any decision in which
the retrospective effect of withdrawal has been considered. My reading of
regulation 8(1) is that it requires the simultaneous existence of a claim and the
Secretary of State’s satisfaction on the basic conditions. In this case, a claim was
made and the Secretary of State was satisfied while that claim existed. That is
sufficient. The subsequent withdrawal of the claimant cannot rewrite history by
pretending that the claim was never submitted in the first place.

Anyone have any ideas?

EKS_COTTON
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Hi everyone,

Update

We went to the hearing and argued, in a nutshell, that if the judge did not find in favour of our claimant, then the status quo re. stop notices would continue, which appears to be that a face to face interview is not required for ID verification, and this set up appears to be leading to a fraudulent abuse of the system.  See for example the recent BBC article on the abuse of advance payments where the person interviewed mentions providing her Id documents and a selfie for the fraudster (https://www.bbc.co.uk/news/uk-48887753).  On this point, the making a claim DWP guide ‘verifying your identity video says:

‘The company you choose will ask for your details and then do some checks to make sure no one else is pretending to be you. The more details you can give, the more likely it is they will be able to help. Details could include, your photo ID, bank statements or mobile phone bills. Some companies that you scan documents in using an app and then take a selfie to compare the images.’

Judgment has been reserved.  The Judge said he could see our side and HMRCs and that he needs to look into it more, may issue directions for DWP to join, etc.  He seemed fascinated that both we and HMRC were relying on LH to support our argument.

I think that my argument that regulation 8 requires face to face verification is quite weak because DWP can argue that they have the CIS system that provides them with enough information to know that the person who is claiming is who they say they are - but then again if this were the case, then why go on to require online or face to face verification of ID after?  Going back to LH, I think what judge Jacobs is saying is that there has to be a system that allows for people to be moved over to UC and the system in place is enough… only the bear basics need be involved, whether or not someone goes on to make a successful UC claim or withdraw it doesn’t matter etc. 

Thoughts anyone?

By the way - thanks so much to Rightsnet for providing all the detailed updates on the fraudulent activity which I could use in evidence. (https://www.rightsnet.org.uk/welfare-rights/news/item/dwp-estimates-that-10-per-cent-of-universal-credit-advances-are-potentially)

EKS

EKS_COTTON
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Hello all,

Finally had a decision on the case: the appeal was allowed.  Wanted to give some feedback on how the case of LH (Judge Jacobs) - CTC/1276/2018 - has been applied in practise, especially following all this UC (ID) fraud that has been going on.

Recap on the facts: this was a tax credit termination appeal.  The couple were in receipt of WTC/CTC and wanted to claim HB.  They were led online to UC instead.  They thought they were making a HB claim.  Mrs X made a claim for UC and verified her ID online.  The HMRC computer system print off showed her UC claim was made and a stop notice issued the same day.  Mr X made a claim the same day, but the data showed his stop notice wasn’t received until 4 days after.  He explained to me that he did not verify his ID online. The day before his stop notice was issued, Mrs X contacted HMRC several times indicating that she wanted to withdraw her claim.

I argued that (a) there was an attempt to withdraw before the stop notice issued and that UC claims can only be made jointly save for certain circumstances that don’t apply in this case (see section 2(1) WRA 2012 and Regulations 3(3) UC Regs 2013. The presenting officer argued that the stop notice for the couple was effective from the date the stop notice was received for Mrs X and that was enough for the couple claim to cease for tax credit purposes. 

The judge questioned Mr X on how he made the claim.  Mr X explained that he didn’t provide correct answers for some of it.  Although he hit the submit button, he then sought advice ASAP on how to retract his claim. The judge found that he did not complete his claim for UC and so Mrs Xs claim could not be treated as effective by virtue of s2(1) WRA + UC regs.

I also argued (b) that there is no explanation of how the system of stop notices work in LH, nor provided in the present case. Basically this info has to be provided by DWP and wasn’t in HMRCs appeal bundle.  the judge found that ‘stop notice referred to [in this case] are of no effect because neither the respondent [HMRC] or partner agencies have provided sufficient evidence to show that the basic condition in relation to the application for UC made by Mrs X were satisfied.’

I hope this is of some use to other advisers out there with similar cases.

Thanks to rightsnet discussion board and news feed for providing much needed advice and useful updates.

EKS