More than 15,000 UC claimants currently receive a Transitional SDP Payment on top of their Universal Credit award.
The Transitional SDP Payment was introduced in January 2019 to compensate those UC claimants who were in receipt of the Severe Disability Premium (SDP) as part of their ‘legacy benefit’ award but lost this on moving to Universal Credit (UC).
More details here.
It followed a challenge by a UC claimant to the High Court where the Judges decided that it was unfair that those claimants who will eventually be ‘managed migrated’ onto UC who lost the SDP would receive compensation by way of a Transitional Element being included in their UC award, whereas those who move onto UC ‘naturally’ ie due to a change in circumstances wouldn’t.
These payments – £405 for couples who had two SDPs, £285 for single claimants / couples who lost one SDP or £120 where the claimant’s UC award includes the LCWRA Element - are currently paid separately, on top of a claimant’s UC award every month and therefore are not affected by any change to that award.
This was only ever going to be a temporary measure. The Regulations introducing these payments said that on a ‘conversion day’ they would convert to being a ‘Transitional Element’ included in the actual UC assessment itself. No date was set for this ‘conversion day’ in the Regulations that introduced it (Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regulations 2019) – but it was to be announced at the discretion of the DWP.
However, on 22nd September the DWP announced that the ‘conversion day’ is to be 8th October 2020.
This means that, for UC assessments made on or after 8th October 2020, for anyone entitled to a Transitional SDP Payment it will be treated as a ‘Transitional Element’ when their Maximum UC award is assessed. It will be added to their Standard Allowance and any other Elements they are entitled to (rather than a separate payment made in addition to their UC award).
But this ‘Transitional Element’ can be eroded over time.
The amount of the ‘Transitional Element’ will be set for the first Monthly Assessment Period it is included in the claimant’s award. But it can then decrease if the claimant’s circumstances change giving them an increase in an existing UC Element* or adding a new UC Element*, meaning they may see no increase in their UC award.
More on eroding of Transitional Elements here.
*with the exception of the Childcare Costs Element.
~ The most UC a claimant could receive – worked out by adding together their Standard Allowance and the Elements they are entitled to on the date their UC is assessed ie on the last day of their Monthly Assessment Period.
Perhaps the best way to explain this is through examples:
Let’s take Jai; he moved onto Universal Credit back in November 2018 when he moved LA area. He had been getting the SDP in his IR-ESA and so was worse off on UC. Since January 2019 he has been getting an extra £120.00 – a Transitional SDP Payment - paid on top of his £1251.81 UC award (Standard Allowance, LCWRA Element and Housing Costs Element).
On 19th October, when his UC is next assessed, the £120.00 will be included as a Transitional Element in his UC award. This gives him a Max UC figure of £1371.81 - and this is what he receives (as he has no earnings, other assessable income, or deductions).
In December 2020 he moves home – into an adapted bungalow - and his rent increases by £20 a week. This in turn increases his Housing Costs Element by £86.67 but this ‘eats into’ the Transitional Element reducing it from £120 to £33.33 and does not alter his Max UC figure – so he continues to receive £1371.81 in UC.
Freya made a claim for UC in October 2019. She wasn’t protected by the SDP Gateway at that time because, although she was on IR-ESA and had previously been getting the SDP, her PIP had been stopped on review. She appealed the PIP decision and in March 2020 her PIP was reinstated and so was the SDP in her IR-ESA award for a period before she moved onto UC. She then requested and was paid a Transitional SDP Payment of £285.00 a month.
On 10th October, when her UC is next assessed, the £285.00 will be included as a Transitional Element in her UC award, increasing her Max UC figure from £1138.14 to £1423.14 – meaning she gets the same award but in one payment.
(She gets Standard Allowance, LCW Element and Housing Costs Element).
In November her health deteriorates, and she requests a review of her limited capability for work – she thinks she should be in the Limited Capability for Work Related Activities group. In January 2021 the DWP agree, but the addition of the LCWRA Element - ie £341.92 instead of LCW Element of £128.25 - erodes the Transitional Element down to £66.33 and so her Max UC figure, and therefore her award, stays the same ie £1423.14
Stewart made a claim for UC in December 2018 when his youngest child turned 5. He had been getting the SDP in his Income Support and so was worse off on UC. Since January 2019 he has been getting an extra £285 – a Transitional SDP Payment - paid on top of his £1755.22 UC award.
(He gets Standard Allowance, 2 x Child Elements, Disabled Child Element and Housing Costs Element).
In May 2020 his PIP was stopped, and he decided not to challenge the decision, but he continues to receive the £285.00 Transitional SDP Payment**.
In October the Transitional SDP Payments are treated as a ‘Transitional Element’ and will be included in his UC award. He receives the same amount of UC overall ie £2040.22 but now in one payment instead of two.
One of his children gets DLA mid rate care, and in January 2021 he finally asks for the Carer Element to be included in his UC award (he was not previously aware that you could get this for looking after children).
But the addition of the Carer Element (worth £162.92) does not increase his Max UC figure – but reduces the ‘Transitional Element’ to £122.08 – so he continues to receive £2040.22 in UC.
NOTE: If Stewart had requested the addition of the Carer Element earlier ie in a Monthly Assessment Period ending before 8th October 2020, then it would have formed part of his pre Transitional Element Max UC figure.
**The Transitional SDP Payment only stops if: the UC award ends, a single UC claimant takes on a partner, or a couple on UC separate.
What will happen when the SDP Gateway rules no longer exist ie from 27th January 2021?
Those moving onto Universal Credit who would previously have been prevented from claiming UC due to the SDP Gateway rules will be entitled to the Transitional SDP Payment – this will automatically be treated as a Transitional Element when their UC is assessed and the rules outlined above will apply.