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Situation: Limited Capability for Work - IB / SDA to UC?

There will be a few claimants who move onto UC from Incapacity Benefit, Severe Disablement Allowance or even Income Support which they have been getting due to their health issues.

Key Facts:

  • The re-assessment of IB/SDA/IS claimants and their transfer onto ESA was supposed to take place between February 2011 and April 2018, however a small number of claimants have not yet been transferred and are still receiving Incapacity Benefit, SDA and/or Income Support.

  • The ‘unfit for work’ status on an IB/SDA/Income Support claim was decided via a different medical assessment (called the Personal Capability Assessment) to the Work Capability Assessment which is now used for ESA and UC. Therefore, that decision cannot be transferred to UC and claimants will need to undergo a Work Capability Assessment in order to determine whether they have a Limited Capability for Work for UC purposes.

  • But if the WCA confirms a Limited Capability for Work / Work Related Activities – then that status applies from the start of the UC claim.

  • Whilst they are awaiting the outcome of their Work Capability Assessment, claimants might be expected to do some job searching or other work-related activities. It is very important that they explain their health conditions and any difficulties these might cause to their Work Coach, so that their Claimant Commitment is appropriate.

What should happen when someone who is unfit for work moves from IB/SDA/IS onto UC?

The Work Capability Assessment

The claimant will need to undergo a Work Capability Assessment in order to establish their ‘unfit for work’ status – ie that they have a Limited Capability for Work.

Until someone has been found to have a Limited Capability for Work, they are treated as though they do not, and could therefore be expected to prepare for / look for work as a condition of receiving UC.

It is therefore very important that claimants explain to their Work Coach how their health condition might limit what they are able to do in terms of work related and work search activities, to ensure their Claimant Commitment is realistic and avoid the risk of a sanction. 

The referral for a WCA will be made by the UC department, unless the claimant has already been issued with a ‘conversion notice’ – ie they had already started the transfer (to ESA) process before they made their claim for UC. If this is the case, the re-assessment will be carried out by the ESA department.

The WCA carried out under the ESA is almost identical to the WCA used for UC claimants, therefore whichever department applies the test is unlikely to make a difference to the outcome. 

How much UC?

LCW/LCWRA Element

Even though the claimant has been on a ‘sickness benefit’, no Limited Capability for Work /Limited Capability for Work Related Activities Element can be included in the UC assessment until the outcome of the Work Capability Assessment is known*. This is because the medical assessment was different for IB/SDA/IS.

Once the WCA is complete – if the claimant is found unfit for work, the LCW or LCWRA element can be included (retrospectively) from the start of the UC award, ie there is no ‘relevant period’.

This mirrors how the award would have looked if the claimant had gone through the transfer to ESA process before they claimed UC and had moved from ESA onto UC (ie the LCW/LCWRA Element included from the start of the UC award as per Reg 19 of the Transitional Regs).

So, claimants will be entitled to extra UC going forwards plus a one-off arrears payment covering the period since they went onto UC.

So, if, following the WCA, it is determined that the claimant has a Limited Capability for Work, their UC assessment will need to be revised to include the LCW Element from the start of their first UC Monthly Assessment Period. They should not be affected by the April 2017 changes – ie they can have the LCW Element included, this is because their 'period of limited capability for work' started before 3.4.17.

If the claimant is found to have a Limited Capability for Work and Work Related Activities, the LCWRA Element should be included in the assessment (and arrears paid) back to the start of their UC award. 

*Exception – Claimants on IB/SDA who:

  • Have not been issued with a conversion to ESA notice, and
  • Are within one year of their State Pension Age when they move onto UC, and
  • Who get PIP/DLA/AA/AFIP/Constant Attendance Allowance/Attendance Allowance as part of a War Disablement Pension,

should automatically get the LCW or LCWRA element included, without having to await the result of the WCA.
The LCWRA Element should be automatically included instead if they are getting the enhanced rate of either the daily living or mobility component of PIP / the high rate care or mobility component of DLA / higher rate Attendance Allowance / Armed Forces Independence Payment / CAA awarded for exceptionally severe disablement / payment for attendance in War Disablement Pension which is not for exceptionally severe disablement.  For any other rate of these disability benefits – the LCW Element is automatically included. If the claimant feels they should have the LCWRA Element included, they would need to request a WCA – best to seek advice.


Incapacity Benefit / Severe Disablement Allowance as income

IB/SDA will continue to be paid until a ‘conversion’ decision is made, following the Work Capability Assessment, at which point (assuming the claimant is found to have a LCW/LCWRA) it will be ‘converted’ to New Style ESA.

Any IB/SDA or New Style ESA received by the claimant counts as unearned income and reduce the UC award £ for £.

Been on Income Support?

The Income Support award should terminate from the day before the UC claim is made. 

Example:

Fred is 55 and has been claiming Incapacity Benefit for many years. He has not been selected for the transfer to ESA process, therefore he has remained on Incapacity Benefit. He also receives the high rate mobility component of DLA, partial Housing Benefit and Council Tax Support.

Fred needs to move to more suitable rented accommodation due to his mobility problems. His new flat is in a different local authority area, which comes under the Full / Digital UC Service, therefore he will need to make a claim for UC for help towards his rent, instead of HB.

Fred moves in on 6th August and makes a claim for UC the same day. 

His Incapacity Benefit remains in payment; his UC award is reduced by the monthly amount of IB.

In September Fred is sent a UC50 questionnaire and in November he is required to attend a face to face medical assessment. On 10th December he is notified that he has been found to have a Limited Capability for Work and Work Related Activities – so the LCWRA Element is to be included in his UC assessment. This applies from the start of the UC claim - 6th August onwards – so he is due some arrears. 

His Incapacity Benefit award is converted to New Style ESA – which continues to be taken into account as income when the UC award is calculated.






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