In the news

OCTOBER 2021

ADVICE UPDATE

Change in COVID easing for Working Tax Credit claimants

The HMRC has confirmed that COVID-related easements for Working Tax Credits claimants will soon be lifted.

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The easements were brought in at the start of the pandemic, treating WTC claimants who were unable to work normal hours due to COVID as if they were still employed or self-employed.

To avoid overpayments of Working Tax Credits, our advice is:

If, at any point in the 8 weeks between 30th September and 25th November,  working hours permanently fall below their normal level, the WTC claimant should report this immediately. They will only get the 4 week run-on from the point of the permanent reduction in hours or at the end of employment/self-employment.
 

If the claimant is working fewer hours than normal, but it is their intention that hours will increase sufficiently to get back to the previous WTC entitlement, then they have this 8 week period to establish those hours.

If the claimant does not manage to work sufficient hours, they should report the change before 25th November.  There is a 4 week run-on, but it is vital to tell HMRC as soon as it seems clear that there will be no return to normal hours by 25th November in order for there to be a permanent reduction in WTC.

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More positively, the government has also announced that 23,000 Working Tax Credit claimaints will receive a final £500 one-off payment, if they met the eligibility criteria on 2nd March 2021.

Government allocates Household Support Fund to local councils

The government has announced a £500m support package for vulnerable households, which it will be issuing to local authorities to 'directly help those who need it most'.

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The Household Support Fund (HSF), launched at the end of September by Chancellor Rishi Sunak and Dr Therese Coffey will apparently be available to councils 'in October 2021'.  It comes at a time when the six million people currently claiming Universal Credit or Working Tax Credit will lose their £20 a week uplift. However, unlike the uplift, it is not an automatic entitlement. The HSF will need to be applied for by a member of the 'vulnerable household' and will be distributed and administered on a selective basis by their local authority. Vulnerable householders on legacy benefits, who were ineligible for the UC/working tax credits uplift but will be entitled to the HSF,  will also be applying, meaning the HSF funding pot is nowhere near as generous as it may appear.

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Helen Barnard, Deputy Director of the Joseph Rowntreee Foundation described the government's launch of the  new fund as 'an eleventh hour attempt to save face (which) does not come close to meeting the scale of the challenge'.

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In recent weeks there has been speculation that the government might reduce the Universal Credit taper rate from 63% to 60% for working claimants, to cover Dr Coffey's erroneous claim that UC claimants could make up for their lost £20 uplift by working for two more hours. It remains to be seen whether this taper rate reduction will also happen.

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DWP seeking those affected by PIP Activity 9 judgment

The DWP have begun the job of identifying those likely to be affected by the Supreme Court judgment relating to PIP Activity 9.

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The judgment in the 'MM' case [2019] UKSC 34 confirmed that, for the purposes of Activity 9, support may be given before or during an activity. It also gives guidance on assessing whether prompting needs to be provided by an experienced or trained person and may therefore be social support.

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Updated guidance shows the social support criteria that has been used to assess new PIP claims made since 17th September 2020.

Work & Pensions Secretary Dr Therese Coffey with Chancellor Rishi Sunak

HRT and PPT waiver for Afghan refugees

New guidance ADM14-21 and DMG11-21 has been issued to give exemption from the Habitual Residence Test (HRT) and Past Presence Test (PPT) to enable certain people arriving from Afghanistan to live in Britain.

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In the main, this exemption is only for those who have entered the UK via the Afghan Relocations and Assistance Policy; the previous scheme for locally-employed staff in Afghanistan or the Afghan Citizens Resettlement Scheme. However, Afghani people fleeing the return of Taliban rule since their takeover of Kabul in August may also be eligible for income-related, if not disability and health related benefits.

N Ireland assists with upfront childcare costs

Rise in disallowed PIP claims

The number of disallowed PIP claims has risen from 50% to 70% compared to April 2021.

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The change could be connected to an end to the temporary extension of time to return PIP2 forms (which is now back to just one month).

New regulations in Northern Ireland provide for payments from the Adviser Discretion Fund to count for the purposes of the childcare element as if the claimant had paid for their childcare.

This allows the claimant to get the childcare element without being constantly in arrears because childcare must be paid for before it can be awarded. This is in stark contrast to situations in the rest of the UK, where upfront childcare can be paid for from the Flexible Support Fund, which doesn’t help much
because the claimant must then somehow find the money for the next instalment in order to claim the childcare element for it.