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Forum Home  →  Discussion  →  Universal credit migration  →  Thread

Transitional Element for Tax Credit-only claimants

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Charles
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Yup, definitely worrying.

They wouldn’t even need to rely on Reg 62 to revise, as that is only necessary where DWP have made a decision based on information held by HMRC/DWP on migration day, and which later turns out to be wrong. Here, the decision would not have been made based on such information, so the regular revision rules would apply (so Reg 9 of the UC(D&A) Regs could be used).

WillH
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Not sure there Charles. Might depend what the revision is about - though I agree they probably don’t have to rely on reg 62 in every (or maybe even any) case.

If as we think reg 54 does require a calculation of the UC someone is entitled to on migration day subject to the assumptions in it, then is it arguable that some of the things they are missing out could be due to ‘official error’ given the definition in reg 62(2)?

I don’t think reg 62 is merely talking about mistakes/errors in information held on migration day, but also incompleteness in the information held on that day. But I do see your point that if it is only referring, in the context of reg 54, to the assumptions made on the basis of that reg, then it might not relate to errors/omissions about other matters.

Not that any of this matters much because I agree that they could revise, & that’s a big concern.

[ Edited: 18 Aug 2023 at 08:42 am by WillH ]
Charles
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I agree that this doesn’t matter much, as they could revise either way, but I still think I’m right!

The only situation in which a normal revision under the D&A Regs cannot be made is where the error was due to the decision being made based on information held by DWP or HMRC on migration day which later turns out to be wrong.

The reason why Reg 62 is necessary in that case is because Reg 53 refers always to the information held on migration day. Reg 54 also does so (indirectly) by referring to that information in 54(7). As such, if that information turns out to be wrong, the decision could still not be revised as it would have been correctly based on the information held on migration day.

In any other case, there is nothing stopping the normal revision rules applying.

So, even if the mistake in the decision falls within the ‘official error’ definition of Reg 62, that still doesn’t mean Reg 62 is needed if the error was not caused by relying on the information held on that day.

Abi Sheridan
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I don’t know how many of you/your organisations are attending the DWP Move to UC meeting tomorrow, but Citizens Advice are planning on asking a bit of a high level question on this to see if we can get any more out of them. Obviously its not on the agenda, so we were thinking if other orgs also tabled a question on this, it might help to move it up the agenda and we might be in better chance of an answer.
We’re planning on asking: “When DWP are calculating the transitional element, what information is used and where does this information come from?”. It probably won’t get anything like a useful answer, but worth a go!

On a different note, we’re currently working through what this means for our advisers and the advice we’re giving on Help to Claim, and if anyone is up for chatting through how/if the advice on how to calculate the TE has changed because of this, I’d really welcome that!

RachelUCN
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Abi Sheridan - 21 August 2023 02:18 PM

if anyone is up for chatting through how/if the advice on how to calculate the TE has changed because of this, I’d really welcome that!

I feel relatively comfortable that I understand how the TE is being calculated (at least based on what the DWP have said / guidance). But I have no idea what the advice would be with regards to how likely it is that the DWP will turn around at some point in the future and say claimants have been overpaid. The length of time taken to respond to my questions and the use of the word ‘currently’ in their response suggests it’s not something they’d thought about before which could mean that they’re now figuring out how to move forward.

Initially, I (perhaps naively) assumed that the worry was that they could change how they were doing things for new claimants, but I gather that the real worry is that they’ll go back and re-look at people’s Transitional Elements. Is there precedent for the DWP writing and following guidance based on their understanding of the Regs and then claiming this was official error?

Jon (CANY)
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RachelUCN - 22 August 2023 10:20 AM

Initially, I (perhaps naively) assumed that the worry was that they could change how they were doing things for new claimants, but I gather that the real worry is that they’ll go back and re-look at people’s Transitional Elements. Is there precedent for the DWP writing and following guidance based on their understanding of the Regs and then claiming this was official error?

A similar-ish precedent would be: at the start of the pandemic when people needed to make new UC claims, DWP’s ‘trust and protect’ policy let them waive some requirements to attend in-person verification interviews etc. Then later on DWP retrospectively required further ID verification, and created overpayments if it was not provided.
https://cpag.org.uk/news-blogs/news-listings/dwp-ending-universal-credit-claims-and-demanding-whole-award-repayments

Daphne
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Well it was discussed at length in the meeting today but I think without resolution - anyone else who was there please do chip in…

While one DWP person wrote in the chat - ‘The housing costs on their UC claim are not relevant for calculating TP, but is still used to calculate their UC award’ - in line with what Housing Systems have been told - Neil Couling seemed unsure - it’s supposed to be being discussed more at our next meeting scheduled for end September….

They also couldn’t say whether the information used for calculating TP will change

WillH
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That is less than reassuring!

Charles, belated thanks for going over reg 62 again - I have got it now (sorry for being slow; you had explained it very clearly first time too!) - and that explanation is extremely useful.

I’m thinking about what our tactical advice should be for claimants who have a transitional element higher than the regs seem to indicate. Query it with DWP? Set aside the additional £.. etc. And then there may be more cases like the one above where we first have to work out the effect of more than one omission.

WillH
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Rachel, I’m now looking at the guidance which was provided in response to your FOI and that seems to suggest they expect there to be overpayments & underpayments, and that cases will be checked for this after the first AP.

https://www.whatdotheyknow.com/request/1005927/response/2395158/attach/3/Calculate%20Transitional%20Protection.pdf?cookie_passthrough=1

See paras 5.3-5.5 (it also crops up in section 6 of the manual calculation of TP top up guidance & in section 2 of the guidance on recalculating transitional protection)

It reads to me that if there is a transitional element (a ‘transitional protection top-up payment’ as it’s worded there), then there should be a ‘Review an overpayment or underpayment’ to-do.

Do you agree?

If so, I suppose it’s good that they look at it quickly (or at least, at some point after the first AP), but not so good if this means they are fully expecting overpayments & underpayments.

Charles
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I think section 5 of the guidance is only relevant where the TP calculation is (for whatever reason) only carried out after the end of the first AP. This would be because the claimant would have been paid (or be about to be paid) for the first AP already without any TP added.

I don’t think it will be relevant in the majority of cases where the TP is calculated during the first AP.

A typical scenario where the TP calculation is carried out after the end of the first AP could be where the UC claim is backdated.

WillH
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Thanks Charles. I can see that the guidance looks as if it is meant to be followed all in one go, so your interpretation would make sense, and I can see why someone might have been underpaid where TP has not yet been calculated.

And I might be being slowly again here, but how might they have been overpaid? If they had been, it wouldn’t be because of the transitional element as it hasn’t been added? Or do you think that’s just the generic name of the ‘to do’ even where only an underpayment is possible?

Understood that we will see some backdating scenarios where people have claimed after deadline but before final deadline.

Charles
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Yes, I think the agent who is doing the TP calculation gets sent to section 5 after completing section 4.8, and the first step of of section 5 says that if the first AP has not yet finished then no action is required.

I had assumed it was just the generic name of the to-do. I agree that there is no way that they could have been overpaid simply due to the TP calculation being done after the end of the first AP.

RachelUCN
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I agree I think that’s for where the Transitional Element is being calculated after the end of the first MAP - which could be likely if they’ve claimed close to their ‘final deadline’. It would also be relevant if their TE is being recalculated for any of the reasons in Reg 62.

I also agree that I think it’s using generic wording and where it’s the first calculation of the TE, there can’t have been an overpayment. I think the key question is 6.2 - where they’re calculating the TE for the first time, if this has been calculated to be £0, they’re told to stop the process. So, they only carry on with reviewing the payments where they should have been getting some TE (ie they’ve been underpaid). Whereas in the guidance specifically on recalculating a TE, 2.2 and 2.3 instruct them to carry on if the recalculated TE is £0 and the initial TE was not (ie they’ve been overpaid).

LITRG
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This is a really interesting thread. We are currently trying to write more detailed guidance for Revenuebenefits on the transitional element but our initial draft was based on the legislation (or at least our understanding of it) but it seems that the process being used is very different.

One of the examples we have is a TC claimant with capital of 20k. Ignoring the capital, the UC award is about £25 per month less than the tax credits. However, our reading of the legislation is that the indicative UC should include tariff income for the capital. Which would increase the TE.

However looking through the documents obtained under FOI above, at step 4.3 of the calculating transitional protection document it says for TC only claimants ‘answer No to the question ‘Does the Household have savings’.

So they aren’t taking it into account and in this example the UC in the first assessment period will be nearly £70 a month less than expected.

Have we understood that correctly?

LITRG

RachelUCN
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I’m not sure about savings - we’ve tried to ask some follow up questions to the DWP but not sure when we’ll get a response!

I agree that the guidance suggests they ignore savings for Tax Credit claimants but in Reg 51 it specifically says that the Transitional Capital Disregard applies when calculating the Indicative UC Amount (a weird thing to mention if all savings are ignored). Additionally, when talking to Charles about how they get income information HMRC, the DWP said that they get information on savings from the UC claim.

So, it seems like their intention is to include savings in the Indicative UC amount - but whether that’s happening in practise I don’t know. We haven’t seen any examples of a TE for a claimant with savings. Not sure if anyone else has?