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UC SDP stopping due to earnings falling below AET
I’d like to know what anyone thinks about a possible challenge to reg 56 of the UC(TP) Regs. Currently helping client in voluntary capacity outside any of my paid jobs, & likely to have to refer to another advice agency anyway, but my question is whether there’s any mileage in doing so.
The client was on irESA doing permitted work, then went on maternity leave & got SMP. She claimed UC (I think after child born, still gathering facts on this). She returned to work when SMP stopped but was unable to get the childcare she needed, & after first reducing her hours, eventually had to stop work.
Her transitional SDP element has stopped as she earned the AET or more when she claimed UC (via maternity pay) & then had 3 assessment periods in which she did not earn at this level.
My thoughts are whether it might be arguable that this particular provision (reg 56(2)(a) UC (TP) Regs) discriminates against someone in the client’s position (disabled person attempting to juggle work & childcare after maternity leave compared to someone not disabled and/or not returning from maternity leave and/or who does not need childcare).
And, if so, is that justified?
And/or is the provision irrational because claimants are not told about it - as far as the client was concerned she did not have to look for work or be available for work, both because of her limited capability for work (I need to check if she also has LCWRA status) & the fact that the child is still only 15 months old. She had no idea that reducing hours/stopping work would reduce her transitional SDP, so could not have been incentivised not to stop work/reduce pay, if that was the point of the provision. To put it another way, she was completely unaware that the AET had any bearing on her circumstances.
Thoughts welcome, & if anyone knows of any debate/discussion that happened which might point to the policy intention behind reg 56, please let me know.
As an aside, when the AET goes up (from 26.9.22), it looks to me as this will increase risk of losing the transitional SDP (though probably low numbers of disabled people entitled to SDP who earn AET/above when they claim UC, there will be others).
As an aside, when the AET goes up (from 26.9.22), it looks to me as this will increase risk of losing the transitional SDP (though probably low numbers of disabled people entitled to SDP who earn AET/above when they claim UC, there will be others).
I don’t have much to say about the rest of your post - although I certainly agree it is very unfair.
About this point though - do you think it is possible to argue that the words “that threshold” in Reg 56(2)(a)(ii) and (b)(ii) refer to the level of the threshold as used for head (i) (i.e., not to the level of the threshold as it was in the first AP of the award)? Because if not, you could well have someone earning the precise same amount each month as s/he was earning before, but still lose his/her transitional element.
I have had that worry too Charles
I would hope ‘That threshold’ in 56(2)(a)/(b) (ii) refers to the AET which applies later (ie not at the beginning of the claim), as it’s a reference back to 56(2)(a)/(b)(i).
As an aside, when the AET goes up (from 26.9.22), it looks to me as this will increase risk of losing the transitional SDP (though probably low numbers of disabled people entitled to SDP who earn AET/above when they claim UC, there will be others).
DWP have responded to a FOI on this point by saying:
The Government has said that Transitional Protection will be terminated when a claimant who has been moved to Universal Credit (UC) has a significant change in the circumstances they were in when they first claimed UC. This includes where there has been a sustained (3 month) fall in a claimant’s earnings, or the joint earnings of joint claimants, which results in a change in the labour market conditionality that will be applied. In light of the increase in the AET we are currently considering what, if anything, needs to be done to maintain the policy intent.
https://www.whatdotheyknow.com/request/changes_to_administrative_earnin#incoming-2148491
This helpfully seems to answer your ‘that threshold’ question Charles?
As regards the policy intent, I am not sure what to hope for, but note that at the moment (as with my client) some people are affected when the labour market regime which applies to them has not changed at all. If that is not the policy intent, that could be useful to my client in challenging the law as it currently stands.
I’m also concerned about how people affected by the MIF, or in a start up period, when they claim UC may be affected. For them, if the labour market regime changes so that the MIF no longer applies (eg they become a carer, have a child, etc) they too would (it seems to me) quite suddenly lose their transitional element because they would no longer be ‘treated as’ earning the AET (that is assuming they did not in fact earn that much).
This helpfully seems to answer your ‘that threshold’ question Charles?
I’m not really sure, to be honest! I think they’re saying that the intention is that only an actual drop in income should cause transitional protection to end, but that they are considering whether the regulations have to be amended to ensure this happens.
I’m also concerned about how people affected by the MIF, or in a start up period, when they claim UC may be affected. For them, if the labour market regime changes so that the MIF no longer applies (eg they become a carer, have a child, etc) they too would (it seems to me) quite suddenly lose their transitional element because they would no longer be ‘treated as’ earning the AET (that is assuming they did not in fact earn that much).
Yes, it looks like this would be the case. Certainly seems unfair!
I was searching for enlightenment on whether the explanatory memorandum to the amending regs trumps the amended transitional provisions regs, when I came across this thread.
The situation I have anecdotally heard (ie not our case) is where a UC claimant with LCWRA was made redundant and therefore earnings dropped below AET. Transitional SDP Element lost but they submitted an MR request based on the fact as they have LCWRA they haven’t moved into a more intensive conditionality regime
They got the wording from
EXPLANATORY MEMORANDUM TO THE UNIVERSAL CREDIT (TRANSITIONAL PROVISIONS) (CLAIMANTS PREVIOUSLY ENTITLED TO A SEVERE DISABILITY PREMIUM) AMENDMENT REGULATIONS 2021 2021 No. 4
7.6 The rules for a transitional element ending are as follows:
• a sustained (three months) earnings drop below the Administrative Earnings Threshold where the claimant has moved into a more intensive conditionality regime; and/ or
But there’s nothing in reg 56 of the TP regs 2014 about moving into a more intensive conditionality regime which was why I was wondering which takes legal precedence. From earlier in the thread it sounds like you can argue this was the original intention.
Worth a try??
Further to this, I’ve just been alerted to the FOI Response
https://www.whatdotheyknow.com/request/900237/response/2148491/attach/html/3/Response%20FOI2022%2074207.pdf.html
which says
The Government has said that Transitional Protection will be terminated when a claimant
who has been moved to Universal Credit (UC) has a significant change in the circumstances
they were in when they first claimed UC. This includes where there has been a sustained (3
month) fall in a claimant’s earnings, or the joint earnings of joint claimants, which results in a
change in the labour market conditionality that will be applied. In light of the increase in the
AET we are currently considering what, if anything, needs to be done to maintain the policy
intent.
Worth a try??
Explanatory memoranda are not part of the law. Whilst it might be permissible to refer to them in cases of genuine ambiguity, they can’t be used for the purposes of inventing new criteria which simply aren’t in the actual legislation.
I’m not really sure, to be honest! I think they’re saying that the intention is that only an actual drop in income should cause transitional protection to end, but that they are considering whether the regulations have to be amended to ensure this happens.
The Regs laid yesterday fix this issue.
However, it does it the opposite way round from what was suggested earlier in the thread. The relevant threshold will be the AET level as at the date of claim rather than the level as at the date of the fall in earnings.
On a separate point, I noticed that the Explanatory Memorandum in a couple of places says that the new single claimant threshold will be £618. By my calculation it is actually £617. (Not a massive difference, but it’s good to be accurate!)
I emailed the DWP yesterday (contact at bottom of EM) on the £617 issue and have had a reply back to say they’re looking into it