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Temporary Housing & UC Work Allowance
Happy Monday All!
I have a tenant in Temporary Accommodation, who’s housing costs are being paid by Housing Benefit but the higher work allowance has been applied on her UC award.
The UC regulations (Reg 22 (2)) and decision maker guidance (ADM chapter E2) state that the Lower work allowance should be applied where the UC award contains an amount for the housing cost. I can’t find any mention of the Lower Rate applying when there is a HB claim.
Does this mean that the tenant is entitled to the higher work allowance or am I missing something?
Thanks
Zeyneb
Unfortunately if they are in temp accommodation they are treated as though they do have UC housing costs so it’s the lower work allowance - reg 5A of the UC(TP) Regs 2014
Thanks Daphne. Must have missed this one!
Only exception would be where the temporary accommodation is also exempt accommodation, which would mean it is provided by a registered HA and the HA also provides some support. You do see this: many local authorities contract out the procurement of temp acc to HAs who then take referrals from the LA homeless section, so if the setting includes some support provided by the HA it will be exempt as well as temp acc - in that case the higher work allowance still applies.
PS - just seen your organisation, so you will know all about HALS already!
I keep going around in circles with this question (at the moment it’s hypothetical, but could become real in a couple of months if my client gets the extra hours they’ve been promised). The first part of this is a serious question, and the second is more academic (even if they could be better off, it could easily go wrong, and could cause confusion and delays in payment).
The first part:
Client is in TA, getting UC, so passported to full HB. If they get the promotion then their income will mean they no longer qualify for UC (without housing costs), and HB will be about £15 pw. But could they cancel the HB, and get the higher work allowance - which would mean they’d qualify for about £140 of UC?
And second:
But then if they got UC would that passport them to full HB for a time (given that a week of full HB would be worth more than a month of UC)? I suppose what I’m saying is that I know that any entitlement to HB during a UC AP would remove the higher work allowance, but I’m not clear on how the UC passporting for HB works - does it have to be for a full week of HB, or just a part?
HB is always an award for a whole week. To demonstrate this, start at s130 of the Conts and Bens Act: a person is entitled to HB if, inter alia, there is an appropriate maximum HB (AMHB) in his/her case. The Act is silent as to the period to which that AMHB relates. Section 130A says AMHB is to e determined in accordance with Regulations.
In the regulations, Reg 70 says that AMHB is the claimant’s eligible rent calculated on a weekly basis, less any non-dep deductions where appropriate. So the starting point in the HB assessment is an amount of AMHB for the whole week, which might or might not be reduced by reference to income. If the claimant has no income in that week, or all of the claimant’s income is disregarded in that week because s/he is on UC, the award for the week is max HB.
On the figures in that example, it would not be worthwhile engineering single-week breaks in HB every few weeks because the amount lost would be less than the additional UC gained. The amount gained will be a maximum of 63% of the difference between the two work allowances - near enough £140 as you say, and less than that if the claimant isn’t earning as much as the higher allowance. Temp acc rents are very seldom less than that much per week.
There is case law on the similar phenomenon of breaking an HB claim in order to migrate to a more advantageous eligible rent regime - there must be a clear week in which the claimant is not entitled to HB. Cannot put my finger on the UT reference for that, but I think it is almost trite law now.
On the figures in that example, it would not be worthwhile engineering single-week breaks in HB every few weeks because the amount lost would be less than the additional UC gained. The amount gained will be a maximum of 63% of the difference between the two work allowances - near enough £140 as you say, and less than that if the claimant isn’t earning as much as the higher allowance. Temp acc rents are very seldom less than that much per week.
I was thinking of it the other way around. It would be a whole UC AP without any HB claim - to get the £140 UC (rather than approximately £15 pw HB). Then we look at whether it’s possible to claim HB for a week at the end of the UC AP based on UC passporting - and getting a whole week of rent (which is, as you say, more than £140) which would mean no UC in the new AP (back to the lower work allowance). But for the rest of the new AP would HB then just assume that the HB was passported, and then have to create an OP when the next UC award comes in as zero? And would that be recoverable?
And if HB just passported for one week, how would they work out the average earnings after the passported week - would it include the extra £140 (which would wipe out HB for the rest of the month), or do they start from scratch?
I’m getting to the point where I’m not even sure if this makes sense to me.
Do you think Reg 5A of the UC(TP) Regs would apply if there was HB for temp acc at any point in the AP, or would it operate subject to the Decisions and Appeals Regs so that ceasing to be entitled to HB during an AP would have effect as if there were no entitlement to HB in that AP?
If it works as a change of circs effective from the beginning of the AP, you want HB to avoid the turn of the AP and the claimant to be on HB for any weeks falling wholly within the AP, but excluding the last day of the AP, so that the claimant is not on HB on the final day of any AP. HB is then passported for the weeks contained in the AP.
If that is not correct and Reg 5A kicks in if there has been HB entitlement at any time during the AP then I am struggling to see how you can get a week of passported HB. You seem to be suggesting claiming HB for a week that straddles the end of the AP, but surely that knocks out two months of UC in one hit?
I hadn’t actually thought about the way Reg 5A of the TP Regs interacts with Reg 20 of the D&A Regs. I was reading “in any assessment period” in 5A as meaning at any time during an assessment period. But I can see that could be inconsistent with supersession back to the start of the AP as provided in the D&A Regs. So if that is the case then yes, you could claim HB and get the higher work allowance as long as you weren’t claiming HB at the end of the AP. So this is important as it affects the advice on when to end the HB claim if they know their income is going to increase - if you play it safe and stop HB before the AP then you might be missing out on three or four weeks of full HB - which is a lot of money.
After a quick search, I found the words “in any assessment period” in Reg 62 UC Regs (minimum income floor). Does the MIF apply to somebody in the AP when they cease self-employment, or do they have to wait until the following AP? It would seem unfair to apply the MIF in a month of partial self-employment (although I’m not suggesting that there is any assumption of fairness in UC).
Coming back to the HB point: I think it has to be correct, as you say, that if HB entitlement overlapped with the end of the UC AP then the lower work allowance would apply. But that still leaves the question of what happens in practice if you claim HB immediately after the AP ends. I would expect HB to be paid based on the most recent UC award - which would mean passporting. But then if the next UC award came out nil (higher than expected earnings coupled with lower work allowance), it would turn out that HB had been overpaid - but would it be recoverable?
“The Universal Credit will simplify the benefits system by moving from the current benefit structure to a simple streamlined payment. People’s benefits will also be withdrawn at one unified rate.” Source: https://www.gov.uk/government/news/universal-credit-introduced
I wanted to comment on this thread, but didn’t have a chance at the time.
In your original post, Timothy, regarding your first question, I think you would be safe to end the HB claim to enable you to benefit from the higher work allowance. Where I would be more concerned is in a case where the housing element of UC is very low - under £140/month - can you choose not to claim it? I don’t see how you can.
Regarding your second point, and your subsequent conversation with Peter, I agree that the phrase “in any assessment period” muddies the waters.
Without that phrase, the requirement of Reg 5A would simply be “entitlement to HB”. This could start (or end) at any point in time, and would therefore involve the normal UC “effective date of a change of circumstances” rule (meaning it would depend on whether there was entitlement to HB at the end of the AP).
However, with that phrase, the requirement would now seem to be “being in an AP which contains within it a period of HB entitlement”. This requirement, by its very definition, can only ever start (or end) being fulfilled at the precise start of an AP. The normal UC “effective date of a change of circumstances” rule will therefore have no effect. It should mean that any entitlement to HB, at any point in the AP, would mean Reg 5A applies.
The MIF regulation no longer has such a phrase, however, I think there is a fairly similar situation with the calculation of earned income - see UC Regs, reg. 54(1). Unearned income, however, doesn’t have such a rule (which is why I hate the drafting of Reg. 73(2A)).
In my pre-pandemic experience, if ‘gainful’ self employment ended during an AP or the claimant moved to a No Work Related Requirement Activity Group etc. then the MIF would not be applied for the complete AP. Post pandemic, the Work Coach has some further discretion with the MIF. See Restoration of the Minimum Income Floor Paragraph 3.
https://www.legislation.gov.uk/uksi/2021/807/made
In your original post, Timothy, regarding your first question, I think you would be safe to end the HB claim to enable you to benefit from the higher work allowance. Where I would be more concerned is in a case where the housing element of UC is very low - under £140/month - can you choose not to claim it? I don’t see how you can.
In my case it is temporary accommodation so there’s no question of choosing whether to claim the UC housing costs element. In accommodation that is covered by UC I started off thinking that £140/month is so low it’s not going to happen, but actually if it’s, say, a single joint tenant with a non-dependant (and the other joint tenant still living there) then the housing costs could easily drop below £140, so it’s not just an academic question. But I think the wording of Reg 26 UC Regs means that if there are housing costs which satisfy Reg 25 then they are “to be included in an award” - so I would have to agree that there is no option of giving up UC housing costs to get the higher work allowance.
On the second point, even if one could claim HB for most of the month and still get the higher work allowance I think in practice it would be too risky to advise as a strategy because of the scope for confusion and mistake. But it’s still fun to ponder.