Advising low income families in Scotland eBulletin - February 2024

Welcome to the February 2024 eBulletin from CPAG in Scotland's service supporting those working with low-income families in Scotland, including lone parents, young parents, low-paid workers, and families affected by violence or imprisonment (previously the Tax Credits and Early Years Project eBulletin).

In this issue

Managed migration to universal credit 

Managed migration is the process by which claimants currently entitled to tax credits and other legacy benefits are being moved onto universal credit. The DWP has announced that managed migration will be implemented in the remaining two areas of Scotland (North and Northeast Scotland) from February 2024. This means that in all parts of Scotland, families receiving tax credits only should expect to receive a migration notice by the end of March. During 2024/25 the migration process will continue:

  • From April, for those claiming tax credits with housing benefit and income support claimants.
  • From June, housing benefit only claimants 
  • From July, employment and support allowance with child tax credits
  • From September, jobseeker’s allowance. 
  • From August, tax credit claimants over state pension age will be asked to apply for either universal credit or pension credit, depending on their circumstances.

The migration notice is an individual letter (both members of a couple receive one) giving them at least three months to claim universal credit. Tax credits are terminated as soon as a universal credit claim is made, or if no universal credit is made by the deadline.

Some of the latest issues with managed migration include:

  • An extension of the deadline can be granted, in one case this was granted for nine months.
  • A significant number of tax credit claims are terminated without a universal credit claim being made.
  • Some claimants are finding that the transitional element is higher than expected, leaving them better off on universal credit. It is advisable to request confirmation from the DWP that the amount is correct, and all circumstances taken into account. In which case, claimants have a legitimate expectation that they are correctly entitled, so should not be asked to repay if the DWP subsequently changes how the transitional element is calculated. 
  • Some claimants are finding that they are worse off on universal credit, despite the government’s repeated pledge that no-one would be worse off at point of transfer, if circumstances unchanged, and they have complied with the process of managed migration. In these cases, it may be advisable to request a mandatory reconsideration of the universal credit decision at the end of the first monthly assessment period.
  • The transitional element is intended to ensure people are no worse off at point of transfer, but will be reduced by increases in other elements of universal credit, including the inflation rise from 8 April.

For more information, see Managing with migration to UC?  

Best Start foods income limits removed 

Best Start foods is a payment card for pregnant women and families with children under three to help pay for heathy foods such as milk, fruit, vegetables and eggs. It has been limited to families on the lowest incomes, earning no more than the equivalent of around 16 hours a week at the minimum wage.

From 26 February 2024, income limits will be scrapped, so that qualifying benefits include any universal credit, tax credits or housing benefit in payment. This extends eligibility to an estimated 20,000 working families, and more closely aligns entitlement with Best Start grant and Scottish child payment. There will also be an 8-week run-on after the qualifying benefit ends. Best Start foods is £4.95 a week during pregnancy/£9.90 for a child under 1, £4.95 for a child aged 1 or 2. 

It will be necessary for claimants to apply from 26 February – even if already getting Scottish child payment or received Best Start grant. 

The Welfare Foods (Best Start Foods) (Scotland) Amendment Regulations 2023

Best Start grant school age payment deadline

The deadline for Best Start grant school age payment applications is 29 February 2024. This is for children born from 1 March 2018 to 28 February 2019, who were eligible to start school last August (but still eligible even if not started school). The school age payment is £294.70, payable to families in receipt of qualifying benefits including universal credit or child tax credit. 
However, for households getting Scottish child payment for the child, it is not necessary to apply for the school age payment, and it should be paid automatically.  
Claims can be made online at mygov.scot or by phone 0800 182 2222. If the deadline has passed and the person is getting Scottish child payment but has not received the school age payment, contact Social Security Scotland. 

Cost of living payment £299

The DWP has announced the qualifying and payment dates for the third of three payments totalling up to £900 for eligible people on means-tested benefits in 2023/24.  

To get the payment of £299, must have received a payment for any day between 13 November and 12 December 2023 (inclusive) of:

  • income-based Jobseeker’s Allowance (JSA) 
  • income-related Employment and Support Allowance (ESA) 
  • Income Support 
  • Pension Credit 
  • Child Tax Credit 
  • Working Tax Credit 
  • Universal Credit (for an assessment period that ended in the period 13 November to 12 December 2023)

If a claim is backdated or later awarded after a revision or appeal to include the qualifying date, the cost-of-living payment is payable. Note that a pension credit claim can be backdated up to three months, so a new claim made now could still qualify. DWP payments to eligible claimants will start on 2 – 22 February 2024.   HMRC payments to claimants receiving tax credits and no other qualifying DWP benefits will receive payments 16 - 22 February 2024. Missing payments can be reported at gov.uk/guidance/cost-of-living-payment#find-out-how-to-report-a-missing-cost-of-living-payment 

Caselaw

This section summarises recent decisions of the Upper Tribunal or courts; these set a binding precedent on HMRC or DWP decision-makers and First–tier Tribunals in similar cases. 

No requirement for mandatory reconsideration before appeal in tax credits

HMRC v Arrbab [2024] EWCA Civ 16 (19 January 2024)

This Court of Appeal decision held that the requirement for a review (mandatory reconsideration) of a tax credits decision before having the right to appeal to a tribunal is unlawful. Claimants can appeal direct to the tribunal on form SSCS5, usually within one month of the decision, and a late appeal can be accepted within 13 months with reason. Claimants may still ask HMRC to review its decision, using form WTC/AP, but this is not a requirement before appeal. If HMRC has previously refused to carry out a review because the request was late, claimants may still be within the time limit to appeal. 

Backdating of disabled child element 

KI v HM Revenue and Customs (TC): [2023] UKUT 212 (AAC) 

This Upper Tribunal decision concerns the disabled child element in child tax credit (CTC) which is payable if disability living allowance (DLA), or child disability payment, is in payment for a child. In this case, the claimant maintained that she notified the award of DLA for the child in 2010 or 2011 but HMRC had no record of this, so the disabled child element was not included for several years. However, at some point in 2016, HMRC became aware of the fact through a data sharing exercise with the Department for Work and Pensions (DWP). [N.B.The autumn statement 2016 Policy costings (page 33) confirmed that: “it is HMRC’s practice to take data from DWP about such children and update the customer’s CTC awards automatically. There was a gap in the data-feed between DWP and HMRC during 2011-14.”]

The judgment found that the failure of automatic notification from the DWP to HMRC was not an official error, so revising of decisions for earlier years was not possible for that reason. 

However, it is worth noting that in this case, HMRC had awarded the disabled child element for the whole of the current year when it became aware of DLA for the child, and subsequently agreed to award the disabled child element for the whole of the previous tax year as well.