Cost of living payment.

silvm

Hi guys,  I'm posting here as the advise i got from UC themselves didn't answer my question.

My question to them was this:-

     I'm just querying if I'm entitled to the 2nd cost of living payment?  My August payment was nil due to a tax rebate, my September payment I did get a universal credit payment.   My qualifying period is something like 30th Aug to 30th Sept in which I got money from UC

The qualifying period for the 2nd payment is 26 August 2022 to 25 September 2022. So will I qualify for the 2nd payment?

If my tax had been correct. and not got a tax rebate. I'd have qualified for the 2nd payment easily.

Thanks

poppy12345

You will be eligible for the second Cost of Living Payment of £324 if you were entitled to a payment (or later found to be entitled to a payment) of Universal Credit for an assessment period that ended in the period 26 August 2022 to 25 September 2022.

Assessment periods last 1 month so if your assessment periods are 31st to 30th of each month then you won't qualify because in the qualifying period for you your UC was reduced to zero because of your earnings.

https://www.gov.uk/guidance/cost-of-living-payment#low-income-benefits-and-tax-credits

You answered your own question here.

silvm said:

If my tax had been correct. and not got a tax rebate. I'd have qualified for the 2nd payment easily.

Spoonie_Turtle

Unfortunately tax rebates are counted as earnings for UC.  Your award for the qualifying period was reduced to nil by it so no.

It's grossly unfair the way tax rebates are treated (we don't usually comment on policy here but I believe the majority of regular posters are in agreement on this point) but those are the rules, and it's just incredibly unfortunate for you that your tax rebate came in that assessment period.

calcotti

Spoonie_Turtle said:

It's grossly unfair the way tax rebates are treated (we don't usually comment on policy here but I believe the majority of regular posters are in agreement on this point) ..

I certainly do.

The argument for treating them this way is taht if someone is claiming UC they get paid UC based on net income. If therefore they are taxed too little while on UC their UC will go up, it is therefore right that a later tax rebate reduces the UC.  However I think that in general most people get tax rebates that relate to periods of employment prior to claiming UC and that is clearly unfair.

For legacy DWP benefits is was explicitly stated that tax rebates should be treated as capital. UC of course has a much high proportion of claimants who are in work compared to legacy DWP benefits. Those in work in the past would have been more likely to be in receipt of Tax Credits and for those tax rebates would have made no difference given that they are calculated on gross income.