ESA Transitional Protection - Premiums

Hi,

I’ve read the previous posts about transitional protection and when it should come to an end, but I can’t find anything that confirms what I’ve been told by the DWP in this case…

Client was getting IS due to ill health, migrated to ESA, failed WCA, appealed and was successful. While they (couple) were under appeal the partner claimed CA - it was only claimed for a few weeks due to a change in the DLA claim.

When calculating the arrears the DWP have stated that they only have to pay transitional amount up until CA was claimed, then, because there was an additional premium in place there is no longer an entitlement to TP. Is this true?

I can’t find anything on it and the DWP have sent me their ‘evidence’, but even that doesn’t confirm what they have said.

Thank you in advance.

An award of an additional premium will reduce the TP by that amount.  It is likely that this could result in losing the TP altogether.  If you later lose the premium you do not get the TP back again.

Thank you Victor.

I had hoped that the client would get the TP back after the premium ended, but apparently not.

Thanks again.

The relevant law is Regs 18 & 21 Conversion Regs (SI 2010/1907) which provide as follows:

18.—(1) The amount of any transitional addition to which a person is entitled by virtue of these Regulations shall be reduced (but not below nil) by a sum equal to the aggregate amount of all relevant increases which occur on or after the effective date in the amount payable to the person by way of an employment and support allowance.

(2) For the purposes of paragraph (1), a relevant increase is–
…….
(b) in relation to a person entitled to an income-related allowance, an increase in any amount applicable to the person under regulation 67(1)(a) or (b) or (3)….of the 2008 Regulations….

21—(1) Any entitlement to a transitional addition which a person (“T”) may have by virtue of these Regulations terminates on whichever is the earlier of–

(a) the reduction in accordance with regulation..18…of the amount of the transitional addition to nil;
(b) n/a
(c) n/a

I disagree with the Dept’s reading of the law.  The carer premium increases the amount applicable to the person under Reg 67(1)(b) ESA Regs so the Dept are arguably right to treat that increase as “a relevant increase” under Reg 18(2)(b) above.

However, I think they overlook the fact that the above Reg 18(1) reduces the Transitional addition only by the amount of the relevant increase(s) PAYABLE (my emphasis) as ESA.

The amount payable is determined by Section 4 WRA 2007 as, for present purposes, the applicable amount minus any income.

Let’s say her IS applicable amount at conversion was (using pre Apr 2013 rates): 154.70 (ie, 111.45 couple personal allowance + 43.25 couple DP). 

IRESA applicable amount on conversion (she was successfully converted retrospectively by tribunal) was: 111.45 + 28.15 WRAC = £139.60.

Transitional Addition (TA): 154.70 – 139.60 = £15.10.

However, the Dept is only paying that TA upto the date partner started claiming CA.

They are basically saying that her IRESA applicable amount increased by 32.60 (ie, the CP) and because 32.60 is greater than 15.10, the TA is reduced to nil under Reg 18(1) above and, therefore, terminates under Reg 21(1)(a) above.

However, that ignores the fact the amount of her PAYABLE ESA would have actually reduced not increased because CA was (I’m assuming) paid to her partner which would have counted as income for IRESA.  Consequently, their IRESA applicable amount during the short period when CA was received was: 111.45 + 28.15 + 32.60 = 172.20. 

172.20 – 58.45 (ie CA) = 113.75.

£113.75 is less than the IRESA applicable amount on conversion which was 139.60.  Consequently, there is no increase in the amount of ESA payable for the purposes of Reg 18(1).  So there is nothing to reduce the 15.10 TA by. 

Post April 2013, the inflationary increases in the couple personal allowance and WRAC will reduce the amount of the TA.

That’s my reading of it anyway.  It was a relevant increase but it didn’t cause an increase “in the amount payable to the claimant by way of an ESA” as required by Reg 18(1) above. 

“Payable” here defined crucially, as stated above, by section 4 WRA.  Were it not for section 4 the Dept might have been able to argue that “payable” did not mean “paid” and instead referred to the max ESA payable in a person’s applicable amount before any qualifying income such as CA was subtracted.

Looking at this again, I think the Dept may be right.  It depends on whether “increase” qualifies “in the amount payable” in Reg 18(1).  I read it earlier as doing so.  However, the fact “relevant increase” is specifically defined in Reg 18(2) suggests it may not, with the effect that all the Dept would need to show is (i) an increase in the applicable amount as is the case here with the addition of a CP, and (ii) that some amount of ESA is still payable, again as is the case here.