19th April, 2020
DWP’s Director General, Neil Couling, was reported last week, as stating – “Many confused families will receive less than they had hoped for from Universal Credit, certainly in their first payment” – due to the fact, when calculating Universal Credit most forms of earned income (e.g. wages, statutory sick, maternity, paternity pay etc) or unearned income (partner’s contributory JSA, ESA, Carer’s Allowance, Widows Pension) will be offset against the claimants’ entitlement.
Mr Couling points to the fact, the number of new claims started to rise, from 16th March and by early April accounted for 1,400,000 Universal Credit claims, plus 500,000 requests for “Advance Payments”. DWP immediately redeployed 10,000 staff from other duties to provide assistance to their 6,500 colleagues, who ordinarily deal with UC claims. From the feedback I’ve received, its staff have to be congratulated for working, especially over the Easter weekend, to clear as many for payment as possible.
However, those first payments that become due on 22nd April, covering the “Benefit Assessment Period” (BAP) 17th March – 15th April, will, in many cases, include, earnings from employment, self-employment as well as various forms of unearned income. The same could equally apply to claims lodged before 1st April, as many of these claimants will also receive some level of earnings from employers, that similarly needs to be offset against entitlement, reducing or nullifying their award.
So, Mr Couling’s warning should definitely be heeded by landlords, as it will inevitably lead to calls, from tenants affected by COVID 19, seeking to secure your agreement to reduce or defer rent payments, until some degree of normality is realised. Government advice suggests – “tenants should continue to pay rent and abide by all other terms of their tenancy agreement to the best of their ability. Tenants who are unable to do so should speak to their landlord at the earliest opportunity.” I’m sure most landlords will do as much as they can to assist, when asked, and will factor into these discussions the potential offsetting, mentioned above, might affect that first payment, quite significantly, whereas, the 2nd and future payments, especially for the SE, might be significantly higher, due to the fact, there’s no or less earned income to be considered.
Another thing frontline staff need to consider is, the rules relating to self-employment (Grant) might prove difficult to satisfy for some SE workers. For example, to qualify, a claimant must have filed a tax return for 2018/19 by no later than 23rd April 2020. They must also have been self-employed prior to 6 April 2019. The compensation level is based on the average reported PROFIT they received during the 3 years or less of self-employment. From past experience, as Head of Benefits & Revenues, I’m aware, many self-employed returns show little or no profit, year-on-year. So, for those SE workers, expecting a grant, involving £000’s in June, you might need to explain, that’s unlikely unless they can demonstrate profit. So, Universal Credit might be their best, if not only way, of securing financial assistance.
DWP also needs to clarify whether the SE income support grant, due to be paid in June, is, in any way, affected by UC awards and whether the grant paid in June 2020 will be offset by any intervening UC payments. I’ve been pursuing this question with DWP hierarchy but, as yet, have still to receive an answer. The query was first raised by one of my Housing Association clients. In its attempts to assist a SE tenant, a UC claim was lodged, only for the tenant to be told, he couldn’t be funded under the SE income support scheme and Universal Credit simultaneously, and, that any payments would be offset as an overpayment. I’ve not seen any mention of this in any of the Government’s circulars & briefings on the topic, and regrettably there is no actual legislation to check.
UC Advice & Advocacy Ltd