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SDP transitional payments to convert to transitional elements on 8 October 2020
Ministerial statement just out confirms that SDP transitional payments in universal credit are to convert to transitional elements on 8 October 2020.
This means they will be subject to erosion under reg 55 of the UC (TP) Regs if other elements, apart from childcare, increase!
Ministerial statement just out confirms that SDP transitional payments in universal credit are to convert to transitional elements on 8 October 2020.
This means they will be subject to erosion under reg 55 of the UC (TP) Regs if other elements, apart from childcare, increase!
So, hypothetically and for example, if a person receiving UC with an SDP element is living with no housing costs but then moves into rented accommodation and is therefore now entitled to a housing element they would see the SDP element disappear if the value of the housing element exceeds the value of the SDP element. Have I understood that correctly?
Yes that’s my understanding :(
In your case Ian, they could even be left with a lower award if they have any earnings (due to the lower work allowance for those with housing costs)!
Thank you both for confirming.
Ministerial statement just out confirms that SDP transitional payments in universal credit are to convert to transitional elements on 8 October 2020.
This means they will be subject to erosion under reg 55 of the UC (TP) Regs if other elements, apart from childcare, increase!
So, hypothetically and for example, if a person receiving UC with an SDP element is living with no housing costs but then moves into rented accommodation and is therefore now entitled to a housing element they would see the SDP element disappear if the value of the housing element exceeds the value of the SDP element. Have I understood that correctly?
Very unpleasant.
You would hope that a total loss of SDP transitional protection due to an increase in housing costs (in particular where this was unavoidable due to care needs) would be a tough one for the Secretary of State to justify…
Potentially another area for Judicial Review I imagine…
There’s nowt like a bit of simplifying to unravel a few almighty complications.
Can I ask if this means that the SDP transitional element is treated the same as the other elements with regard to the calculation in benefit cap cases?
By that I mean maximum UC is calculated including SDP transitional element, prior to deductions for income and the application of the benefit cap?
Anyone with an SDP-derived UC supplement is by definition exempt from the cap as at the point of conversion to a transitional element, because continuing entitlement to the SDP supplement requires the claimant to be still getting PIP etc.
If the claimant subsequently ceases to be entitled to PIP and is not otherwise exempt from the cap (however unlikely that may be), then the way I read it they will not be capped because the amount of a UC transitional element is determined after accounting for the cap - see Reg 53(11) of the Transitional Provisions Regs. If the SDP compo is converted to a transitional element, Reg 53 is by-passed and there is no further provision to reduce the element because of the cap. The underlying UC award could be capped but the SDP transitional element will float on top of it as far as I can see. But this is unlikely to affect very many people in practice as most former SDP recipients will probably stay on PIP and/or continue to have LCWRA
Yes, I only thought afterwards that the client would likely still get PIP or LCWRA but in the event they didn’t the thing that threw me was Reg 52(2)
The transitional element
52.—(1) A transitional element is to be included in the calculation of an award if the total amount of any awards of existing benefits determined in accordance with regulation 53 (“the total legacy amount”) is greater than the amount of an award of universal credit determined in accordance with regulation 54 (“the indicative UC amount”).
(2) Where a transitional element is to be included in the calculation of an award, the amount of that element is to be treated, for the purposes of section 8 of the Act (calculation of awards), as if it were an additional amount to be included in the maximum amount under section 8(2) before the deduction of income under section 8(3).
Anyone with an SDP-derived UC supplement is by definition exempt from the cap as at the point of conversion to a transitional element, because continuing entitlement to the SDP supplement requires the claimant to be still getting PIP etc.
If the claimant subsequently ceases to be entitled to PIP and is not otherwise exempt from the cap (however unlikely that may be), then the way I read it they will not be capped because the amount of a UC transitional element is determined after accounting for the cap - see Reg 53(11) of the Transitional Provisions Regs. If the SDP compo is converted to a transitional element, Reg 53 is by-passed and there is no further provision to reduce the element because of the cap. The underlying UC award could be capped but the SDP transitional element will float on top of it as far as I can see. But this is unlikely to affect very many people in practice as most former SDP recipients will probably stay on PIP and/or continue to have LCWRA
I don’t agree.
There is nothing to say the benefit cap provisions in the UC Regs don’t apply to the full award including the transitional element.
The purpose of Reg 53(11) of the TP Regs is to stop someone getting a notional transitional element which could be used one day - either when other elements reduce or if they become exempt from the benefit cap.
Thanks Charles.
I was struggling to see how Reg 53(11) would ever result in a different amount from the indicative UC amount, give or take coppers in the monthly/weekly conversion. I can see how 53(11) is necessary to deal with cases where the legacy benefits other than HB exceeded the cap amount - as only HB was capped, it was possible to get Tax Credits above the level of the cap, so Reg 53(11) prevents that from being carried over into the transitional element. However, as the indicative UC amount is also calculated by reference to the cap I was assuming that was the cap done with for that claimant - having applied it to the UC indicative amount they wouldn’t then apply it again after any transitional element has been added. But I can see that isn’t actually spelt out anywhere.
Fortunately this is unlikely to apply to anyone in real life!
Thanks, guys. I did a couple of calculations on Quick Benefits with and without SDP TP and in both cases the amount of UC payable was capped at the same amount ie. there was no extra when TP was applied so I take from that (and your erudite explanations), the transitional element, whether SDP or not, is counted as just another element in the maximum UC amount now.
Can anyone clarify whether this CPAG briefing from October 2019 is still correct as it appears to suggest that SDP TP can continue if the qualifying benefit ends:
WHEN DO PAYMENTS COME TO AN END?
Once a determination has been made that a claimant is entitled to a transitional SDP amount, it is not necessary for all of the criteria for a transitional SDP amount to continue to be met throughout the remainder of the UC award. The regulations state that the transitional SDP amount is, following the determination that a claimant meets the criteria for the payment, to be payable ‘for each subsequent assessment period before the conversion day’. Guidance states that ‘even if the claimant’s circumstances change at a later date, the transitional SDP amount continues to be included in the UC award.’
I looked for the guidance in ADM15/19 but it appears to have disappeared.
Source: https://cpag.org.uk/welfare-rights/resources/article/transitional-sdp-amount
Payments are made indefinitely once the claimant has been found entitled to them. It doesn’t matter whether they subsequently cease to qualify for PIP or otherwise fall out of what would have been SDP entitlement. The payments will eventually be eroded due to the transitional protection rules.
If you want the regs for that - Sch 2 UC(TP)Regs, Para 1 is the source of your quote and provides for the payments to start. There is no provision for them to stop.
Many thanks. Elliot