David, Will and Michael discuss: rollout of the UC Managed Migration; changes to the childcare element of UC; mortgage support measures; Pension Credit take-up campaign; council tax arrears; lump sum payments of War Pensions.

Benefits Newscast July 2023 Transcript

David: [00:00:04] Hello. Welcome. It’s our July newscast. As usual, it’s Will Hadwen and myself. And we are joined by Michael Chambers, who works for a local authority welfare rights unit when he’s not working for us. Michael, can I turn straight to you? I wonder if you could tell us the three topics that you’ve brought with you?

Michael: [00:00:30] Well, I talked about Universal Credit Managed Migration last time but I wanted to revisit that. And then a couple of things caught my eye regarding some easements for people with mortgages, council tax arrears and war pensions.

David: [00:00:52] Okay. Council tax arrears and war pensions.

Michael: [00:00:55] Odd combo.

David: [00:00:57] They’re together, right? That’s a combination, right?

Michael: [00:00:59] No, no, no. Separate. It was just some stats, just some stats on the increase unfortunately in council tax arrears.

David: [00:01:09] Okay, fine. So four things, some of them short perhaps, but; Universal Credit Migration and Managed Migration, mortgages, council tax arrears and war pensions. Okay, cool. Just checking. Thank you. And Will, what have you brought, I wonder?

Will: [00:01:26] Well I’ve also brought Managed Migration, yet again. I hope different points to Michael, but I can’t guarantee that. And then I also thought about just reviewing the changes to the childcare element of UC, which we have talked about before, but since then we’ve got the regs and guidance and finally Pension Credit take up campaigns.

David: [00:01:49] Right, lovely. Thanks very much. Well, let’s go straight to Managed Migration then, since you’ve both got that on your list. Michael, do you want to introduce that for us?

Michael: [00:01:58] Yeah, sure. So we talked about it before, but we know a little bit more now about what was going to just, just revisit was the timetable, the process for when a Managed Migration notice is issued and also about deferments and exemptions – just briefly on that. So that’s what I was going to just look at. So the DWP have confirmed basically that they’re intending to migrate the remaining 2.5 million households on legacy benefits over to UC by the end of 2028-29. We know that they’re starting with Tax Credit claimants, but all cases for on Income Support and Jobseekers Allowance, income based JSA and Housing Benefit only cases, they are intending to migrate by the end of 2024. We’re not getting much notice of the areas as they come out, sort of roughly about, you know, not much more than a month. And the next areas to go in July are Kent, North London, East Anglia and Durham Tees Valley. So what happens when a Managed Migration notice is issued? Well, claimants roughly have about a minimum of three months to make a claim for UC (three months and a day). Should get a reminder letter at seven weeks and again at ten weeks if no claim has been made, and there are some further safeguards that can extend the claim by date by another four weeks. And if a late claim for UC goes in after legacy benefits have stopped, then if it’s within a month assessment period, then the claim can be backdated to the claim by date and should include any transitional protection and any two week run on of legacy benefits.

Michael: [00:03:55] But these notices, the DWP do have a power to cancel them if they’re either being issued in error or the guidance says if a person circumstances change within the three months of the notice being issued and if they fall into one of the deferral or exclusion groups, then a cancellation can be issued. So I thought maybe just mention briefly who can crop up in exclusion groups. These include people who are in prison or within six months of retirement age, or people in receipt of Housing Benefit only, living in specified or temporary accommodation. And some of the people who should have the notice deferred include 16 and 17 year olds deferred until their 18th birthday and ESA claimants who are still in the assessment phase and never had the Work Capability Assessment applied should be deferred until the outcome of the Work Capability Assessment comes. So actually that could be good in prompting the DWP to actually, you know, we come across quite a lot of people who have been putting in fit notes for quite some time. Well, after the three months and no sign of a Work Capability Assessment, so hopefully it might get the DWP to do that. So there is obviously the Help to Claim service and the National Citizens Advice being extended for another year. And they should do all of the necessaries in terms of, you know, assisting with the claim, additional support for people who need it, keeping the claim and keeping it open until the first payment.

Michael: [00:05:45] So that’s going to be available at least until next April. And I’ll just mention as well, the DWP did some research in the discovery phase that the pilots, and basically concluded that most households are able to make the claim and make the move to Universal Credit without too much problem. But the Child Poverty Action Group had just published a very interesting briefing. It’s well worth a read if just looking at some of the problems that did crop up during Managed Migration, obviously missing elements worth getting the new claim checked, some missing transitional protection, particularly where DWP asks for additional information and that wasn’t forthcoming. Some older claimants being migrated so perhaps just fall outside of the six months. So legacy benefits have to claim Universal Credit, then have to make a claim for Pension Credit and Housing Benefit. So quite a palaver for that. And worth remembering you can make a Pension Credit claim up to four months before reaching pension age. And just the other two issues that they identified, astonishingly, DWP staff still use manual forms as part of this Managed Migration process and delays in sort of issuing them or acting on them is causing legacy benefit overpayments and recovery. And also there was some issues flagged up about the appointeeship process, which I think not necessarily anything new. And the DWP have announced they are doing a full review of the whole appointeeship process. So you know how appointees are identified and registered, and reviews, resignations, revocations. So I think that’s quite welcome, actually.

David: [00:07:45] Okay, great. Thanks, Michael. There’s lots going on there. Maybe I can check a few things and then I’ll turn to Will for any other thoughts. And I’ve kind of noted those things into sort of three main categories. First of all, thinking about the migration notice and the deadlines and acting within that time. And there are some caveats, as you were describing. So particularly looking out for the migration notices. I think for us as advisers, we want to distinguish between the sort of the Managed Migration and the other sort of moves on to Universal Credit, which come via what we might think of as the natural migration. So sort of looking out for that migration notice and following the deadlines and all of that kind of stuff. I think the other things that sort of jumped out at me was the whole sort of cancellation, mitigation things and extensions and vulnerable groups basically, that we might want to think about and check or certain groups who may be able to get some sort of further help, if you like. And thinking about the process. I’m glad you mentioned the Citizens Advice Help to Claim project, which of course, we’ll share within our link so that people know that they can direct their clients and service users to that service as a sort of signposting. But also the importance of people using our service, if you’re an eligible participant, having been on one of our courses, it’s a good time, if one of your clients gets a migration notice, it’s a good time to check with us, which you can do via our advice service. Because there are, like you were saying, there are a number of things that people are going to want to check as advisors to make sure that people aren’t missing out on things – whether it be transitional protection itself or other sort of good practice points that we might want to share. Lots going on. Will, I wonder what your thoughts are?

Will: [00:09:37] Yes. I thought what Michael shared was really, really useful. Just on the appointee issue, we did have a query about that. And one of the problems is that at the moment, whilst they are concentrating on Tax Credit only claimants, you might have an appointee for your PIP claim, for example, but not have an appointee for your Tax Credit claim. And if you had a deferral (if you had an appointee, rather) for your Tax Credit, your Managed Migration would be deferred. But you don’t have an appointee for Tax Credits, that’s very unusual, and so you get a migration notice. Of course you could try asking the DWP to give you an extension on the basis that you are someone who does need an appointee for UC but you can’t guarantee that. So there’s lots of issues like that where we might think this person could get a deferral, but they won’t necessarily. The things that I identified were a bit different. So first of all, there’s quite a useful map on RightsNet of the rollout areas which I’ve added to the links. And I think geographically it’s a bit approximate, but we can use it to see what areas are coming on board and at what time, and it’s usefully colour coded. The two other issues that I picked up which are things that may occur are; one is the minimum income floor and the start-up period.

Will: [00:11:09] Just a reminder for self-employed claimants and many self-employed claimants on Working Tax Credit. If they get a migration notice, they should still get a start-up period before the minimum income floor is applied. And there has to be a decision that they are in gainful self-employment first. But what people may not realise is whilst you don’t have any work related requirements, if the minimum income floor is applied, that doesn’t apply during the start-up period. So that could be an issue. In other words, you are under pressure to look for work, more work, other work. Get your self-employment making enough money during the start-up period, otherwise it could terminate early. And the other issue that has been identified, I think again by CPAG, is those people who are not currently benefit capped because on Tax Credits, the benefit cap doesn’t really come into it unless you also get Housing Benefit or some other benefits. But if you don’t get Housing Benefit, then you might find that you’re someone who would be capped in UC, even though the cap didn’t apply when you got Tax Credits only. And that could be a real shock for some people who are expecting to get transitional protection and actually will just see a loss.

David: [00:12:27] So there’s a lot going on here, isn’t there, as is usually the case, and so many things to check either because we want to check that they are correct and we might be able to affect some change to increase people’s income. Or perhaps it might be that we’re simply understanding the process and being able to explain to our clients what’s happening during this transition. And if it is correct and at least explaining it in the way that you might have to, perhaps in that example of someone who becomes capped. Alright, great. And thank you also because my first Managed Migration client is somebody who’s self-employed, so I’ve got to remember some of those things. Great. So returning to your list, Will, what should we mention next? The childcare stuff, because that’s pressing. Do you want to mention that one?

Will: [00:13:24] Why not? So I think Liam mentioned this back in May, and since then we’ve got the regulations and we’ve got the guidance, and it does work exactly as Liam predicted it would, which is if you’re going into work or you’re increasing your hours and you need help with your upfront childcare costs from the Flexible Support Fund (which is the pot of money Jobcentre Plus have) you can then claim that back as part of your childcare element, which you couldn’t before. So that is helpful. I don’t think it goes far enough to help people with their childcare costs. It still leaves quite a few people who’ve got a running debt because these rules only apply to people with an assessment period on or after the 28th June. So only people going into work or increasing their hours from then. And also because it remains very, very difficult for people to understand the childcare element. There is a little bit of, perhaps, discretion in the new rules in that it must be the case that the person is either likely to have to give up work or drop their increased hours if they don’t get the childcare element paid. And that is interesting, although in practice I’m hoping that actually there won’t be many such decisions. If the person says I need this money, then I’d hope that they would get it.

David: [00:14:52] Okay. So there is an element of discretion.

Will: [00:14:55] Yeah. In that decision as to whether without the payment of the childcare element for that new cost or increased cost, the person will be likely to give up work or give up their increased hours.

David: [00:15:06] Okay. And that’s use of the Flexible Support Fund. So the discretion is within…

Will: [00:15:11] No, the discretion is to pay you back after you’ve used the Flexible Support Fund and now you want the childcare element to pay you for what was covered by the Flexible Support Fund, otherwise you just have the upfront cost again for your next assessment period.

David: [00:15:28] I see. Right. It’s hard to imagine that.

Will: [00:15:32] I can’t imagine them refusing somebody on that basis. I think it would be very odd and there’s nothing in the guidance to suggest to decision makers that they need to weigh that up in any way. There’s an example which is very straightforward. So hopefully that’s not an issue.

David: [00:15:47] Got it. And in terms of dates and implementation and people working with clients and assessment periods and stuff, you mentioned 28th June. So all of this can apply in assessment periods beginning…

Will: [00:16:03] Beginning on or after.

David: [00:16:04] On or after 28th June. Great.

Will: [00:16:06] And that applies to the increases in the childcare element as well. Really significant maximum increases, which will make a big difference to people already getting UC, but also mean more people are likely to be able to get UC on higher earnings. And if you’re making a better off calculation between UC and tax free childcare, you need to redo it to include these higher elements, which I’m sure will be welcome news for people who ever do that very complicated calculation.

David: [00:16:36] Alright. Thanks, Will. Really good. Okay. Michael, I’m looking back at the list. I wonder which one you’d like to mention of your other ones?

Michael: [00:16:46] Well, I’ll mention just the easements for mortgages. Just very briefly, I think this is probably of interest to people who’ve done the benefit training company debt course. Just announced in the last week, the government has agreed with lenders some measures for people who are going to be struggling with, the high interest rates. And they’ve agreed that there will be no repossessions without consent within 12 months of a missed payment, and swapping to an interest only mortgage for six months or extending the mortgage term and they can approach the mortgage lender, you know, for information and support without any impact on the credit score. So it worth, I think, very welcome and just announced in the last seven days.

David: [00:17:39] Right, great. And like you say, that will be very relevant to people that have been on the debt course which you deliver for us. And I suppose it’s a good opportunity also for us to remind people that there have been changes to the support for mortgage interest loans in that the waiting period has has been reduced from nine months to three months and the no earnings rule has been removed. So we should be checking for that, I guess, as well alongside all those other things. Great. Thanks, Michael. Okay. Will, we’ve got a bit of time. Your other point was around Pension Credit, I think, and take up?

Will: [00:18:18] Yes. So you might remember there was a take up campaign, I think, around this time last year.

David: [00:18:24] Yes, Sarah. Sarah raised it. I can remember.

Will: [00:18:27] And, there’s just been another one – there’s been a take-up week for Pension Credit and I think Martin Lewis and other commentators have talked about it because it just does make such a big difference to people’s income, especially with the Cost of Living crisis at the moment and so many, not just rising costs, but additional costs that people face. So the thing that I wanted to point out is that, although that take-up week is now finished, the DWP are sending letters to pension age households on Housing Benefit in ten local authorities, essentially inviting them to claim Pension Credit. Now, not all of those people will be entitled because it is possible to get Housing Benefit at higher income than Pension Credit due to the way the calculation works. But nevertheless, some of them will be. So it’s worth doing. And I just think that it’s worth people being aware of that. So I’ve put the ten local authorities and a link to the press release in our sources documents. And also just to say if you are confused about Pension Credit or benefits for older people in general, we do have a course on it. Because I think people maybe haven’t done a calculation for some time, have gotten used to Universal Credit and it does work differently.

David: [00:19:48] Sure. Really, important. Thanks. Yes. And the thing that springs to mind also is the importance of those and interactions between disability benefits and Pension Credit and the whole Severe Disability Premium thing, which, you know, still confuses people, isn’t it, and underlying entitlement to carer’s allowance? All these things which we cover on our older people’s course, are all income maximisation opportunities for us (things to check). I’m glad you mentioned the relationship between Pension Credit and Housing Benefit because I think it’s very easy to miss that. And the fact that if people might calculate Pension Credit and think that’s the end of the story, but like you say, you can have quite a significantly higher income, can’t you, and still get Housing Benefit, even though that income has been high enough to bring you out of Pension Credit entitlement. So it’s still worth checking. Another calculation to learn!

Will: [00:20:46] Yeah. And also just be careful with the Pension Credit helpline. I think Pension Credit and the Pension Service in general are very helpful, but they’re not going to check your Housing Benefit for you. So I’ve had clients who’ve said, oh, Pension Service said no. And then they’re very reluctant for me to do a Housing Benefit check. But really they should go ahead with that because they could be missing out.

David: [00:21:04] Great. Yeah. Thank you. Very, very quickly, Michael, we’re sort of running out of time, but I’m keen just to turn to you for the final points that you had, not least because I’m curious. So could you sort of summarise it like, in one minute? Is that possible?

Michael: [00:21:17] I’ll try. And following on from what you said, Will, about, you know, not forgetting the Housing Benefit, don’t forget the Council Tax Reduction as well, because the latest figures are 5.5 billion is owed astonishingly, in council tax arrears to local councils, increased by 10% last year. So, I think just add that on to, to what you said. And I’ll probably end on a, well I think probably a good bit of news in terms of War Pensions, something that we don’t come across too often. And this was a change in the rules back in 2015 that prior to that, if certain people who received War Pensions, if they remarried or cohabited, they lost those pensions. The rules were changed in 2015 and got lifelong awards after that, irrespective of you know, if they remarried or cohabited. But the change didn’t help people who had lost their pensions pre 2015. So they’ve just announced that they are going to start a scheme to make one-off payments to members of this group instead. So considerable lump sum, sort of £90,000, just shy of. And it’s not up and running yet. Applications are going to be hopefully open from this winter. So I don’t know obviously whether or not the DWP are going to be writing to people, identifying them or whether they’re going to have to sort of self-identify and make an application. Not clear about that, but worth keeping an eye out, I think, for for people who might potentially, you know, get this payment.

David: [00:22:58] Excellent. Thank you, Michael. That is a good way to end. Thank you very much. And it’s a reminder that all of these topics we can help you with via our advice service. If you’ve attended training with us in the last year. If not, of course, you can find details of all of our courses on our website. Thanks again, Michael. Thanks again, Will. Thanks everybody for listening. Take care. Goodbye.