Universal credit: Some hard facts
Published by Max Salsbury for 24dash.com in Universal Credit and also in Housing
By Bill Irvine, HB Advice & Advocacy & Universal Credit Advice
In the past I’ve highlighted concerns over the way the universal credit (UC) ‘assessment period’ operates when there is a change in the claimant’s household make-up and/or financial circumstances.
Because UC is paid monthly, in arrears the DWP has incorporated a ‘whole-month’ approach to the various changes which can occur, during the life-time of a claim.
This avoids the need to, for example, apportion rent liability increases, arising from the annual uprating of RSL rents or during a tenant's move to a larger and more expensive property.
It also means that where the change results in more UC being payable, the ‘whole-month’ rule can produce a windfall, as the change is effectively backdated to the start of the tenant’s ‘assessment period’. This, in turn, should help RSLs to secure payment of the rent!
To illustrate the point, let’s say Eleanor (26) & John (28) are joint tenants of one of your homes. They’re married, are claiming UC as a couple, including an amount for housing costs.
UC is paid on the 7th of each month, in arrears. Eleanor gives birth to a baby girl on the 5th of August 2014. John immediately alerts the DWP by phone of the change.
By reporting the change immediately, the couple can expect an additional £274.58 in their UC award, effective from 7th July - i.e. the start of their ‘assessment period’.
Under housing benefit rules, the change would kick in the Monday following the birth, so UC is clearly more generous than HB in this respect.
However, here’s the rub. Where a change is to the disadvantage (less UC) of the tenant, it’s also effective from the start of the claimant’s ‘assessment period’. The retrospective nature of this rule could almost certainly mean that RSLs will find it more difficult to collect their rent from the affected tenant’s reduced UC award, where, for example, a partner/dependent child leaves the household; one of the partners starts full-time work, resulting in a much reduced award.
One exception to this rule is where someone in the household dies; the household’s UC continues at the same rate for the two months following the death; a form of transitional protection designed to prevent an immediate financial loss and unnecessary hardship. This is provided for in part 4, Regulation 37 of the UC Regulations 2013.
Surprisingly, this more generous transitional protection rule does NOT apply where there’s a single tenant. So, for example, let’s say you have a tenant, George (56), living on his own, whose UC is paid on the 10th of each month. He dies on the 9th of August; the change comes into effect from the 10th of July (again, the start of his assessment period). George won’t be bothered but his landlord can almost certainly forget receiving payment of the housing element for that month, even where alternative payment arrangements are in place. His liability to pay rent, for the month up to the date of death, has seemingly no bearing on UC.
Whilst I can see merit in the ‘whole month’ approach, in terms of its simplicity, situations like the one I’ve just described need to be provided for by an ‘exception’ to the normal rule. I dare to say, this is something you might wish to raise directly with your local MP or government minister! There are many other anomalies to consider; too many to cover in this briefing!