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Forum Home  →  Discussion  →  Universal credit administration  →  Thread

23-year-old on contractual sick pay - when to claim UC?

Josh
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Major Trauma Signposting Partnership, Citizens Advice Manchester

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The client is a 23-year-old who has suffered major injuries following an assault. He’s likely to have LCWRA for at least year. His employer is paying him full pay at the moment (c.£1600pm) but this will run out at some point - client isn’t yet sure when, his father is checking for him. After this contractual sick pay has run out they’ll presumably move him to statutory sick pay.

When should the client claim UC?

If claims now, his earnings from CSP - and even, later, SSP - will mean he gets a £0 payment, and I don’t know if they’ll close his UC if this continues for several months.

Or perhaps he should he claim today, so that the lengthy WCA can go ahead as soon as possible and he can get the LCWRA element as early as allowed…

Any advice very much appreciated.

James Craig
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I can’t find chapter and verse for this, but I believe that your UC claim will be kept open if you have no entitlement to a payment but:
- you are having a WCA; and
- if you are found to have LCWRA then you will after three months have an entitlement to a payment.

It’s worth remembering that your client will, if he is found to have LCWRA, not only become entitled to the LCWRA element after three months, but will get a £515 work allowance, I think immediately he has been assessed. This means that he would be entitled to some UC if his pay goes down to SSP, even if this happens before the LCWRA element is added.

If his net earnings are £1,600 per month then by my calculations he would just fall short of a payment entitlement if this level of pay continued after the LCWRA element were awarded, but it’s very close - if his earnings were £50 less then he would have a small entitlement.

Josh
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Thank you James!

A plot twist - the client is likely eligible for new-style ESA. I have advised he claim this 3 months before his SSP ends, i.e. three months from the date of his injury.

I’ve also advised he claim UC once his CSP ends. Based on what you’ve said, he could put in a UC claim now and get the ball rolling with the WCA, even if UC pays £0 for the time being. However, another adviser has told me that the WCA process is smoother for ESA claimants than UC ones, so it’s probably better for the client to start his ESA claim first if UC would make him no better off financially.

Finally, I’ve asked he (or rather his father) find out when his CSP ends, and how much his last few paychecks will be.

I am finding this a surprisingly messy area of advice - for something that must happen quite often - so I really appreciate your input.

[ Edited: 10 Sep 2021 at 01:53 pm by Josh ]
James Craig
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I’ve just found the chapter and verse - it’s UC Regulation 28(7), described on page 42 of the CPAG WB Handbook, which says that if your earnings or other deductions mean you aren’t entitled to UC because you don’t yet have the LCWRA element as you are still in the three month waiting period, you are still entitled to UC at the minimum amount of £0.01.

I got my calculations slightly wrong before, because I failed to remember that your client will only get the under 25 standard UC allowance, now reduced to £257. The maximum CSP amount that would still give him some entitlement to UC (once the LCWRA element is added) is around £1,467 per month, I think.

Ianb
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Is there also a problem that while being paid that level of contractual sick even if he applied for UC he would not be referred for a WCA anyway (regardless of whether or not there would be UC entitlement if the LCWRA element were payable).

Josh - 10 September 2021 09:52 AM

After this contractual sick pay has run out they’ll presumably move him to statutory sick pay.

Whether or not SSP is payable after contractual sick pay runs out will depend on how long the contractual sick pay has been paid for.

[ Edited: 10 Sep 2021 at 04:38 pm by Ianb ]
Josh
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Ianb - 10 September 2021 04:35 PM

Is there also a problem that while being paid that level of contractual sick even if he applied for UC he would not be referred for a WCA anyway (regardless of whether or not there would be UC entitlement if the LCWRA element were payable).

I thought as much, but James’ helpful comment above seems to indicate that wouldn’t be the case. Can you think of any other reason why it might be?

Ianb
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Josh - 10 September 2021 05:26 PM
Ianb - 10 September 2021 04:35 PM

Is there also a problem that while being paid that level of contractual sick even if he applied for UC he would not be referred for a WCA anyway (regardless of whether or not there would be UC entitlement if the LCWRA element were payable).

I thought as much, but James’ helpful comment above seems to indicate that wouldn’t be the case. Can you think of any other reason why it might be?

Upon reflection I think the question of a WCA referral is not immediately relevant.

However based on current earnings even if LCWRA is included there is still no UC entitlement (as per James post at #3) so your client doesn’t appear to meet the conditions for UC award being treated as 0.01p.

Nonetheless I admit I am having difficulty interpreting more generally how regulations 28 and 41 interact for claimants with earnings over the threshold.

Regulation 28 appears to say that in such a case the relevant period starts at the start of the UC claim. The relevant period will end after three months. Let’s say earnings drop after two months and claimant is then referred for WCA and found to have LCWRA. Does the LCRA element become payable from the fourth AP of the claim? It appears so. However I am not clear that the regulation actually requires the claim to be kept open if the relevant period has ended but the WCA has not been completed.

If earnings have continued at same level throughout the first three months and no WCA referral made the claim will presumably be closed.

(Most of my clients are automatically entitled to be treated as having LCWRA so even if in work the earnings threshold doesn’t apply so haven’t had to grapple with this.)

[ Edited: 10 Sep 2021 at 08:35 pm by Ianb ]
Ruth_T
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SSP generally forms part of contractual sick pay and is paid from the outset.  The employer is entitled to deduct SSP from their CSP.  In that case, for a period of sickness absence longer than 28 weeks, there will be no SSP at the end of the CSP period.

Ianb
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Ruth_T - 10 September 2021 08:32 PM

SSP generally forms part of contractual sick pay and is paid from the outset.  The employer is entitled to deduct SSP from their CSP.  In that case, for a period of sickness absence longer than 28 weeks, there will be no SSP at the end of the CSP period.

Exactly so, that was what I was alluding to in my earlier comment

UB40
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Yes, the claim should be kept open regardless of the level of the earnings.

  “This Spotlight product has been designed to help support staff in closing claims correctly. It replaces the ‘Closing a claim - what you need to do’ product.”
“Claimants on the health journey at any point from day 1 to the date of the determination of the WCA outcome must not have their claim closed when entitlement is nil due to income, earnings or both.
On these cases, the following entry will be created in claimant history ‘Award is Nil due to earnings but a WCA decision has not been input’.”

[ Edited: 11 Sep 2021 at 05:57 pm by UB40 ]