UC benefit cap grace period

Have a case where a self-employed couple previously earning good money have seen their earnings fall dramatically due to the coronavirus outbreak.  They still consider themselves self-employed and they have not permanently packed it in, but they have very little earnings at the moment and certainly less than 16x NMW x52/12.

DWP have said they do not qualify for a benefit cap grace period because it’s a new claim and they have not “ceased paid work”.  I am looking at Reg 82(2)(a):

(2) A grace period is a period of 9 consecutive months that begins on the most recent of the following days in respect of which the condition in paragraph (3) is met—

(a) a day falling within the current period of entitlement to universal credit which is the first day of an assessment period in which the claimant’s earned income (or, if the claimant is a member of a couple, the couple’s combined earned income) is < NMW x 16 x 12 / 52

I don’t see why the first day of a new UC award cannot satisfy that: it is the first day of an AP and it falls within a current period of UC entitlement.  Otherwise an utterly perverse situation would arise where a claimant with no earnings at all gets the grace period while a claimant with earnings 1p less than the target doesn’t - that’s hardly making work pay.  Or equally perverse, a claimant with 1p of earnings doesn’t get the grace period despite his/her situation being no different (bar that 1p) from the person who completely ceases paid work.

They will have an alternative argument that they have in fact ceased work, but surely Reg 82(2)(a) must cover someone who has some but not very much earned income for the first time in more than a year.

I think this is what Example 4 in the ADM is saying isn’t it?  Para E5053 here

In the month before the date of claim for UC did they have sufficient earnings? If not, then (although it is perverse) I think DWP are right, as although para (2)(a) is satisfied, para (3) isn’t.
EDIT: That’s obviously subject to the ceasing work argument.

It’s actually an interesting question as to what sufficient earnings would be for the month which straddles the date when the minimum wage changed (which it could well have done here). I think it could well be the new rate, so £604 for a month ending on or after 01/04/2020, and £569 for earlier months.

Thanks Charles

Yes the timing needs to be right so that para (3) is satisfied - but subject to that, do you agree in principle that a new claim could satisfy subpara (2)(a)?

Yes, I definitely do agree. It does seem to be confirmed by Example 4 (and Example 1, I think) in the ADM, as you say.

Thanks again Charles