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Lost Transitional Protection

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 So after receiving a big reduction in our UC, I found the following message....

"Transitional protection

£0.00

You are no longer eligible for transitional protection

This is because your earnings have dropped below the amount agreed in your Claimant Commitment for 3 consecutive months"

This is because hubby had an overpayment when we were on tax credits that the employer is recovering each month. Is there any way to challenge this? 

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Comments

  • Robbie64
    Robbie64 Posts: 2,173 Forumite
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    edited 20 February at 12:49PM
    I'm wondering if your employer has been reporting your earnings correctly. My understanding is that net pay for UC purposes is simply gross pay less tax, NI and certain pension contributions, regardless of what you actually are paid. I wouldn't have thought that attachment of earnings orders / Direct Earnings Attachment (for HMRC / DWP overpayments, child maintenance and anything else) should affect your net pay for UC purposes.
    If the overpayment had been deducted from your UC instead of your wages, then your TP would still be in payment.
    Hopefuly someone with a better knowledge of the UC system will post about what you can do next.
  • HillStreetBlues
    HillStreetBlues Posts: 6,068 Forumite
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    edited 20 February at 2:16PM
    I believe UC has used the correct figure. If hubby was on UC when overpaid UC would still have used that figure though overpaid.
    H3010 https://assets.publishing.service.gov.uk/media/6717bc20a71f39bdb1c9c18a/adm-chapter-h3-earned-income-employed-earnings.pdf
    Example 2
    Ryan is in receipt of UC. He works as a receptionist at a hotel. His pay for the month of May was £350.
    Ryan thinks that his employer has overpaid him because he worked fewer shifts in May than normal. For
    the purposes of UC, Ryan’s earned income is based on the actual amount received in May: £350.


    As UC have used the correct figure I don't know if there is any mechanism for those on TP, as normally UC would have increased with the lower reported earnings.

    EDIT misread OP
    Let's Be Careful Out There
  • born_again
    born_again Posts: 20,416 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    marcia_ said:
     So after receiving a big reduction in our UC, I found the following message....

    "Transitional protection

    £0.00

    You are no longer eligible for transitional protection

    This is because your earnings have dropped below the amount agreed in your Claimant Commitment for 3 consecutive months"

    This is because hubby had an overpayment when we were on tax credits that the employer is recovering each month. Is there any way to challenge this? 

    Mandatory reconsideration 

    Why is it being recovered via employer. Rather than you paying direct?
    Life in the slow lane
  • Newcad
    Newcad Posts: 1,784 Forumite
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    edited 20 February at 1:35PM
    That doesn't sound right and I'm sure that it's worth a request for MR.
    It's happened because of the recovery is being done direct from earnings which has artificially lowered your earnings.
    That's what I would be arguing anyway - That the earnings haven't decreased at all, there is just a new deduction being take from them at source.
    In other words your take-home wages have reduced, but your overall earnings haven't.
    Think about that - If you had set up a payment plan to make payments yourself, rather than a deduction from earnings, then your take home pay would still be the same.
    It looks like like the real problem here may be the employer - there may be an issue with how the employer is reporting the earnings for Tax Purposes.
    I'm pretty sure that the employer should still be reporting the full amount earned, before the overpayment recovery is taken off.
    ie, the earnings reported to HMRC. and thus from HMRC to UC, shouldn't have changed.
    If instead the employer is reporting only what you are getting after the overpayment recovery has been taken off then I'm sure that is wrong. You should still be paying tax on that even though you never see it.


  • HillStreetBlues
    HillStreetBlues Posts: 6,068 Forumite
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    edited 20 February at 2:15PM
    Newcad said:
    That doesn't sound right and I'm sure that it's worth askong for a MR.
    It's happened because of the recovery is being done direct from earnings which has artificially lowered your earnings.
    That's what I would be arguing anyway - That the earnings haven't decreased at all, there is just a new deduction being take from them at source.
    In other words your take-home wages have reduced, but your overall earnings haven't.
    It looks like like the real problem here may be the employer - there may be an issue with how the employer is reporting the earnings for Tax Purposes.
    As far as I am aware the employer should be reporting the full amount earned, before the overpayment recovery.
    ie, the earnings reported to HMRC. and thus to UC, shouldn't have changed. (Only what's put in your pay packet/bank acciunt should have changed).
    Think about that - if you had set up a payment plan yourself then your take home pay would be the same and you would make your own payment for the overpayment.
    If instead the employer is reporting only what you are getting after the overpayment recovery has been taken off then I'm sure that is wrong. You should still be paying tax on that even though you never see it.
    The issue I see is normally they would equal out. Overpaid in one AP (less UC) underpaid in another AP (more UC).
    But the two issues are the overpayment was on WTC and the underpayment lead to loss of TP.
    You can't have two different systems, as if earnings were taken before the overpayment then UC  be less when the overpayment occurred, but not increase when paying back that overpayment.
    EDIT misread the OP
    Let's Be Careful Out There
  • Newcad
    Newcad Posts: 1,784 Forumite
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    edited 20 February at 1:55PM
    Sorry HSB, I'm not following you there at all.
    There is nothing in the OP regarding under/over payments in different APs.
    It seems simply that 3 or 4 months ago the recovery of a (old?) TC debt was started as (or changed to) an attachment of earnings, and that the employer has for some reason messed up what they are now reporting to HMRC as being earnings.
    If that is the case then the RTI that UC get from HMRC will be incorrect too, and it's that incorrect RTI that has subsequently led to the loss of TP..
  • HillStreetBlues
    HillStreetBlues Posts: 6,068 Forumite
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    edited 20 February at 2:19PM
    Newcad said:
    Sorry HSB, I'm not following you there at all.
    There is nothing in the OP regarding under/over payments in different APs.
    It seems simply that 3 or 4 months ago the recovery of a (old?) TC debt was started as (or changed to) an attachment of earnings, and that the employer has for some reason messed up what they are now reporting to HMRC as being earnings.
    If that is the case then the RTI that UC get from HMRC will be incorrect too, and it's that incorrect RTI that has subsequently led to the loss of TP..
    Sorry my mistake, I read it as employer made an overpayment while Hubby was on tax credits, rereading it  I see now that it was the tax credit that has been overpaid and being taken from his wages  so forget my previous remarks as not sure how it will be calculated.
    Let's Be Careful Out There
  • Icequeen1
    Icequeen1 Posts: 450 Forumite
    Part of the Furniture 100 Posts Name Dropper
    marcia_ said:
     So after receiving a big reduction in our UC, I found the following message....

    "Transitional protection

    £0.00

    You are no longer eligible for transitional protection

    This is because your earnings have dropped below the amount agreed in your Claimant Commitment for 3 consecutive months"

    This is because hubby had an overpayment when we were on tax credits that the employer is recovering each month. Is there any way to challenge this? 

    How is the tax credit overpayment repaid via the employer? Has it been put into your husbands tax code and his tax code changed, which is reducing his take home pay or is there an attachment of earnings order in place? 
  • marcia_
    marcia_ Posts: 3,406 Forumite
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     Sorry i was not clear. Shouldn't have mentioned TC, it was a work overpayment over a long period that they are now recovering for the next few months 
  • HillStreetBlues
    HillStreetBlues Posts: 6,068 Forumite
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    marcia_ said:
     Sorry i was not clear. Shouldn't have mentioned TC, it was a work overpayment over a long period that they are now recovering for the next few months 
    In that case the UC has been calculated with the correct figures (I'm not going re-edit my posts). I don't know of any exemptions (not to say there isn't one) to make this fair. 
    Let's Be Careful Out There
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