Transitional Element for Tax Credit-only claimants

More confusion! And back tracking?

We sent some more questions to the DWP and have just got a response - which contradicts a lot of what they’ve said in the past with no recognition of that fact. We’ve asked some follow-up questions asking for clarification / whether they’ve changed how they’re doing things but as an update -

1. If a Tax Credit-only claimant is getting NS-ESA, the LCW/RA decision from that claim will be used to calculate their Indicative UC Amount ie Elements and Work Allowance. That makes sense but seems to contradict them telling us that Carer’s Allowance wouldn’t give the Carer Element so I’ve asked if that’s still the case.

2. They say that unearned income should be taken from the UC claim form not HMRC or any other source - that contradicts what they told Charles earlier in the year and seems to contradict the guidance that tells them to get benefit info from searchlight and ignore the UC claim. Again, I’ve asked them to clarify if they’ve changed their position.

3. They say ‘the indicative UC amount should be as accurate an assessment as we can make of the amount of UC a person would be awarded based on their circumstances the day before the UC claim.’ Which again contradicts what they told us about the HCE and Carer’s Element not being included in the IUCA so again I’ve asked for clarification on whether they’ve changed what they’re doing.

Thank you for keeping chasing them
For everyone’s sake I really hope we all get some clarity from them soon.

We now have a date for our stakeholder meeting specifically about TP - 1 November - and are invited to send in questions in advance. I’ve spoken with Rachel and this is what I’ve sent in so far but please post here if you have additional ones and I can send them too. The more notice they have, the more chance of getting them answered on the day I think…

- Is the Housing Costs Element only included if the claimant is receiving HB or do they take information from elsewhere and, if so, where – previous answers have indicated that it is only included where there is HB in place - if this is not the case has there been a change of position?
- If a Tax Credit-only claimant is receiving Carer’s Allowance, will their indicative UC include the Carer Element – if yes, is this a change of position from previously?
- Where is information about ‘other income’ (i.e., benefit and student income) taken from – if the UC claim, has there been a change of position on this?
- If there has been a change of position on how things are done, how will that work? Will TEs that have already been calculated be reviewed or will any changes just apply going forward?
- If transitional elements are reviewed will there be an amnesty on any overpayments created so they are not recovered
- How are savings affecting claimants indicative UC – where does any information about savings come from?
- Can we have some written guidance which clarifies all of the above

Hi Daphne,
Big thanks for doing this, really hoping we can get some clarity but not holding my breath!

When you ask about where they get information about other income, could you give benefits & student income as examples (rather than ie)? I’ve also got cases of pension income and spousal maintenance causing similar problems.

Ta,

Will

thanks for this -
- similar query, but more specifically, do they include things like spousal maintenance, private pensions, and maternity allowance in indicative UC calculation? and does TC give UC a breakdown of how much of each so UC know how to treat it in indicative UC?
- probably not, and this may be a daft one, but do they include a carers element in indicative UC if not in receipt of carers allowance, but declare they are a carer in UC claim.
- if they do not include the housing element unless on HB, how do they know what work allowance rate to apply to indicative UC?
- do they include any pension payments client makes from their wage in indicative UC?
- would the 3 months a claim is kept open as a ‘1p award’ reg 28(7) during the WCA relevant period before the LCWRA kicks in, be included towards the 12 assessment period capital protection months?
- is there any plans or process for claimants to be able to obtain a breakdown of the transitional element calculation easily?

Thanks for these - I’ve added them on - although I don’t think anyone would be on a 1p award as they would get some benefit even if it’s only the transitional element, wouldn’t they??

Confusing one. Client managed migrated to uc with some transitional element. Then earnings increased too high for any uc. Waiting a wca now and if awarded lcwra will be entitled to uc again within 3 assessment periods. So keep transitional element. But wasn’t sure if the 3 months with no uc, during relevant period and just a 1p award would count as part of the 12 months of capital transitional protection.

Oh - see what you mean now - thanks :)

I have the following to add:

1. The guidance on exclusions and deferrals states that claimants with a child who turned 19 years of age prior to 01/09/23, and is still in full-time non-advanced education will not be migrated until the child turns 20. However, we have had at least one case where such a claimant has received a migration notice. Furthermore, the operational guidance intended to be used to weed out the exclusions and deferrals does not seem to provide for this case.
The issue here is that such claimants will be significantly worse off, as the “indicative UC amount” is calculated assuming the same number of children as the tax credit claim, whereas in reality the UC claim will not include the 19-year-old.

2. The ‘telephone interview’ letter being sent out by HMRC to many claimants who have received a migration notice is a) scaring many people, and b) tells claimants to obtain a lot of evidence/information in preparation for the interview.
In reality, the interviews are all short straightforward phone-calls, simply intended to ensure the claimants circumstances are correct in preparation for migration (and the TP calculation).
Will they consider reviewing the wording of these letters to reflect the reality?

Just to add to point 1 above:

I advised the client concerned to request the migration notice be cancelled (as provided for by Reg 44(5) of the UC(TP) Regs). The agent he spoke to denied there was such a possibility. I had told him to be firm, so he managed to speak to a team leader who (supposedly) was well-versed in the migration process. However, he also said that there was no possibility of cancelling the migration notice!
So, perhaps that is a further point to bring up at the stakeholder meeting - can they provide guidance to staff on the possibility of cancelling migration notices?

Also Citizens Advice have been told. Is this true? That if you claim uc due to MM via a telephone claim. That it is not automatically picked up as a MM claim. And someone has to manually do it. So to ask for an MR if not identified as a MM case!

If it’s not too late, I have another thing I would like cleared up:
How will they be implementing the benefit cap to the total legacy amount (under Reg 53(11)?
Specifically, can they provide details of when it will be applied, and how it will be calculated.

Thanks for these Charles - sorry for delay replying - I was away last week.

Will send up those questions now for them to look at before our meeting

So just out of meeting - given that we sent so many questions in beforehand, it was extremely disappointing that so few of them were answered - attached are my notes - others who were at meeting please do correct, add.

The main thing they seemed to clarify is that their interpretation of reg 54(1) is that they don’t included housing costs or carer status in indicative UC award if there is no HB or CA in payment even though they have been declared in UC claim - they are adamant that this is correct and are even considering clarification to the legislation to make it clear that is the case - don’t know if that impacts on your calculator Charles??

My first thoughts:

1. Are they saying that it was never their practice to take the unearned income figure from tax credits? If so, why did (does?) their TP calculator ask for the other income figure from tax credits???

2. They’re saying that if the claimant is actually on Carer’s Allowance, then that will be taken into account in the indicative UC amount, which is not what their original guidance, and response to Rachel, suggested.

3. Interesting to hear the point about limited company directors, but would be very surprised if they actually change anything!

I will have to make a couple of changes to my spreadsheet:
a. Unearned income is not taken from the TC claim, but from actual info as per the UC claim and other benefits entitlement.
b. Include Carer element in indicative UC amount if they’re actually on Carer’s Allowance.