ESA to UC woes because of SDP backpay

Jazeebo

Hi, Peeps,

I'm after some advice again.

I'm currently undergoing a migration to Universal Credit from ESA, and let's just say the whole process is not going very smoothly.

I also had to fill out a Housing Benefit review recently. I explained that I had been paid SDP backpay of over £15K back in February and was informed by some nice peeps on this forum that the whole amount should be disregarded as savings capital for the length of the ESA claim and carried over into the claim for UC.

I also had this confirmed by someone at the DWP over the telephone and asked for this in writing. The document I got back from them was pretty brief and only stated that the SDP award of £15k was disregarded for the life of the ESA claim and didn't mention UC at all! Oh no!

Anyway, Housing Benefit backed off after I gave them the info they asked for and said if my claim for ESA ends the amount will be classed as capital. No problem, I thought as I'm moving over to UC and have been told it is disregarded there too.

I've recently got a letter through the post from the local Council again, this time it's from the Council Tax department and it's pretty aggressive!

They state they know from DWP I have savings of over £6k and because my ESA ended, I'm not entitled to any Council Tax Support, NIL as they put it. They also state that I've been overpaid and I owe them £372.78 arrears and have to pay my council tax in full in the future! 

I don't think this is the case, is it? It looks like they either don't know about my claim for UC which is currently being processed or don't know about the disregard carrying over to the new benefit.

I have contacted them twice by email and re-iterated the situation again, told them about what was said to me on this forum, and also provided evidence to a legal document that was shown to me the last time I posted here. Yesterday, I contacted UC to ask for confirmation of this disregard and they are completely clueless about any disregard for backpay and said I have to contact the DWP about the ESA yet again.  

As someone who suffers from mental health problems, such as depression, anxiety, overthinking, paranoia, and psychosis, I think I'm on the verge of another meltdown.

Is this reallythe case that this disregard does carry over to UC and that the local Council taxation department should not be harassing me for hundreds of pounds? I just don't know what to believe any more. This amount of money is turning out to be a curse and more trouble than it's worth, to be honest. 

What is the best way forward now? Do I have to phone up DWP ESA again and ask for a more detailed letter that states the UC disregard on it or should I be thinking about getting legal representation in case the Council just doesn't get it?

Maybe I'm getting myself into a state of paranoia here, but I just think this is ridiculous.

I wouldn't be surprised if UC comes back to me in the next week or so to say you've got capital over £6k so we've made deductions there too. 

We gave you £15k purposely so we can make your life miserable and accuse you of involuntary fraud and hope you feel like a criminal. That's how it currently feels. 

I would appreciate any advice, and the best way forward for this fiasco.

Many thanks in advance.

J.

KxMx

Council Tax Support is decided on locally, each area has different rules so it's really hard to advise on that aspect with any certainty.

You might have more success with local welfare rights rather than a national forum for that aspect. 

https://advicelocal.uk/

Newcad

Your issue would appear to be that while having IR ESA "Passported" you to full Council Tax relief, having UC doesn't do that.

Instead the Council Tax, and any Council Tax Relief due, has to be calculated based on your Income and Capital, just like it is for most others.

Many people migrating from IR ESA to UC have found that they then have to pay some Council Tax, but not everybody does, it depends on your income and savings/capital - as well as on your particular council.

2 things do need more explaining:

Firstly that change from 'passporting' to a calculation should only apply from when you started to claim UC - How far back are they backbilling for Council Tax? (£373'ish looks like it may be correct depending where you live).

Secondly is whether the capital/savings that you have from backpayment of benefits can still be disregarded from Council Tax or not -
It is (should be) still disregarded from UC.
However for Council Tax purposes it is almost certainly not disregarded anymore.
I say 'almost certainly' because, 1- Most councils will and do disregard backpayments of benefits but only for 12 months after they were received, 2- Some councils can have odd rules.

To explain that difference in whether it is disregarded or not:

Council Tax Relief is not a benefit, it is a discount on what Council Tax you have to pay.
Because Council Tax Relief is not a benefit then it is not bound by benefits rules and so any benefits disregards for savings/capital do not apply to Council Tax Relief. (They may, or may not, be disregarded for 12 months by a particular councils own rules).
The 'Passporting' that you previously had from IR ESA trumped the councils own rules and gave you full Council Tax Relief as long as you were on IR ESA, regardless of what savings you had or where they were from.
However as you have now migrated to UC then you no longer have that 'Passporting' and so the Council will now use their own rules and will almost certainly take all the savings/capital into account when calculating how much Council Tax you have to pay from now on.

You can ask the council to look at it again, with regard to disregarding the money from backpayment of benefits.
I strongly suspect though that they will just say again that it is not disregarded for the purpose of Council Tax Relief calculations.

Sorry that it isn't better news.

Robbie64

As above, each council sets its own rules with regards to Council Tax Support although most tend to follow one of a small number of schemes. The rules for your local council will be on its website.

It's possible that the following has happened, as this seems to apply to a number of councils:

1. While in receipt of income related ESA your savings were ignored as you were passported to the maximum amount of CTS. The income related ESA was all the council considered and savings were ignored.

2. The way that CTS is worked out for people in receipt of UC is different to that of EA (IR) and there is no passporting scheme. Instead the council's own rules on income (including UC) and capital comes into play.

3. Some councils have an upper capital limit of £6,000, some have a limit of £16,000 and most will most likely ignore arreas of benefits, at least beyond a certain time limit.

4. The £372.78 might be the balance of what you owe on your council tax from x date (when ESA ceased) to 05/04/25 (the end of the financial year). It might be a backdated amount to the start of the financial year (06/04/24) although that seems to be a low amount for 7 months worth of council tax.

5. It suggests that the council tax support scheme adopted by your council has a savings upper limit of £6,000. Again, you will need to consult the scheme details.

6. Unfortunately someone with exactly the same income and savings and receiving universal credit can be left much worse off than someone receiving the same income and savings under ESA (IR). This is due to how individual councils calculated CTS under UC.

If you feel you are getting nowhere with your council when talking to them on the phone, consider contacting your local councillor who should at least take up the matter and ask the council for clarification.

Jazeebo

Thanks for your info people, that is very much appreciated.

I have done all I can with the Council and DWP. It would appear there is one set of rules in one department and another set in another. 

I am currently awaiting a decision on whether I have to pay full council tax, or not.

That's fine because if they ask for the whole lot then I will pay the whole lot for 1 year £1383.64 and then I will work to spend the whole of the remaining amount over 12 months on things that I can justify. I will keep full accounts of what gets spent on what so I can argue this after the 12 months if needed.

I could do with a pre-paid funeral package, some dental work (veneers and whitening) not covered by NHS to improve my confidence, a new UK passport, Driving Lessons, a Car, Tax/Insurance first year, a new Washing Machine/Dryer, new Microwave and a new single mattress. All that comes to almost 12.5 large ones (the remainder of the backpay award). All things that I desperately need for better quality of life and if I'm ever going to get back to work again.

Let's see how they like them Apples!

I will be making an appointment with my local counselor to get her opinion on all this.

I can always chase the possibility of getting a refund on that council tax once my savings drop below that £6k threshold again, and they will.

Thanks again for all your help. I have a plan going forward. It's my money and I will spend it, however, I damn well, please.

Many thanks.

HillStreetBlues

Newcad said:

However for Council Tax purposes it is almost certainly not disregarded anymore.
I say 'almost certainly' because, 1- Most councils will and do disregard backpayments of benefits but only for 12 months after they were received, 2- Some councils can have odd rules.

Below applies to England
The £15k will be disregarded for council tax reduction.
For working age claimants each council can set their own rules as long as they follow certain legal requirements, they don't have carte blanche it has to be set in certain perimeters.
 These are laid out in the The Council Tax Reduction Schemes (Prescribed Requirements) (England) Regulations 2012
Schedule  6 (Capital Disregards) Part 1.22

Subject to sub-paragraph (3), any payment of £5,000 or more which has been made to rectify, or to compensate for, an official error relating to a relevant benefit and has been received by the applicant in full on or after the day on which he became entitled to a reduction under an authority’s scheme.

As OP received the back payment  after entitlement of CTR then it has to be ignored, the council has no option in that matter.

Newcad

....... has been received by the applicant in full on or after the day on which he became entitled to a reduction under an authority’s scheme.

I was discounting that as applying here because the monies were received before the new calculation was done regarding entitlement to CTR.

The previous entitlement to Full CTR  was based on mandatory 'Passporting' from a legacy benefit, being mandatory it was not an entitlement "under the authority's scheme".

That previous passported entitlement ended with the migration to UC.

In which case a calculation needs to be carried out by the council to check if there is now any new CTR entitlement.

If there is then that would be an entitlement "to a reduction under the authority's scheme", rather than one due to passporting.
Any such new entilement "under the authority's scheme" would be starting well after the backpayment for error had been received and so the backpayment is not covered by that clause.

Whether it should also have been covered or not, as things stand it isn't.

There are a number of things like this that didn't get adequately considered for the migration to UC, because they are not actually benefits nobody seems to have thought about them (or if someone did then they decided to ignore the consequences).

Jazeebo

Quick update:

I've been advised to get a detailed breakdown letter from DWP ESA detailing everything, including whether it is an official error, where liability lies, etc.

I've just been on the phone with them (again) and they have agreed to do this. The previous letter they gave me was one sentence, and way too vague.

I forgot to mention that I have it in writing that the local Council is prepared to 'honor the disregard until my benefit award ends'. Well, it hasn't ended has it? It's a migration that I'm forced to make by law. DWP highlights this is not my fault, not my problem. I am in breach of no rules/regulations. 

I've been told the Council will reconsider their decision/action and nothing will come into effect until January next year anyway. 

The ruling for my local Council is savings over £6k negate entitlement to CTR but the argument is the award is not savings/capital and therefore is to be disregarded.

I am not arguing with the rules laid down by my local Council, but it looks like they are attempting to twist the words of DWP and what they stated in their original written explanation of the award and its disregard. 

It's not really about the amount of money but more about the fact they are accusing me of wrongdoing, involuntary fraud, etc. Claiming that, which I'm not entitled to, which I've been told is absolute rubbish, and that I've done nothing wrong.

I'm waiting for them to look at it again and I will likely still appeal if they do not back down. I will keep you all informed on what happens.

Thanks for all your info so far, peeps. All are greatly appreciated.

HillStreetBlues

CTR will be on-going as there still will be an entitlement, it doesn't end and restart.
Example claimed UC first of Octocber,  Council sent notification ESA as ending on 30th Sep. Council systems then  say no entitlement on 1st Oct. OP then has to show the Council  a UC statement as the CTR will be based on earnings or Group. As OP isn't working  then there will be CTR from the 1st Oct.  That means it's a continuous claim as there hasn't been a break.
It doesn't matter about passporting or the method of calculation  all that matters for the capital disregard is the claim continuous, and it is.

HillStreetBlues

Jazeebo said:

Quick update:

I've been advised to get a detailed breakdown letter from DWP ESA detailing everything, including whether it is an official error, where liability lies, etc.

I've just been on the phone with them (again) and they have agreed to do this. The previous letter they gave me was one sentence, and way too vague.

I forgot to mention that I have it in writing that the local Council is prepared to 'honor the disregard until my benefit award ends'. Well, it hasn't ended has it? It's a migration that I'm forced to make by law. DWP highlights this is not my fault, not my problem. I am in breach of no rules/regulations. 

I've been told the Council will reconsider their decision/action and nothing will come into effect until January next year anyway. 

The ruling for my local Council is savings over £6k negate entitlement to CTR but the argument is the award is not savings/capital and therefore is to be disregarded.

I am not arguing with the rules laid down by my local Council, but it looks like they are attempting to twist the words of DWP and what they stated in their original written explanation of the award and its disregard. 

It's not really about the amount of money but more about the fact they are accusing me of wrongdoing, involuntary fraud, etc. Claiming that, which I'm not entitled to, which I've been told is absolute rubbish, and that I've done nothing wrong.

I'm waiting for them to look at it again and I will likely still appeal if they do not back down. I will keep you all informed on what happens.

Thanks for all your info so far, peeps. All are greatly appreciated.

The issue is the average person working for the council hasn't a clue about the actual law.
You shouldn't need a letter from the DWP about the capital disregard, as the your UC statement will show it's disregarded and that the council has to mirror disregards.

Jazeebo

HillStreetBlues said:

Jazeebo said:

Quick update:

I've been advised to get a detailed breakdown letter from DWP ESA detailing everything, including whether it is an official error, where liability lies, etc.

I've just been on the phone with them (again) and they have agreed to do this. The previous letter they gave me was one sentence, and way too vague.

I forgot to mention that I have it in writing that the local Council is prepared to 'honor the disregard until my benefit award ends'. Well, it hasn't ended has it? It's a migration that I'm forced to make by law. DWP highlights this is not my fault, not my problem. I am in breach of no rules/regulations. 

I've been told the Council will reconsider their decision/action and nothing will come into effect until January next year anyway. 

The ruling for my local Council is savings over £6k negate entitlement to CTR but the argument is the award is not savings/capital and therefore is to be disregarded.

I am not arguing with the rules laid down by my local Council, but it looks like they are attempting to twist the words of DWP and what they stated in their original written explanation of the award and its disregard. 

It's not really about the amount of money but more about the fact they are accusing me of wrongdoing, involuntary fraud, etc. Claiming that, which I'm not entitled to, which I've been told is absolute rubbish, and that I've done nothing wrong.

I'm waiting for them to look at it again and I will likely still appeal if they do not back down. I will keep you all informed on what happens.

Thanks for all your info so far, peeps. All are greatly appreciated.

The issue is the average person working for the council hasn't a clue about the actual law.
You shouldn't need a letter from the DWP about the capital disregard, as the your UC statement will show it's disregarded and that the council has to mirror disregards.

Yeah good point, and they should, but will they?

They did seem to think they could dictate 'their law' to me without checking the facts first. I'm just doing this to cover myself, just in case they come back heavy-handed, which should shut their cake holes in the way of an appeal once and for all. 

It almost looks as if they think my ESA had ceased my entitlement completely and didn't realise it was a managed migration to UC, they then thought they could dismiss the disregard and count it as capital and jump on me. 

Not the case here and now both ESA and UC will point that out to them. I have emailed them a ton of supporting evidence so far and explained the situation and they have gone very quiet. 

I hope someone is red-faced and bowing their head in shame for the nasty letter they sent to me. 

The next step, if they still don't get it will be to involve my local MP, who I'm sure will put a Rocket up their high and mighty behinds. 

HillStreetBlues, thanks again for all your insightful info and help. It is all very gratefully appreciated.