Will this cause Transitional Protection to end?

Yamor

A couple of points worth pointing out:

1. The UT has been very critical of the terminology used by DWP in many cases. For example, DWP often talk about "closing a claim". Legally, a "claim" is the process of applying for benefit, and disappears once benefit is awarded. Similarly, a claim (or more accurately, an award) cannot simply be "closed". A decision must be made that there is no longer entitlement, and therefore to terminate the "award".
The reason I point this out is to say that it wouldn't make sense for the regs to talk about the first day of a "claim".
Furthermore, even if a decision on entitlement is only made following the end of the first AP, the "award" certainly begins on day 1 of entitlement. "Awards" are always expressed in terms of an entitlement for a certain period, and that starts on day 1.

2. There is no magic rule that UC only ever considers circumstances on the last day of an AP.
The basis of this rule is actually rooted in the decision-based system implemented under the Social Security Act 1998.
Basically, where a formal decision has been made, and that decision is formally "superseded" due to a change of circumstances, then the effective date of the superseding decision is usually the first day of the AP in which the change occurred.
However the imposition of work-related conditions is not done in this way, and where a claimant has sufficient earnings to meet the AET, no formal decision is made to somehow place them in the light-touch regime. At most, a decision is made to impose a particular requirement.
My understanding is that in practice, in the past, where there has been a change to the AET level, DWP will wait until a full AP has passed where the claimant is below the new threshold before moving a claimant to the intensive work search conditionality group. However, legally, they could apply conditionality from the date the AET changes.

I would therefore say that in the OPs case, the relevant threshold is £743.

Regarding the deduction of tax, NICs and pension contributions, the regs are clear that what matters is net earnings, after all deductions (unlike the rules for conditionality purposes). Whether DWP use that in practice or not, I don't know.

the_pink_panther_2

@Yamor thank you for the clear detailed response, as always really useful.