New UC claim, what are the next steps likely to be?

Spoonie_Turtle

ElwoodBlues said:

As you're self employed/ltd company owner, then you have the added complication of submitting monthly accounts to DWP and your entire business income being treated as your own personal income. Between your salary and rental income I'm not sure your UC entitlement will be worth the hassle of claiming.

May depend on whether the rental income is deemed earnings from self-employment, or ignored (like income from a lodger is).

@kekestano apply now on the off-chance, you have nothing to lose.  But if you don't do it today then you certainly won't be entitled.

Yamor

Unfortunately, if the date in the migration letter was 23rd September, then yesterday was the latest you could claim and still get transitional protection.

As an aside, rental income never counts as income for UC purposes.

Newcad

I have to agree with the others that by ignoring the Managed Migration letter you have probably left things too late now. (Even if only by one day).

However apply the old addage of "If you don't ask you won't get" and bang in a claim for UC.

The worst that can happen is that they say you are not entitled and you have lost 30 minutes or so filling in the online claim.

ElwoodBlues

Now I've just had notification of my first UC payment. And it's quite a bit more than the benefits calculators had suggested, and more than I was getting on tax credits. I've had a look at the breakdown and they've included an element of Transitional Protection. Wasn't expecting that - as I mentioned previously I missed the deadline for a managed migration/TP entitlement by several months. Without the TP element the entitlement is about what I would have expected it to be. Seems like a mistake that they've then added on TP to give me substantially more than I was receiving under tax credits?

ElwoodBlues

Does anyone know what's supposed to happen to finalise a tax credits claim after managed migration has taken place? Does HMRC wait until tax year end next April? I was expecting something to happen more quickly than that. They wrote to me a couple of months ago with a provisional final calculation for my tax credits shortly after I claimed UC, asking me to inform them if any of the details were incorrect (they weren't, all good). That showed a small overpayment of tax credits. Not sure if that will need to be repaid separately to HMRC or if they claw it back by deducting from my UC entitlement?

Yamor

HMRC will normally finalise your award sometime after the deadline on the letter they sent you, and then any overpayment would be recovered through a deduction from your ongoing UC payments.

Did you ever work out why you got transitional protection despite claiming UC after your TCs had already ended?
Was the end date of your tax credits (per the in-year finalisation letter you received) in fact much earlier than the date you claimed UC?

ElwoodBlues

Yamor said:

HMRC will normally finalise your award sometime after the deadline on the letter they sent you, and then any overpayment would be recovered through a deduction from your ongoing UC payments.

Did you ever work out why you got transitional protection despite claiming UC after your TCs had already ended?
Was the end date of your tax credits (per the in-year finalisation letter you received) in fact much earlier than the date you claimed UC?

The deadline they gave me to migrate was in May. That passed and my tax credits stopped being paid then. At that point UC sent me a letter saying I had a further 30 days to claim with transitional protection. I didn't get around to starting my UC claim until about 4 months later.

Heard nothing from tax credits or UC until after I'd started UC claim. Then about a week after that I received a letter from HMRC: "Award review for period ended May 2023 (dated Oct 23). It gave me 30 days to check and contact them with any incorrect details, and then another 30 days after that as a deadline for requesting a mandatory reconsideration. That time is just about up now, so maybe I'll hear something soon. The calculation in the award review letter suggests I've been overpaid by a small amount in tax credits during the period April-May 2023, although it does say this is still TBC.

I don't know why they still gave me TP, suspect possibly they're more generous than the extra 30 days that they officially stated. Maybe it's just an automated thing because we're still in the same tax year, and the system just does it? But from the timeline, it does seem that HMRC made no attempt to finalise my tax credit entitlement until they'd been notified that I'd started to claim UC. Guessing if it had got past the 5th April then the standard end of year finalisation would have happened instead.

Yamor

Very interesting.

I actually think the opposite is true:
Because transitional protection is done manually, that's probably why they've given it to you. The case manager who dealt with it must not have noticed that you were past your final deadline.
If it'd been automated I doubt such an error would have happened...

I would just be careful, because all overpayments of UC are recoverable, so if they ever do realise, they will ask for the money back.

The fact that HMRC only started the finalisation process after you'd claimed UC makes sense. This is because the in-year finalisation process can only be used where a claim for UC is made. Otherwise the normal finalisation procedure must be used (i.e., after the year is over).

ElwoodBlues

Interesting that TP is done manually, I'd assumed they'd spent all this time developing computer systems to handle most of the managed migration process.

I don't even know why there's a TP element because my standard UC entitlement is pretty much the same (within £5/wk) as what I would have been getting with TC. The TP is over and above, and quite a substantial amount too. I can't see any explanation or calculation on my UC account, so completely in the dark as to how they've come up with the figure that they have.

Yes, I'm slightly concerned that one day they might turn around and decide it's (their) mistake and demand it back. Ordinarily I'd try and set aside the money, but then it won't be long before it starts to lift my capital above the 6k threshold. 

Yamor

DWP have developed a digital tool to carry out the TP calculation, but it requires an agent to input the details etc.

The most common reasons for people to get a transitional element despite being entitled to a similar or greater amount on UC is when they are a carer, or if they pay rent (but were not on Housing Benefit).