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Forum Home  →  Discussion  →  Universal credit migration  →  Thread

SDP case - Problems claiming tax credits following a change of circumstances.

PeteS
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Financial inclusion - NPT Homes, Neath

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One of our clients was a lone parent claiming ESA,HB and tax credits as well as PIP.
Her partner has moved in and he is working. She needs to claim for help with housing costs and for the children.

Her tax credits stopped when the partner moved in. She cannot claim UC as she was in receipt of SDP prior to her change of circumstances. She has attempted to reclaim tax credits but has been told on several occasions that she cannot do this and will have to claim UC. The case has been referred to the tax credits specialist team who have also said no to a tax credit claim.

Does anyone know what is the best way to pursue this? She at present doesn’t seem to be able to claim tax credits or UC and we don’t have a decision from tax credits to challenge.

Elliot Kent
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She can claim UC. The SDP Gateway only applies if you are either getting the SDP or you were getting it in the past month and you still satisfy the eligibility conditions for it. http://www.legislation.gov.uk/uksi/2019/10/made

Your client received SDP within the last month but no longer meets the eligibility conditions for it, so the SDP provisions don’t apply and it would be a case of both partners making a joint claim for UC.

PeteS
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Her claim had not ended during the previous month. She was still in receipt of ESA and HB with SDP in payment when she first attempted to add her partner to the tax credit claim.

HB Anorak
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HB Anorak
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So there are three existing awards: HB, ESA(ir) and Child Tax Credit.  Then her working partner moves in.  This affects the three existing benefits in different ways.  The end result is likely to be a UC claim, or the nose/face/spite do without option.

HB: this could survive them becoming a couple.  The SDP will be lost and the partner’s earnings will be added to the mix, so HB will almost certainly go down.  But there might be residual entitlement.

ESA: if the partner works 24 hours, income related ESA will stop and even if he doesn’t his earnings might well be sufficient to knock out ESA(ir) - the SDP is going to be removed from the applicable amount so he won’t need to earn that much.  But even so it is possible that there will be some residual ESA(ir) and passported full HB.

Tax Credits: but here’s the problem.  There is no support for children in ESA/HB and the single TC award has to end because she has become a member of a couple.  They cannot make a new CTC claim as a couple on the strength of her former entitlement to the single SDP because they do not, as a couple, meet the conditions for entitlement to the SDP.  If you are thinking that she can delay telling HB and DWP what has happened so that those benefits are still in payment to her as a single person, thus enabling them to reclaim Tax Credits as a couple, I do not think that is an option.  They are not entitled to the SDP, which is what UC(TP) Reg 4 requires.  Also, if she tries to pull that stunt, she will be rumbled through data matching and there will probably be overpayments of HB/ESA: since she won’t be entitled to UC for the o/p period (as she won’t have claimed it) she would be worse off overall.

I think a UC claim is advisable as the only way to get any money for the children’s living costs.  It’s either that or do without, leaving just wages and whatever ESA/HB remains without the SDP

zoeycorker
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Crap…
I’ve got a client I’m due to see next week in similar circumstances
She’s currently single on contribution based ESA with income related entitlement due to the SDP
Also getting DLA for one of her twins so getting underlying carer premium in her applicable amount as well as widowed parents allowance
Partner due to move in…
I thought they would avoid the UC due to her having had SDP previously
And I carelessly thought it wouldn’t be a new claim for tax credits just adding a partner to the claim.
She knows she will lose her HB because of his earnings but are they going to have to go through the nightmare of UC for the children’s allowances?

Charles
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You may struggle to get tax credits to agree to this, but I think her housing benefit (which should also include an SDP) continues as is until the end of the benefit week in which he moves in. That being the case, there should be a window of a few days in which they could make a joint claim for tax credits.

zoeycorker
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Charles - 03 April 2019 07:35 PM

You may struggle to get tax credits to agree to this, but I think her housing benefit (which should also include an SDP) continues as is until the end of the benefit week in which he moves in. That being the case, there should be a window of a few days in which they could make a joint claim for tax credits.

Can she do this despite the regs stopping new claims to tax credits?

Charles
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Yes, because for those few days she is still entitled to a benefit which includes an SDP.
I’m not necessarily recommending you try this though, as I wouldn’t like to speculate on the chances of you being successful with this!

Charles
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Elliot Kent - 01 April 2019 04:05 PM

Your client received SDP within the last month but no longer meets the eligibility conditions for it, so the SDP provisions don’t apply and it would be a case of both partners making a joint claim for UC.

HB Anorak - 01 April 2019 05:02 PM

They cannot make a new CTC claim as a couple on the strength of her former entitlement to the single SDP because they do not, as a couple, meet the conditions for entitlement to the SDP.

Just thinking about this again. The legislation only specifies that the claimant has to satisfy the conditions for an SDP if the legacy benefit award has ended. Here, the legacy benefit awards have possibly not ended, despite the SDP being removed from them.

What do you think?

Elliot Kent
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Charles - 04 April 2019 10:16 AM
Elliot Kent - 01 April 2019 04:05 PM

Your client received SDP within the last month but no longer meets the eligibility conditions for it, so the SDP provisions don’t apply and it would be a case of both partners making a joint claim for UC.

HB Anorak - 01 April 2019 05:02 PM

They cannot make a new CTC claim as a couple on the strength of her former entitlement to the single SDP because they do not, as a couple, meet the conditions for entitlement to the SDP.

Just thinking about this again. The legislation only specifies that the claimant has to satisfy the conditions for an SDP if the legacy benefit award has ended. Here, the legacy benefit awards have possibly not ended, despite the SDP being removed from them.

What do you think?

Isn’t it the inverse of Timothy’s point which the DWP concede according to Steve’s email?

A claimant who is “entitled to” but not in receipt of the SDP within an existing benefit award qualifies - so a claimant who is in receipt of, but not entitled to, the SDP within their existing benefit award doesn’t?

 

Charles
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But they were entitled to it at some point in the last month, no?

EDIT: I think I made my point badly. I don’t mean they should be able to stay on legacy because the SDP is still in payment despite her not being entitled.

[ Edited: 4 Apr 2019 at 10:36 am by Charles ]
Elliot Kent
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Oh okay - I see what you mean.

So the Regs say:

No claim may be made for universal credit on or after 16th January 2019 by a single claimant who, or joint claimants either of whom—

(a) is, or has been within the past month, entitled to an award of an existing benefit that includes a severe disability premium; and

(b) in a case where the award ended during that month, has continued to satisfy the conditions for eligibility for a severe disability premium.

They were entitled to an award of an existing benefit that included the SDP within the last month, they no longer are, but (b) does not operate because the condition in bold is not met. The award of benefit had not ended. So it isn’t relevant that they are no longer qualified for the SDP.

I suppose the other reading might be that “award” ought to be read contextually in a way which encompasses the SDP entitlement?

But I think that you might be right. This regulation is a real can of worms isn’t it?

I remember saying at the time that it really would have been better if they had just excluded anyone getting PIP or DLA from UC.

 

Charles
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Elliot Kent - 04 April 2019 03:05 PM

They were entitled to an award of an existing benefit that included the SDP within the last month, they no longer are, but (b) does not operate because the condition in bold is not met. The award of benefit had not ended. So it isn’t relevant that they are no longer qualified for the SDP.

I suppose the other reading might be that “award” ought to be read contextually in a way which encompasses the SDP entitlement?

But I think that you might be right. This regulation is a real can of worms isn’t it?

These were precisely the possibilities I had considered!