Kafka, LCTR scheme, legacy benefit ‘overlapping payments’ recovered under UC(TP)Reg 10 & double recovery
This follows on to an extent from https://www.rightsnet.org.uk/forums/viewthread/12339/
The following is not an extract from a work by Kafka.
One of our LA’s uses for UC claimants a reduction scheme based on the claimants ‘UC income’ falling within specified income bands to determine a banded % CT reduction rather than a traditional tapered excess income scheme. There are some other LA’s who use similar banded income schemes.
The claimant’s ‘UC income’ used in the LCTRS is based on the UC standard allowance plus certain other income taken into account under UC such as earnings and other benefits to determine within which income band the claimant falls and therefore by which % band their CT liability will be reduced (100/75/50/25 or nil). Which may be a simpler but cruder scheme for the LA to administer.
However, because UC(TP)Reg 10 treats ‘overlapping payments’ overpayments of a legacy benefit as ‘income’ in the calculation of UC (they appear in the ‘other benefits’ section of the UC payment statement as HB, ESA etc) the LCTRS includes this overpayment recovery as ‘income’ in their calculation of ‘UC income’ under the scheme rules .
In the case of an ‘overlapping payment’ overpayment of HB this means the relevant LA notifies UC of the ‘overlapping payment’ overpayment. UC recovers it under UC(TP)Reg 10. and records it as ‘other income’ in UC payment. The LA then use the claimant UC income figure including that overpayment (treated as ‘income’ in UC) to re-calculate LCTRS and reduce the LCTR award accordingly (if the change in ‘UC income’ is enough to change the income band) and thus increase the claimants CT liability as a result! If the ‘overlapping payment’ is, for example, ESA the result is the same.
The overpayment is in effect being recovered from UC and then again in some cases by a reduction in LCTR support.
Advisers in other areas where a council uses a banded income / banded reduction in their LCTR scheme for UC claimants may wish to check this does not happen under their local scheme (they are not all the same so may not lead to the same impact).
Yet another simplification due to UC![ Edited: 10 Jan 2019 at 02:50 pm by Peter Turville ]
that is kafka…..
that is kafka…..
Well, yes! I should have noted that they are the same clients as my post https://www.rightsnet.org.uk/forums/viewthread/13890/ and there is more including a https://www.rightsnet.org.uk/forums/viewthread/13877/ issue ........
beggars belief really except sadly all to predictable[ Edited: 11 Jan 2019 at 11:07 am by Peter Turville ]