December 2020 Newsletter
Welcome to our latest newsletter - bringing you right up to date with useful welfare benefit information.
In this issue find out more about:
- Benefit Cap set to hit many families - as 'grace period' comes to an end.
- EEA Nationals with Pre-Settled Status - IMPORTANT UPDATE - new rules allow some to claim benefits beyond 30th June 2021.
- New case law that may help some with a UC backdate - if they've accidentally claimed HB instead.
- Coronavirus and Council Tax Support - how a small entitlement can get you an extra £150 off your bill.
- Watch out if applying for free childcare! - as HMRC / DWP sometimes wrongly stop WTC / UC.
- On UC with LCW and health deteriorated? - don't wait until the next DWP review.
- DON'T FORGET - the SDP Gateway (NOTE: the SDP Gateway no longer applies - it was revoked from 27th January 2021) rules are coming to an end on 27th January 2021.
- Christmas club pay outs and UC/HB - How should the DWP treat the payout?
- Your chance to WIN £50 for your local FOOD BANK and a box of chocolates for you!
Benefit Cap set to hit many families
We are all aware that there was a spike in UC claims back in March when the first ‘lock down’ hit.
Many of those claimants are about to see a sudden drop in their UC: claimants whose UC award would have been reduced due to the Benefit Cap, but they were entitled to the 9 month ‘Grace Period’. That protection is about to run out.
In March 2020 Kristy, a mother of 4, was furloughed. She’s been getting UC (Assessment Periods running 5th – 4th) and her award was reassessed. Her earnings dropped below the level that protected her from being affected by the Benefit Cap. But as she has been working and has had earnings above the Benefit Cap earnings threshold for 12 months, she was entitled to the Benefit Cap ‘Grace Period’ protecting her from the Benefit Cap for 9 Monthly Assessment Periods (MAPs). Her 9th MAP will be the one that ends on 4th December 2020. Unless she is excluded from the Benefit Cap it will be applied to her award when it is assessed on 4th January 2021 and she will see a drop in her income.
IMPORTANT update to the article in our November newsletter
Regulations have been published which protect the benefit entitlement of those with pre-settled status who also have a ‘Right to Reside’, after 31st December 2020 for, it appears, an indefinite period.
This means that as long as an EEA National (or family member) has been granted pre-settled status under the EUSS they will continue to be entitled to means tested benefits (including Universal Credit), Tax Credits and Child Benefit beyond 31st December 2020 if they can demonstrate that they also have a ‘Right to Reside’.
In fact, the rules are better than we had hoped, because it appears that they allow those EEA Nationals (or family members) with pre-settled status and a ‘Right to Reside’ to be entitled to these benefits beyond 30th June 2021 too.
These Regulations extend those ‘Right to Reside’ rules to these claimants after Brexit up to the point of them being granted settled status.
As soon as they have converted their pre-settled status to settled status ie after living in the UK for 5 years, they would then be able to access all benefits without having to demonstrate having a ‘Right to Reside’ too.
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New case law may help some with a UC 'backdate'
UC Regulations (Reg 26(3)(aa) of the UC claims and Payment Regs) allow a UC claim to be treated as made earlier - ie backdated - where the claimant was late being notified that a previous legacy benefit has ended.
In a recent Upper Tribunal - CP v Secretary of State for Work and Pensions (UC):  UKUT 309 (AAC) - the Judge ruled that a claim for UC can be treated as made earlier - ie backdated (one month max) - where a HB claimant moves LA areas and accidentally makes a new claim for HB in the new LA area. The notification from that LA telling them that they are not entitled to HB can be treated as 'late' notification that the claimant's HB has ended.
So, as long as the claimant then goes on to make a claim for UC without any delay, they can request that the claim be treated as made up to a month earlier.
The Judge said: "...the ‘notification of expiry of entitlement’ to housing benefit should be taken to be the letter from (name of new LA) that spelled out that the old mechanism for re-establishing entitlement to housing benefit in a new borough by way of a new claim to the new council was no longer available (and hence a claim for universal credit had to be made instead). This notification was sent after the claimant’s last day of entitlement to housing benefit."
Derek moved from one Local Authority to another. He had been receiving ESA and HB and assumed that he would be able to claim HB in the new authority. Two weeks later he received a letter from HB saying he should claim UC instead. He made that claim and asked UC to pay from the start of his tenancy (from the end of his old HB entitlement) due to this caselaw. UC were able to backdate (for one month maximum) as they could treat the letter from the new Local Authority as late notification of a legacy benefit ending.
Coronavirus and Council Tax Support
Council Tax Hardship Fund - England
Where someone who is liable for the Council Tax is working age and getting Council Tax Support/Reduction, then their Council Tax account should be credited with £150 or until the Council Tax bill is zero (ie if their liability is below £150pa). This level of £150 can be increased by individual Local Authorities depending on how much of their grant allocation is left.
Even if the Council Tax bill payer is only entitled to a small amount of CTS or only for a few weeks, they should still receive this help.
Note that the minimum required to be paid by all working age bill payers - set by local restrictions - is ignored for this purpose (for instance where the local scheme restricts entitlement to 85% of liability, the full amount of £150 should be credited even if this means that the bill payer now has less than 15% to pay themselves).
Jasmine is a lone parent with two children age 12 and 15. Her Council Tax Liability is £940 for the year. She works part-time and gets paid £160 a week. She also gets Tax Credits of £187 a week, partial HB and Child Benefit. If she claimed Council Tax Support in her LA area she would be entitled to over £5.00 a week and she would also get an additional £150 deducted off her bill.
Every Local Authority has to have an exceptional hardship fund. It is a statutory fund - financed by the Local Authority themselves (and so help is limited) - to alleviate hardship by reducing a Council Tax bill in exceptional cases.
Generally not very well advertised - we have a standard letter anyone can use to request help.
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Watch out if applying for free childcare
|We are hearing reports that where a parent applies for the free childcare to which they are entitled that this is then automatically ending their UC or Tax Credit award.|
This is probably wrong and needs to be challenged.
Parents with pre-school children age 3 or 4 years old can get up to 30 hours a week childcare free of charge. Obviously they cannot claim additional money in their UC or Tax Credits to help pay for this childcare as they are not paying for it, and there will be a small number of cases where the reduction in childcare costs may mean that they are no longer entitled to UC or Tax Credits.
However the DWP / HMRC seem to be taking a blanket approach and ending a UC / Tax Credit award whenever a parent applies for free childcare regardless of whether there would be an ongoing entitlement.
In the majority of cases this will be wrong, will cause problems for the claimant and should be challenged.
On UC with LCW and health deteriorated?
|Where a UC claimant is found to have a Limited Capability for Work (LCW), a review date is set for their next assessment. Unless the claimant reports a change in their condition in the interim period, the DWP will start a new Work Capability Assessment when the review date comes up.|
If, following the review assessment, the claimant is found to have a Limited Capability for Work and Work Related Activities (LCWRA) rather than just LCW, they will get extra UC.
Where the review assessment was triggered by the DWP, any extra UC will only be awarded from the Assessment Period during which the decision is made. Due to the Coronavirus, these decisions are taking longer than normal - so claimants are missing out as a result of these delays.
If the claimant triggers a review Work Capability Assessment (WCA) the situation is different.
If a claimant reports to the DWP that their health condition has worsened, that will trigger a WCA. If they are moved from LCW to LCWRA following a WCA triggered by the claimant, then any decision takes effect from the Assessment Period during which the claimant notified the UC dept of the deterioration in their health.
So, to safeguard that extra money, the claimant shouldn't wait for their next review assessment as set by the DWP. Instead they should formally request a supersession of the LCW decision on their journal.
Word of caution -
Before asking for their LCW status to be reviewed, claimants should speak to a benefits adviser about the risks. A new WCA could bring with it the risk of being found fit for work - so the claimant needs to be confident that they won't lose their LCW status and confident that the evidence supports them having LCWRA status instead.
DON'T FORGET - The SDP Gateway (NOTE: the SDP Gateway no longer applies - it was revoked from 27th January 2021) rules are ending
|Since 16th January 2019, certain claimants have been 'protected' from claiming UC by the 'SDP Gateway (NOTE: the SDP Gateway no longer applies - it was revoked from 27th January 2021)s'. These are an extra set of conditions that claimants must "pass through" to be able to claim UC.|
The aim of the 'Gateway', in simple terms, is to make sure certain disabled claimants don't see a drop in their income - that they would not otherwise have experienced - because they have had to claim UC.
It is to prevent anyone who is currently (or was recently) getting a Severe Disability Premium in an award of benefit from losing it if they claim Universal Credit. Universal Credit does not have a Severe Disability Premium.
But it is coming to an end on 27th January 2021 - confirmed by The Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regulations 2019.
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|We have heard of several UC claimants whose request for a 'backdate' has been refused simply because they did not make the request within their first monthly assessment period (MAP). We believe this to be incorrect.|
The 'backdating' rules for UC are quite strict and the maximum period is one month - but those who fit the criteria under Regulation 26 of the UC Claims & Payments Regulations to allow their UC claim to be treated as made earlier should not be refused this on the grounds that they made the request after their first assessment period had ended.
The request is actually a request for a revision (mandatory reconsideration) of the decision to start the claim from the date the claim was made. So the deadline to make the request is (ideally) one month from the date of the decision (which is the last day of the first MAP) but a late request can still be made if it is within 13 months of the date of decision.
One of the causes of this problem - and an argument to support the MR request - is that the online claim does not ask for any information about what date the claimant wants to claim from.
Our new standard letter is UC CP1A
Employer Christmas Club
& UC / HB
|If someone pays into a Christmas Savings Club run by their employer and receives a pay-out in their wage just before Christmas – there is a risk that the DWP or the HB Office will count the pay-out as income, causing their UC or HB award to reduce. But this could be wrong and can be challenged.|
These Christmas Savings Clubs enable employees to pay a regular amount of their salary into a secure savings account, to build up a pot for Christmas. Employees can pay as much as they want and they usually cannot access their savings until they are paid out on a set date before Christmas.
The pay-out will probably show up on the payroll system and on the employee’s payslip – because most employers will want to have a visible audit trail of the deductions taken and the payment made. So, when the DWP or the HB Office pick up details of earnings from PAYE, there is a risk that they will include the lump sum pay-out as earned income.
There is no DWP guidance on this matter, but we believe that the pay-out should be treated as savings – not income.
This is because the Christmas Savings Club money should already have been taken into account as income when the DWP or HB Office worked out the claimant's earnings throughout the year. To count it as income again when the pay-out is made would be counting the same income twice!
Net earnings for UC or HB are calculated by using the gross pay and deducting tax and National Insurance contributions and 100% for UC or 50% for HB of any occupational pension contribution.
When someone has deductions taken from their wages to pay into a Christmas Club throughout the year, these deductions cannot be disregarded. So, their net income for the UC or HB calculation should include the money they have paid into their Christmas Savings Club.
The pay-out before Christmas is therefore money that they have saved - ie savings - and should be treated as such!
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