Simon Osborne describes some important recent changes in universal credit (UC).
Migration to UC
‘Migration’ refers to a claimant transferring from a legacy benefit (income support, income-related employment and support allowance, income-based jobseeker’s allowance, housing benefit (HB), child tax credit and working tax credit) to UC. ‘Natural’ migration can occur at any time and results from a claim for UC. There is no transitional protection to the level of the legacy benefit. ‘Managed’ migration will be a statutory process triggered by the DWP, involving the ending of legacy benefit entitlement and a notice to claim UC instead. Transitional protection will apply. The process is now expected to be piloted in July and apply to other current claims between 2020 and 2023.
Changes regarding ‘natural’ migration and severely disabled people came into force on 16 January. Rules on ‘managed’ migration had not been finalised at time of writing. However a fresh set of draft regulations gives an indication of how the process will work.
Natural migration and severe disability
From 16 January, claimants of ‘legacy’ benefits entitled to the severe disability premium (SDP), or who had been entitled to it in the last month, are prevented from making a new claim for UC.1 In effect, the claimant is prevented from naturally migrating to UC. The DWP may refer to this as the ‘SDP gateway’. The gateway also applies to ‘joint claimants’ where one is or has been entitled to the premium. Where prevented from making a claim for UC by these rules, the claimant is able to make a new claim for legacy benefits or tax credits.
The prevention from claiming UC will cease to apply at the point the claimant (or the claimant and partner) becomes a ‘notified person’ for the purposes of managed migration – ie, s/he becomes subject to the managed migration process.2 In short, the protection from migration to UC for severely disabled claimants is only regarding natural migration, and such claimants will eventually be included in the managed migration process.
The ‘SDP gateway’ applies only from 16 January. For claimants who naturally migrated to UC before that date and had been entitled to the SDP, it is planned that there will be a ‘transitional SDP amount’. This is an extra monthly amount of UC, paid at a fixed rate. Rules were still in draft form at time of writing. Entitlement will be dependenton UC having continued and the claimant still satisfying the conditions for the premium.
Rules (regarding an initial pilot in 2019) were still in draft form at time of writing, but had been renewed and likely official plans are now clearer.3
Probably from 22 July 2019, the DWP is likely to have powers to run a ‘managed migration pilot’. These powers are limited so as to stop when the total number of UC awards made as a result of the pilot reaches 10,000. At that point, further regulation will be required, and the rules may differ from those operated in the pilot. No details were available about which claimants were to be subject to the pilot. Full operation of the managed migration process is currently expected to take place between November 2020 and 2023.
Draftrules for the pilot included the following.
- The migration process will start with the issue of a ‘migration notice’ informing the claimant that legacy benefits are to terminate and that s/he ‘will need’ to claim UC. The DWP can decide to cancel the notice.
- There will be no automatic claim or entitlement to UC. The usual UC claim rules will apply (although elsewhere the government has indicated a willingness to explore variations).4 A ‘deadline day’ will be specified by which the UC claim must be made. That day must be at least three months from the notification but can be extended if there is ‘good reason’ to do so. Legacy benefit entitlement terminates from the date of the UC claim or, if not made, from the day before the deadline day (with a two-week run-on for HB).
- Where UC is awarded, a ‘transitional element’ as part of the maximum amount will provide transitional protection where the UC is worth less than the legacy benefits. Where a claimant transfers from tax credits with more than £16,000 in capital, a one-year disregard of the excess will allow her/him to qualify for UC.
- If the decision on the claim is that there is no entitlement to UC, then no transitional protection is to be included in any subsequent award of UC (ie, on a new claim) except for certain cases involving excess earnings.(This provision will be of concern in any case where the DWP decides there is a ‘failed claim’ (ie, no entitlement) – eg, following failure to attend the initial interview with the work coach.)
- Full-time students who would normally be unable to get UC are able to do so if transferred via managed migration. Self-employed claimants who transfer in this way will be able to benefit from a 12-month exemption to the minimum income floor even if they started their self-employment more than 12 months ago.
UC two-child limit and interim period
From 1 February, rules on the ‘two-child limit’ in UC are changed so that, in effect, any child born before 6 April 2017 cannot be subject to the limit.5 It remains that such a child will still be counted towards the number of children in the claimant’s family (unless s/he would come under the exceptions about non-parental caring arrangements or adoption, as provided for since 5 November 2018 by the Universal Credit and Jobseeker's Allowance (Miscellaneous Amendments) Regulations 2018, SI No.1129). Formally, this is achieved by providing that any child born before 6 April 2017 who is a third or subsequent child is transitionally protected. The previous somewhat complicated transitional protection rules are omitted.
Separately, the ‘interim period’ rule under which new claims for UC from claimants with three or more children were prevented is formally abolished from 1 February.6 (A determination confirming the ending of the interim period from that date had already been issued by the Secretary of State – see Bulletin 267, p3)
Currently, a ‘mixed-age couple’ (ie, where one person has reached pension age but the other has not) has, in effect, a choice about whether to get pension credit (PC) or UC. Their rent can also be covered by HB rather than UC. Rule changes mean that from 15 May that changes, so that the general rule is that a mixed-age couple cannot start to get PC or HB instead of UC (but note the continuing possibility of a claim for HB under the rules about severe disability described above).7
The rules contain savings provisions so that, generally speaking, a mixed-age couple already on PC or HB under the rules for people of pension age on 14 May can continue on those benefits unless entitlement to both PC and HB as part of that couple comes to an end. As an online DWP factsheet makes clear, 8where PC entitlement as a mixed-age couple can be backdated to 14 May (or before), the standard three-month backdating rules mean that it may be possible to establish entitlement as late as a claim made by 13 August 2019. Also, PC entitlement can start for a period on or after 15 May where the mixed-age couple are entitled to HB under the rules for people of pension age from before that date.
There are some particularly complex provisions regarding HB. The basic provision is that a mixed-age couple can only make a claim for HB for a period before 15 May if they would do so under the rules for people of pension age (again, backdating provisions should apply) or, for a period onorafter 15 May, where there was entitlement to PC or HB as part of the same mixed-age couple since before that date and the couple are able to get HB under the rules for people of pension age. Awards are terminated where the current award ends on or after 15 May – for example, where a claimant becomes a member of mixed-age couple, or where entitlement under the HB rules for people of pension age cease to apply.9
Other amendments provide that, in effect, from 1 February 2019 the general rule is that nobody, including people who have reached pension age (including where part of a mixed-age couple) can make a new claim for tax credits (but note the continuing possibility of a new claim under the rules aboutsevere disability described above).10 For mixed-age couples, from 15 May, the alternative on a new claim may be UC rather than PC
Please be aware that welfare rights law and guidance change frequently. Older Bulletin articles may be out of date. Use keywords or the search function to find more recent material on this topic.
- 1. Universal Credit (Transitional Provisions) (SDP Gateway) Amendment Regs 2019, No.10, which inserts a new reg 4A to the Universal Credit (Transitional Provisions) Regs 2014, No.1230
- 2. At time of writing, this cessation was in draft form only, as it was included in the draft rules about managed migration.
- 3. Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regs 2019 (draft)
- 4. House of Commons Work and Pensions Committee, Universal Credit: managed migration: government response to the Committee’s Twentieth Report of Session 2017–19, HC 1901, 23 January 2019. Variations may include not having to make a claim for UC, and non-mandatory ‘invitations’ to take part in the pilot.
- 5. Universal Credit (Restrictions on Amounts for Children and Qualifying Young Persons) (Transitional Provisions) Amendment Regs 2019, No.27
- 6. Reg 39 Universal Credit (Transitional Provisions) Regs 2014, No.1230 is omitted by SI 2019 No.27
- 7. Welfare Reform Act 2012 (Commencement No.31 and Savings and Transitional Provisions and Commencement No.21 and23 and Transitional and Transitory Provisions (Amendment)) Order 2019, No.37
- 8. DWP factsheet, ‘Pension Credit: extra information’, January 2019, available at www.gov.uk/government/publications/pension-credit
- 9. See note 7, Arts 5 and 6
- 10. The Welfare Reform Act 2012 (Commencement No.32 and Savings and Transitional Provisions) Order 2019, No.167