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If earning under Permitted Work and transferred to Universal Credit a WARNING FOR CLIENTS

 

Judy Scott
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You may have spotted this folks but just in case.

People in receipt of ESA will be starting to be transferred to Universal Credit. There are two pitfalls which apply to people earning part-time which is allowed in ESA.

People who are in receipt of Employment and Support Allowance are allowed if they get prior permission, to earn up to but not more than £125.50 a week. It is called Permitted Work.

When they are transferred to Universal Credit the earning limit is reduced to £125.28 a week (the National Minimum wage x 16 hrs) although the government claim the cliff edge has been removed. In this instance they are not automatically stopped their benefit but they will have their entitlement reviewed. And as so many mistakes are made there is a high risk of losing the element for ‘limited capacity for work’ of £29 a week. And being required to job search constantly or be sanctioned.

This could happen because they continue to earn as is allowed by the Permitted Work limit. And they are earning 23p too much.

Oddly this also applies to people who receive DLA or PIP or AA. I don’t understand this part.

Others who have not yet been assessed as yet as having limited capability for work and are earning £125.28 or more a week will automatically not qualify for being assessed for a WCA.when transferred to Universal Credit.

See Universal Credit Regulations reg 41.

And people receiving mortgage interest (or loan) will if they continue to earn a penny - as allowed for Permitted Work but reduced over £20 a week - have this stopped for 9 months. See Universal Credit Regulations Schedule 5. Housing costs elements for owner occupiers.

Can you publicise this scenario? Warn your clients?
Can anyone take this up and lobby against this or at least insist people are warned

      [ Edited: 8 Sep 2018 at 10:24 am by Judy Scott ]

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Daphne
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My understanding is that if a claimant already has LCW/LCWRA on migration to UC then that continues to apply under reg 19 of the UC (Transitional Provisions) regs 2014.

The status isn’t lost automatically but the DWP may carry out a new WCA and could find them fit for work on the basis of that. But of course they always carry out a new WCA whether you’re working or not.

If someone hasn’t previously been assessed under the WCA and they are earning over the threshold then they can be referred for a WCA but only if they are getting PIP/DLA/AA (reg 41(2)(a)) - I think that’s the bit about PIP/DLA/AA that you are referring to.

     
Judy Scott
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Daphne thanks for this. Reg 41 is confusing.

The CPAG Welfare Rights Bulletin page 4 written by Simon Osborn gives another understanding. See para Work and Study.

My query is also about the amount of earnings. Permitted Work in ESA allows £125.50 week.
Universal Credit with a LCW has earnings at ‘The National Minimum Wage Regulations x 16hrs’ which actually gives £125.28 a week if not rounded up.

This could lead to a person on ESA who is earning £125.50 a week who is transferred to UC with earnings of £125.28 a week or more triggering an assessment IF I have understood the reg that is.

I am trying to ask for clarification from DWP at a senior level. Does anybody have a contact?

     
Peter Turville
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There will also be issues regarding ESA ‘permitted work’ earnings and migrating to UC because the UC earnings allowances are less than the PW limit. For claimants who are naturally migrated and are undertaking PW they will almost certainly be worse off under UC before considering the additional loss of SDP/EDP etc. (or the ‘disabled worker’ element of WTC).

I did some training prior to FSUC roll out locally for an organistaion that provides ‘supported permitted work’ and a key part of their funding is to ‘progress’ clients from PW to ‘full-time’ work and Working Tax Credits. We did some illustrative figures to demonstate the ‘losses’ their clients could suffer under UC new claims / ‘natural migration’. For example - still in assessement period, already have LCFW or LCFWRA, have SDP/EDP, with / without housing costs, earnings received less than monthly, earnings increase above the ‘relevant threshold’ etc. etc.

That was without considering the impacts of ‘manged migration’ on this client group - remember its all about simplification!

 

     
Chrissum
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Daphne - 10 September 2018 10:57 AM

If someone hasn’t previously been assessed under the WCA and they are earning over the threshold then they can be referred for a WCA but only if they are getting PIP/DLA/AA (reg 41(2)(a)) - I think that’s the bit about PIP/DLA/AA that you are referring to.

So am I right in thinking that if someone is in receipt of PIP and earns over the threshold as well as being recently assessed as having LCWRA, they get to keep the LCWRA component without the earnings cap?
My client has recently started her UC journey (July), works in 4 jobs (earns approx. £600 pcm) all declared, receives PIP. Completed a UC50 and was found to have LCWRA on papers only.

     
Daphne
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Yes that’s my understanding