Managed migration payments very different

Icequeen1

poppy12345 said:

Icequeen1 said:

andrewmp said:

Icequeen1 said:

andrewmp said:

Spoonie_Turtle said:

I understand now, thank you - so we're still none the wiser why OP isn't getting any TP, but it shouldn't be a systemic flaw hammering everyone.

The system is broken. They said nobody would be worse off, but loads will be.  Basically anyone with unearned income.

It isn't the case that anyone with unearned income is worse off. This came up on a previous thread and i think Yamor explained that there seems to be a difference between the legislation and what is happening in practice in some cases and so that can be challenged via a mandatory reconsideration. The legislation does not make everyone with unearned income worse off. 

But there are situations where due to the definitions used or a few other things people will be worse off. Equally there will be a few situations where people will get a transitional element even though their UC award will be higher. 

Students are especially worse off.  Especially those with families.

Are you saying they are worse off intentionally (so applying the transitional protection legislation they are still worse off ) or is it because of the way DWP are calculating it (perhaps not correctly)? Why are they worse off? It may be the case that there are some groups worse off but it isn't everyone with unearned income. 

It's purely because of student maintenance loans. They were disregarded for Tax credits but it's my understanding they are not for UC, even with TP.

 I think this has been covered on another thread but there should be TP in this situation because when the notional UC figure is calculated the loan will be unearned income and so the notional UC figure will be lower than the legacy benefit award (assuming all other things equal). The legislation seems quite clear on this point - whether the DWP apply it correctly is a separate issue and it may require a mandatory reconsideration. 

kaMelo

Icequeen1 said:

poppy12345 said:

Icequeen1 said:

andrewmp said:

Icequeen1 said:

andrewmp said:

Spoonie_Turtle said:

I understand now, thank you - so we're still none the wiser why OP isn't getting any TP, but it shouldn't be a systemic flaw hammering everyone.

The system is broken. They said nobody would be worse off, but loads will be.  Basically anyone with unearned income.

It isn't the case that anyone with unearned income is worse off. This came up on a previous thread and i think Yamor explained that there seems to be a difference between the legislation and what is happening in practice in some cases and so that can be challenged via a mandatory reconsideration. The legislation does not make everyone with unearned income worse off. 

But there are situations where due to the definitions used or a few other things people will be worse off. Equally there will be a few situations where people will get a transitional element even though their UC award will be higher. 

Students are especially worse off.  Especially those with families.

Are you saying they are worse off intentionally (so applying the transitional protection legislation they are still worse off ) or is it because of the way DWP are calculating it (perhaps not correctly)? Why are they worse off? It may be the case that there are some groups worse off but it isn't everyone with unearned income. 

It's purely because of student maintenance loans. They were disregarded for Tax credits but it's my understanding they are not for UC, even with TP.

 I think this has been covered on another thread but there should be TP in this situation because when the notional UC figure is calculated the loan will be unearned income and so the notional UC figure will be lower than the legacy benefit award (assuming all other things equal). The legislation seems quite clear on this point - whether the DWP apply it correctly is a separate issue and it may require a mandatory reconsideration. 

The problem is tax credits completely disregards any student loans, virtually all other unearned and notional income needs to be declared alongside earned income for tax credits however you are specifically told not to include student loans in that declaration..

Looking at the transitional provisions legislation;
54 (7) The calculation of the indicative UC amount is to be based on the information that is used for the purposes of calculating the total legacy amount, supplemented as necessary by such further information or evidence as the Secretary of State requires

As student loans form no part in the calculation for the legacy amount, student loans cannot form part of the indicative UC calculation.  Once a maximum award has been calculated, UC rules mean any available student maintenance loans, whether taken or not, is deducted in full from the maximum award.   

Now, the paragraph above is something Yamor and I disagree on, their interpretation is that student loans should form part of the indicative UC calculation whereas I don't.  Maybe the student loan amount falls into the category "further information or evidence as the Secretary of State requires" in which case Yamor would be correct.
Although I've yet to see any published information for decision makers on how to implement this my understanding is that DWP are not including student loans in calculating an indicative UC amount so don't receive any transitional protection

Icequeen1

kaMelo said:

Icequeen1 said:

poppy12345 said:

Icequeen1 said:

andrewmp said:

Icequeen1 said:

andrewmp said:

Spoonie_Turtle said:

I understand now, thank you - so we're still none the wiser why OP isn't getting any TP, but it shouldn't be a systemic flaw hammering everyone.

The system is broken. They said nobody would be worse off, but loads will be.  Basically anyone with unearned income.

It isn't the case that anyone with unearned income is worse off. This came up on a previous thread and i think Yamor explained that there seems to be a difference between the legislation and what is happening in practice in some cases and so that can be challenged via a mandatory reconsideration. The legislation does not make everyone with unearned income worse off. 

But there are situations where due to the definitions used or a few other things people will be worse off. Equally there will be a few situations where people will get a transitional element even though their UC award will be higher. 

Students are especially worse off.  Especially those with families.

Are you saying they are worse off intentionally (so applying the transitional protection legislation they are still worse off ) or is it because of the way DWP are calculating it (perhaps not correctly)? Why are they worse off? It may be the case that there are some groups worse off but it isn't everyone with unearned income. 

It's purely because of student maintenance loans. They were disregarded for Tax credits but it's my understanding they are not for UC, even with TP.

 I think this has been covered on another thread but there should be TP in this situation because when the notional UC figure is calculated the loan will be unearned income and so the notional UC figure will be lower than the legacy benefit award (assuming all other things equal). The legislation seems quite clear on this point - whether the DWP apply it correctly is a separate issue and it may require a mandatory reconsideration. 

The problem is tax credits completely disregards any student loans, virtually all other unearned and notional income needs to be declared alongside earned income for tax credits however you are specifically told not to include student loans in that declaration..

Looking at the transitional provisions legislation;
54 (7) The calculation of the indicative UC amount is to be based on the information that is used for the purposes of calculating the total legacy amount, supplemented as necessary by such further information or evidence as the Secretary of State requires

As student loans form no part in the calculation for the legacy amount, student loans cannot form part of the indicative UC calculation.  Once a maximum award has been calculated, UC rules mean any available student maintenance loans, whether taken or not, is deducted in full from the maximum award.   

Now, the paragraph above is something Yamor and I disagree on, their interpretation is that student loans should form part of the indicative UC calculation whereas I don't.  Maybe the student loan amount falls into the category "further information or evidence as the Secretary of State requires" in which case Yamor would be correct.
Although I've yet to see any published information for decision makers on how to implement this my understanding is that DWP are not including student loans in calculating an indicative UC amount so don't receive any transitional protection

There are several examples where there is a difference between tax credits and UC. FWIW i agree with Yamor and so i think it is best to say that there are some uncertainties rather than saying anyone with unearned income is worse off or students are necessarily worse off. 

I disagree with your interpretation of the legislation because I think 54(7) has to be read in conjunction with 54(1) which says that the indicative uC amount is the amount to which a claimant would be entitled if an award of UC were calculated in accordance with Section 8 of the Act by reference to the claimant's circumstances on the migration day. 

54(7) then states that the calculation (referred to in 54(1) is to be based on info that is used for the purposes of calculating the total legacy amount, supplemented as necessary by such further information or evidence as required. 

I think that means information or evidence required in order to calculate what the claimant would have been entitled to if an award of UC were calculated under Section 8. 

I think that there are a number of things that support this interpretation:

1. The whole point of transitional element is that people are not worse off on transition - so it makes sense to interpret in the way that meet the well documented intention

2. If your interpretation is right, then there would seem to be no need to add 'supplemented as necessary by such further information or evidence as the secretary of state requires'. If they were just using the info from legacy benefits then they wouldn't need any further info

3. Your interpretation would make some of 54(2) pointless - why do they need an assumption about the number of children if 54(1) and 54(7) mean you just use the legacy benefit information. 

4. DWP are taking into account capital as tariff income in the unearned income calculation for the UC indicative amount. Why would they do this as its not relevant for tax credits? DWP can't interpret the same provision two ways. 

So i think we'll have to agree to disagree :-) I suspect there will be plenty of challenges on TP as the numbers increase. 

Auti

Hello. Just a question as to how long I wait for an acknowledgment to my request for transitional payment calculation information/ mandatory reconsideration  as today is the third day and no response on journal. I am trying to avoid phone as I do not do well on phone and as my previous post citizens advice have said they are to allowed to help.

andrewmp

poppy12345 said:

Icequeen1 said:

andrewmp said:

Icequeen1 said:

andrewmp said:

Spoonie_Turtle said:

I understand now, thank you - so we're still none the wiser why OP isn't getting any TP, but it shouldn't be a systemic flaw hammering everyone.

The system is broken. They said nobody would be worse off, but loads will be.  Basically anyone with unearned income.

It isn't the case that anyone with unearned income is worse off. This came up on a previous thread and i think Yamor explained that there seems to be a difference between the legislation and what is happening in practice in some cases and so that can be challenged via a mandatory reconsideration. The legislation does not make everyone with unearned income worse off. 

But there are situations where due to the definitions used or a few other things people will be worse off. Equally there will be a few situations where people will get a transitional element even though their UC award will be higher. 

Students are especially worse off.  Especially those with families.

Are you saying they are worse off intentionally (so applying the transitional protection legislation they are still worse off ) or is it because of the way DWP are calculating it (perhaps not correctly)? Why are they worse off? It may be the case that there are some groups worse off but it isn't everyone with unearned income. 

It's purely because of student maintenance loans. They were disregarded for Tax credits but it's my understanding they are not for UC, even with TP.

That's right.  The difference for students can be huge.  Student parents on tax credits will end up losing loads.

andrewmp

One of my friend's uncles currently receives a total of £40k+ pa in student loans and bursaries.

His wife earns about £30-35k a year and they get about £800pm in tax credits.

They're going to be loads worse off. I hope they don't starve. 😂😂

Yamor

Icequeen1 said:

kaMelo said:

Icequeen1 said:

poppy12345 said:

Icequeen1 said:

andrewmp said:

Icequeen1 said:

andrewmp said:

Spoonie_Turtle said:

I understand now, thank you - so we're still none the wiser why OP isn't getting any TP, but it shouldn't be a systemic flaw hammering everyone.

The system is broken. They said nobody would be worse off, but loads will be.  Basically anyone with unearned income.

It isn't the case that anyone with unearned income is worse off. This came up on a previous thread and i think Yamor explained that there seems to be a difference between the legislation and what is happening in practice in some cases and so that can be challenged via a mandatory reconsideration. The legislation does not make everyone with unearned income worse off. 

But there are situations where due to the definitions used or a few other things people will be worse off. Equally there will be a few situations where people will get a transitional element even though their UC award will be higher. 

Students are especially worse off.  Especially those with families.

Are you saying they are worse off intentionally (so applying the transitional protection legislation they are still worse off ) or is it because of the way DWP are calculating it (perhaps not correctly)? Why are they worse off? It may be the case that there are some groups worse off but it isn't everyone with unearned income. 

It's purely because of student maintenance loans. They were disregarded for Tax credits but it's my understanding they are not for UC, even with TP.

 I think this has been covered on another thread but there should be TP in this situation because when the notional UC figure is calculated the loan will be unearned income and so the notional UC figure will be lower than the legacy benefit award (assuming all other things equal). The legislation seems quite clear on this point - whether the DWP apply it correctly is a separate issue and it may require a mandatory reconsideration. 

The problem is tax credits completely disregards any student loans, virtually all other unearned and notional income needs to be declared alongside earned income for tax credits however you are specifically told not to include student loans in that declaration..

Looking at the transitional provisions legislation;
54 (7) The calculation of the indicative UC amount is to be based on the information that is used for the purposes of calculating the total legacy amount, supplemented as necessary by such further information or evidence as the Secretary of State requires

As student loans form no part in the calculation for the legacy amount, student loans cannot form part of the indicative UC calculation.  Once a maximum award has been calculated, UC rules mean any available student maintenance loans, whether taken or not, is deducted in full from the maximum award.   

Now, the paragraph above is something Yamor and I disagree on, their interpretation is that student loans should form part of the indicative UC calculation whereas I don't.  Maybe the student loan amount falls into the category "further information or evidence as the Secretary of State requires" in which case Yamor would be correct.
Although I've yet to see any published information for decision makers on how to implement this my understanding is that DWP are not including student loans in calculating an indicative UC amount so don't receive any transitional protection

There are several examples where there is a difference between tax credits and UC. FWIW i agree with Yamor and so i think it is best to say that there are some uncertainties rather than saying anyone with unearned income is worse off or students are necessarily worse off. 

I disagree with your interpretation of the legislation because I think 54(7) has to be read in conjunction with 54(1) which says that the indicative uC amount is the amount to which a claimant would be entitled if an award of UC were calculated in accordance with Section 8 of the Act by reference to the claimant's circumstances on the migration day. 

54(7) then states that the calculation (referred to in 54(1) is to be based on info that is used for the purposes of calculating the total legacy amount, supplemented as necessary by such further information or evidence as required. 

I think that means information or evidence required in order to calculate what the claimant would have been entitled to if an award of UC were calculated under Section 8. 

I think that there are a number of things that support this interpretation:

1. The whole point of transitional element is that people are not worse off on transition - so it makes sense to interpret in the way that meet the well documented intention

2. If your interpretation is right, then there would seem to be no need to add 'supplemented as necessary by such further information or evidence as the secretary of state requires'. If they were just using the info from legacy benefits then they wouldn't need any further info

3. Your interpretation would make some of 54(2) pointless - why do they need an assumption about the number of children if 54(1) and 54(7) mean you just use the legacy benefit information. 

4. DWP are taking into account capital as tariff income in the unearned income calculation for the UC indicative amount. Why would they do this as its not relevant for tax credits? DWP can't interpret the same provision two ways. 

So i think we'll have to agree to disagree :-) I suspect there will be plenty of challenges on TP as the numbers increase. 

Absolutely agree with this. In fact, I made some of these points in a post last month:

https://forums.moneysavingexpert.com/discussion/comment/80283079#Comment_80283079

Yamor

Auti said:

@yarmor  - is this what you mean? I have no idea what the £1 earnings as an employee means as I have not worked for a few years. Edit: just to say for child I got 1 x family element £549 (366 days), 1 x child element £3235.44 (366 days) with no reduction due to my income.



 

Sorry, I just realised that I didn't respond to this.

Based on the information you've provided, and the tax credit award notice, then by my calculations, and following DWP guidance, you should have been awarded a transitional element of about £81.71.

Based on the legislation (which IMO the DWP guidance does not follow), you are actually entitled to a transitional element of about £137.96.

The difference is due to the issue identified by icequeen1 earlier in the thread: due to tax credits being based on last year's income.

Why they haven't given you any transitional protection could be because they haven't taken into account the ESA, or because they haven't taken into account the pension income. Or it could be something else completely!

Auti

@Yarmor- thank you. They have deducted the CBESA and pension as unearned income so know about them - it is so confusing! Thank you for doing the calculation. I have asked for a mandatory reconsideration on 8.10 and am waiting to see if they respond. Thank you again it is appreciated.

Yamor

Auti said:

@Yarmor- thank you. They have deducted the CBESA and pension as unearned income so know about them - it is so confusing! Thank you for doing the calculation. I have asked for a mandatory reconsideration on 8.10 and am waiting to see if they respond. Thank you again it is appreciated.

When I say that perhaps they didn't take the pension or the ESA into account, I mean when doing the TP calculation. Of course, when they made the eventual entitlement decision for your first assessment period, they did take them both into account.

I would follow up now on your journal, asking for the MR request to be dealt with ASAP, and for them to confirm that it has been passed on to a Decision Maker.