The introduction of a two week run-on in HB (or what the DWP call a Transition to UC Housing Payment) for those moving from legacy benefits to Universal Credit was first announced in the government's Autumn 2017 Budget.
This change has now been confirmed and will apply to all new UC claims (who qualify for it) made on or after 11th April 2018.
What do the rules say?
So from April 11th 2018, new UC claimants who were on Housing Benefit immediately before their UC claim was made and whose HB ended due to the claim for UC will be entitled to a two week Transition to UC Housing Payment.
What about claimants moving out of specified accommodation?
Claimants moving out of specified accommodation are not entitled to the Transition to UC Housing Payment.
The DWP confirmed this for us, they stated: 'A Transition to UC Housing Payment cannot be made to those moving out of specified accommodation as their HB is not ending because they have made a claim for UC but because they are moving home. Instead, as they are not excluded from being a UC claimant and getting HB for specified accommodation they could get HB for their notice period for up to 4 weeks under the 'normal' HB rules.'
How much will a claimant get?
The HB for this two week period will be awarded on the basis that the claimant is a UC claimant (even if their UC award has not been decided yet).
Because the rules are that anyone on UC is entitled to maximum HB (ie UC is a 'passport' benefit for HB), the amount of HB paid during the two week 'run-on' period will be the maximum HB regardless of the claimant's income ie rent less ineligible services, less Bedroom Tax reduction, less non-dependant deduction.
What about the Benefit Cap?
The HB two week run on - or what the DWP are calling 'Transitional UC Housing Payment' will be classed as 'welfare' for Benefit Cap purposes - so if the claimant's HB was being capped before they went onto UC, the two week payment will also be capped. However the HB rules say that where a claimant is in receipt of UC then the cap no longer applies. So once UC is awarded the cap should then be lifted for those two weeks and the payment made.
What about on-going deductions for an overpayment?
If a deduction was being made in respect of recovery of an HB overpayment this can stay in place for the two weeks.
Who receives the payment?
Where the claimant is making a new claim for UC and is not moving home, then the two week 'run-on' will be paid to whoever has been receiving it- landlord or claimant.
Where the claimant has moved home, the two week 'run-on' will be paid directly to the claimant. Claimants may be required to provide up-to-date bank account details to the LA to enable this.
If the claimant has moved to a new LA area, the 'run-on' of HB will be paid by the ‘old’ LA (ie. it will be a continuation of the existing claim).
Doesn't it just reduce the claimant's first UC award £1 for £1?
No. The Transition to UC Housing Payment is not counted as income for UC purposes.
Will everyone who claims UC after being on HB get the two week run-on?
The HB must have ended because the claimant has made a new claim for UC rather than for any other reason.
So watch out for those with a gap between their HB ending and UC starting - even if this is just a matter of days.
And where a claimant is making a claim for UC following the death of their partner who was the HB claimant, then we do not believe the two week run-on will apply - as the HB award is ending because of the death of the claimant, rather than because their partner has made a new claim for UC.
We also understand that HB claims will need to be adjusted manually to pay the correct run-on period.
Why introduce this rule?
The purpose of the change is to help minimise the risk of rent arrears when claimants move from HB to UC.
In his statement to the House of Commons on 23rd November, David Gauke, Secretary for Work and Pensions stated:
"From April, for new claimants already receiving support towards their housing costs, we will provide an additional payment of two weeks of their housing benefit to support them as they transition to universal credit, helping to address the issue of rent arrears for those who most need it."
Penny has been getting Income Support as a lone parent. When her youngest child turns 5 she is advised to claim Universal Credit (she lives in a Full / Digital UC area). Her last day of Income Support is 12th August 2018, and she makes her claim for UC on 13th August 2018.
Her claim will start on 13th August and be assessed on 12th September; and she will receive her first UC payment on 19th September. As she is moving from legacy benefits onto UC and her HB award is ending because of this, she is entitled to a HB two week run on – so her HB entitlement will not end until 26th August 2018.
Simon is moving to a new LA area and his new home is in a Full / Digital UC area. He has been getting Jobseekers Allowance and Housing Benefit and so the move triggers the need for him to claim Universal Credit. He moves out of his old home on 8th May 2018, and makes a claim for Universal Credit the same day.
His Jobseekers Allowance comes to an end from the day before his claim for UC ie 7th May 2018. As his HB is ending due to the fact he has made a new claim for UC, he is entitled to the two week HB run on. This is an extension of his old award which should therefore end on 22nd May 2018 and be paid by his old Local Authority. But because he has moved home this part of his entitlement needs to be paid directly to him.
Simon was having his HB paid directly to his landlord at his old address and so he will need to provide his old LA with his bank details so that they can make the payment directly to him.
Stuart has been getting Income-Related Employment and Support Allowance and Housing Benefit. He has been found fit for work as he has failed to score 15 points on his medical and so his IR-ESA is brought to an end – his last day of entitlement is 7th June 2018. As he lives in a Full / Digital UC service area he has been advised by the Job Centre that is only option is UC*. He doesn’t fancy having to go on UC and so does nothing.
The HB Office are informed that his IR-ESA has ended and so suspend his HB claim and request up-to-date income information from him – but he doesn’t respond. On 28th June, after a few weeks of borrowing from friends and family Stuart makes a new claim for UC. He has not provided the HB Office with the information they need to re-instate his claim for HB and so they end his award from 8th June on the basis of an ‘adverse inference’ decision.
Because the Regulation used to end Stuart’s HB award is not Reg 8 of the UC Regulations, Stuart is not entitled to the two week HB run-on. Stuart could try to get his HB award re-opened and awarded up to 27th June on nil income grounds: he would then also be entitled to the two week run on.
*He does have another option – which is to request a quick Mandatory Reconsideration of the ESA decision that he is fit for work and then go on to Appeal if necessary – he can stay on HB under a nil income until the Appeal is lodged and, once lodged, (as long as he is not caught by the 'repeat fit for work rules', request that his ESA is re-instated – click here for more details.