UC Migration First Payment Calculation Error - Have I Got This Wrong??...

Carefulspender1

Hi everyone, apologies for the longer post. My partner and I, who are both self-employed, were on WTC and applied to migrate to UC.  Having now been told that we are not entitled to anything for our first payment, I’m looking for advice regarding the payment calculation, which I am sure is a clear error.

We both had our separate work coach initial Gateway Intervention interviews, where we had to provide proof of self-employment and we went over and above to prove this, with documents and proof of marketing etc. For those interested, the interviews lasted an hour each. Both our work coaches agreed for each of us, both verbally, in writing on our journal and in a letter that “you have been found to be gainfully self-employed and the start-up period applies.” We were both told and fully understand that the Minimum Income Floor will be applied once our start up period has ended in April 2025.

We both duly reported our income online for April to May, which was £750 and £350 net after expenses. However, the next day our payment was notified online as being zero and the calculation, from their notice, is as follows:

Your payment this month is £0

Standard allowance = £617.60

Transitional protection = £145.73 You get this because of other benefits you were on before you moved to Universal Credit. The payment will continue until you have a significant change of circumstances.

Total entitlement before deductions = £763.33

What we take off (deductions) = Take-home pay minus ‑ £1,260.52

My Earnings from self-employment = £735.55

The amount we'll use to work out your Universal Credit is £735.55

My Partner Earnings from self-employment = £350.00

Total earnings = £350.00

Your expected earnings (Minimum Income Floor) is £1,556.30

The amount we'll use to work out your Universal Credit is £1,556.30

The total take-home pay this period is £2,291.85

Money, savings and investments = minus ‑ £0.00

Total deductions = minus ‑ £1,260.52

I telephoned the UC helpline first thing Friday morning to raise a query but was told to do a journal note to raise it, which I did straight away, however nobody has responded yet. I have since seen many complaints that UC don’t respond to a large percentage of journal queries. As you can imagine this has become a really stressful experience for us both.

We are both completely confused – I am pretty certain this is a clear error because they have applied the Minimum Income Floor to the calculation but I would really appreciate it if anyone on the forum has experience enough to decipher whether this calculation is correct. I'd also wonder how long I should wait before chasing UC again about this query.

Any help would be much appreciated, many thanks.

tacpot12

You are correct that the zero award is due to them having applied the Minimum Income Floor when they should not have done so. 

I think that the calculation is probably correct IF you were subject to the Minimum Income Floor. I know that they combine the your Minimum Income Floor with that of your partners to give a combine minimum floor, but I don't know how they do this. I think the combined amount is the £2,291.85 figure. it would be more helpful if the confirmed that this was the case. 

If they apply the Minimum Income Floor, your Income is assumed to be £2,291.85, and then they multiply this by 0.55 to give the amount of UC that needs to be deducted because of your income; £2,291.85 x 0.55 =  £1,260.52

So you just need to point out that they have applied the Minimum Income Floor when they should not have. 

Carefulspender1

tacpot12 said:

You are correct that the zero award is due to them having applied the Minimum Income Floor when they should not have done so. 

I think that the calculation is probably correct IF you were subject to the Minimum Income Floor. I know that they combine the your Minimum Income Floor with that of your partners to give a combine minimum floor, but I don't know how they do this. I think the combined amount is the £2,291.85 figure. it would be more helpful if the confirmed that this was the case. 

If they apply the Minimum Income Floor, your Income is assumed to be £2,291.85, and then they multiply this by 0.55 to give the amount of UC that needs to be deducted because of your income; £2,291.85 x 0.55 =  £1,260.52

So you just need to point out that they have applied the Minimum Income Floor when they should not have. 

Thank you for replying - re the MIF being wrongly applied, that's what I thought too but they seem  to baffle with so many figures it was so confusing. Now at least I can be more confident in saying they've made an error! Re the likely figures for next year - that's pretty worrying too...how do any self employed people qualify for UC if the MIF is applied I wonder?! Thankfully I'll be retiring next summer but then we'll have a whole new issue of me being retired and my partner still working - such joy!!

Rubyroobs

It's not unreasonable for an adult to be expected to earn more than £350 ( or even £750 ) a month from self employment assuming no children or disability. I'm surprised they found you gainfully self employed with earnings that low? Are these figures typical or a particularly low month ?

Alice_Holt

https://www.litrg.org.uk/benefits/universal-credit/self-employment-and-universal-credit/minimum-income-floor

See para 

When the minimum income floor does not apply

The minimum income floor does not apply in all cases. It does not apply at all in the following situations:

• For the first twelve months of trading, sometimes called a start-up period.
• If you are not in the all-work requirements group.
• If you are not gainfully self-employed.
• Where you have moved over to universal credit from legacy benefits under the formal managed-migration exercise, the minimum income floor is not applied for the first 12 months 
  
  Which confirms that the MIF should not have been applied.
  
  In order to get it corrected, I'd request a mandatory reconsideration (by letter and via the journal) against the decision to calculate your UC using the MIF.
  
  https://www.citizensadvice.org.uk/benefits/benefits-introduction/problems-with-benefits-and-tax-credits/challenging-benefit-decisions/challenging-a-decision-by-the-dwp-or-hmrc/challenging-a-benefit-decision-mandatory-reconsideration/
  
  https://www.gov.uk/government/publications/challenge-a-decision-made-by-the-department-for-work-and-pensions-dwp
  

Carefulspender1

Alice_Holt said:

https://www.litrg.org.uk/benefits/universal-credit/self-employment-and-universal-credit/minimum-income-floor

See para 

When the minimum income floor does not apply

The minimum income floor does not apply in all cases. It does not apply at all in the following situations:

• For the first twelve months of trading, sometimes called a start-up period.
• If you are not in the all-work requirements group.
• If you are not gainfully self-employed.
• Where you have moved over to universal credit from legacy benefits under the formal managed-migration exercise, the minimum income floor is not applied for the first 12 months 
  
  Which confirms that the MIF should not have been applied.
  
  In order to get it corrected, I'd request a mandatory reconsideration (by letter and via the journal) against the decision to calculate your UC using the MIF.
  
  https://www.citizensadvice.org.uk/benefits/benefits-introduction/problems-with-benefits-and-tax-credits/challenging-benefit-decisions/challenging-a-decision-by-the-dwp-or-hmrc/challenging-a-benefit-decision-mandatory-reconsideration/
  
  https://www.gov.uk/government/publications/challenge-a-decision-made-by-the-department-for-work-and-pensions-dwp
  

Thank you Alice for your comprehensive and reassuring reply - it looks like the minimum income floor has been applied incorrectly on the basis that our claim is a managed migration from WTC to UC. I understand that we have 30 days to request a mandatory reconsideration - should I wait to see if UC respond to the journal note I put up on Friday, stating that we think they had made a mistake or is it better to just put in a mandatory reconsideration by letter and journal straight away, as they may not take note of the journal entry I have already made?

Alice_Holt

I'd do it straight away.

Carefulspender1

Alice_Holt said:

I'd do it straight away.

Right - thank you Alice for getting back to me, I'll do that by journal and by using the form ref CRMR1 and post that off to them, recorded delivery I think to make sure they confirm receipt. 

Alice_Holt

You then have 2 avenues open to get resolution.

I suggested posting a MR form, as sometimes work coaches don't forward journal messages requesting a MR onto a decision maker. 

tomtom256

Check your journal and see what decision letter has been uploaded, it should be a UCD151a I thnk it is, confirming you have been granted a start-up period. If it is there, no need for an MR, just ring and ask them to send a PAC email asking the MIF be removed.
Probably whats happened is they have put 2024 as the start-up period end and not 2025, happens all too frequently.

Carefulspender1

tomtom256 said:

Check your journal and see what decision letter has been uploaded, it should be a UCD151a I thnk it is, confirming you have been granted a start-up period. If it is there, no need for an MR, just ring and ask them to send a PAC email asking the MIF be removed.
Probably whats happened is they have put 2024 as the start-up period end and not 2025, happens all too frequently.

Yes, I've just checked - we've both got UCD151a letters confirming we have been granted a start up period. I will try one more phone call based on this fact but the woman I spoke to Friday morning was very insistent telling me I could only raise a query via the journal. What you say makes sense though, especially if it is a frequent error on their part, so I'll give it a try before resorting to to an MR.  One question, forgive me for being a bit clueless here but what is a PAC email?