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Johnson - The response - answer to parliamentary question

Gareth Morgan
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The solution to Johnson and 2 month’s pay, says PQ answer, is “..We intend to bring forward legislation to address the issues raised by the Court of Appeal, so that in future for cases affected by this issue monthly earnings can be reallocated to another assessment period, which means that only one set of earnings should be taken into account rather than two.” 

Isn’t that just moving the problem?

Elliot Kent
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I suppose we will have to see the regs, but it sounds like the intention is basically to legislate for the position in Johnson HC, i.e. that the DM can shift the payment to another AP if this results in a more accurate reflection of the reality.

If we take the archetypal Johnson situation (AP runs from last day to penultimate day and wages are paid monthly on the last banking day) then the problem can be solved by shunting one of the payments onto the next AP can’t it?

AP 31/03/20-29/04/20 includes the paydate on 31/03/20
AP 30/04/20-30/05/20 includes the paydates on 30/04/20 and 29/05/20
AP 31/05/20- 29/06/20 includes no paydates (next one being 30/06/20)

AP 30/06/20-30/07/20 includes the paydate on 30/06/20
AP 31/07/20-30/08/20 includes the paydates on 31/07/20 and 28/08/20
AP 31/08/20- 29/09/20 includes no paydates (next one being 30/09/20)

So if the DM just pretends that the payments made on 29/05 and 28/08 were made in the following AP, this resolves the narrow problem of the loss of the work allowance doesn’t it?

Or is there a counter-example where this doesn’t work?

Gareth Morgan
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How about this for APs and paydays:

30/09/2020 - 29/10/2020 1
30/10/2020 - 29/11/2020 ‬1
30/11/2020 - 29/12/2020 ‬1
30/12/2020 - 29/01/2021 ‬2
30/01/2021 - 26/02/2021 ‬1
27/02/2021 - 29/03/2021 0

You’d have to move it two APs.  Lots of questions, such as what happens if this person stops claiming in February?  What does this do to surplus earnings rules?

Elliot Kent
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That’s interesting Gareth, and they are all fair questions. I am sure that there will be a well-thought out, coherent and logical response to them in the regs.

In fairness, the High Court reasoning could not answer them either.

Gareth Morgan
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I think there will be a lot of better-off issues around changes of circumstance and when they are taken into account.

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Elliot Kent - 06 October 2020 04:51 PM

That’s interesting Gareth, and they are all fair questions. I am sure that there will be a well-thought out, coherent and logical response to them in the regs.

In fairness, the High Court reasoning could not answer them either.

In fairness, I don’t think the High Court are tasked with finding answers, that is the job of the legislators and the official in DWP who came up with this genius system.

BC Welfare Rights
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As a complete aside, why does Reg 21 set the Feb AP date at the 26th (or 27th in a leap year) rather than the 28th or 29th? I’ve never understood that.
Edit, sorry that should of course be the 27th (or 28th in a leap year)

[ Edited: 7 Oct 2020 at 12:54 pm by BC Welfare Rights ]
Charles
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I’ve also always thought it’d make more sense for AP’s to begin on the 1st of the next month when the claim date doesn’t exist in a particular month, rather than an earlier date in the month.

The way it is now could often mean someone has to wait 4 APs before getting the LCWRA element. For example, if the claim is made on 30/11, the relevant period will end 28/2 (or 29/2), and they will only get the LCWRA element from 30/3.
I haven’t seen this in practice though…

Daphne
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Legislation due to laid today according to written answer yesterday.

Second written answer gives more info -

The Court of Appeal ruled that the way the Department calculated Universal Credit awards involving earnings in an assessment period was a correct application of the regulations, but that not considering the impact on the specific cases of those paid calendar monthly who are affected a ‘a non-banking day salary shift’ was irrational. The legislation we are making today and laying tomorrow, revises those arrangements and provides a remedy that satisfies the Court of Appeal Judgment in the case of Johnson and Others. It will mean that in future for cases affected by this issue, monthly earnings will be reallocated to another assessment period, which means that only one set of earnings will be taken into account rather than two, and certain claimants will be able to benefit from any applicable work allowance.

 

Timothy Seaside
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https://www.legislation.gov.uk/uksi/2020/1138/contents/made

Reg 61 is replaced with a new version including…

Reallocation of reported payments
(5) Where it appears to the Secretary of State that a payment of employed earnings has been reported late, or otherwise reported in the wrong assessment period, the Secretary of State may determine that the payment is to be treated as employed earnings in the assessment period in which it was received.

(6) Where a person is engaged in an employment where they are paid on a regular monthly basis and more than one payment in relation to that employment is reported in the same assessment period, the Secretary of State may, for the purposes of maintaining a regular pattern, determine that one of those payments is to be treated as employed earnings in respect of a different assessment period.

Consequential adjustments
(7) Where the Secretary of State makes a determination under any of paragraphs (4) to (6), the Secretary of State may make such other adjustments to the calculation of the person’s employed earnings as may be necessary to avoid duplication or to maintain a regular payment pattern.

[ Edited: 20 Oct 2020 at 12:25 pm by Timothy Seaside ]
Gareth Morgan
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A few questions there:

What is “a regular monthly basis”?  Same date in the month, last working day of month, 4th Wednesday in the month etc?

“more than one payment in relation to that employment is reported in the same assessment period, the Secretary of State may, for the purposes of maintaining a regular pattern, determine that one of those payments is to be treated as employed earnings in respect of a different assessment period.”  Presumably the 1st payment but ... may?

“Consequential adjustments
(7) Where the Secretary of State makes a determination under any of paragraphs (4) to (6), the Secretary of State may make such other adjustments to the calculation of the person’s employed earnings as may be necessary to avoid duplication or to maintain a regular payment pattern.”  Presumably allows for a domino effect where the following month also has a payment within it.

Doesn’t handle the 4 weekly pay issue, where there will always be one AP in the year with 2 payments, or the weekly 5 paydays or fortnightly, 3 pay days.

Timothy Seaside
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Yes it is a bit vague about carrying over. And it only covers Johnson. I think it gives decision makers the room to make the right decision in these cases - and only allocate one lot of monthly pay to each AP. The word “may” suggests it is optional, but I think the Johnson judgment makes it very clear that the power should be used in similar cases - failure to do so would be irrational.

I think the consequential amendments give enough flexibility to deal with shunting payments along where there was already one payment in that AP.

I can’t immediately see any problems with surplus earnings, but maybe I need to think about that.

But what about a situation where UC ends due to a small amount of excess income in a month based just on payslip A. Payslip B is carried forward, but there is nowhere for it to carry to. If the claimant makes a new claim during the next AP I’m not sure how Payslip B could be introduced into the new claim. Payments can be moved between APs but can that extend to moving between awards?

Gareth Morgan
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The explanatory note seems clear about which earnings count - ” Paragraph (6) relates to calendar monthly paid employees who receive more than one payment in a single assessment period.”.

That seemingly excludes, last working day and 4th Wednesday type cycles.

Timothy Seaside
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Gareth Morgan - 20 October 2020 03:02 PM

The explanatory note seems clear about which earnings count - ” Paragraph (6) relates to calendar monthly paid employees who receive more than one payment in a single assessment period.”.

That seemingly excludes, last working day and 4th Wednesday type cycles.

I wouldn’t read it so restrictively (especially given the mischief it’s meant to be addressing). I would say “monthly paid” means “paid for a month of work” or “paid once per month” rather than paid at intervals of exactly one month.

I guess we’ll find out more in November when it comes into force. Slightly disappointing that we have to wait four weeks.

Gareth Morgan
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Agree it seems odd but the best definition I’ve found is:

Calendar Month means the period of time beginning on the numeric day in question in a calendar month and for Calendar Months thereafter, beginning on the earlier of (i) the same numeric day of the next calendar month or (ii) the last day of the next calendar month. Each Calendar Month shall end on the day immediately preceding the beginning of the next succeeding Calendar Month.

Charles
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Timothy Seaside - 20 October 2020 12:22 PM

Reallocation of reported payments
(5) Where it appears to the Secretary of State that a payment of employed earnings has been reported late, or otherwise reported in the wrong assessment period, the Secretary of State may determine that the payment is to be treated as employed earnings in the assessment period in which it was received.

Not really sure why this was needed. This could (and should) always have been sorted using the existing provisions. See: https://assets.publishing.service.gov.uk/media/59ba6554e5274a561339d3a3/CUC_0166_2017-00.pdf

Gareth Morgan
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Interesting, also, that Amos Toh from Human Rights Watch has had an FOI response saying that pay period info is passed across to DWP within RTI as part of the RTE data set.  Needed, of course, for the new regs to work.

Contrast that with what Carol Krahe, Policy Team Leader at the DWP, said in evidence during the Johnson hearing. (My emphases)

““9. DWP uses a system called Real Time Earnings (RTE) to
obtain a relevant subset of earnings information from the RTI
database. For the purpose of calculating UC, the DWP receives
a subset of the earnings information in order to calculate a
person’s UC award in each assessment period. The system is
built upon the basis that all relevant information is fed into the
RTE system for the calculation of UC. There are data protection
issues that regulate the information that can properly be
processed by DWP.

10. The information that is communicated to the UC system to
calculate the UC award does not include ‘payment pattern’ or
pay cycle information.
This information is not routinely
accessible to operational delivery staff when viewing what has
been accounted for in determining the UC award”

30. She continues:
It is not therefore possible with the current arrangements to
process the ‘pay cycle’ data as part of the UC award
. As I
indicated in my first statement, the DWP is considering reforms
in relation to pay cycles. However, this requires considerable
input from policy, legal and technical stakeholders. It is not
realistic to rely on the fact that HMRC is able to capture pay
cycle data to conclude that UC decision makers can approach the
calculations in the way suggested by the Claimants
(i.e. by
assuming that any salary payment which is paid with a 28-day
‘indicator’ will inevitably be paid in the same way on an ongoing
basis).”

Charles
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I have a feeling the new regs will not be implemented automatically, but on a manual basis when claimants complain. If so, they probably can get the info on a case-by-case basis as needed.

But let’s wait and see!

Ros
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CPAG’s head of stategic litigation Carla Clarke has set out what the new regs mean for claimants and asks people who are experiencing difficulties in getting their UC payment adjusted to get in touch -

New universal credit assessment period regulations

AlexJ
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Just to rekindle this issue on a slightly different note, has anyone had an appeal hearing yet on a Johnson-type case, where the UC decisions in question were made prior to the November 16th changes to the regulations? I have an appeal coming up and we have to rely on the findings of irrationality in Johnson (my client’s case is on all fours with Johnson - he is paid on the last working day of each month, his assessment period runs last day of each month to the penultimate day of the next month), but there are no alternative regulations in place that I can argue should be applied because the decisions in question were made several months ago. We asked for MRs and then appealed as soon as the decisions were made by the DWP, because we knew there was a test case in the pipeline .

I’ve had a read of CPAG’s views on this here (and indeed I have relied on their suggested MR request as a starting point for my submission): https://cpag.org.uk/welfare-rights/legal-test-cases/universal-credit-assessment-period-inflexibility. They helpfully suggest relying on the irrationality argument upheld in Johnson, alongside a human rights argument that the Johnson decision did not touch upon.

However, I’m wondering whether anyone has any practical experience of how FtTs are disposing of these cases, and if they are allowing them, on what grounds? My argument has a whiff of ‘please do something, but I’m not entirely sure what, because the regs have been clearly found to be unlawful, but there aren’t any alternative regs for us to rely on’. So I’m slightly apprehensive about what the Tribunal will make of it.

Many thanks on any thoughts/experiences/views on this issue.

Alex

Peter Turville
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In a similar vein.

We have just picked up a case where UC have ‘corrected’ a UC award following Johnson (described as due to a RTI complaint made by claimant at the time). Relevant period is pre amendment. But what they appear to have done is attributed the salary payment to the correct AP and raised an overpayment (due to no earnings originally taken into account) - but not re-calculated the following AP entitlement without the same earnings taken into account or paid arrears then due / ‘off set’ against the overpayment.

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AlexJ - 10 December 2020 03:28 PM

Many thanks on any thoughts/experiences/views on this issue.

Have you considered a DHP application? If you set it out in terms of a clear calculation of what has been lost, and an explanation about the lack of legal remedy, it might be quicker and more straightforward than an appeal.

I have a Johnson client who has already had to ask for a recalculation under the new rules. Haven’t had a response from UC yet.

Daphne
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Following last month’s stakeholder meeting, DWP have sent us a timeline of the process for dealing with cases where two salary payments are made in one assessment period -

The process is as follows:

• Claimant raises with Work Coach /Case Manager who refer to the Real Time Information (RTI) disputes team
• They use the information to defer earnings to the appropriate Assessment Period (AP).
• They let the Case Manager (CM) know to advise the claimant and take follow up actions.

The timeline is as follows:

• Aim to handle disputes involving 2 salaries in a single AP within 3 days. This is from receipt by the RTI Dispute Team through to outcome and correction of earnings on UC.
• This timeline may be extended by up to 3 days If salary values form part of the dispute and a referral to HMRC JMET required.
• Following receipt of the Dispute Outcome CMs need to action to recalculate and release any payment due to the claimant. 

The Operational Centre works with the RTI Dispute Network to support the timescales outlined above but variance occurs due to the volatility of RTI Dispute intake (volumes can double from one week to the next). The standard timeline for completion for this type of dispute would be 3 days and we have been aware of delays of 10 days on some cases, but this has not been the norm.

We have been working on improvements to increase flexibility in the RTI resource to manage this volatility in intake, reduce average clearance times and remove any prolonged delays in clearing cases.

 

Daphne
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Written answer on Friday which sets out the numbers of UC claimants who had wages assigned to different assessment periods in each week from 21 February 2021 to 1 April 2021…