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Yamor said:

NedS said:

Yamor said:

NedS said:

Yamor said:

However, in this case, UC seem to have only deducted one Carer's Allowance when calculating the Indicative UC Amount. This therefore left the Indicative UC Amount at £803.54 (£470.96 + £332.58 = £803.54), and the transitional element was therefore calculated as being only: £907.94 - £803.54 = £104.40.
Although this mistake was made for the transitional element calculation, the actual UC award was calculated correctly in this respect, with two deductions made for Carer's Allowance.
This mistake actually brings out the point that the transitional element is calculated as a one-off snapshot, without reference to the actual UC award in the first (and subsequent) assessment periods.

@Yamor I think you may have identified a bug in the way the TP calculator works. Even for a joint claim, it appears to work under one claimant's name. The calculator pre-populates their DoB, asks if they are a carer, if they are in receipt of LCW/LCWRA and pre-populates the tax credits award data etc. There is nowhere AFAIK for the agent to record that both members of a couple are carers. I will investigate further and see what I can find out.

Thanks, I would be really interested to hear!

It may not be as simple as that, because in this case it DID identify that they were both carers for the purposes of the carer element, just not for the deduction for the Carer's Allowance income.

Sorry, I was mistaken - the TP calculator does have the facility to input caring activity for both the claimant and the partner, but it is not auto-populated so the agent must check what has been declared and complete the todo correctly.

What about income from DWP benefits (incl. Carer's Allowance) - is that auto-populated? And if yes, does it capture the info for both claimants?

No, it's not auto-populated. It asks if the partner receives any other benefits and the agent must manually check and select yes, and then enter details of any CA award in payment. So this looks like a case of agent error.

Hi2928828292

Spoken to citizens advice they have said this. 

@yamor what’s your take on this .
Thank you 

Hello,

Please find below the opinion on your case of our expert advice team:

Hi 

Thank you for your inquiry and the further information that you have sent. 

Having looked at this I think the UC transitional element is about £132.78 a month below what it should be. However, the DWP have not supplied any details as to how they have calculated this amount, so I cannot definitively check this. Your client will need to lodge a mandatory reconsideration (MR) to challenge the current amount and to get a breakdown as to how this has been calculated. Other than the amount of the transitional element (TE) the calculation of the UC award seems to be correct. Despite this there are number of reasons why your client will be worse-off financially on universal credit (UC). 

Dealing with the calculation of the TE first. This is calculated by comparing the amount of the claimant's legacy benefits with their indicative UC. The DWP make a number of assumptions regarding this. Applying this to your client. Your client was entitled to child tax credit of £907.94 a month. I actually calculated £910.35 a month, but used a monthly rate, so the DWP's is probably more accurate as they will have used daily figures. 

The DWP then look at the indicative UC figure. Your client's maximum UC without the TE is £1681.43. This includes two child elements, a couples standard amount, two carers element and child disability element. Your client's income then needs to be deducted from this maximum amount. All your client's income is what UC call 'unearned income' there are two monthly amounts of carers allowance and an occupational pension. At the current time this income is £1210.42 a month. However, I think that the DWP will use the figure that tax credits have for your client's previous year income. This is £12,128 per year or £1010.67. This is because one of the assumptions made by the DWP is that the income figure is the one that the tax credits are based on (see reg 54 UC(TP) regs 2014).

Even if the lower income figure is used the indicative UC will be £1681.43 - £1010.67 = £670.76.

The TE should then be legacy benefits £907.94 - £670.76 = £237.18. This is £132.78 a month higher than the DWP's figure of £104.40. This means I think your client should lodge a MR/appeal against the decision on the UC claim on the basis that the TE has been incorrectly calculated. 

In addition to the above, I think there are a number of reasons why your client might be worse-off financially on UC. This is because of the different rules regarding tax credits and UC and their treatment of unearned income. Your clients have unearned income of an occupational pension and two awards of carers allowance. If a claimant receives child tax credit only the earnings limit to receive maximum tax credits is £18,725. As your client's total income was below this they received the maximum amount of child tax credit and then their unearned income was paid on top of this. For UC all unearned income reduces UC entitlement pound for pound. This means your client's only receive the difference figure between their maximum UC entitlement and their unearned income. 

Unfortunately the TE does not compensate claimants for the different treatment of unearned income in relation to earnings disregards. Some protection is afforded by the TE but for claimants like your client who received maximum child tax credits and had unearned income they will lose out financially. This is because the carers allowance and occupational pension are not added to the legacy benefit figure. 

You might want to add to your client's UC appeal that the TE should have used your client's current yearly income figure rather the previous tax years figure. This is because although the tax credit entitlement was based on previous year income, arguably, tax credits should have had up to date information on uprated benefits (like carers allowance) on migration day. Arguably, this should have informed the income assumptions made under reg 54 UC(TP) regs 2014

Yamor

Hi2928828292 said:

Spoken to citizens advice they have said this. 

@yamor what’s your take on this .
Thank you 

Hello,

Please find below the opinion on your case of our expert advice team:

Hi 

Thank you for your inquiry and the further information that you have sent. 

Having looked at this I think the UC transitional element is about £132.78 a month below what it should be. However, the DWP have not supplied any details as to how they have calculated this amount, so I cannot definitively check this. Your client will need to lodge a mandatory reconsideration (MR) to challenge the current amount and to get a breakdown as to how this has been calculated. Other than the amount of the transitional element (TE) the calculation of the UC award seems to be correct. Despite this there are number of reasons why your client will be worse-off financially on universal credit (UC). 

Dealing with the calculation of the TE first. This is calculated by comparing the amount of the claimant's legacy benefits with their indicative UC. The DWP make a number of assumptions regarding this. Applying this to your client. Your client was entitled to child tax credit of £907.94 a month. I actually calculated £910.35 a month, but used a monthly rate, so the DWP's is probably more accurate as they will have used daily figures. 

The DWP then look at the indicative UC figure. Your client's maximum UC without the TE is £1681.43. This includes two child elements, a couples standard amount, two carers element and child disability element. Your client's income then needs to be deducted from this maximum amount. All your client's income is what UC call 'unearned income' there are two monthly amounts of carers allowance and an occupational pension. At the current time this income is £1210.42 a month. However, I think that the DWP will use the figure that tax credits have for your client's previous year income. This is £12,128 per year or £1010.67. This is because one of the assumptions made by the DWP is that the income figure is the one that the tax credits are based on (see reg 54 UC(TP) regs 2014).

Even if the lower income figure is used the indicative UC will be £1681.43 - £1010.67 = £670.76.

The TE should then be legacy benefits £907.94 - £670.76 = £237.18. This is £132.78 a month higher than the DWP's figure of £104.40. This means I think your client should lodge a MR/appeal against the decision on the UC claim on the basis that the TE has been incorrectly calculated. 

In addition to the above, I think there are a number of reasons why your client might be worse-off financially on UC. This is because of the different rules regarding tax credits and UC and their treatment of unearned income. Your clients have unearned income of an occupational pension and two awards of carers allowance. If a claimant receives child tax credit only the earnings limit to receive maximum tax credits is £18,725. As your client's total income was below this they received the maximum amount of child tax credit and then their unearned income was paid on top of this. For UC all unearned income reduces UC entitlement pound for pound. This means your client's only receive the difference figure between their maximum UC entitlement and their unearned income. 

Unfortunately the TE does not compensate claimants for the different treatment of unearned income in relation to earnings disregards. Some protection is afforded by the TE but for claimants like your client who received maximum child tax credits and had unearned income they will lose out financially. This is because the carers allowance and occupational pension are not added to the legacy benefit figure. 

You might want to add to your client's UC appeal that the TE should have used your client's current yearly income figure rather the previous tax years figure. This is because although the tax credit entitlement was based on previous year income, arguably, tax credits should have had up to date information on uprated benefits (like carers allowance) on migration day. Arguably, this should have informed the income assumptions made under reg 54 UC(TP) regs 2014

Unfortunately, the expert advice team have got this wrong. Universal Credit only take 'earned income' details from the tax credits award, not 'unearned income' - i.e., pension income and Carer's Allowance.

It seems pretty clear to me what the error made by Universal Credit is, as per my earlier post, and I agree that you should request an MR, on the grounds that they have not calculated the TP correctly, in that they do not seem to have included both sets of Carer's Allowance in their calculation.

The expert advice team has also got it wrong about the lack of compensation for the different treatment of unearned income. This is not correct, and TP does compensate for that. However, the protection is a cash protection only, so in future the different treatment of unearned income will mean that they will not be getting as much as they would have been getting had they remained on tax credits.

Finally, their last paragraph is again incorrect, for the same reason mentioned above, that UC do not get this information from tax credits.

Yamor

Hi2928828292 said:

Dealing with the calculation of the TE first. This is calculated by comparing the amount of the claimant's legacy benefits with their indicative UC. The DWP make a number of assumptions regarding this. Applying this to your client. Your client was entitled to child tax credit of £907.94 a month. I actually calculated £910.35 a month, but used a monthly rate, so the DWP's is probably more accurate as they will have used daily figures.

By the way, where did the Citizen's Advice expert advice team get the figure £907.94 from?

Hi2928828292

Universal credit sent that too much originally when I queried about the payment being too low. 

 I have sent those messages that you told me send on the journal. What’s the process?
Thank you so muck aswell!

They said that figure in this message 

Thank you for your message.

Your entitlement to Universal Credit is £1785.83 and your entitlement to Child Tax Credits was £907.94.

Regarding your query about the deduction of the Carers Allowance. Because Universal Credit is a monthly benefit based on a 12 month calendar and Carers Allowance is paid weekly, we average the Carers Allowance deduction because there are more weeks in some months than others.  The Carers Allowance deduction is calculated as follows:  

£76.75 (weekly carers allowance amount) x 52 (weeks in the year) divided by 12 (months in the year) = £332.58.  We can confirm the deduction for the Carers Allowance has been calculated correctly. 

Universal Credit only pays the child element up to the August after the child's 19th birthday.

We can confirm your Universal Credit award has been calculated correctly.

Kind regards

Yamor

OK, that's good, because if you look at my earlier post where i made the calculations, I came to the same figure, so I'm pleased with that!

With regard to the process, I would just continue chasing it up on your journal to make sure they have actually sent it to a Decision Maker for a Mandatory Reconsideration. This can take some time, unfortunately.

As we have (almost certainly) worked out what the issue is, I would also separately leave a message on your journal asking them to confirm whether both sets of Carer's Allowance were included when they made the TP calculation.

Hi2928828292

Thank you so much! 

Yamor

Hi2928828292 said:

Thank you so much! 

Great!

And it matches precisely to what we thought it should be!

Hi2928828292

Hi, 
I have another question if you don't mind answering.
On the tax credit award letter it says the payment should be £738.52 in April. 
What should my parents  be getting on UC in April?
Also, tax credits were £929.61so shouldn't it be this much instead of £907?

I don't  want  UC to pay incorrectly from Apriln
Thank you appreciate it!

Yamor

Hi2928828292 said:

Hi, 
I have another question if you don't mind answering.
On the tax credit award letter it says the payment should be £738.52 in April. 
What should my parents  be getting on UC in April?
Also, tax credits were £929.61so shouldn't it be this much instead of £907?

I don't  want  UC to pay incorrectly from Apriln
Thank you appreciate it!

UC will reduce slightly in April, as the Carer's Allowance and (presumably) the pension income will increase, leading to greater deductions from their UC award. The "maximum UC" before deductions will not increase, as any increase due to the April uprating will be countered by an equivalent reduction in transitional protection.
Effectively, their total income, after adding together the Carer's Allowances, the pension income and the UC will be the same as it was beforehand, but the proportions paid by each will be different.

Regarding tax credits paying them £929 prior to migration: they were actually getting more like £1,007/month (as the £929 was 4-weekly). However, that is simply how tax credits had split up their payments over the year. Their underlying entitlement was actually £907/month. This is very common on the tax credits system.

To explain further, your parents' tax credits was recalculated from September 2023 when a child left the claim. At that point HMRC made a calculation as to how much they were entitled to from 01/09/23 to 05/04/24 - i.e. 218 days.
However, your parents were paid 4-weekly, and if you check the dates you will see that there were only 7 payment dates between 01/09/23 and 05/04/24. Seven 4-weekly payments equates to 196 days. This meant 218 days of entitlement were squashed into 196 days of payment. If you calculate £1,007*196/218 it comes to around £907.