May 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:
- Coronavirus and Benefits Update - new announcements you may have missed.
- Self-Employed SEISS payments - impact on UC
- Stuck abroad? - relaxation of temporary absence rules
- Post Office Card Accounts - no longer a payment option for new claims
- PIP awards - automatically extended?
- UC Time limits - a quick reminder of some of the rules.
- On UC because DWP incorrectly ended a legacy benefit? - claimants win High Court discrimination case.
- Coronavirus and Benefits E-Learning - free to use.
- Your chance to WIN £50 for your local FOOD BANK and chocolates for you!
Coronavirus & Benefits Update
Announcements you may have missed.......
- Third Party Deductions for Rent arrears, Service Charge arrears and Council Tax arrears were suspended between 10 April and 10 May. The DWP took this step in order to re-deploy staff to process the 'unprecedented number of Universal Credit applications' which have been received. They have said that third party deductions will resume on 10 May. The suspension of deductions for overpayments, recovery of Social Fund loans and Tax Credit debts remains in place until the beginning of July - click here.
- Working Tax Credit - further relaxation of the rules. Previously HMRC had said that claimants did not need to report a drop in hours if this was likely to be for less than 8 weeks. Now they are saying that awards will continue for claimants whose working hours have temporarily reduced or stopped due to Coronavirus, or who are being furloughed. They will be treated as working their normal hours until the Job Retention Scheme and Self-Employment Income Support Scheme close, even if they are not using either scheme. They do not need to contact HMRC about this change. - click here.
- SEISS payments are to be made by 25th May and not in early June, as previously announced. The SEISS payment is counted as earned income for UC - more information below.
- UC Childcare Costs - more clarity from the DWP. Since the start of the lockdown, the only workers who have had access to childcare are critical workers. Critical workers who claim UC will be able to continue to receive help with these costs through their UC award.
Other claimants may well have paid for childcare in advance, or be paying a retainer fee to reserve a childcare place for future use. The DWP have confirmed that those who have paid in advance for childcare will be able to receive a Childcare Costs Element once that childcare has been provided, but retainers are not eligible to be covered.
UC and the Self-Employed Income Support Scheme Grant
Self employed people who are eligible for an SEISS payment can apply from 13th May and should receive their payment by 25th May.
The SEISS payment is a taxable grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month. The payment will be a lump sum to cover March, April and May.
More details on the scheme and who is eligible here.
Impact on Universal Credit
For those who are already claiming UC, their SEISS grant will be treated as earnings for Universal Credit for the Monthly Assessment Period during which it is received.
They will need to report the payment as they would normally report self employed earnings. So the SEISS payment will form part (or all) of their self-employed income. They will also report expenditure in that assessment period, such as for tax, national insurance and allowable expenses etc.
If the claimant has been reporting a loss every month up to then, 'unused losses' can be offset against the grant and only the difference will be treated as earnings. More on this here.
For many, the lump sum SEISS grant payment will mean that the claimant's UC award reduces to nil for that month.
It will be important for claimants to be aware that they will actively need to reclaim in order to be awarded UC for the following assessment period.
Some claimants will be affected by the 'surplus earnings' rule – where some of the surplus earnings, due to the SEISS grant, are expected to be used in the following month/s. More on this here.
Stuck abroad due to Coronavirus?
We have heard that there is some internal guidance to Housing Benefit staff, advising that they can continue to pay HB where the claimant is stuck abroad and is unable to return due to the Coronavirus travel restrictions.
In other words, HB can continue in payment when it would normally stop once the claimant has been abroad longer than the period allowed under the temporary absence rules (normally 4 weeks). This is understood to be an extra-statutory payment – ie the HB Regulations have not been changed, but the payments are allowed in these circumstances.
We are not aware of any similar guidance for other benefits, eg UC, however we see no reason why this policy would only be intended for HB claimants…
Please check the website for updates.
From 11 May 2020 there is no longer an option of having any benefit or pension paid into a Post Office Card Account unless the claimant has already been having benefits or pensions paid into a Post Office Card Account.
So those benefit claimants who currently have their benefits or pension paid into their Post Office Card Account can continue to do so - even if they are making a new claim for a benefit.
The change is a step towards the abolition of Post Office Card Accounts from November 2021.
Claimants are expected to use a bank, building society or credit union account wherever possible. There is a Payment Exception Service for those who cannot open a bank account.
The government has temporarily suspended face to face medical assessments for disability and sickness benefits due to the Coronavirus pandemic. It has also said that these benefits will be automatically extended if they are due to expire.
On 23rd April, DWP Minister Justin Tomlinson confirmed,
‘for those that would be due for a reassessment in the next three months, we’ve automatically extended their benefit by six months.
If their condition has deteriorated, and they feel they would be entitled to more money, they can still request a reassessment but otherwise they are automatically extended.’
There appears to be a problem for some PIP claimants.
We have heard of some claimants whose award period has come to an end and has not been extended, and payments have stopped.
Claimants can contact their MP about this matter and it could be worth raising with CPAG via their Early Warning System. If you come across someone in this situation, please let us know.
Here is a quick reminder of some of the time limits for UC claimants.
Requesting a mandatory reconsideration
We are still seeing this sort of (inaccurate) message put on claimants' journals when a decision is made on their claim.
You should request a mandatory reconsideration within one month of the date of the decision.
But did you know that a request for a mandatory reconsideration can be made within 13 months of the date of the decision?
The claimant should provide reasons for the delay if their request is made more than one month after the decision. If the DWP accept their reasons, they will carry out a mandatory reconsideration. If the reasons for the delay are not accepted, the DWP might not carry out a mandatory reconsideration in full (ie look at the decision again) but, crucially, even if they do not carry out the reconsideration they must produce a mandatory reconsideration notice which will enable the claimant to lodge an appeal.
If claimants are told by the DWP that they are out of time to request a mandatory reconsideration, because the decision was made more than one month ago, and so they don't make the request, they are being denied the opportunity of taking their challenge to an independent tribunal.
Let us know if you come across this - and let your DWP Partnership Manager know too!
Also note that there is no time limit to request a mandatory reconsideration of a decision which is made due to official error, a decision to impose a sanction, a Benefit Cap decision or a decision based on a Rent Officer determination.
See here for more info.Reporting a changeChanges in circumstances should be notified before the end of the Monthly Assessment Period in which they occurred.
If the change means an increase in UC
The increase in UC can only be included from the monthly assessment period in which the change is reported. So claimants could miss out if they fail to report changes promptly.
However, the regulations do allow some flexibility. If the claimant can demonstrate that there are special circumstances that meant it was not practicable for them to notify the change of circumstances within that assessment period, the increase in their UC can be paid from the assessment period during which the change occurred. The absolute time limit for this is 13 months after the date the change occurred. The longer the delay, the more compelling the special circumstances need to be.
(If the DWP require evidence of the change there is another deadline to meet - see below.)
Exception to the rule
There is no time limit where a UC claimant, their partner, their dependent child or non-dependant has been awarded a 'qualifying benefit', eg. Personal Independence Payment, Disability Living Allowance or Attendance Allowance. The resulting increase in UC is paid from the monthly assessment period during which the qualifying benefit was awarded, regardless of when the claimant reports that change.
Stricter time limit
If the change is that the claimant is finishing work, they could be sanctioned if they don't report this change within 5 days.
If the change means a decrease in UC
If the claimant does not report the change before the end of the monthly assessment period in which the change occurred, they will be overpaid UC. All UC overpayments are recoverable. The claimant might also incur a 'Civil Penalty' too.
More info here.
Change of circumstances
When a UC claimant reports a change in circumstances, they may be required to provide evidence.
Where the change is a beneficial one - meaning more UC entitlement - the evidence must be provided within 14 days of the date the claimant notified the UC dept of the change. This deadline can be extended if the claimant requests this and needs longer to obtain the evidence.
There is a time limit of one month from the date the evidence was requested for new claimants to provide evidence in support of their claim. The deadline can be extended where the DWP consider this to be reasonable.
More info here
Universal Credit - The Basics
Find out more about how to access our E-learning courses - click here
UC Discrimination - case wins in Court of Appeal
The Court of Appeal has ruled that there was unjustifiable disability discrimination against two claimants who ended up on Universal Credit because their legacy benefits were incorrectly stopped.
The first is a carer for her disabled daughter. Her Income Support was incorrectly terminated when her daughter's renewal DLA claim was being processed. She claimed UC on advice from the DWP and this left her almost £140 per month worse off. Despite the DWP accepting that they were wrong to end her IS, she was not allowed to move back onto IS.
The second claimant's PIP was ended and then her ESA was terminated because she failed to attend a work capability assessment. Although later the PIP and ESA were reinstated because they had been ended wrongly, she was forced to claim UC while awaiting the decisions because her only income at that time was Housing Benefit. On UC, she received up to £187.95 less per month than she would have on the correct legacy benefits, but she too was trapped in the UC 'lobster pot'.
The Court ruled that there was no justification for treating the two households differently from those claimants who will in the future be moved on to UC through managed migration – and who will keep the same income level as their legacy benefits through being transitionally protected.
The DWP will need to find a remedy for the discrimination - which could see disabled claimants (or those with disabled household members) moved back onto legacy benefits or receiving an additional amount of UC to make up for their losses. Of course, this could be delayed because the DWP might seek leave to appeal to the Supreme Court.
If you know of claimants:
- Who had a benefit stopped by the DWP in error, and
- Who then had no option but to claim Universal Credit, and
- Who were worse off as a result,and
- Whose reduction in income was related to the household's disabilities, and
- Who would have been entitled to transitional protection had they stayed on the legacy benefit system and been manage-migrated onto UC
- then they could make a request for compensation.
Have you seen
our new workers self-isolating / shielding