Changes in UC transitional protection rules for those on or who lost severe disability premium

Wed,6 June 2018
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Universal Credit: Written statement - HCWS745

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Universal credit and disability

In this statement, made by Esther McVey (The Secretary of State for Work and Pensions) the Government makes changes to the transitional payment rules for claimants in receipt of severe disability premium who move onto universal credit.

There are also changes to the earnings rules for lone parents and capital rules for people receiving tax credits.

Transitional protection ensures that a claimant moving from one benefit to another does not suffer a loss in income at the point of change. However, claimants receiving transitional payments usually ‘mark time’ and do not receive any April benefit increases (though these are frozen at the moment) until the level of their benefit matches that of other claimants.

The process of migrating claimants on legacy benefits will begin in July 2019. The completion of UC rollout has now been moved to March 2023.

The view of Disability Rights UK

DR UK welcomes this announcement. Currently the loss of the SDP on disabled people claiming UC means that they lose around £180 per month. This has so far affected 4,000 disabled people who moved from ESA to UC. Further, the commitment to ensure that past SDP losers will not miss out is also to be welcomed.

We believe the Government U-turn has been made in anticipation of a decision against the DWP in a Leigh Day solicitors judicial review case concerning a terminally ill man who lost his premiums when he moved to UC.

We also have a number of concerns about this announcement.

How will the DWP ensure no-one who has lost SDP misses out? Presumably it will involve yet another DWP case trawl – it already needs to do an ESA and two PIP case trawls as a result of legal judgments.

How will it ensure that those who no longer need to claim UC will not do so?

In reality, the reform does nothing to prevent the injustice of UC not including the SDP.

In the future, countless new disabled UC claimants will lose entitlement to around £2,000 annually.

It has also to be remembered that any transitional SDP will not be subject to any future increase.

So its real value will inevitably fall over time.

Highlights from the statement

In order to support the transition for those individuals who live alone with substantial care needs and receive the Severe Disability Premium, we are changing the system so that these claimants will not be moved to Universal Credit until they qualify for transitional protection. In addition, we will provide both an on-going payment to claimants who have already lost this Premium as a consequence of moving to Universal Credit and an additional payment to cover the period since they moved.

Second, we will increase the incentives for parents to take short-term or temporary work and increase their earnings by ensuring that the award of, or increase in, support for childcare costs will not erode transitional protection.

Third, we propose to re-award claimants’ transitional protection that has ceased owing to short-term increases in earnings within an assessment period, if they make a new claim to UC within three months of when they received the additional payment.

Finally, individuals with capital in excess of £16,000 are not eligible for Universal Credit. However, for Tax Credit claimants in this situation, we will now disregard any capital in excess of £16,000 for 12 months from the point at which they are moved to Universal Credit. Normal benefit rules apply after this time in order to strike the right balance between keeping incentives for saving and asking people to support themselves.

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