Auto reclaim for UC is back.

DWP Confirm that #UniversalCredit claims stopped by higher earnings will not have to reclaim in following period, but auto-reclaim will happen.

“As part of this strategy, we have just written to the Committee explaining that we have laid the Universal Credit (Coronavirus) (Self-employed Claimants and Reclaims) (Amendment) Regulations 2020. These regulations have been brought in using the urgency provisions because HMRC has been able to introduce the Self Employment Income Support Scheme (SEISS) earlier than had originally been announced by the Chancellor of the Exchequer. The regulations clarify that the payment from the SEISS will be treated as self-employment income in the usual way, and that payments from the Coronavirus Job Retention Scheme to a self-employed person, to fund the pay of their employees’ will be ignored in the calculation of the Universal Credit award.

Where a payment from the Coronavirus Job Retention Scheme is used to fund earnings, the earnings of the employee will be taken into account in the calculation of entitlement to Universal Credit in the usual way. The intention being that payments to self-employed people and employees should mirror the way equivalent income is treated in Universal Credit.

These regulations also introduce an important easement which means that we will not automatically be closing claims where earnings exceed the claimant’s entitlement, thereby making it easier for awards of Universal Credit to be re-instated without the need for claimants to make a new claim. This also applies to people who are affected by the surplus earnings rules.”

Like Live Service - for how long?

This is a discretionary power though, isn’t Gareth? New reg 32 says ‘subject to any conditions the Secretary of State considers appropriate’.

Which seems to be confirmed by the language here: ‘we will not automatically be closing claims’.

So… if a client knew that they were going to be going back to actually making a profit in an assessment period, & therefore can see they will breach the surplus threshold again (ie once actual self-emp income in that AP & the surplus carried over are taken into account), they could ask the DWP not to treat them as reclaiming…?

But no right of appeal if refused.

I don’t yet have a client in this situation but given the wide range of self-employed people who’ve claimed UC in the last few weeks, it seems possible this scenario could arise.

Thanks Gareth, I had missed this one, another website update done

WillH - 29 May 2020 02:36 PM

So… if a client knew that they were going to be going back to actually making a profit in an assessment period, & therefore can see they will breach the surplus threshold again (ie once actual self-emp income in that AP & the surplus carried over are taken into account), they could ask the DWP not to treat them as reclaiming…?

You can read the formula as increasing the surplus earnings figure in that case, but I have doubts about whether that should actually apply.  If they renew the SEISS payment and put it in accounts next month, the I suppose we’ll find out. 

As to whether they will make manual determinations to not reclaim, and take into account the wishes of claimants?  Your guess as good as mine, I suppose we wait and see.

Does this mean that UC payments will be suspended (as opposed to closed) until the surplus is reduced?