March 2021 Newsletter
Welcome to our latest newsletter - bringing you right up to date with useful welfare benefit information.
In this issue find out more about:
- Budget announcements - what's changing
- £500 payment for WTC claimants - who and when
- Bedroom Tax issue - UC computer system problem
- Complex needs - how to get them logged.
- New Benefit Rates
- Change to HB personal allowance for some pension age claimants
- State pension arrears payments - and how treated by PC and HB
- New Tools - a leaflet about the EU Settlement Scheme
- Our May Conference - a date for your diary
- Your chance to WIN £50 for your local FOOD BANK and a box of chocolates for you!
|Here are the main announcements relating to welfare benefits as announced by the Chancellor on 3rd March 2021.|
Working Tax Credit
- Standard Allowance The £20 uplift in the UC Standard Allowance will continue for a further 6 months from April 2021.
- Minimum Income Floor The suspension of the MIF continues to the end of July 2021. It will gradually be re-introduced in August but with discretion for it not to be applied to claimants whose self employed earnings are adversely affected by Covid.
- Repayment of Advances From April 2021, New Claim Advances & Benefit Transfer Advances can be repaid over 24 months.
- Deduction rates From April 2021, the maximum amount for Third Party Deductions will be reduced from 30% of standard allowance to 25%.
- Surplus Earnings The surplus earnings threshold will remain at £2500 until 31st March 2022 (when it is due to be reduced from £2,500 to £300).
- £500 payment The temporary £20 uplift ends from April, but claimants will receive a £500 one off payment. (See below.)
Local Housing Allowance Shared Accommodation Rate
From June 2021:
- Care leavers: Care leavers remain exempt from the Shared Accommodation Rate until age 25.
- Homeless Hostels: Those exempt from the Shared Accommodation Rate due to having lived in homeless hostels for 3 months will include claimants under 25 (currently they must be age 25-35).
£500 Payment for WTC claimants
Whilst the higher Standard Allowance is continuing for Universal Credit claimants until September, for Working Tax Credit claimants, the government has decided to award a one-off payment instead.
Eligibility for this £500 payment is based on eligibility for WTC on 2nd March 2021. This also includes those who are entitled to both Working Tax Credit and Child Tax Credit but who only receive CTC because their earnings are too high for them to receive both.
There is no need to make an application for the £500 payment; HMRC will contact claimants by text message or letter in April to confirm they are eligible. Payments should be received by 23rd April 2021.
Will the £500 payment affect HB?
As it is a one-off payment, it would not count as income for HB, but if the payment takes the claimant’s savings over £6000, they should notify the HB Office.
Could claimants get the £500 payment and then move onto UC instead and get the extra £20 pw on UC?
Once someone has received their £500 payment, there appears to be nothing at the moment to stop them from claiming UC instead – and getting the £20 per week uplift until September. But they should check first that UC is the best option for them.
|Want to know more about the recent changes?|
Book onto our
Welfare Benefit Update
Tuesday 30th March, 9.30-12.30 - just £59+vat pp
click here for more info.
Bedroom Tax & UC computer glitch
We have recently been alerted to a problem with the Universal Credit computer system.
Where a social housing claimant has three bedrooms and would normally only be eligible for one but they have been granted a second bedroom on medical grounds, then the UC system excludes them from the spare room subsidy altogether ie no Bedroom Tax deduction is made even though there is one 'spare' bedroom.
The result is that they are receiving more UC than they are entitled to.
The DWP is aware of the situation but we understand that no fix is due 'in the foreseeable future'.
Our concern is that when the DWP are able to fix the system, they will then create an overpayment in respect of the extra UC that has been awarded incorrectly. This is because all UC overpayments are recoverable - even those caused by DWP error. And, the information we have suggests that the DWP believe that they are making both the claimant and landlord aware of the situation and so will probably be assuming that the tenant is putting aside the extra UC so will be able to repay the overpayment in the future.
Obviously there are numerous implications for both the tenant and the landlord:
We would be interested to hear from you if you are aware of tenants that are in this situation. email email@example.com
- The tenant may be refused a DHP because, from the LA's perspective, there is no Bedroom Tax reduction.
- Where the landlord is receiving an APA managed payment, then any overpaid Housing Costs Element will be recovered from them, meaning a rent account that is clear one day could go deep into arrears the next.
- If the overpayment is recoverable from the claimant then the DWP usually recover this from the claimant's on-going UC entitlement. So at the point that the Bedroom Tax deduction starts being made, the claimant's UC award is further reduced due to the recovery of the overpayment.
New addition to our suite of courses
Housing Costs Element - how calculated.
You could have an annual subscription that gives unlimited access to all our E-Learning courses - recently updated to take account of
Subscriptions for all your staff to have access to these courses start at just £750+vat per annum.
Click here for more info.
Complex Needs - Safeguarding procedures
It is important that claimants make the DWP aware of any 'complex needs' they have - so that the correct safeguards can be applied to their claims.
This topic has been in the news recently due to the decision in the High Court that the DWP did not act unlawfully in the very sad case of Errol Graham who starved to death in 2018 after his ESA had stopped.
Mr Graham had failed to attend a medical assessment, so the DWP wrote to him to ask why he did not attend. When he failed to reply to the letter, the DWP attempted to telephone him, sent him a text message and phoned again. They then attempted two home visits. They were unable to make any contact with Mr Graham. Mr Graham's ESA was then stopped. At that time (2017) there was no DWP guidance on what to do after failed safeguarding visits.
The judge ruled that in the particular circumstances of the case, the DWP had not acted unlawfully.
In July 2020, internal DWP guidance was amended in relation to ESA, UC and PIP claims.
There is a concern that a claimant could have 2 ineffective visits by a DWP visiting officer and a decision made to sanction, disallow or suspend their payment without considering safeguarding when they may be vulnerable....Where it is deemed a customer is a safeguarding concern the claim will not now be closed automatically after 2 ineffective visits, payments will not cease. Instead, the case will be escalated to a manager for an additional layer of checks.
The majority of benefit rates will increase from the start of the new financial year - which this year is 12th April 2021 (due to the first Monday in April being Easter Monday ie a non-working day). Tax Credit rates will increase from 6th April, while HB rates for weekly rents will increase from 5th April and monthly rents from 1st April.
The increase is 0.5% in line with CPI, with State Pension being uprated by 2.5% in line with the government’s ’triple lock’ commitment (and appropriate increases to Pension Credit).
NOTE: The £20 a week uplift in UC standard allowance has been extended for 6 months, but with Working Tax Credit claimants receiving a lump sum alternative of £500, the 16/30 hour earnings disregard in HB will drop back to £17.10 (it had been increased to £17.10 in 2020/21)
The new rates apply from monthly assessment periods which start on or after 12 April 2021. This ensures that no-one benefits from the change for a period before the change was legally in place.
So any UC assessment made up to 10th May 2021 will be calculated using the 2020/21 rates.
Benefit Rates Poster
Our Benefits Rates Poster is available now to view online / print off - see link below.
Folding Benefit Rates Leaflets
These are with the printer- we are waiting for a delivery of 25,000.
We will shortly be contacting our main contacts at each of our subscribing organisations to gather information about how many rates leaflets are needed and an address to send these to. Please note we will not be taking orders in any other way at the moment. If you have not received yours by 1st May 2021 then please contact us: firstname.lastname@example.org
Two sets of HB rates for Pension Age claimants
From 1st April there will be two different levels of personal allowance rates for Pension Age HB claimants. Which rate applies to whom will depend on when they turned Pension Age.
Those who reach Pension Age on or after 1st April 2021 will have a lower personal allowance of £177.10 if they are single or £270.30 for couples.
Whereas, for HB claimants who turned Pension Age before that date, the amounts are £191.15 for single claimants and £286.05 for couples.
For couples, as long as one of them turned Pension Age before 1st April 2021, they will have the higher personal allowance.
Nobody will see a drop in their award due to this change - they will either be on the higher or lower standard allowance, depending on the date they turned Pension Age.
And note that anyone who is on Guarantee Pension Credit will be 'passported' onto 'maximum' HB anyway. But many Pension Age HB claimants do not qualify for Guarantee Pension Credit and their HB is calculated by looking at their applicable amount (which includes the personal allowance) and their income. Over time, therefore, we will see an increasing proportion of Pension Age HB claimants whose HB personal allowance is lower.
Why has the lower rate been introduced?
When Pension Credit was introduced back in 2003, the personal allowance of Housing Benefit for Pension Age claimants was increased by the maximum amount of Savings Pension Credit. This was to protect claimants' incomes; if the HB allowance had not been increased, those who received Savings Pension Credit would have lost some of their HB. The higher personal allowance was there to ensure that if someone got Savings Pension Credit their HB would not be reduced as a result.
But Savings Pension Credit is being phased out. Anyone turning Pension Age since 6th April 2016 has not been able to claim it. The HB rates remained the same for 5 years, but from April 2021 they are dropping - because those who turn Pension Age from April 2021 onwards will not be getting SPC and therefore do not need that extra protection.
The Pension Service has started checking thousands of State Pension records, following the discovery of historic errors which have led to underpayments.
It is estimated that about 200,000 women could be owed on average £13,500 in back payments.
In some cases, underpayments could date back to 1992! Some men could be owed backpay too.
Some pensioners have already received arrears payments of thousands of pounds.
Find out whose records are being checked by the Pension Service, and whose aren't (some pensioners might need to ask the Pension Service to check their award) in our new Hot Topic.
We also consider the impact on Housing Benefit and Pension Credit of these large payments of arrears.
New leaflet - all about the EU Settlement Scheme
From 1st July 2021 EEA Nationals (and their non EEA family members) will no longer be able to rely on their previous rights to live, work and study in the UK unless they have been granted either Pre-Settled or Settled Status under the EU Settlement Scheme.