Updates on Universal Credit: Case Law, Coronavirus, and More
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Tom Barrett
1
I
M
A
T
r
a
i
n
i
n
g
•
Universal Credit: An Essential Guide.
•
Universal Credit: The Tricky Bits
•
As well as many other courses, info
here:development/training/www.i-m-a.org.uk/learning-
W
h
a
t
w
e
w
i
l
l
c
o
v
e
r
:
•
UC in the Covid19 World!
•
Salary not paid monthly.
•
Housing Costs Element.
•
Tax Credits.
•
Capital.
•
Childcare Costs.
•
Students.
•
Self-Employed.
•
Maternity.
•
Basic Amount.
•
DWP Errors.
•
Real Time Information
System.
•
Redundancy.
•
Various issues to look out
for.
U
C
i
n
t
h
e
C
o
v
i
d
1
9
W
o
r
l
d
!
•
Pre-Covid benefit fraud and error payments were at their
highest ever, account for £1 in every £10 in UC.
•
This accounts for around £4.5bn out of a total £93.1bn total
benefit expenditure in 2019/20.
•
In February 2020 2.9m were on UC, by August this had
reached 5.6m.
•
At the end of March the DWP were receiving 100,000 new
claims a day.
•
The DWP turned off some fraud and overpayment guards to
manage this.
•
BBC reported that £1bn of UC fraud was uncovered by one
person during lockdown.
•
Overpayment issues for people over the capital threshold.
Some definition…
•
Natural Migration
–
A move to UC caused by a change of circumstances. For
example a change in relationship, having a baby, etc.
–
No transitional protections.
•
Managed Migration
–
A move to UC after ‘invite’ by the DWP.
–
Has transitional protections.
A
s
s
e
s
s
m
e
n
t
o
f
E
a
r
n
i
n
g
s
•
Earnings generally assessed on a monthly basis.
•
But the system was previously too rigid.
•
This caused significant problems for some UC
claimants.
•
The rules were successfully challenged in the case of:
•
R (Johnson, Woods, Barrett and Stewart) v
SSWP
CO/1552/2018
T
h
e
R
e
m
e
d
y
•
The SSWP appealed and lost in June 2020.
•
The SSWP confirmed they will not appeal.
•
The Universal Credit (Earned Income) Amendment
Regulations 2020
•
These come into force on 16
th
November 2020.
•
Pre 16
th
November 2020 claims should still be
challenged.
•
Only directly applies to people paid monthly.
F
o
u
r
W
e
e
k
l
y
P
a
y
a
n
d
t
h
e
B
e
n
e
f
i
t
C
a
p
•
Consider the case of
R (Pantellerisco and others) v
SSWP
[2020] EWHC 1944 (Admin).
•
Miss Pantellerisco claimed UC and worked 16 hours
per week.
•
But was still benefit capped!
•
The system could not handle the fact that she was
pad four weekly.
•
CPAG used the irrationality and discrimination
argument, and won.
•
The SSWP has applied for permission to appeal.
H
o
u
s
i
n
g
C
o
s
t
s
E
l
e
m
e
n
t
(
H
C
E
)
a
n
d
U
C
•
Issues with the calculation for some people who pay rent
weekly.
•
HCE Calculated using 52/12 conversation ratio.
•
Doesn’t account for 52 wks and 1 day, or two in a leap
year.
•
Challenged on the grounds of irrationality and Article 14
discrimination.
•
The judge found it was neither irrational or unlawful.
•
HCE is only intended as a contribution, not to pay full
rent.
•
See case of Caine v SSWP
[2020] EWHC 2482
(Admin).
T
a
x
C
r
e
d
i
t
s
•
No capital limits in the tax credit system.
•
Upper Capital Limit of £16,000 in UC.
•
Many recent UC claimants have lost their TC and not
been awarded UC.
•
This is due to the way people enter the UC system.
–
The Basic Conditions
–
Financial Conditions
•
Tax Credits have now been abolished to new claimants.
•
New style JSA/ESA.
•
Only report changes to hours if the change is
permanent.
T
a
x
C
r
e
d
i
t
s
•
Therese Coffey SSWP confirms that the issue would be
looked at.
•
Then decides this is tough!
•
A disclaimer button has now been added to the
application.
•
No way back to Tax Credits!
–
But is this correct?
•
Not everybody was refused.
R
e
t
u
r
n
i
n
g
t
o
T
a
x
C
r
e
d
i
t
s
•
A loophole!
•
Article 7 Paragraph 6 of The Welfare Reform Act 2012
(Commencement No. 23 and Transitional and Transitory
Provisions) Order 2015.
•
The ‘Same Person or Persons’.
•
Substantiation in the case of: W v HMRC [2020] UKUT
239 (AAC).
•
New claims will still be difficult.
•
As yet untested.
–
But appeals are in process.
•
Keep an eye on Rightsnet.
C
a
p
i
t
a
l
F
r
o
m
t
h
e
S
a
l
e
o
f
a
P
r
o
p
e
r
t
y
•
Paragraph 13 of Schedule 10 of The Universal Credit
Regulations 2013.
•
Capital from the sale of a home can be disregarded.
–
Provided it is to be used for the purchase of another home, and;
–
Was received in the last six months.
•
The intention to purchase a home does need to be
established by any ‘certainty’.
•
But it needs to be shown ‘that it is more probable than
not that the money "is to be used" for that purpose.’
•
See the case of: EAM v SSWP [2020] UKUT 247 (AAC)
U
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C
r
e
d
i
t
&
C
h
i
l
d
c
a
r
e
C
o
s
t
s
•
Childcare costs must be paid up front.
•
UC can pay 85% of your childcare costs, up to a
maximum of £646 a month for one child, or £1,108 for two
or more.
•
The legislation clearly says ‘the claimant pays’.
•
The Flexible Support Fund (FSF) can be used to cover
these costs.
•
In response to a question in Parliament Mims Davies MP
stated:
–
“Work Coaches can use the Flexible Support Fund (FSF) to pay 100%
of the upfront childcare costs up to the payment limits set that the
claimant incurs between starting work and receiving their first wage.”
U
n
i
v
e
r
s
a
l
C
r
e
d
i
t
&
C
h
i
l
d
c
a
r
e
C
o
s
t
s
•
Nichola Salvato grant permission to take a Judicial
Review to the High Court.
•
She argues that the upfront payment disproportionately
impacts single parents.
•
As single parents are disproportionately women this is
therefore a discriminatory policy.
•
The policy is irrational because it undermines Universal
Credit’s stated aims.
•
The hearing was heard on 10
th
and 11
th
November 2020.
•
Judgment is yet to be given.
•
Appeal FSF decisions.
U
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s
“If you pay (and report) advance childcare costs for a future
assessment period, but no childcare actually takes place during
that time, you will not be able to reclaim those costs as part of
your Universal Credit claim”
The Competition and Markets Authority have stated that people
should not have to pay for childcare that cannot be used.
S
t
u
d
e
n
t
s
a
n
d
U
n
i
v
e
r
s
a
l
C
r
e
d
i
t
•
People ‘receiving education’ cannot generally claim UC.
–
Exceptions for disabled students.
•
Students need to have a passed a WCA assessment to
claim UC.
•
Previously
–
Students claimed UC and requested a ‘freeze’, or;
–
Claimed New Style-ESA prior to becoming a student.
•
The first option was closed on 5
th
August 2020.
•
Students refused a WCA prior to 5
th
August may now be
able to revisit their claim.
•
See case of: R (Kauser and JL) v Secretary of State for
Work and Pensions (CO/987/2020, 7 October 2020).
S
e
l
f
-
E
m
p
l
o
y
e
d
•
Minimum Income Floor.
–
Currently suspended until the end of April 2021.
•
Surplus Earnings Rule.
–
De Minimis currently set at £2500.
–
Self Employed Income Support Scheme (SEISS) Grant will
trigger this.
•
Money Set Aside for Tax.
–
This should not count as capital.
–
But it sometimes is counted!
–
Consider paying early.
M
a
t
e
r
n
i
t
y
A
l
l
o
w
a
n
c
e
-
S
t
a
t
u
t
o
r
y
M
a
t
e
r
n
i
t
y
P
a
y
•
The recent JR decision has created some definition
between MA and SMP for the purposes of UC.
•
Moore and Others v Secretary of State for Work and
Pensions
[2020] EWHC 2827 (Admin).
•
The case concerned a single parent who changed jobs
at start of her pregnancy.
•
Her intention was create more stability, moving away
from a zero hours contract.
•
Due to changing roles she was not entitled to SMP.
•
Claimed MA but discovered she was much worse off.
•
The JR failed, but CPAG are seeking leave to appeal.
U
C
B
a
s
i
c
A
m
o
u
n
t
•
The UC basic amount was increased by £20 per week
from 6
th
April 2020 for 12 month.
•
The government has so far resisted making this
permanent.
–
Watch for another U-Turn!
•
But not everybody is better off.
–
Due to interactions with the benefit cap.
•
Leigh Day are currently bringing a case on this issue.
•
Pressure for legacy benefit parity.
•
SDP Gateway prevents many disabled people
accessing the uplift.
R
e
t
u
r
n
i
n
g
t
o
L
e
g
a
c
y
B
e
n
e
f
i
t
s
A
f
t
e
r
a
D
W
P
E
r
r
o
r
•
If UC is claimed there is no way back to legacy benefits.
•
This is the case even if there is an error on the part of
the DWP.
•
People are often compelled by need to claim UC.
•
CPAG are currently challenging this concept.
•
See the case of TD & Ors, R (On the Application Of) v
Secretary of State for Work And Pensions [2020] EWCA
Civ 618.
•
On 12
th
May 2020 the Court of Appeal handed down
judgment in favour of the appellants.
•
The SSWP has applied to the Supreme Court for
permission to appeal.
R
e
a
l
T
i
m
e
I
n
f
o
r
m
a
t
i
o
n
(
R
T
I
)
S
y
s
t
e
m
•
Employers report PAYE information to the RTI.
•
If the employer fails to do so the responsibility is the
individual’s.
•
Each monthly UC statement is a DWP decision.
•
Dispute incorrect calculations via MR, and appeals
process.
•
DWP should refer to the ‘Jointly Managed Engagement
Team’.
•
Between January 2016 and February 2018 the DWP
passed 10,698 cases over.
R
e
d
u
n
d
a
n
c
y
I
s
s
u
e
s
•
The 39 week ‘grace’ period (Benefit Cap).
–
8% increase in the numbers benefit capped since May
2020.
•
Paying debts with redundancy money.
•
Redundancy pay – play tactically!
•
Look to CB benefits first.
T
h
i
n
g
s
t
o
l
o
o
k
o
u
t
f
o
r
:
•
Wait for the first payment.
–
Two week run-on when moving from IS, IR-ESA, or IB-JSA.
•
Support Payments:
–
Test and Trace Support Payment (England)
–
Self Isolation Support Grant (Scotland)
–
Self Isolation Support Scheme (Wales)
–
Discretionary Support Self Isolation Grant (NI)
•
Video Relay Service for Deaf People.
•
Failure to Attend Telephone Work Capability
Assessment.
•
Jobcentre Tier Arrangements.
Q
u
e
s
t
i
o
n
s
?
T
h
a
n
k
Y
o
u
!
Introductions, how the session will run etc….
Break at 1 hour.
Explain how questions will be answered.
Note that the information was correct at the time of writing.
Explore the latest developments surrounding Universal Credit, including case law updates, impacts of coronavirus, and key information for debt advisers. Topics covered range from changes in UC due to Covid-19 to assessment of earnings and benefit caps. Stay informed on recent trends and regulations shaping the Universal Credit landscape.
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Presentation Transcript
Universal Credit: Case law, Coronavirus, and other updates for debt advisers Tom Barrett 1
IMA Training Universal Credit: An Essential Guide. Universal Credit: The Tricky Bits As well as many other courses, info here: www.i-m-a.org.uk/learning- development/training/
What we will cover: UC in the Covid19 World! Salary not paid monthly. Housing Costs Element. Tax Credits. Capital. Childcare Costs. Students. Self-Employed. Maternity. Basic Amount. DWP Errors. Real Time Information System. Redundancy. Various issues to look out for.
UC in the Covid19 World! Pre-Covid benefit fraud and error payments were at their highest ever, account for 1 in every 10 in UC. This accounts for around 4.5bn out of a total 93.1bn total benefit expenditure in 2019/20. In February 2020 2.9m were on UC, by August this had reached 5.6m. At the end of March the DWP were receiving 100,000 new claims a day. The DWP turned off some fraud and overpayment guards to manage this. BBC reported that 1bn of UC fraud was uncovered by one person during lockdown. Overpayment issues for people over the capital threshold.
Some definition Natural Migration A move to UC caused by a change of circumstances. For example a change in relationship, having a baby, etc. No transitional protections. Managed Migration A move to UC after invite by the DWP. Has transitional protections.
Assessment of Earnings Earnings generally assessed on a monthly basis. But the system was previously too rigid. This caused significant problems for some UC claimants. The rules were successfully challenged in the case of: R (Johnson, Woods, Barrett and Stewart) v SSWP CO/1552/2018
The Remedy The SSWP appealed and lost in June 2020. The SSWP confirmed they will not appeal. The Universal Credit (Earned Income) Amendment Regulations 2020 These come into force on 16th November 2020. Pre 16th November 2020 claims should still be challenged. Only directly applies to people paid monthly.
Four Weekly Pay and the Benefit Cap Consider the case of R (Pantellerisco and others) v SSWP [2020] EWHC 1944 (Admin). Miss Pantellerisco claimed UC and worked 16 hours per week. But was still benefit capped! The system could not handle the fact that she was pad four weekly. CPAG used the irrationality and discrimination argument, and won. The SSWP has applied for permission to appeal.
Housing Costs Element (HCE) and UC Issues with the calculation for some people who pay rent weekly. HCE Calculated using 52/12 conversation ratio. Doesn t account for 52 wks and 1 day, or two in a leap year. Challenged on the grounds of irrationality and Article 14 discrimination. The judge found it was neither irrational or unlawful. HCE is only intended as a contribution, not to pay full rent. See case of Caine v SSWP [2020] EWHC 2482 (Admin).
Tax Credits No capital limits in the tax credit system. Upper Capital Limit of 16,000 in UC. Many recent UC claimants have lost their TC and not been awarded UC. This is due to the way people enter the UC system. The Basic Conditions Financial Conditions Tax Credits have now been abolished to new claimants. New style JSA/ESA. Only report changes to hours if the change is permanent.
Tax Credits Therese Coffey SSWP confirms that the issue would be looked at. Then decides this is tough! A disclaimer button has now been added to the application. No way back to Tax Credits! But is this correct? Not everybody was refused.
Returning to Tax Credits A loophole! Article 7 Paragraph 6 of The Welfare Reform Act 2012 (Commencement No. 23 and Transitional and Transitory Provisions) Order 2015. The Same Person or Persons . Substantiation in the case of: W v HMRC [2020] UKUT 239 (AAC). New claims will still be difficult. As yet untested. But appeals are in process. Keep an eye on Rightsnet.
Capital From the Sale of a Property Paragraph 13 of Schedule 10 of The Universal Credit Regulations 2013. Capital from the sale of a home can be disregarded. Provided it is to be used for the purchase of another home, and; Was received in the last six months. The intention to purchase a home does need to be established by any certainty . But it needs to be shown that it is more probable than not that the money "is to be used" for that purpose. See the case of: EAM v SSWP [2020] UKUT 247 (AAC)
Universal Credit & Childcare Costs Childcare costs must be paid up front. UC can pay 85% of your childcare costs, up to a maximum of 646 a month for one child, or 1,108 for two or more. The legislation clearly says the claimant pays . The Flexible Support Fund (FSF) can be used to cover these costs. In response to a question in Parliament Mims Davies MP stated: Work Coaches can use the Flexible Support Fund (FSF) to pay 100% of the upfront childcare costs up to the payment limits set that the claimant incurs between starting work and receiving their first wage.
Universal Credit & Childcare Costs Nichola Salvato grant permission to take a Judicial Review to the High Court. She argues that the upfront payment disproportionately impacts single parents. As single parents are disproportionately women this is therefore a discriminatory policy. The policy is irrational because it undermines Universal Credit s stated aims. The hearing was heard on 10th and 11th November 2020. Judgment is yet to be given. Appeal FSF decisions.
Universal Credit & Childcare Costs If you pay (and report) advance childcare costs for a future assessment period, but no childcare actually takes place during that time, you will not be able to reclaim those costs as part of your Universal Credit claim The Competition and Markets Authority have stated that people should not have to pay for childcare that cannot be used.
Students and Universal Credit People receiving education cannot generally claim UC. Exceptions for disabled students. Students need to have a passed a WCA assessment to claim UC. Previously Students claimed UC and requested a freeze , or; Claimed New Style-ESA prior to becoming a student. The first option was closed on 5th August 2020. Students refused a WCA prior to 5th August may now be able to revisit their claim. See case of: R (Kauser and JL) v Secretary of State for Work and Pensions (CO/987/2020, 7 October 2020).
Self-Employed Minimum Income Floor. Currently suspended until the end of April 2021. Surplus Earnings Rule. De Minimis currently set at 2500. Self Employed Income Support Scheme (SEISS) Grant will trigger this. Money Set Aside for Tax. This should not count as capital. But it sometimes is counted! Consider paying early.
Maternity Allowance - Statutory Maternity Pay The recent JR decision has created some definition between MA and SMP for the purposes of UC. Moore and Others v Secretary of State for Work and Pensions [2020] EWHC 2827 (Admin). The case concerned a single parent who changed jobs at start of her pregnancy. Her intention was create more stability, moving away from a zero hours contract. Due to changing roles she was not entitled to SMP. Claimed MA but discovered she was much worse off. The JR failed, but CPAG are seeking leave to appeal.
UC Basic Amount The UC basic amount was increased by 20 per week from 6th April 2020 for 12 month. The government has so far resisted making this permanent. Watch for another U-Turn! But not everybody is better off. Due to interactions with the benefit cap. Leigh Day are currently bringing a case on this issue. Pressure for legacy benefit parity. SDP Gateway prevents many disabled people accessing the uplift.
Returning to Legacy Benefits After a DWP Error If UC is claimed there is no way back to legacy benefits. This is the case even if there is an error on the part of the DWP. People are often compelled by need to claim UC. CPAG are currently challenging this concept. See the case of TD & Ors, R (On the Application Of) v Secretary of State for Work And Pensions [2020] EWCA Civ 618. On 12th May 2020 the Court of Appeal handed down judgment in favour of the appellants. The SSWP has applied to the Supreme Court for permission to appeal.
Real Time Information (RTI) System Employers report PAYE information to the RTI. If the employer fails to do so the responsibility is the individual s. Each monthly UC statement is a DWP decision. Dispute incorrect calculations via MR, and appeals process. DWP should refer to the Jointly Managed Engagement Team . Between January 2016 and February 2018 the DWP passed 10,698 cases over.
Redundancy Issues The 39 week grace period (Benefit Cap). 8% increase in the numbers benefit capped since May 2020. Paying debts with redundancy money. Redundancy pay play tactically! Look to CB benefits first.
Things to look out for: Wait for the first payment. Two week run-on when moving from IS, IR-ESA, or IB-JSA. Support Payments: Test and Trace Support Payment (England) Self Isolation Support Grant (Scotland) Self Isolation Support Scheme (Wales) Discretionary Support Self Isolation Grant (NI) Video Relay Service for Deaf People. Failure to Attend Telephone Work Capability Assessment. Jobcentre Tier Arrangements.
