Search rightsnet
Search options

Where

Benefit

Jurisdiction

Jurisdiction

From

to

Forum Home  →  Discussion  →  Universal credit administration  →  Thread

Johnson - The response - answer to parliamentary question

Gareth Morgan
forum member

Managing director - Ferret, Cardiff

Send message

Total Posts: 1737

Joined: 16 June 2010

The solution to Johnson and 2 month’s pay, says PQ answer, is “..We intend to bring forward legislation to address the issues raised by the Court of Appeal, so that in future for cases affected by this issue monthly earnings can be reallocated to another assessment period, which means that only one set of earnings should be taken into account rather than two.” 

Isn’t that just moving the problem?

Elliot Kent
forum member

Shelter

Send message

Total Posts: 1828

Joined: 14 July 2014

I suppose we will have to see the regs, but it sounds like the intention is basically to legislate for the position in Johnson HC, i.e. that the DM can shift the payment to another AP if this results in a more accurate reflection of the reality.

If we take the archetypal Johnson situation (AP runs from last day to penultimate day and wages are paid monthly on the last banking day) then the problem can be solved by shunting one of the payments onto the next AP can’t it?

AP 31/03/20-29/04/20 includes the paydate on 31/03/20
AP 30/04/20-30/05/20 includes the paydates on 30/04/20 and 29/05/20
AP 31/05/20- 29/06/20 includes no paydates (next one being 30/06/20)

AP 30/06/20-30/07/20 includes the paydate on 30/06/20
AP 31/07/20-30/08/20 includes the paydates on 31/07/20 and 28/08/20
AP 31/08/20- 29/09/20 includes no paydates (next one being 30/09/20)

So if the DM just pretends that the payments made on 29/05 and 28/08 were made in the following AP, this resolves the narrow problem of the loss of the work allowance doesn’t it?

Or is there a counter-example where this doesn’t work?

Gareth Morgan
forum member

Managing director - Ferret, Cardiff

Send message

Total Posts: 1737

Joined: 16 June 2010

How about this for APs and paydays:

30/09/2020 - 29/10/2020 1
30/10/2020 - 29/11/2020 ‬1
30/11/2020 - 29/12/2020 ‬1
30/12/2020 - 29/01/2021 ‬2
30/01/2021 - 26/02/2021 ‬1
27/02/2021 - 29/03/2021 0

You’d have to move it two APs.  Lots of questions, such as what happens if this person stops claiming in February?  What does this do to surplus earnings rules?

Elliot Kent
forum member

Shelter

Send message

Total Posts: 1828

Joined: 14 July 2014

That’s interesting Gareth, and they are all fair questions. I am sure that there will be a well-thought out, coherent and logical response to them in the regs.

In fairness, the High Court reasoning could not answer them either.

Gareth Morgan
forum member

Managing director - Ferret, Cardiff

Send message

Total Posts: 1737

Joined: 16 June 2010

I think there will be a lot of better-off issues around changes of circumstance and when they are taken into account.

Paul_Treloar_AgeUK
forum member

Information and advice resources - Age UK

Send message

Total Posts: 2300

Joined: 7 January 2016

Elliot Kent - 06 October 2020 04:51 PM

That’s interesting Gareth, and they are all fair questions. I am sure that there will be a well-thought out, coherent and logical response to them in the regs.

In fairness, the High Court reasoning could not answer them either.

In fairness, I don’t think the High Court are tasked with finding answers, that is the job of the legislators and the official in DWP who came up with this genius system.

BC Welfare Rights
forum member

The Brunswick Centre, Kirklees & Calderdale

Send message

Total Posts: 1164

Joined: 22 July 2013

As a complete aside, why does Reg 21 set the Feb AP date at the 26th (or 27th in a leap year) rather than the 28th or 29th? I’ve never understood that.
Edit, sorry that should of course be the 27th (or 28th in a leap year)

[ Edited: 7 Oct 2020 at 12:54 pm by BC Welfare Rights ]
Charles
forum member

Accountant, Haffner Hoff Ltd, Manchester

Send message

Total Posts: 809

Joined: 27 February 2019

I’ve also always thought it’d make more sense for AP’s to begin on the 1st of the next month when the claim date doesn’t exist in a particular month, rather than an earlier date in the month.

The way it is now could often mean someone has to wait 4 APs before getting the LCWRA element. For example, if the claim is made on 30/11, the relevant period will end 28/2 (or 29/2), and they will only get the LCWRA element from 30/3.
I haven’t seen this in practice though…

Daphne
Administrator

rightsnet writer / editor

Send message

Total Posts: 2837

Joined: 14 March 2014

Legislation due to laid today according to written answer yesterday.

Second written answer gives more info -

The Court of Appeal ruled that the way the Department calculated Universal Credit awards involving earnings in an assessment period was a correct application of the regulations, but that not considering the impact on the specific cases of those paid calendar monthly who are affected a ‘a non-banking day salary shift’ was irrational. The legislation we are making today and laying tomorrow, revises those arrangements and provides a remedy that satisfies the Court of Appeal Judgment in the case of Johnson and Others. It will mean that in future for cases affected by this issue, monthly earnings will be reallocated to another assessment period, which means that only one set of earnings will be taken into account rather than two, and certain claimants will be able to benefit from any applicable work allowance.

 

Timothy Seaside
forum member

Housing services - Arun District Council

Send message

Total Posts: 319

Joined: 20 September 2018

https://www.legislation.gov.uk/uksi/2020/1138/contents/made

Reg 61 is replaced with a new version including…

Reallocation of reported payments
(5) Where it appears to the Secretary of State that a payment of employed earnings has been reported late, or otherwise reported in the wrong assessment period, the Secretary of State may determine that the payment is to be treated as employed earnings in the assessment period in which it was received.

(6) Where a person is engaged in an employment where they are paid on a regular monthly basis and more than one payment in relation to that employment is reported in the same assessment period, the Secretary of State may, for the purposes of maintaining a regular pattern, determine that one of those payments is to be treated as employed earnings in respect of a different assessment period.

Consequential adjustments
(7) Where the Secretary of State makes a determination under any of paragraphs (4) to (6), the Secretary of State may make such other adjustments to the calculation of the person’s employed earnings as may be necessary to avoid duplication or to maintain a regular payment pattern.

[ Edited: 20 Oct 2020 at 12:25 pm by Timothy Seaside ]
Gareth Morgan
forum member

Managing director - Ferret, Cardiff

Send message

Total Posts: 1737

Joined: 16 June 2010

A few questions there:

What is “a regular monthly basis”?  Same date in the month, last working day of month, 4th Wednesday in the month etc?

“more than one payment in relation to that employment is reported in the same assessment period, the Secretary of State may, for the purposes of maintaining a regular pattern, determine that one of those payments is to be treated as employed earnings in respect of a different assessment period.”  Presumably the 1st payment but ... may?

“Consequential adjustments
(7) Where the Secretary of State makes a determination under any of paragraphs (4) to (6), the Secretary of State may make such other adjustments to the calculation of the person’s employed earnings as may be necessary to avoid duplication or to maintain a regular payment pattern.”  Presumably allows for a domino effect where the following month also has a payment within it.

Doesn’t handle the 4 weekly pay issue, where there will always be one AP in the year with 2 payments, or the weekly 5 paydays or fortnightly, 3 pay days.

Timothy Seaside
forum member

Housing services - Arun District Council

Send message

Total Posts: 319

Joined: 20 September 2018

Yes it is a bit vague about carrying over. And it only covers Johnson. I think it gives decision makers the room to make the right decision in these cases - and only allocate one lot of monthly pay to each AP. The word “may” suggests it is optional, but I think the Johnson judgment makes it very clear that the power should be used in similar cases - failure to do so would be irrational.

I think the consequential amendments give enough flexibility to deal with shunting payments along where there was already one payment in that AP.

I can’t immediately see any problems with surplus earnings, but maybe I need to think about that.

But what about a situation where UC ends due to a small amount of excess income in a month based just on payslip A. Payslip B is carried forward, but there is nowhere for it to carry to. If the claimant makes a new claim during the next AP I’m not sure how Payslip B could be introduced into the new claim. Payments can be moved between APs but can that extend to moving between awards?

Gareth Morgan
forum member

Managing director - Ferret, Cardiff

Send message

Total Posts: 1737

Joined: 16 June 2010

The explanatory note seems clear about which earnings count - ” Paragraph (6) relates to calendar monthly paid employees who receive more than one payment in a single assessment period.”.

That seemingly excludes, last working day and 4th Wednesday type cycles.

Timothy Seaside
forum member

Housing services - Arun District Council

Send message

Total Posts: 319

Joined: 20 September 2018

Gareth Morgan - 20 October 2020 03:02 PM

The explanatory note seems clear about which earnings count - ” Paragraph (6) relates to calendar monthly paid employees who receive more than one payment in a single assessment period.”.

That seemingly excludes, last working day and 4th Wednesday type cycles.

I wouldn’t read it so restrictively (especially given the mischief it’s meant to be addressing). I would say “monthly paid” means “paid for a month of work” or “paid once per month” rather than paid at intervals of exactly one month.

I guess we’ll find out more in November when it comes into force. Slightly disappointing that we have to wait four weeks.

Gareth Morgan
forum member

Managing director - Ferret, Cardiff

Send message

Total Posts: 1737

Joined: 16 June 2010

Agree it seems odd but the best definition I’ve found is:

Calendar Month means the period of time beginning on the numeric day in question in a calendar month and for Calendar Months thereafter, beginning on the earlier of (i) the same numeric day of the next calendar month or (ii) the last day of the next calendar month. Each Calendar Month shall end on the day immediately preceding the beginning of the next succeeding Calendar Month.

Charles
forum member

Accountant, Haffner Hoff Ltd, Manchester

Send message

Total Posts: 809

Joined: 27 February 2019

Timothy Seaside - 20 October 2020 12:22 PM

Reallocation of reported payments
(5) Where it appears to the Secretary of State that a payment of employed earnings has been reported late, or otherwise reported in the wrong assessment period, the Secretary of State may determine that the payment is to be treated as employed earnings in the assessment period in which it was received.

Not really sure why this was needed. This could (and should) always have been sorted using the existing provisions. See: https://assets.publishing.service.gov.uk/media/59ba6554e5274a561339d3a3/CUC_0166_2017-00.pdf

Gareth Morgan
forum member

Managing director - Ferret, Cardiff

Send message

Total Posts: 1737

Joined: 16 June 2010

Interesting, also, that Amos Toh from Human Rights Watch has had an FOI response saying that pay period info is passed across to DWP within RTI as part of the RTE data set.  Needed, of course, for the new regs to work.

Contrast that with what Carol Krahe, Policy Team Leader at the DWP, said in evidence during the Johnson hearing. (My emphases)

““9. DWP uses a system called Real Time Earnings (RTE) to
obtain a relevant subset of earnings information from the RTI
database. For the purpose of calculating UC, the DWP receives
a subset of the earnings information in order to calculate a
person’s UC award in each assessment period. The system is
built upon the basis that all relevant information is fed into the
RTE system for the calculation of UC. There are data protection
issues that regulate the information that can properly be
processed by DWP.

10. The information that is communicated to the UC system to
calculate the UC award does not include ‘payment pattern’ or
pay cycle information.
This information is not routinely
accessible to operational delivery staff when viewing what has
been accounted for in determining the UC award”

30. She continues:
It is not therefore possible with the current arrangements to
process the ‘pay cycle’ data as part of the UC award
. As I
indicated in my first statement, the DWP is considering reforms
in relation to pay cycles. However, this requires considerable
input from policy, legal and technical stakeholders. It is not
realistic to rely on the fact that HMRC is able to capture pay
cycle data to conclude that UC decision makers can approach the
calculations in the way suggested by the Claimants
(i.e. by
assuming that any salary payment which is paid with a 28-day
‘indicator’ will inevitably be paid in the same way on an ongoing
basis).”

Charles
forum member

Accountant, Haffner Hoff Ltd, Manchester

Send message

Total Posts: 809

Joined: 27 February 2019

I have a feeling the new regs will not be implemented automatically, but on a manual basis when claimants complain. If so, they probably can get the info on a case-by-case basis as needed.

But let’s wait and see!

Ros
Administrator

editor, rightsnet.org.uk

Send message

Total Posts: 1277

Joined: 6 June 2010

CPAG’s head of stategic litigation Carla Clarke has set out what the new regs mean for claimants and asks people who are experiencing difficulties in getting their UC payment adjusted to get in touch -

New universal credit assessment period regulations