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HB and new higher earnings disregard and application for furloughed workers
One of the measures announced due to Covid-19 to increase provision of benefits was to provide an extra £20 per week earnings disregard under HB for those who meet the criteria for WTC, or would do if they claimed it.
However, the regulations are written in such a way that, rather than awarding this higher disregard for a furloughed employee by relying on what their award is from WTC, it is based on whether the person is in remunerative work. http://www.legislation.gov.uk/uksi/2006/213/schedule/4 (paragraph 17).
I have a client who normally works 16 hours per week and is entitled to WTC both as a lone parent and a disabled worker. They have been furloughed. HB is not awarding the extra £20 disregard, in fact, they have also taken away the normal extra £17.10 (so just the £25 lone parent disregard is being applied), and I believe this is because the claimant is not actually working.
Has anyone else come across this, do they think this local authority is interpreting the rules correctly and how might a successful reconsideration/appeal be approached? I feel like this is not the in the spirit of what was intended by this rule change i.e. to protect furloughed workers.
[ Edited: 14 May 2020 at 02:26 pm by Elliott S ]We have heard that DWP have told councils to treat furloughed workers as still being in remunerative work. See for example here.
One council replied to my query with the following, and I quote: “We are following the DWP’s advice and treating those furloughed as still in remunerative work and working their normal hours. This means that they can continue to qualify for the Additional Earnings Disregard based on the hours they normally work. Some customers may qualify for the disregard (which has been increased to £37.10 a week) even though they do not receive Working Tax Credit and therefore have not received the increased income that the change to the disregard was intended to offset. These customers may see an increase in their Housing Benefit entitlement.”
The HB Adjudication Circular here is not as clear. You could interpret para. 7 as saying that only when Sched 4 para 17(2)(a) applies will entitlement to the AED apply.
We have heard that DWP have told councils to treat furloughed workers as still being in remunerative work. See for example here.
One council replied to my query with the following, and I quote: “We are following the DWP’s advice and treating those furloughed as still in remunerative work and working their normal hours. This means that they can continue to qualify for the Additional Earnings Disregard based on the hours they normally work. Some customers may qualify for the disregard (which has been increased to £37.10 a week) even though they do not receive Working Tax Credit and therefore have not received the increased income that the change to the disregard was intended to offset. These customers may see an increase in their Housing Benefit entitlement.”The HB Adjudication Circular here is not as clear. You could interpret para. 7 as saying that only when Sched 4 para 17(2)(a) applies will entitlement to the AED apply.
Thanks Charles, this is really useful.
Given paragraph 7 doesn’t specifically mention Sched 4 para 17(2)(a) - why would you say it could be interpreted as only applying where that applies?
Clearly it wouldn’t for my client, so if that negates the effect of paragraph 7 then this could be why it has gone wrong for my client.
To be clear, I don’t think para 7 means this, as we know DWP intend such claimants to still be considered in remunerative work, per the first paragraph in my previous post.
The issue would only be if the LA interpret it wrongly, as could be the case with your client. Basically, they could think that the sentence “This means they will also continue to be entitled to the additional earnings disregard…” is referring back only to those with WTC entitlement as mentioned earlier in the paragraph, and where that WTC entitlement is a reason to give the AED - that is, where it includes the 30-hour element.
To be clear, I don’t think para 7 means this, as we know DWP intend such claimants to still be considered in remunerative work, per the first paragraph in my previous post.
The issue would only be if the LA interpret it wrongly, as could be the case with your client. Basically, they could think that the sentence “This means they will also continue to be entitled to the additional earnings disregard…” is referring back only to those with WTC entitlement as mentioned earlier in the paragraph, and where that WTC entitlement is a reason to give the AED - that is, where it includes the 30-hour element.
Its taken me some time to get my head around this way of interpreting it. Problem is I think the way the law is worded supports this thinking and the law will likely supersede any circular.
Nevertheless that circular gives me a tool with which to challenge the decision so I’ll give that a go. Thank you.
Happy to report the local authority very quickly backed down after being challenged on this and have agreed to return the additional earnings disregard and at the higher rate.