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Benefit cap and weekly pay
A UC claimant is exempt from the benefit cap if, during an AP, they have income of at least minimum wage x “16 hours per week, converted to a monthly amount by multiplying by 52 and dividing by 12” (Reg 82(1)(a) UC Regs).
What does this mean for workers who do the 16 hours and are paid weekly? I believe the DWP uses a figure of £569. Are they fine in a five payday AP, but capped in all the four payday APs? And if so, has anybody tried to challenge this?
It seems to me that the wording of Reg 82 suggests an argument that as well as calculating the cap level by the x52/12 method, it allows them to calculate the claimant’s earned income the same way (just for the purposes of assessing whether they should be capped).
The reason I’m asking is that I’ve just advised somebody how much better off they will be if they work 16 hours per week, but then realised they’re quite likely to be paid weekly in the jobs they’re applying for.
I think your analysis is right but I’m more than happy to be corrected!
Pulling at this thread I’m also concerned that this has a consequential impact when it comes to the grace period exemption, which looks back at whether the previous 12 months’ earnings met the same threshold.
& further to this I’m wondering could a client who has been exempt from the benefit cap in legacy benefits (working 16 hrs @ NMW + claiming WTC) be made redundant, claim UC but immediately be capped because it is linked to theoretical assessment periods over the previous year? Or am I over-reading (82)(3) here when it refers to ‘each of the 12 months immediately preceding that day’?
Be assured that you’re not the only ones who have spotted this problem.
CPAG has an ongoing case regarding precisely this in regards to a claimant who is paid 4-weekly, which you can read about here: https://cpag.org.uk/welfare-rights/legal-test-cases/current-test-cases/benefit-cap-and-those-paid-4-weekly The outcome of this case may well be of relevance to claimants being paid weekly too.
It always helps our cases progress if we have an idea of the scope of the problem, so do tell us about similar cases here: https://cpag.org.uk/policy-campaigns/early-warning-system
Pulling at this thread I’m also concerned that this has a consequential impact when it comes to the grace period exemption, which looks back at whether the previous 12 months’ earnings met the same threshold.
I think there’s a lot of thread pulling to be done here!
Be assured that you’re not the only ones who have spotted this problem.
CPAG has an ongoing case regarding precisely this in regards to a claimant who is paid 4-weekly, which you can read about here: https://cpag.org.uk/welfare-rights/legal-test-cases/current-test-cases/benefit-cap-and-those-paid-4-weekly The outcome of this case may well be of relevance to claimants being paid weekly too.
Excellent, thank you. I will let you know if my client gets weekly paid work. I will be letting them know about the problem they’re likely to have if they’re paid weekly. I was thinking that a DHP would be an option while any dispute was ongoing but I think the extra income from employment will make it quite hard to make a case for that.
[ Edited: 27 Jan 2020 at 04:37 pm by Timothy Seaside ]