July 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:
- New two week run on of IS / IR-ESA / IB-JSA - for claims made on or after 22nd July 2020
- Changes to APA managed payments - To be paid to social landlords on same date as claimant
- Coronavirus and Benefits Update - the latest on conditionality and medical assessments
- Court of Appeal decision - two wages in one UC Assessment Period - new case law that may help, although.....
- High Court decision on the Benefit Cap - will help many working claimants.
- No way back for those whose Tax Credits stopped when they were misadvised to claim UC - the DWP have confirmed
- Will we see an increase in sanctions? - Now that conditionality is back!
- Your chance to WIN £50 for your local FOOD BANK and chocolates for you!
New two week run-on for IS, IR-ESA and IB-JSA
From 22 July 2020, a new two-week 'run on' applies to Income Support, Income Related Employment and Support Allowance and Income Based Jobseeker’s Allowance.
This means that where entitlement to one of these benefits ends as a result of a claim for Universal Credit, the end date is not the day before the date the initial UC claim is made, but two weeks later.
We expect this to work in a similar way to the Transition to UC Housing Payment (two-week run-on of Housing Benefit) which has been in place since 11th April 2018.
The idea behind introducing this two week run on is to provide some extra income to help claimants adjusting to monthly budgeting.
What's happening to Advance Payments?
The rules on Advance Payments are not changing.
So these claimants can still receive a Benefit Transfer Advance without having to show that they would suffer hardship without it.
And could still request up to 100% of their likely Universal Credit award.
What if the IS, IR-ESA or IB-JSA is still in payment beyond the two weeks?
Occasionally claimants can find that their IS, IR-ESA or IB-JSA continues in payment when it should have been stopped - because they have claimed Universal Credit.
From 22nd July 2020, where this happens only the IS, IR-ESA or IB-JSA paid beyond the two week run-on should be classed as income when assessing the Universal Credit award.
Is everyone who has been on IS, IR-ESA or IB-JSA prior to making a claim for UC entitled?
No. A UC claimant will only be entitled to the two week IS, IR-ESA or IB-JSA 'run-on' if they were the main claimant of that benefit and their claim for IS, IR-ESA or IB-JSA has come to an end on or after 22nd July 2020 because they made a claim for UC.
Watch out for:
- Those whose award of IS, IR-ESA or IB-JSA had already terminated before the day they made their claim for Universal Credit.
- Those who are claiming UC following the death of a partner - where it was the partner who was the IS, IR-ESA or sole IB-JSA claimant.
- Those whose IS, IR-ESA or IB-JSA is ending because they are becoming a couple with someone already on UC - because this is not seen as a new claim.
- Mixed age couples who are claiming UC because an award of IR-ESA, IB-JSA, IS has ended.
What happens when the older member of a working age couple on IS, IR-ESA or IB-JSA becomes a mixed age couple?
A claimant will be entitled to the two week IS, IR-ESA or IB-JSA run-on if their claim for IS, IR-ESA or IB-JSA is ending because they have made a new claim for Universal Credit.
If a couple on IS, IR-ESA, IB-JSA make a claim for Universal Credit before the older member turns pension age, then their IS, IR-ESA or IB-JSA is coming to an end because of the UC claim (rather than because one of the couple have become pension age) and therefore we see no reason why they would not be entitled to the two week run-on. But if they wait until the day after the older member has turned pension age, then the award of IS, IR-ESA or IB-JSA will already have ended and so they will not be entitled to the IS, IR-ESA, IB-JSA two week run-on.
How much will they get?
Their award of IS, IR-ESA or IB-JSA will end two weeks after the date the UC claim was made - this suggests that the DWP will continue to assess the claim and so will be based on the claimant's income, savings and circumstances during that two week period.
So whilst it is called a 'run-on' it is a 'run-on' of the claim rather than a 'run-on' of the award.
Doesn't it just reduce the claimant's first UC award £1 for £1?
No. The IS, IR-ESA, IR-ESA two week run on is not counted as income for UC purposes.
What if the claimant was getting Contributory ESA or Contribution-Based JSA topped up by Income-Related ESA or Income-Based JSA?
Then the run on will still apply to the IR-ESA / IB-JSA, but the C-ESA / CB-JSA will be treated as income from day one of the UC claim and will reduce the claimant's award £1 for £1.
Will the payment be made automatically or does the claimant have to apply for it?
A claimant should not have to apply for it: when the IS, IR-ESA, IB-JSA department are notified by the UC Dept that a claimant has made a claim for UC on or after 22nd July 2020: they should end the IS, IR-ESA, IB-JSA award two weeks after the date of the UC claim.
Will this extra benefit be taken into account when working out a claimant's total 'welfare' to see if they are affected by the Benefit Cap?
|Which food bank would you help|
with a £50 donation?
Why not enter our Food Bank Competition this month to do just that? (see below):
"Thank you so much for your kind donation of £50 towards our work amongst the homeless and vulnerable. As you can imagine a lot of our usual donations have dried up recently as companies, schools, places of worship and community groups have not been meeting and fundraising, so your gift is especially welcome."
Crawley Open House
APA Managed Payments changes
The DWP have been testing out a new way to pay landlords APA Managed Payments - to try to resolve the issues of 'skipped payments' and delays.
On 9th July Neil Couling - in a letter - confirmed that the testing process was over and had been a success, and that the new way of paying APA Managed Payments will start to be rolled out from August 2020.
Rather than being paid on one 4 weekly schedule, the APA managed payment will be aligned with the claimant's Assessment Periods, meaning landlords will receive an APA Managed Payment on the same date that the claimant receives their UC payment.
This means that landlords could receive payments every working day of the year.
In addition, landlords will be able to see how much APA Managed Payment they are due to receive - this information should be available on the date the claimant's UC is assessed ie the last day of their Monthly Assessment Period.
But it would appear that the system cannot handle 'untidy tenancies' ie where a joint tenant has left the property. In the FAQs it states: 'We will pay 50% of any housing costs via the new payment system, the remaining 50% will be paid via the existing Third Party Payments System. NB. We are looking at ways to resolve the issue of absent joint tenants and unequal apportionment of rent.'
The DWP will be contacting landlords two weeks before they are due to change over to this system.
Coronavirus and Benefits Update
At the beginning of the Coronavirus outbreak the government set in place a number of easements - these were either due to the need to prevent the spread of Coronavirus or to help the DWP deal with the unprecedented number of new UC claims.
Many of these easements were set to end in June - and some did! We give a brief outline below:
(Keep an eye on our News Headlines for updates).
- Work search and availability requirements were suspended for three months from 30th March 2020 - and have now ended - please see article below for more information.
- Recovery of certain debts was suspended from 3rd April 2020 for 3 months - this was so that the DWP could redeploy staff to help with the high volume of new claims they were receiving at that time. We understand that this suspension has been lifted and claimants will begin to see these deductions again for assessments made on or after 3rd July 2020.
- Suspension of benefit reviews and reassessments for Universal Credit (LCW/LCWRA), Employment and Support Allowance and Personal Independence Payment were in place up to 24th June 2020. We understand PIP & DLA reviews and reassessments will gradually resume from this month, starting with those claimants whose reviews/reassessments were already underway when they were suspended.
- Face-to-face assessments for health and disability benefits were suspended from 17th March 2020 for an initial period of three months. The DWP has announced that face-to-face assessments for disability benefits remain suspended, to protect people from unnecessary risk of Coronavirus. But this will be kept under review.
Court of Appeal decision - two wages in one UC Assessment Period
The phenomenon of a ‘non-banking day salary shift’ - meaning two wages are taken as paid in the same Assessment Period - has been found to be unlawful.
The DWP has confirmed that they will not be appealing the Court of Appeal's decision and will now have to consider what to do to rectify the situation.
High Court decision - Benefit Cap
Another Universal Credit case has won in the Courts - this time one looking at the Benefit Cap.
In this case the claimant was penalised because of the way she was paid - every 4 weeks - so for the majority of her UC Assessment Periods according to the Universal Credit computer system it looked like she wasn’t earning enough to escape the Cap – but if you worked out a monthly wage figure for her she should not have been capped.
CPAG, who represented her, explained the injustice that exists just because she is paid four-weekly whereas Universal Credit is worked out monthly. So another claimant doing exactly the same work, for the same number of hours at the same rate of pay, but paid monthly, would be exempt from the Benefit Cap.
The Court agreed that this situation was irrational and unlawful.
We are now waiting to see if the DWP will appeal the decision, and if not, how they will fix it.
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Tax Credits -
No way back!
At the beginning of the Coronavirus outbreak many families saw their income drop - and the advice at the time was 'claim Universal Credit'.
For many - those who were entitled - the extra income from UC brought some relief.
However, the advice was given without considering the impact on the families' existing benefits nor whether they could actually end up worse off.
Some who applied for UC found that the Tax Credits that they could have remained entitled to stopped as soon as the claim was made, but due to their savings/capital (being more than £16,000) they were not actually entitled to any UC.
But there is no way back! The claim for UC had brought their Tax Credits claim to an end, and they were not allowed to make a new one.
On 15th July, Will Quince, Work and Pensions Minister said that there is 'no route back' and, while options have been explored, the Department 'has not found one that is workable'.
His statement also appears to have closed the door on these claimants making a complaint and requesting compensation for misadvice, Mr Quince has said -
'When you suggest that the government advised people to claim universal credit I don't actually think that's the case - we advise people to check whether they're eligible for universal credit and it is made absolutely clear throughout ... that a universal credit claim, and making one, will cease any existing entitlement to legacy benefits and that includes tax credits - that's made absolutely clear in the system.'
However, where someone has missed out because they were told they had no option but to claim Universal Credit it is still worth them making a complaint. Each case should be considered on its merits.
The claimant will need to provide as much evidence as possible that they were misadvised by the DWP - ie what was said to them / what they read - including dates and times of phone calls / visits to websites.
Where that advice came from an organisation other than the DWP then they need to follow that organisation's complaints procedure.
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Will we see an increase in sanctions?
From 30th March the government made a number of changes to Universal Credit due to Covid-19, including suspending claimant commitments and not requiring claimants to look for work.
Regulations were amended so that there were no work search requirements until 30th June, and no sanctions could be given for people who failed to look for work; but from 1st July new claimants subject to all work search requirements will have to work search and be able and willing to take up paid work and/or attend an interview.
So claimant commitments are back in force and claimants can be sanctioned for failing to undertake work search or work preparation.
However the DWP have said, in their Touchbase magazine, that existing claimants will not be sanctioned until their claimant commitment has been updated:
“ No sanction will be used until the claimant has an up-to-date claimant commitment in place. After that, a sanction will only be used where a claimant has not provided good reason for meeting the agreed requirements in the claimant commitment. Claimants who are shielding, have childcare responsibilities because of COVID restrictions, etc. will have their claimant commitment tailored to reflect their circumstances and will not be asked to do anything unreasonable.”
Confirming the reintroduction of conditionality in a written parliamentary answer, Employment Minister Mims Davies says -
“From 1 July we will reintroduce the requirement for claimants of universal credit, new-style and legacy jobseeker’s allowance to accept a claimant commitment as part of any new claim. For existing claimants, we will review and update their claimant commitment as capacity allows. This is so we can provide tailored support to help them find work or increase hours.
Claimant commitments must be reasonable for the ‘new normal’, acknowledging the reality of a person’s local jobs market and personal circumstances to prepare them for getting back into work.”
NB - Ms Davies also confirmed that, from this month, claimants will be able to make an appointment with their work coach if they can’t get the help they want online or over the phone.
But many Job Centres are still closed?
Not all Job Centres are open. But claimants can still communicate with their Work Coach and search for and apply for jobs online. Where someone needs to, but can’t get to, a Job Centre, or it’s closed, then they will still be expected to use other means to contact the DWP, participate in interviews etc.
Increase in claim closures / sanctions
So, many claimants who made a new claim during the Coronavirus may not have had any work search requirements linked to their claim for UC, but will now have their claimant commitment reviewed to include these.
If they fail to accept the new claimant commitment within 7 days then their claim for UC will be closed.
And if they fail to complete the tasks/work search required they could be sanctioned. However the sanction should be imposed only if they failed to meet their updated claimant commitment. If the sanction was imposed for failing to do something that would be ‘unreasonable’ taking into account their personal circumstances under the ‘new normal,’ then they may have grounds to challenge it.
EEA Nationals and UC
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