Universal Credit change in Calculations?

NedS

Livinfatorynightmare said:

NedS said:

This month UC rolled out a bug fix to fix an ongoing error in the way UC is calculated for couples where one is self-employed and the other has PAYE earnings. For the last 10 years the system has not been calculating deductions for earnings correctly and that has now been fixed. The UC system was previously doing weird things, often either randomly ignoring the MIF or PAYE earnings, so earnings were not being fully taken into account.

The journal message is being sent to all claimants who may potentially be affected.

"A ten year bug" in other words the system was set up like that, and now they want to change it.

Well yes, I guess you could say it was set up like that and now they want to change it - that kind of falls under the definition of a bug. But it was never set up like that intentionally and in being set up like that for the last 10 years has contradicted legislation (hence it being a bug/error), which has now been identified and fixed. The underlying policy intent (the law) has not changed. 

Livinfatorynightmare said:

There was never anything "weird" about it, if the MIF was a higher figure than your partners paye income, that would be the figure used. If the PAYE was higher that was the figure. 

And now the change (which I happen to somewhat agree with) is being rolled out instantly. Zero warning.

But that is not what the law says should happen. Both the MIF AND partner's PAYE earnings should be taken into account, giving consideration to the couple threshold.

Quite simply, the system was not taking into account both MIF and partner's PAYE earnings as it should (as set out in legislation). You were effectively being overpaid UC. That has now been fixed and if the amount of UC you now receive has dropped, then that is the reason and likely means that you have been overpaid UC in previous months. They couldn't give you any more warning as literally last week we did not know if this fix was going to be rolled out this week or not. Besides, what warning should you need that you are subject to the law? It's been there in legislation for you to read since 2013 - is that not enough notice for you?

Tell you a great "bug" when partners on PAYE get paid 13 times a year. In their double month they now get income figures of two payments and the inflated MIF. Whopeee

That's not a bug - the system is working to design. UC works on a monthly basis as that is how the majority of people are paid. If someone is paid 13 times per year (4 weekly), then once a year two pay periods will fall within one month. That is simply a fact of how the system works. In some cases this will work to the claimants advantage, and not in others. If it is disadvantageous to your partner, they can ask their employer to switch to a monthly payroll system as employers have the choice how they pay their employees whereas the monthly design aspect of UC is written in law and cannot be easily changed.

tomtom256

It could be worse. They could have decided to correct all previous incorrect payments caused by the bug, where an overpayment would occur, causing further debt, instead of leaving it and essentially writing it off as an error.

Awards should have always been based on using the combined CET as the maximum amount of income, when PAYE and self-employment occur on claim, however the system cocked it up and it never did it.

Work coaches had to spot it to manually correct it, but as it only occurs after the MIF is imposed, it would never  be noticed, as claimants lose their work coach once the MIF is applied.

Spoonie_Turtle

Livinfatorynightmare said:

NedS said:

Livinfatorynightmare said:

NedS said:

This  rolled out a bug fix to fix an ongoing error in the way UC is calculated for couples where one is self-employed and the other has PAYE earnings. For the last 10 years the system has not been calculating deductions for earnings correctly and that has now been fixed. The UC system was previously doing weird things, often either randomly ignoring the MIF or PAYE earnings, so earnings were not being fully taken into account.

The journal message is being sent to all claimants who may potentially be affected.

"A ten year bug" in other words the system was set up like that, and now they want to change it.

Well yes, I guess you could say it was set up like that and now they want to change it - that kind of falls under the definition of a bug. But it was never set up like that intentionally and in being set up like that for the last 10 years has contradicted legislation (hence it being a bug/error), which has now been identified and fixed. The underlying policy intent (the law) has not changed. 

Livinfatorynightmare said:

There was never anything "weird" about it, if the MIF was a higher figure than your partners paye income, that would be the figure used. If the PAYE was higher that was the figure. 

And now the change (which I happen to somewhat agree with) is being rolled out instantly. Zero warning.

But that is not what the law says should happen. Both the MIF AND partner's PAYE earnings should be taken into account, giving consideration to the couple threshold.

Quite simply, the system was not taking into account both MIF and partner's PAYE earnings as it should (as set out in legislation). You were effectively being overpaid UC. That has now been fixed and if the amount of UC you now receive has dropped, then that is the reason and likely means that you have been overpaid UC in previous months. They couldn't give you any more warning as literally last week we did not know if this fix was going to be rolled out this week or not. Besides, what warning should you need that you are subject to the law? It's been there in legislation for you to read since 2013 - is that not enough notice for you?

Tell you a great "bug" when partners on PAYE get paid 13 times a year. In their double month they now get income figures of two payments and the inflated MIF. Whopeee

That's not a bug - the system is working to design. UC works on a monthly basis as that is how the majority of people are paid. If someone is paid 13 times per year (4 weekly), then once a year two pay periods will fall within one month. That is simply a fact of how the system works. In some cases this will work to the claimants advantage, and not in others. If it is disadvantageous to your partner, they can ask their employer to switch to a monthly payroll system as employers have the choice how they pay their employees whereas the monthly design aspect of UC is written in law and cannot be easily changed.

(Removed by Forum Team)

NedS is simply explaining the situation so that you and others can understand what is happening and why.  Tomtom is also correct in pointing out that actually under the law it could have been worse - the legislation says all overpayments are recoverable even if it's official error.

The journal notice says within two months.  Did you get that?  I agree it's better to give people notice but they're not obligated to. 

We know that the administration of UC can be shoddy and cause people real problems, so it is good to get some perspective and be thankful the bug worked in your favour all this time and they're not going to ask for money back (which again, legally they could do.  Morally, that's another matter, but the law is the law.  If you don't like it, you'll have to take it up with your MP and/or charities who can lobby; this forum is not the place).

Livinfatorynightmare

Just a quick update on this, they have decided it was wrong form the start and are now starting the collection of all over paid MIF related issues over the past ten years. You should get your bill soon. 

NedS

Livinfatorynightmare said:

Just a quick update on this, they have decided it was wrong form the start and are now starting the collection of all over paid MIF related issues over the past ten years. You should get your bill soon. 

That's not correct.

It is correct top state it was wrong from the start and has been corrected from Aug 31st 2023 moving forward, but Policy have not yet decided what if anything will happen about any past overpayments.

Some cases that were identified prior to the fix in Aug 31st 2023 were manually recalculated and overpayments recovered.

And therein lies the dilemma for Policy - I suspect they would happily ignore previous overpayments and write them off if it were not for the fact these have been partially recovered from some claimants but not from others - so there is also this inconsistency element to consider in the way some claimants have been treated. Anyway, Policy are very much aware but have not yet decided on a course of action regarding previous overpayments of UC caused by this issue.

Livinfatorynightmare

NedS said:

Livinfatorynightmare said:

Just a quick update on this, they have decided it was wrong form the start and are now starting the collection of all over paid MIF related issues over the past ten years. You should get your bill soon. 

That's not correct.

It is correct top state it was wrong from the start and has been corrected from Aug 31st 2023 moving forward, but Policy have not yet decided what if anything will happen about any past overpayments.

Some cases that were identified prior to the fix in Aug 31st 2023 were manually recalculated and overpayments recovered.

And therein lies the dilemma for Policy - I suspect they would happily ignore previous overpayments and write them off if it were not for the fact these have been partially recovered from some claimants but not from others - so there is also this inconsistency element to consider in the way some claimants have been treated. Anyway, Policy are very much aware but have not yet decided on a course of action regarding previous overpayments of UC caused by this issue.

It is the case, I have spoken to ICE today who have confirmed that under the terms and conditions of universal credit the recoverable amount are very much in the process of recovery and we personally can expect a bill to the tune of 13 thousand for overpayment based upon a 15% reduction to the standard allowance - they did however apologise and offer is £100 gesture of good will. 

next stop, tribunal 

Yamor

What will be the basis of your appeal? Seeing that the law does seem to allow DWP to recover the overpayment.

NedS

Livinfatorynightmare said:

NedS said:

Livinfatorynightmare said:

Just a quick update on this, they have decided it was wrong form the start and are now starting the collection of all over paid MIF related issues over the past ten years. You should get your bill soon. 

That's not correct.

It is correct top state it was wrong from the start and has been corrected from Aug 31st 2023 moving forward, but Policy have not yet decided what if anything will happen about any past overpayments.

Some cases that were identified prior to the fix in Aug 31st 2023 were manually recalculated and overpayments recovered.

And therein lies the dilemma for Policy - I suspect they would happily ignore previous overpayments and write them off if it were not for the fact these have been partially recovered from some claimants but not from others - so there is also this inconsistency element to consider in the way some claimants have been treated. Anyway, Policy are very much aware but have not yet decided on a course of action regarding previous overpayments of UC caused by this issue.

It is the case, I have spoken to ICE today who have confirmed that under the terms and conditions of universal credit the recoverable amount are very much in the process of recovery and we personally can expect a bill to the tune of 13 thousand for overpayment based upon a 15% reduction to the standard allowance - they did however apologise and offer is £100 gesture of good will. 

next stop, tribunal 

It may be the case for you if your case was identified and recovery work started on it before the fix was implemented, but as I said, it has most definitely NOT been decided (at this time) by DWP Policy that everyone affected will have to repay. I'm not sure you read my response properly.

As @Yamor says, on what basis will you argue at tribunal? If DWP are correct that you have been overpaid according to the law, and again according to the law DWP have the right to recover the overpayment. Where is your argument?

Yamor

To be honest, when this error came to light, I was shocked, of course by the initial error, but much more so by the fact it continued for so long!

There is no question that the legislation supports the current practice, and that all overpayments are generally recoverable.

However, I do think it is hugely unfair. One of the stated reasons for the MIF is to discourage claimants with failing businesses from continuing with the business, and to rather look at doing something else (possibly as a regular employee). Very possibly, had a claimant affected by the error known about the lower entitlement, then they may have given up the self-employed work earlier.

ElwoodBlues

NedS said:
And therein lies the dilemma for Policy - I suspect they would happily ignore previous overpayments and write them off if it were not for the fact these have been partially recovered from some claimants but not from others - so there is also this inconsistency element to consider in the way some claimants have been treated. Anyway, Policy are very much aware but have not yet decided on a course of action regarding previous overpayments of UC caused by this issue.

NedS said:

It may be the case for you if your case was identified and recovery work started on it before the fix was implemented, but as I said, it has most definitely NOT been decided (at this time) by DWP Policy that everyone affected will have to repay. I'm not sure you read my response properly.

Right, so they can't write them off because it would be unfair seeing as they've recovered some overpayments from some claimants, but at the same time they can't decide whether everyone should have to repay?

That wouldn't be fair either though would it? If they want to be 'fair' they have to recover all the overpayments from everyone, potentially going back 10 years. The reason DWP are reluctant to do so is because of the adverse publicity they'll receive when the public and media (and MPs) pick up on it and realise what a !!!!!! show DWP/UC is.

Most people would consider that spirit of the legislation stating that overpayments can be recovered even when it's DWP's fault is intended for when they've made the odd human error (mis hearing someone on the phone, mistyping a bit of data) rather than a wide scale bug in their system that's been missed for a decade!

There's all kinds of laws that could fight this - why doesn't statute of limitations apply? Even HMRC can only recover underpaid tax going back 4 years when it's a 'careless error' by the taxpayer. Even for deliberate tax evasion they're limited to 20 years. So why would it be fair, when it's the authority's fault, that they can recover back to the beginning of time? At the very least statute of limitations should apply. It could also be argued that the legislation is wholly  unfair - if it were a contract it would certainly be deemed an unfair one. Of course, the people affected by this massive !!!!!! up aren't going to be able to afford the legal fees to fight it. So DWP are on a home run to get away with covering up their incompetence.

Further, the whole UC system/calculations are so complicated that most claimants have no idea whether their entitlement has been correctly calculated by the DWP's clunky computer system. Even if you contact DWP to ask for an explanation, their staff can't seem to work it out/tell you, it's always just a case of 'computer says no/£x'. It's unfortunate that there's been a mass overpayment and that it's cost the tax payer, but the reality is that it's 100% DWP's fault. Their senior employees should foot the bill, take it out of their salaries and over generous pensions - that would be fairer than clawing it back from the entirely innocent claimants. And then they should be sacked for gross incompetence.

People affected by it really need to raise the issue with their MP. The only hope is that negative publicity causes senior government to tell DWP to waive their right to reclaim it.