The Universal Credit (Transitional Provisions) Regulations 2014

[F1 Transitional Protection U.K.

Textual Amendments

F1 Pt. 4 inserted (24.7.2019) by The Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regulations 2019 (S.I. 2019/1152), regs. 1(2), 3(7) (with reg. 2)

Meaning of “qualifying claim” U.K.

48.   A “qualifying claim” is a claim for universal credit by a single claimant who is a notified person or by joint claimants, both of whom are notified persons, where the claim is made on or before the final deadline (see regulation 46(4)).

Meaning of “migration day” U.K.

49.   “Migration day”, in relation to a qualifying claim, means the day before the first day on which the claimant is entitled to universal credit in connection with that claim.

Secretary of State to determine whether transitional protection applies U.K.

50.— (1) Before making a decision on a qualifying claim the Secretary of State must first determine whether—

(a) a transitional capital disregard is to apply; or

(b) a transitional element is to be included,

(or both) in the calculation of the award.

(2) But the Secretary of State is not to determine whether a transitional element is to be included in a case where regulation 47 (notified persons who claim as a different benefit unit) applies.

The transitional capital disregard U.K.

51.— (1) A transitional capital disregard is to apply where, on the migration day, the claimant—

(a) is entitled to an award of a tax credit; and

(b) has capital exceeding £16,000.

(2) Where a transitional capital disregard applies, any capital exceeding £16,000 is to be disregarded for the purposes of—

(a) determining whether the financial condition in section 5(1)(a) or 5(2)(a) of the Act (capital limit) is met; and

(b) calculating the amount of an award of universal credit (including the indicative UC amount).

(3) Where a transitional capital disregard has been applied in the calculation of an award of universal credit but, in any assessment period, the claimant no longer has (or joint claimants no longer have) capital exceeding £16,000, the transitional capital disregard is not to apply in any subsequent assessment period.

(4) A transitional capital disregard is not to apply for more than 12 assessment periods.

The transitional element U.K.

52.— (1) A transitional element is to be included in the calculation of an award if the total amount of any awards of existing benefits determined in accordance with regulation 53 (“the total legacy amount”) is greater than the amount of an award of universal credit determined in accordance with regulation 54 (“the indicative UC amount”).

(2) Where a transitional element is to be included in the calculation of an award, the amount of that element is to be treated, for the purposes of section 8 of the Act (calculation of awards), as if it were an additional amount to be included in the maximum amount under section 8(2) before the deduction of income under section 8(3).

The transitional element - total legacy amount U.K.

53.— (1) The total legacy amount is the sum of the representative monthly rates of all awards of any existing benefits to which a claimant is, or joint claimants are, entitled on the migration day.

• Tax credits

(2) To calculate the representative monthly rate of an award of working tax credit or child tax credit—

(a) take the figure for the daily rate of the award on the migration day provided by HMRC and calculated on the basis of the information as to the claimant’s circumstances held by HMRC on that day; and

(b) convert to a monthly figure by multiplying by 365 and dividing by 12.

(3) For the purposes of paragraph (2)(a) “the daily rate” is—

(a) in a case where section 13(1) of the 2002 Act applies (relevant income does not exceed the income threshold or the claimant is entitled to a prescribed social security benefit), the maximum rate of each element to which the claimant is entitled on the migration day divided by 365; and

(b) in any other case, the rate that would be produced by applying regulations 6 to 9 of the Tax Credits (Income Thresholds and Determination of Rates) Regulations 2002 as if the migration day were a relevant period of one day.

• IS, JSA(IB) and ESA(IR)

(4) To calculate the representative monthly rate of an award of income support, income-based jobseeker’s allowance or income-related employment and support allowance—

(a) take the weekly rate on the migration day calculated in accordance with—

(i) in the case of income support, Part 7 of the Social Security Contributions and Benefits Act 1992 and the Income Support (General) Regulations 1987,

(ii) in the case of income-based jobseeker’s allowance, Part 1 of the Jobseekers Act 1995 and the Jobseeker’s Allowance Regulations 1996, or

(iii) in the case of income-related employment and support allowance, Part 1 of the 2007 Act, the Employment and Support Allowance Regulations 2008 and the Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) (No.2) Regulations 2010,

on the basis of the information held by the Secretary of State on that day; and

(b) convert to a monthly figure by multiplying by 52 and dividing by 12.

(5) The amount of an award of income-related employment and support allowance or income-based jobseeker’s allowance is to be calculated before any reduction for a sanction.

(6) Where—

(a) a claimant who is entitled to income-based jobseeker’s allowance is also entitled to contribution-based jobseeker’s allowance; or

(b) a claimant who is entitled to income-related employment and support allowance is also entitled to a contributory allowance,

then, notwithstanding section 4(8) to (11) of the Jobseekers Act 1995 and section 6(3) to (7) of the 2007 Act (excess over the contributory allowance to be treated as attributable to the income-based, or income-related, allowance) the weekly rate in paragraph (4) is to be calculated as the applicable amount less the claimant’s income (if any).

• Housing benefit

(7) To calculate the representative monthly rate of an award of housing benefit—

(a) take the weekly rate on the migration day calculated in accordance with Part 7 of the Social Security Contributions and Benefits Act 1992 and the Housing Benefit Regulations 2006, on the basis of the information held by the Secretary of State on that day, and convert to a monthly figure by multiplying by 52 and dividing by 12; or

(b) in a case where the claimant has rent free periods, calculate the annual rate by multiplying the weekly rate (as above) by the number of weeks in the year in respect of which the claimant is liable to pay rent, and convert to a monthly figure by dividing by 12.

(8) For the purposes of paragraph (7), if the migration day falls in a rent free period, the weekly rate of housing benefit is to be calculated by reference to the amount of rent for the last complete week that was not a rent free period.

(9) In paragraphs (7) and (8) “rent free period” has the meaning in regulation 81 of the Housing Benefit Regulations 2006.

(10) In a case where regulation 8(3) (continuation of housing benefit in respect of specified accommodation or temporary accommodation) applies, no amount is to be included in the total legacy amount in respect of housing benefit.

• The benefit cap

(11) Where—

(a) the existing benefits do not include an award of housing benefit, or they include an award of housing benefit that has been reduced to the minimum amount by virtue of Part 8A of the Housing Benefit Regulations 2006 (the benefit cap);

(b) Part 7 of the Universal Credit Regulations (the benefit cap) applies in the calculation of the indicative UC amount; and

(c) the claimant’s total entitlement to welfare benefits (as defined in section 96(10) of the Act) on the migration day is greater than the relevant amount,

the total legacy amount is reduced by the excess (minus the amount for childcare costs referred to regulation 54(2)(b) where applicable) over the relevant amount.

(12) For the purposes of paragraph (11)—

(a) the amount of each welfare benefit is the monthly equivalent calculated in the manner set out in regulation 73 (unearned income calculated monthly) of the Universal Credit Regulations; and

(b) the “relevant amount” is the amount referred to in regulation 80A of those Regulations which is applicable to the claimant.

The transitional element - indicative UC amount U.K.

54.— (1) The indicative UC amount is the amount to which a claimant would be entitled if an award of universal credit were calculated in accordance with section 8 of the Act by reference to the claimant’s circumstances on the migration day, applying the assumptions in paragraph (2).

(2) The assumptions are—

(a) if the claimant is entitled to an award of child tax credit, the claimant is responsible for any child or qualifying young person in respect of whom the individual element of child tax credit is payable;

(b) if the claimant is entitled to an award of working tax credit that includes the childcare element, the indicative UC amount includes the childcare costs element and, for the purposes of calculating the amount of that element, the amount of the childcare costs is equal to the relevant weekly childcare charges included in the calculation of the daily rate referred to in regulation 53(2), converted to a monthly amount by multiplying by 52 and dividing by 12;

(c) the amount of the claimant’s earned income is—

(i) if the claimant is entitled to an award of a tax credit, the annual amount of any employment income or trading income, as defined by regulation 4 or 6 respectively of the Tax Credits (Definition and Calculation of Income) Regulations 2002, by reference to which the representative monthly rate of that tax credit is calculated for the purposes of regulation 53(2) converted to a net monthly amount by—

(aa) dividing by 12, and

(bb) deducting such amount for income tax and national insurance contributions as the Secretary of State considers appropriate,

(ii) if paragraph (i) does not apply and the claimant is entitled to an award of income support, income-based jobseeker’s allowance or income-related employment and support allowance, the amount of earnings by reference to which the representative monthly rate of that benefit was calculated for the purposes of regulation 53(4) to (6) (including nil if none were taken into account) converted to a monthly amount by multiplying by 52 and dividing by 12, or

(iii) if paragraphs (i) and (ii) do not apply, but the claimant had an award of housing benefit, the amount of earnings by reference to which the representative monthly rate of that benefit was calculated for the purposes of regulation 53(7) to (10) (including nil if none were taken into account) converted to a monthly amount by multiplying by 52 and dividing by 12.

(3) If the claimant would not meet the financial condition in section 5(1)(b) of the Act (or, in the case of joint claimants, they would not meet the condition in section 5(2)(b) of the Act) the claimant is to be treated, for the purposes of calculating the indicative UC amount, as if they were entitled to an award of universal credit of a nil amount.

(4) If a transitional capital disregard is to apply, the claimant is to be treated as having met the financial condition in section 5(1)(a) or 5(2)(a) of the Act (capital limit).

(5) The indicative UC amount is to be calculated after any reduction under Part 7 of the Universal Credit Regulations (the benefit cap) but before any reduction under section 26 (higher-level sanctions) or 27 (other sanctions) of the Act.

(6) But there is to be no reduction for the benefit cap under that Part where the amount of the claimant’s earned income (or, in the case of a couple their combined earned income) on the migration day, calculated in accordance with paragraph (2)(c), is equal to or exceeds the amount specified in paragraph (1)(a) of regulation 82 (exceptions – earnings) of the Universal Credit Regulations.

(7) The calculation of the indicative UC amount is to be based on the information that is used for the purposes of calculating the total legacy amount, supplemented as necessary by such further information or evidence as the Secretary of State requires.

The transitional element – initial amount and adjustment where other elements increase U.K.

55.— (1) The initial amount of the transitional element is—

(a) if the indicative UC amount is greater than nil, the amount by which the total legacy amount exceeds the indicative UC amount; or

(b) if the indicative UC amount is nil, the total legacy amount plus any amount by which the income which fell to be deducted in accordance with section 8(3) of the Act exceeded the maximum amount.

(2) The amount of the transitional element to be included in the calculation of an award is—

(a) for the first assessment period, the initial amount;

(b) for the second assessment period, the initial amount reduced by the sum of any relevant increases in that assessment period;

(c) for the third and each subsequent assessment period, the amount that was included for the previous assessment period reduced by the sum of any relevant increases (as in sub-paragraph (b)).

(3) If the amount of the transitional element is reduced to nil in any assessment period, a transitional element is not to apply in the calculation of the award for any subsequent assessment period.

(4) A “relevant increase” is an increase in any of the amounts that are included in the maximum amount under sections 9 to 12 of the Act (including any of those amounts that is included for the first time), apart from the childcare costs element.]