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UC Reg 73 - backdated Carers Allowance

Smithbull
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Universal Support, Citizens Advice Northumberland

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Hi, can someone please help me interpret Reg 73 when a client receives a backdated payment of CA. If I understand correctly it should be calculated as a monthly amount. So if a client rec’d a lump sum that would ordinarily mean their income is more than their max UC in that AP, the lump sum shouldn’t be treated that way and instead calculated monthly and apportioned to the relevant period it was paid for? If that’s the case is it retrospectively applied to previous AP’s potentially resulting in a previous overpayment of UC? (I hope I’ve worded that in a way that makes sense).

Also what about a scenario where a client claims CA part way through their 1st UC AP and receives 2-3 payments of CA. If it’s calculated monthly the client loses out as they haven’t actually had a full month’s payment of CA. Is that right?

Charles
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Accountant, Haffner Hoff Ltd, Manchester

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Yes, you are correct that it would be taken into account as unearned income over the period it was paid for. So yes, it would cause an overpayment in those earlier APs. Should be partly set off by the Carer Element though.

If CA starts in the middle of an AP, they pro-rate it accordingly. See Reg 73(2A). You can often gain through this, as the Carer Element would be included for the full AP.

Smithbull
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Universal Support, Citizens Advice Northumberland

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Thanks for clarifying for me.

seand
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Welfare rights officer - Dunedin Canmore HA, Lothians

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Charles - 15 September 2020 10:07 AM

Yes, you are correct that it would be taken into account as unearned income over the period it was paid for. So yes, it would cause an overpayment in those earlier APs. Should be partly set off by the Carer Element though.

Can you explain why you think this is the case Charles? The commentary to Reg 66 in vol V of Sweet & Maxwell states that it’s not clear how arrears of benefit should be treated. I just wondered if there’s been more recent developments than this…

Charles
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I haven’t got Sweet & Maxwell, but I’m surprised by this, and would be interested in knowing why they think it may not count as income in the earlier assessment periods.

I’ve always assumed it would count, as the claimant was entitled to the relevant benefit at that time, and the supersession rule here applies. See also the ADM para A4220.

seand
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Welfare rights officer - Dunedin Canmore HA, Lothians

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Charles - 15 September 2020 06:18 PM

I haven’t got Sweet & Maxwell, but I’m surprised by this, and would be interested in knowing why they think it may not count as income in the earlier assessment periods.

I’ve always assumed it would count, as the claimant was entitled to the relevant benefit at that time, and the supersession rule here applies. See also the ADM para A4220.

I was just going to launch into a lengthy explanation when I realised the issue is when someone receives backdate of a benefit that covers a period before the UC award starts. It’s not clear from the UC Regs whether these arrears should be ascribed to an assessment period,n treated as income going forward or treated as capital

If the backdate period is during a UC award, then yeah the normal supersession rules can apply

carry on…

roecab
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Welfare benefits supervisor - Roehampton CAB

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Would CA not speak to UC first and then calculate the arrears to not double pay for the same period?

That is what they do for legacy benefits, clients will normally get a letter before CA pay arrears to say that they are speaking to the local office (IS/IBJSA/IRESA) before paying the arrears, so not overpaid?

Would be interested to know if UC do not have the same procedure?

Thanks

Tara CAC
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Children's Centre Project: Citizens Advice Cornwall

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You’d think that’d be the logical way to do it but they don’t. This is my blurb

If the backdated carers is for a period during your uc claim your award will be recalculated generating an overpayment of 292pm (per full assessment, pro rata for part assessment) due to carers income they would have deducted from your uc if it had been in payment at the time.
If you haven’t already been getting the carer element this should also be added generating an underpayment of uc (162pm).
This 162 would be offset against the overpayment 292 making your total overpayment of uc 130 per full assessment from date of your carers allowance award.

roecab
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Welfare benefits supervisor - Roehampton CAB

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Tara,

Thanks for that, so advise cl’s don’t spend backdated CA, use to pay the overpaid UC or leave it and let it be recovered, with the problem then being the rate of recovery!

Cheers

Michael