Good morning,

In an earlier bulletin http://universalcreditadvice.com/housing-associations/2014/08/universal-credit—beware-of-the-whole-month-approach-and-its-threat-to-rent-collection I alerted you to the potential problems, caused by the “whole month rule” when changes in circumstances occur in the tenant’s household which then have a knock-on effect on their Universal Credit entitlement. I’ve been pursuing some real case “what if” scenarios with DWP so as to reinforce my own understanding and ensure the advice I’m providing to you is as accurate and informative as possible.

The good news is, DWP is actually listening. It’s evident from my frequent exchanges that as UC develops changes are being made to address some of the more anomalous situations. This should, certainly in the longer-term, help remove or at least reduce some of the perceived problems. Meantime, we’re still left with a few worrying situations which could lead to UC awards, including the “housing element” being adversely affected. This, in turn, could lead to rent arrears accruing and tenancies being compromised – something you’d wish to avoid!

To illustrate what I’m referring to, you’ll find below, one of my actual Q’s to DWP.

Q 1. Let’s say Tom (35) & Sharon (34) are a couple claiming UC, have two kids aged 6 and 4 and live in a two bed property. Their benefit assessment period (BAP) is 1st to 31st with a monthly payment day of 7th. They decide to split; Tom moves out on the 20th and takes up a one bed-roomed PRS tenancy. He reports the change by phone to DWP on 23rd and is asked to make a new claim. Sharon remains in the tenancy with her two kids and will assume responsibility for the rent. Not an unusual scenario!

So what happens to Tom & Katie’s respective positions as far as UC is concerned?

The DWP response to the above question was:

“This is quite a complex area, not helped by the fact that there are two different sets of rules related to the formation and dissolution of couples depending on whether the claimants are in the ‘live service’ areas or the ‘digital’ areas. 

Couples separating in live service areas. 

When couples separate, the person reporting (phone, on-line, Jobcentre) the separation first will be removed from the award of Universal Credit. If they wish to continue claiming they will be required to make a new claim. 

The new claim will run on a monthly cycle starting from the date of claim.  However, this claim can be backdated by a maximum of one month to fill the gap between the end of their last payment as a couple and the date their new claim begins.  This backdating is not automatic, the claimant must request it, but if a request is made payment is guaranteed (that is, the decision maker has to allow the backdating and has no discretion to deny it).  UC agents should provide appropriate advice about these backdating arrangements when the change is notified.  If the change is reported but the new UC claim is not made within one month then backdating is no longer guaranteed but payment can still be made where there extenuating circumstances leading to the delay. 

The award to the other former member of the couple will continue without the need for a new claim, subject to them confirming their circumstances.  This is processed as a change of circumstance, with the claimant retaining their original assessment period. 

So, in your example, Tom and Sharon are getting the two bedroom “housing costs” rate for each assessment period, ending on the last day of the month.  They are paid UC as a couple for the period ended 31st March and he leaves on 20th April.  His departure does not affect Sharon’s housing element. So she will get her two-bed rate for the period ended 30th April.  He makes a new claim on 23rd April so his first payment is due for the month ending 22nd May.  However, he can make a backdated claim.  If he does so, the whole of his UC entitlement (including the housing element) will be payable from 1st April.  Payment will be made in accordance with his new monthly cycle. 

Couples separating in digital service areas. 

New regulations came into force on the 26/11/14 which will apply in the Digital Service only (LB of Sutton at the moment).  Where DWP is notified that a couple have separated, we will treat the claims by both single claimants as a change of circumstance.  Each will retain the existing assessment period.  There is no backdating rule as there will not be any discontinuity of payment.

In your example, both Sharon and Tom retain the same assessment period, i.e. the 1st to the 31st of each month.  UC entitlement is based upon the circumstances that pertain on the last day of the assessment period.  So for the period ended 31st April Sharon gets the two bedroom LHA rate and Tom the one bedroom rate”. 

I don’t always agree with DWP but this concurs with my own assessment of what would happen. At the moment, if any of your tenant couples are claiming UC they could be at risk if they’re living in any of the “Live Service” areas i.e. anywhere outside LB of Sutton.

The Q & A approach underlines just how complicated and potentially very troublesome the “whole month rule” could prove to be to both tenants and Landlords. This is just one example, there are so many more to consider. Consequently, your staff need to be fully briefed on all these quite common scenarios as tenants will see their landlord as their first line of defence and point of contact when problems occur. Keeping in mind the very tight timescales applying, there’s a need for timely intervention otherwise losses will definitely occur.

If you require any further clarification on this or any other HB/UC issue please contact me bill@ucadvice.co.uk or phone me 07733 080 389.