November 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 some of the issues covered in our Budget Update and more: |
- Changes for UC workers - earnings taper rate and work allowance
- Other Budget Announcements
- 'Special rules' - change to definition
- Disabled Students - tighter rules
- UC rollout - update
- PIP - Engaging with other people - Supreme Court judgement
- New Standard Letter - for working UC claimants if struggling to get a fit note
- WEBINAR - Debts, Deductions and Sustaining Tenancies
- Your chance to WIN £50 for your local FOOD BANK and a Webinar place for yourself
Changes to UC for workers
The UC rules are to change very soon! The changes mean that working claimants will be better off, as more of their earnings will be ignored when their UC is calculated.
There are two changes:
The Universal Credit taper rate is being reduced from 63p to 55p
This means a claimant’s award will be reduced by 55p, rather than 63p, for every £1 of net earnings above any Work Allowance.
The Work Allowance is increasing by £500 per year.
Those who qualify for a Work Allowance currently have the first £344.00 or £573.00 of their net monthly earnings completely disregarded.
Claimants will be entitled to a Work Allowance if they have dependent children or if they have (or their partner has) a limited capability for work.
The Work Allowance is £344.00 per month if there is a Housing Costs Element included in the UC assessment or if the claimant lives in temporary accommodation. Otherwise it is £573.00.
These amounts are increasing by £500 per year (£41.67 per month). This is likely to be rounded up to an additional £42 per month. So £335 and £557.
The increase in the Work Allowance is to ensure that UC claimants with a Work Allowance benefit as much from the reduction in the taper as people without.
When are the rules changing?
In the Budget announcement, the government said that the change would be in place before 1st December. More recently, the Secretary of State for Work & Pensions, Dr Therese Coffey has said this could possibly be from 24th November. We assume this means from the Monthly Assessment Period that starts on or after this date - to ensure claimants see the increase before Christmas.
How can you work out what difference the change will make to someone's UC?
We have produced a new calculator for this! (See link below)
We are reprinting our Benefits Rates Pocket Guide too - they should be sent to the main contact in your organisation in December. We've not yet updated the benefit rates on the website version, that you can also download, as we are waiting for the exact figures to be confirmed first.
Other Budget Announcements
In addition to the changes to the Universal Credit earnings taper and Work Allowance, the following other (future) changes have been announced in the Budget statement.
The surplus earnings de minimis threshold will stay at £2,500 until 31st March 2023.
The threshold was expected to drop to £300 in April 2022 but is being kept at the higher figure for a further 12 months. This will avoid an increase in the number of claimants being affected by the complicated surplus earnings rules.
| Want to know more about the Surplus Earnings rules - watch our video. |
Victims of domestic abuse and modern slavery will be exempt from the Shared Accommodation Rate (SAR) from October 2022.
This exemption was expected to be brought in from October 2023 but will be implemented 12 months early. It means that single claimants under 35 whose help with housing costs is based on the Local Housing Allowance (e.g. those living in private accommodation) will, if they have experienced domestic abuse or modern slavery, be excluded from the Shared Accommodation Rate and have their HB assessed using the one bedroom rate instead.
The planned merger of Pension Credit and Housing Benefit has been pushed back to April 2025.
The government had been planning to create a new element of Pension Credit to replace pension age Housing Benefit from April 2023. This has been pushed back by two years to account for delays to the full rollout of Universal Credit.
Cohabitees with children will be entitled to Bereavement Support Payments (and Widowed Parents Allowance) from around September 2022
These benefits are currently only available where the couple were married or in a civil partnership. It will come into effect after it has been approved by parliament – expected to be around September 2022. Some claimants will receive back payments to August 2018.
Extension of ‘Special Rules for Terminal Illness’.
See item below.
Special rules for terminally ill claimants
The government has announced a change to the special benefit rules for terminally ill claimants.
Currently, where a doctor confirms that their patient has a progressive illness and could reasonably be expected to die within six months, the special benefit rules apply.
In 2022 these rules will be extended to those whose death could reasonably be expected within 12 months.
The special rules fast-track claimants onto:
- the appropriate amount for someone who has a limited capability for work and work related activities in ESA or UC
- the maximum rate for care needs in the appropriate disability benefit for them - including Disability Living Allowance, Personal Independence Payment and Attendance Allowance.
The changes will happen in two stages:
For Employment and Support Allowance or Universal Credit the government has stated that the rules will be extended from April 2022.
For the disability benefits (PIP, DLA & AA) the change will be from a later date because primary legislation has to be passed first.
Disabled students - tighter UC rules
Most full time students are not eligible to claim Universal Credit, but the rules do allow certain students to claim. One of the categories of students who can make a claim is disabled students. But they must fit specific rules to be classed as a 'qualifying disabled student':
They must be getting Personal Independence Payment, Disability Living Allowance or 'Attendance Allowance' AND they must have already been found to have a limited capability for work.
There was a possible solution for students who were already on PIP, DLA or 'AA', but who had not had an assessment to decide if they had a limited capability for work. Previously, the advice for some students would have been to claim New Style ESA and request a Work Capability Assessment to get National Insurance credits for limited capability for work. Once their LCW had been decided, they could then make a claim for UC.
That loophole is being closed!
New amending Regulations which come into effect from 15th December 2021 state that, for UC claims made on or after that date, disabled students need to have been found to have a Limited Capability for Work before they started their course, to be eligible to claim UC whilst 'receiving education'.
There are two other important points to check though!
1. Does the student fit into any of the other categories of students who can claim UC?
2. The student might not be classed as a 'student' for UC purposes! UC is not available to most people who are classed as 'receiving education' but some people who are attending courses do not fall within the UC definition of 'receiving education'.
If someone is on:
- a part-time course of advanced or non-advanced education, or
- a full-time course of non-advanced education for which they are not entitled to a loan or grant for their maintenance (unless classed as a 'qualifying young person'),
- the course does not prevent them from complying with all of the work-related requirements in their claimant commitment (if they have any)
then they are not 'receiving education' under the UC regulations and can claim UC.
| Online Workshop: |
Students and Universal Credit
Thursday 16th December, 1.30pm - 4.30pm
What the UC Regs say, What is 'receiving education',
Which students can claim UC, New rules for disabled students,
How student income is treated, Common mistakes
Just £79+vat per delegate
UC Rollout - what's happening?
DWP promoting the benefits of UC
The DWP have added information to their Understanding Universal Credit web pages to raise awareness of UC. The information promotes the benefits of UC and it suggests:
If you’re already receiving other benefits and tax credits (including Child Tax Credits, Housing Benefit, Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA) and Working Tax Credit), it might be worth considering what Universal Credit can offer.
The problem is that this information does not mention that some people are financially worse off on UC, compared with the benefits that it is replacing (the 'legacy' benefits).
Anyone who chooses to claim UC and is financially worse off will not be protected - there is no transitional protection for those who voluntarily claim UC or whose changing circumstances trigger the need to claim UC. Once someone has claimed UC, there is no chance to get back on legacy benefits.
The information does suggest that claimants of other benefits can use a benefits calculator to check what they might get. A better off calculation can certainly help! However, there could be other factors to consider too, such as:
- Deductions from Universal Credit are higher for some debts than from other benefits. So even if an estimate on a calculator shows that the claimant will get the same amount or more from UC, once deductions have been taken, they could find that they have less money after all.
- Some deductions cannot be taken off Tax Credits or Housing Benefit - but they can from UC.
- Changes that may occur in the next few months that might change the award and make them worse off, such as a non-dependant on IR-ESA turning 21.
- Conditionality for partners. If a couple are currently on IR-ESA, IS or Tax Credits the partner would not be expected to look for work - but they might if they claim UC.
Each case will be different, so specialist advice is essential.
Managed Migration on hold
'Managed migration' to UC is where the DWP contact claimants and tell them they must move off their legacy benefit/s onto UC. These claimants do get financial transitional protection. At the point of moving onto UC they get an extra amount in UC if, otherwise, they would have been worse off.
There was a pilot to test the process of managed migration, in Harrogate. Around 13 claimants were manage migrated through the pilot. The pilot was put on hold due to the Coronavirus pandemic.
The government has recently announced that the managed migration pilot in Harrogate is not expected to be resumed. Dr Thérèse Coffey has said that the DWP learnt a lot from the pilot and are using this to inform their plan to have Universal Credit rolled out by March 2025.
Of course, if more claimants naturally migrate onto UC (without transitional protection) and fewer are manage migrated, the government will make financial savings.
Ensure that the UC information on your customer facing website is up-to-date
Click here to find out more...
PIP - Engaging with other people
Following a 2019 Supreme Court judgement about the daily living activity 'engaging with other people', the DWP has recently started checking some claims.
The court ruling and the checking are about two matters in connection with 'engaging with other people':
Firstly, if the claimant needs help from a particular relative or friend who is experienced in supporting the claimant (as opposed to any relative or friend) they could score 4 points for needing social support. They might have only been awarded 2 points for needing prompting - so their award could be increased.
Secondly, the Supreme Court decided that social support does not need to take place at the time of or immediately before a social engagement. It could take place weeks before, or after the social engagement. So, for example if the claimant has monthly meetings with a therapist or counsellor, and without those meetings the claimant would not be able to manage social engagement to an acceptable standard, the claimant could be considered to need social support. This could mean the claimant should have scored 4 points, where perhaps they were not awarded any.
It is estimated that 320,000 - 340,000 claimants will need to have their claims reviewed.
The DWP will only be reviewing claims where the extra points (if awarded) would make a material difference to the award. In other words, the extra points would increase their total points for daily living to 8 or more (meaning they qualify for the standard rate) or to 12 or more (for the enhanced rate).
The exercise is targeting decisions that were made between April 2016 and September 2020. (From September 2020 new guidance has been followed, in line with the court ruling).
The DWP are not checking awards made by tribunals - so claimants whose PIP award was decided by an appeal tribunal will need to contact the DWP if they think their case should be checked.
Anyone who thinks they might be entitled to a higher PIP award due to this judgement could contact the PIP dept to ensure that their claim is going to be checked.
If someone with a health problem is working and claiming Universal Credit they can, in certain circumstances, request a Work Capability Assessment - and if found to have a LCW or LCWRA they may receive more UC.
Working UC claimants are only able to have Work Capability Assessment (to assess if they have a limited capability for work for UC purposes) if:
- they have monthly earnings of less than £617.76 per month (the monthly equivalent of 16 hours pw paid at the minimum wage), or
- they are earning £617.76 per month or more but they get Personal Independence Payment, Disability Living Allowance, Armed Forces Independence Payment, Constant Attendance Allowance or Attendance Allowance, or
- they have already been found to have a limited capability for work on a previous Work Capability Assessment (WCA) and the new WCA is a review assessment.
Working claimants who want to be referred for a WCA for the first time sometimes have trouble getting fit (sick) notes from their GP - because they are working!
We have a new standard letter that claimants can use to explain that fit notes are needed by the UC department, so that the claimant can be assessed. The letter explains that, although they can do some work, it is limited due to their health condition - which is what the DWP will assess.
| Your chance to join in |
Friday Fun Quiz
Friday 3rd December @ 3pm
This quiz will look at common benefit rules and themes that are relevant to UC and legacy benefits.
Click here for more information and previous quizzes.