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Benefit Cap: Grace Period - Separating couples
So how does the grace period work for separating couples?

Where a couple has separated and it is the ex-partner who is (or was) working – it can be tricky to work out if the grace period applies.

The answer could be different, depending on whether the ex-partner is still working and on the benefits they were claiming as a couple (or not).

For example the situation could involve:

  • A couple on UC who separate.
  • Someone who is making a new claim for Universal Credit after separating from their partner who was not claiming any benefits previously (due to ex-partner's earnings).
  • Someone who is making a new claim for Universal Credit after separating from their partner who was previously claiming Tax Credits jointly with their partner.
There are different results for these groups!

Remember that the Benefit Cap grace period depends on previous earnings !



Can the ex-partner’s earnings over the preceding 12 months count?

The UC Regulations are not explicit on how the grace period works when a couple separate - but the UC digital service guidance (click here) does say (our emphasis)

'To qualify (for a grace period) a claimant, partner or ex-partner must have earned at or above the level of the in-work exemption threshold in each of the previous 12 months.
If a claimant is relying on work and earnings from an ex-partner, they must have been a couple during that period of work to qualify.'

And the guidance also says:

'If a couple split during a grace period, the remainder of the grace period is applied to both parties.'

Couples who are jointly claiming UC when they separate

When a couple who are jointly claiming UC separate, the UC Regulations say that a new claim for UC is not necessary – the joint claim becomes two single claims from the beginning of the Monthly Assessment Period in which they separate. (Reg 9 of the UC etc Claims & Payments Regs 2013).

Therefore, we believe that (as per the above guidance) the Benefit Cap grace period should be applied for a UC claimant whose ex-partner has met the earnings threshold in the last 12 months – and it does not matter if he/she is still working (as long as they were a couple throughout the 12 month period).

Example: 
Larissa has just separated from her partner Ned. She has moved into rented accommodation with her 5 children.
Ned works full time – and has done for the last 3 years. They have been claiming Universal Credit as a top-up to Ned’s wages.

The joint claim becomes two single claims* from the start of the Monthly Assessment Period during which they separate. As per the above guidance, Larissa should have a 9-month Benefit Cap grace period applied because her ex-partner has earned above the threshold for the last 12 months, they were living together as a couple throughout that period and now she has seen a reduction in earnings (ie she is no longer living off his wages).

*Ned might not be entitled to any UC if he is claiming as a single person in full-time work – depending on his circumstances.

Example:
Ruby has just separated from her partner Benjamin. Benjamin moved out yesterday. Ruby will remain living in her rented house with her 4 children.

Ruby and Benjamin have been claiming Universal Credit as a couple since Benjamin lost his job 4 months ago. They are already in a Benefit Cap grace period – as Benjamin had worked full-time for two years.

So (as per the guidance above) on her single UC award, Ruby should not be affected by the Benefit Cap for the remainder of the current grace period – ie for the next 5 months.

Not previously claiming any benefits

Although the guidance says that a claimant can rely on the earnings of an ex-partner to qualify for the Benefit Cap grace period, the UC Regulations use the words: the 'claimant's earned income is less than.....'.

So it is difficult to see how someone who is making a new claim for UC could have a grace period applied if their ex-partner is still working and earning above the threshold level.

Example:

Rob has just separated from his partner Gayle. He has moved into rented accommodation with his 3 children.
Gayle works full time and the family have been living on her high earnings.

Rob has no income – so he makes a claim for UC for himself and the children.

Rob is making a new claim for UC – but as Gayle is still working and earning above the threshold – there is no grace period.
(He could try for a Discretionary Housing Payment).

Previously claiming Tax Credits 

When a couple who are claiming Tax Credits separate, their joint Tax Credit award is terminated. This normally triggers the need to claim UC.

As in Rob’s scenario, it is difficult to see how someone who is making a new claim for UC could have a grace period applied if their ex-partner is still working.

Example:

Maddy has 4 children. Her partner, Linda has recently left – they had not been getting on well for some time.
Linda works full time – they were claiming Tax Credits as a couple – but these have ended due to the separation. They were not entitled to any Housing Benefit due to the amount of wages and Tax Credits they received.

Maddy now has no income apart from Child Benefit, so she makes a claim for UC for herself and the children – and to pay her rent.

Maddy is making a new claim for UC – but as Linda is still working and earning above the threshold – there is no grace period. (She could try for a Discretionary Housing Payment).

What if Linda finished work at the same time as the separation?
It is difficult to say how the DWP would decide on this. Maddy is making a new claim for UC and if the guidance allows the ex-partner’s earnings to be taken into account, it could be argued that if the UC claim is made after Linda ceased work, then the grace period should apply.

The problem is that the Regulations are not explicit on any of this!





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