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The UC ‘coronavirus bonus’ and sdp compensation
As we know, the £1040 bonus is intended to last for one year. Has anyone come across a situation where this increase in the basic rate simply eats into the sdp ‘compensation’ payment made late last year?
if it does, what will happen when the payment is withdrawn in 2021 - will the compensation be reinstated?
That’s an interesting point.
Let’s say we have a former support group ESA claimant living alone in a Tyneside private rental. In 19/20,, they would be receiving UC of £1047.92 plus the SDP payment of £120. Based on the proposed rates for 20/21, they would have received £1066.86 pcm base.
On the increased 20/21 rates, their base UC will be £1175.65 - an increase of £127.73 against 19/20.
Because the SDP compensatory payments are treated as though they were transitional elements under the MM regulations, the “relevant increase” of £127.73 is deducted from the compensatory payment of £120. That obviously nils it out, so no further SDP compensation would be paid.
Assuming that there is then a reversion to “normal” rates in 21/22 then the base UC for this claimant for that year might be something like £1077.53 pcm (assuming a 1% increase on the proposed rates for this year).
However because there is no legislation allowing the UC transitional element to be revived after it stops, no further SDP compensation would be paid and this claimant would be down about £90 pcm in 21/22 against 19/20.
That was my thinking, without doing the maths, but on some later digging, I found ADM memo 15/19. This has one throwaway line that the transitional SDP amount isn’t reduced by any subsequent changes to the UC award, which could mean that its protected protection!
But otherwise, I’m in agreement.
Oh hang on, I am wondering if this is even right at all because of the whole gubbins about a “conversion day”.
Are the regs and ADM Memo 15/19 not saying that the amount will remain fixed at the same amount until some, as yet undetermined point known as “conversion day” when the SDP compensation will become a transitional element?
So because the SSWP has not yet declared “conversion day”, our hypothetical claimant’s compensation isn’t treated as a transitional element and will instead remain fixed at £120.
(Conversion day also presumably being the day that Skynet unveils itself and the machines take over…)
Oh hang on, I am wondering if this is even right at all because of the whole gubbins about a “conversion day”.
Are the regs and ADM Memo 15/19 not saying that the amount will remain fixed at the same amount until some, as yet undetermined point known as “conversion day” when the SDP compensation will become a transitional element?
So because the SSWP has not yet declared “conversion day”, our hypothetical claimant’s compensation isn’t treated as a transitional element and will instead remain fixed at £120.
(Conversion day also presumably being the day that Skynet unveils itself and the machines take over…)
Conversion day surely means the day on which the claimant undergoes managed migration? There cannot be a transitional element before then. Meanwhile the SDP compo just floats above the regular UC award, including the temporary increase in the standard amount.
Well the claimant can’t undergo managed migration, because they already have naturally migrated. The “conversion day” is helpfully defined as “a day determined by the Secretary of State having regard to the efficient administration of universal credit” and ADM Memo 15/19 para 26 tells us “At present, no date for conversion day has been set” - something which does not appear to have changed.
But yes, the compo just floats above the award - something I had missed when I initially posted - so there shouldn’t be anything to worry about.
Just realised my reply doesn’t make sense, the claimant is already on UC. Ignore me!
LA Welfare Direct lite 9/2019 confirms at Q8 - the SDP transitional payment is separate to the UC award and does not affect ongoing payments
Tell you what, I’m glad we replaced all those complex benefits with this one simple one.