Benefits,Welfare Reform,Universal Credit

Iain Duncan Smith

Page last updated February 22nd 2015

The Welfare Reform Act 2012 may mostly come into force by 2017. Welfare rights cases have been taken out of the scope of Legal Aid. Child Poverty Action Group Welfare Handbook GOV.UK Advice for DWP decision makers last updated December 15th 2014 DWP Decision Makers Guides on GOV.UK for DWP staff who make decisions about benefits and pensions (except UC, PIP on previous link) updated December 17th 2014.

Self-Employment and Universal Credit (UC)

"In future, if you are self-employed and on benefits, you may be moved onto Universal Credit if your circumstances have not changed for some time. If this happens, you will not be subject to a minimum income floor for the first six months of your claim. This will give you time to increase your earnings and makes sure that you do not lose out due to the change." GOV.UK UC + Self Employment Quick Guide Link reference updated February 2015

Universal Credit will bring substantial changes for the self-employed as the Government envisages a Minimum Income Floor, which will apply after the first or "trial year" of self-employment (known as "the start-up period." Regulations on the Minimum Income Floor and the Start-up Year can be found here UC Self-Employed Welfare Reform Act The start-up period (exemption from assumed Minimum Income Floor and job-search requirements) relates to the first year of a new business, which must have begun trading in the 12 months preceding the claim for Universal Credit. See

63.—(1) A "start-up period" is a period of 12 months and applies from the beginning of the assessment period in which the Secretary of State determines that a claimant is in gainful self-employment where— (a) the claimant has begun to carry on the trade, profession or vocation which is their main employment in the 12 months preceding the beginning of that assessment period; and
(b) the claimant is taking active steps to increase their earnings from that employment to the level of the claimant’s individual threshold (see regulation 90).
(2) But no start-up period may apply in relation to a claimant where a start-up period has previously applied in relation to that claimant, whether in relation to the current award or any previous award of universal credit, unless that previous start-up period—
(a) began more than 5 years before the beginning of assessment period referred to in paragraph (1); and
37(b) applied in relation to a different trade, profession or vocation which the claimant has ceased to carry on.
(3) The Secretary of State may terminate a start-up period at any time if the person is no longer in gainful self-employment or is no longer taking the steps referred to in paragraph (1)(b). Meaning of “gainful self-employment”
64. A claimant is in gainful self-employment for the purposes of regulations 62 and 63 where the Secretary of State has determined that—
(a) the claimant is carrying on a trade, profession or vocation as their main employment;
(b) their earnings from that trade, profession or vocation are self-employed earnings; and
(c) the trade, profession or vocation is organised, developed, regular and carried on in expectation of profit.

See also Guide UC Self Employment web page and UC Self Employment Briefing Paper 8 page pdf

GOV.UK Self Employment Tax Credits and move to Universal Credit
DWP Universal Credit Personal Planner
GOV.UK Self Employment UC Quick Guide updated February 2015

Universal Credit (UC) Delay

The GOV.UK page on Universal Credit with a list of the relevant JobCentres and which type of claim, updated February 16th 2015. There is no start date in sight for UC claimants who are self-employed Regulations June 2014

UC Statistics published by DWP, published September 2014. "On the 14th August 2014, the total caseload of Universal Credit claimants was 11,070 people; Nearly 60% of the Universal Credit caseload on 14th August 2014 are under 25. The highest caseload is in Greater Manchester East and West followed by Greater Manchester Central and Cheshire."

Lone Parents and Universal Credit (UC)

When Universal Credit is brought in for lone parents, lone parents whose youngest child is aged 1 will have some conditionality attached to their benefits and may be required to participate in "work readiness" schemes. There will be 4 grades of conditionality: full conditionality; work preparation; keeping in touch with the labour market; and no conditionality. Universal Credit Regulations 2012 91.—(1) For the purposes of section 20(1)(a) of the Act (claimant is the responsible carer for a child aged at least 1 and under a prescribed age) the prescribed age is 5." [ie work-focused interview only] (page 50). 88.-2(b) where the claimant is a responsible carer for a child under the age of 13, the number of hours that the Secretary of State considers is compatible with the child's normal school hours (including the normal time it takes the child to travel to and from school)"

Universal Credit (UC) Sanctions

It is the standard personal allowance - and not eg the housing component or the amount allocated for dependent children - which will be reduced if the claimant fail without "good reason" to meet the conditionality requirements. More More about local administration of UC housing

In Work Benefits: Working Tax Credits (WTC) inc for Self-Employed

Self-Employed Test from April 2015 Working Tax Credits, announced in Chancellor's Autumn statement, December 2014.

"2.92 Access to benefits – From April 2015, self-employed Working Tax Credit (WTC) claimants will need to register their self-employment with HMRC for Self Assessment purposes and provide a Unique Tax Reference number in order to be able to claim. Those declaring income less than the equivalent of working 24 hours a week at the National Minimum Wage (NMW) will also be required to provide evidence to HMRC that the work they are undertaking is genuine and effective." Autumn Statement December 2014 paragraph 2.92 Link via this page

Citizens Advice Bureau Guide to Working Tax Credit
Tax Credits Guide from Contact-a-Family
Tax Credits Self-Employed
Tax Credits Self Employment
Turn2Us Guide Tax Credits Self Employed
Rightsnet forum: Working Tax Credit minimum hours/earnings
HMRC Manual Tax Credits Guide Self Employed
GOV.UK New Enterprise Allowance
Mortgage Help, Money Saving Expert
In Work Credit £40pw inc self-employment ARCHIVED. Ceased October 2013

Lone Parent Benefits: Income Support (IS)

Lone parents' entitlement to Income Support ceases once their youngest child reaches age 5. Income Support Regulations Gingerbread IS Information Sheet

Changes in Income Support for lone parents with a child between 3 and 5 were introduced by the IS Work Related Activity Regulations 2014 A claimant with a child over 3 may be required to undertake work-related activity, and part of the benefit may be withdrawn for non-compliance, unless the claimant can show good cause

Statistics 2014 "In the year up to and including March 2014, we imposed 42,900 sanctions on lone parents in receipt of Income Support. These sanctions were imposed upon 39,600 individual claims. This represents 5.6% of the Income Support lone parent client base in that 12 month period..."

Lone Parent Benefits: Jobseeker's Allowance (JSA)

Lone parents are eligible for Jobseeker's Allowance if they are seeking work of at least/no less than 16 hours a week See Link the Explanatory Note to Regulation 13A, The Jobseeker’s Allowance (Lone Parents) (Availability for Work) Regulations 2010 No. 837 which permits lone parents with a child under age 13 to restrict their working hours to the child's normal school hours. The JSA regime has been modified to take account of the caring responsibilities of all parents who have children living in their household.

Gingerbread Fact Sheet on Benefit Sanctions

DWP Press Release April 7th 2014 From 28 April 2014, first interview at Jobcentre, adviser will check what claimant has done to make themselves employable prior to claiming JSA.

To make a successful claim for Jobseeker's Allowance the lone parent must sign an agreement to look for at least/no less than 16 hours work a week During the course of the JSA claim, the lone parent will be expected to sign on at the JobCentre once a fortnight. Failure to attend interviews or to comply with requirements of the JSA regime may ultimately result in the parent's personal allowance being cut by 40%. Jobseeker's Allowance is made up of a personal allowance for the adult claimant plus an allowance for children, also known as Child Tax Credit. It should be noted that the Child Tax Credit element of the JSA payment will not be cut. (See the Gingerbread JSA Fact Sheet for more information.) The only parents permitted to remain on Income Support after their children reach the maximum qualifying age will be those who receive Carer's Allowance. Entitlement to CA is only triggered by being the official carer for someone entitled to Disability Living Allowance (DLA) at medium or high rate.

Click here for information about postal signing for claimants who live more than an hour from the nearest JobCentre (by public transport).

In 2011 Minister Chris Grayling assured MPs that "Jobcentre Plus cannot instruct a grandparent to look after a child. We recognise the importance of informal child care—in many family situations, it may be the best option available — but Jobcentre Plus cannot require a third-party adult to provide unpaid, informal child care."

Home Educating Lone Parents

"While people will need to demonstrate that they have made genuine efforts to locate such childcare, this will provide lone parents who educate their children at home with protection if no local services that meet their needs are available." Read the letter from Minister Chris Grayling about home educators on JSA here.

The regulations for home educating lone parents are the same as for all other lone parents. While receiving benefits home educating lone parents must attend mandatory Work Focused Interviews or face benefit sanctions unless different arrangements have been agreed in advance with the JobCentre. Home educating lone parents who take the view that home education is a full time job and that therefore the parent is not in any conceivable circumstances available for paid work will not meet the requirements of Jobseeker's Allowance. Home educators who refuse to consider any options for formal childcare in order to be available for work will also not meet the requirements of Jobseeker's Allowance, Staff at the JobCentre should not suggest using school or older siblings for childcare purposes so that the home educating lone parent can take a job. Nor should staff at the JobCentre suggest that children may be left alone while the parent goes out to work. If there is no appropriate affordable childcare, the home educating lone parent is currently entitled to turn down a job offer or to leave a job.

Personal Independence Payment (PIP)

PIP map PIP reassessment new areas from 23 February 2015 Details Map to download GOV.UK Timetable (Fixed period DLA awards ending; young people turning 16; change in the claimant’s condition or disability; + existing DLA claimants opting for PIP claim.)

Contact-a-Family Tax Credits + PIP + including points for Daily Living and Mobility (pages 17-21)

DWP Updated PIP Assessment Guide published May 28th 2014. Line by line comparison new PIP Guide May 29th 2014 here

Bedroom Tax (Under-occupancy Penalty)

Rightsnet on Overnight Carer Case updated August 5th 2014 Overnight Carer Case Upper Tribunal upholds claimant SD v Eastleigh Borough Council (HB) (Housing and council tax benefits other) [2014] UKUT 325 (AAC) (09 July 2014) "A bedroom cannot be switched on and off ... there is nothing in the word “regularly” that requires that the carer must be required to stay overnight on the majority of nights for the claimant to meet the criterion."

Rutherford supported by CPAG (grandparents care for disabled grandson) The judicial review challenge has been dismissed by the High Court because the family has been granted a discretionary housing payment. Further commentary on the Rutherford case here, highlighting the fact that DWP only won because Discretionary Housing Payments were in place for the foreseeable future.

DWP circular confirming that new regulations implementing the Court of Appeal’s ruling in the Gorry case (disabled child requiring own room, not expected to share) Paul Lewis on Bedroom Tax DWP Discretionary Housing Payments 2013

Representing Yourself in Court + Legal Aid Legal Aid via

People representing themselves in court are known as "litigant in person". This practice is likely to increase following the huge cuts to the legal aid budget as a result of the Legal Aid Sentencing and Punishment of Offenders Act 2012. Litigant In Person Guide Bar Council Litigant in Person Guide

Welfare Legal Aid Contract Awards

Legal Aid Tenders Archive Legal Aid Tenders GOV.UK

Useful Links Legal Aid Checker Legal Aid eligibility check for civil cases (ie NOT School Attendance Order prosecution which is criminal) such as Consumer (eg you’re denied a service due to your sex or race); Debt (eg bankruptcy, mortgage debt); Discrimination (eg you’re treated unfairly due to your sex, race, etc); Education (eg special educational needs); Employment (eg unfair treatment at work); Family (eg divorce, separation, contact with your child); Housing (eg eviction, landlord harassment); Immigration (eg advice about asylum); Welfare benefits (eg disagreeing with a benefits decision)

GOV.UK Exceptional Cases Legal Aid Funding The Legal Aid Sentencing and Punishment of Offenders Act 2012 (LASPO) introduced the practice of applying for Exceptional Case Funding or (ECF) which is made where a case falls outside the scope of legal aid but the client or conducting solicitor believes there is evidence to support there being a requirement to provide funding because failure to do so would be a breach of their Convention rights. A typical application is in private family law proceedings concerning the right of contact with and residence of the applicant's child. Only 8 ECF applications of this type were granted during 2013-14, with 574 refused and 216 rejected.

Rightsnet forum Help with Child Care costs incurred other than when claimant is working Tips on JSA and ESA sanction appeals and claiming Hardship Payments
Turn2us Fact Sheets Benefits Cap; Universal Credit; Council Tax Benefit; Housing Benefit; Social Fund; Disability Living Allowance
Latest ESA 50 questionnaire interactive guide
Jobseeker's Allowance Regulations 1996
Shelter Guide to Housing Benefit Appeals
Shelter Homeless Help Families with Children
PIP Regulations
GOV.UK Web page Welfare Reform Act Regulations
Jane Young on Motability Rules
My PIP consultation response
PIP consultation web page
Disability Living Allowance, Attendance Allowance and Carer's Allowance may be claimed online. It is necessary first to register with Government Gateway and receive a unique ID number through the post
Two grades of PIP vs 3 grades of Disability Living Allowance
Disability premium cut from £54 to £27 pw

Carers' Working Tax Credits (WTC)

Couples continue to receive the credits IF one partner works 16 hours per week AND their partner is entitled to Carer’s Allowance. See here Income Support may be claimed when a person is receiving Carer’s Allowance which is payable where the person cared for gets the middle or highest rate of disability living allowance (DLA) care component

Childcare Tax Credits

If you are responsible for a child and pay for childcare you can claim if you work at least 16 hours a week. (Couples would both usually have to work at least 16 hours a week each unless one is incapacitated and getting a benefit for disability or illness or is entitled to Carer's Allowance.) You can claim childcare costs for any child up to the Saturday following September 1st after their 15th birthday.

To get help with childcare costs via tax credits in England, your childcare provider must be properly registered or approved. Your childcare provider needs to be registered on the Ofsted Early Years Register if your child is under 5; registered on the Ofsted compulsory part of the General Childcare Register if your child is aged 5 to 7; registered on the Ofsted voluntary part of the General Childcare Register if your child is age 8 or over. Some providers such as nannies who provide care in the child's own home don't need to register but if you use this type of provider and you want to get tax credits help with childcare costs, your provider must register on the voluntary part of the General Childcare Register.

To get help with childcare costs via tax credits in Wales your childcare provider must be registered with the Care and Social Services Inspectorate Wales (CSSIW) or someone approved by the Approval of Child Care Providers (Wales) Scheme 2007 providing childcare in the child's home.

See HMRC Guide Childcare Tax Credits for more details about childcare tax credits in England and Wales.

Tax Credits (TC) for post-16 Home Education

Tax Credits are payable for children under the age of 16 and for children over the age of 16 who are in full-time education, including home education. Home education is recognised as a valid form of full-time education for Child Benefit and for Child Tax Credit purposes. More

Benefit Cap

Legal Challenge Against Benefit Cap Fails Supreme Court judgement March 18th 2015

Cumulative Impact Welfare Reforms SSAC April 2014

The Government limits the amount of Housing Benefit that can be paid for certain types of privately rented property. This is known as the Local Housing Allowance (LHA). Parliamentary Briefing Paper Housing Benefit GOV.UK on Benefit Cap Turn 2 Us Benefit Cap Information See Shelter on LHA Phased Introduction Benefit Cap

Link Reference

This article is The following links to other websites are contained in the article, displayed as citations to aid you in printing the document.

  1. DWP Decision Makers Guides on GOV.UK
  3. UC Self Employment Briefing Paper
  4. Regulations June 2014
  5. Universal Credit Regulations
  6. More about local administration of UC housing
  7. Self-Employed Test from April 2015
  8. Citizens Advice Bureau Guide to Working Tax Credit
  9. Tax Credits Guide from Contact-a-Family
  10. Tax Credits Self-Employed
  11. Tax Credits Self Employment
  12. Turn2Us Guide Tax Credits Self Employed
  13. Rightsnet forum: Working Tax Credit minimum hours/earnings
  14. HMRC Manual Tax Credits Guide Self Employed
  15. Mortgage Help, Money Saving Expert
  16. In Work Credit £40pw inc self-employment
  17. Income Support Regulations
  18. Gingerbread IS Information Sheet
  19. good cause
  20. Link
  21. Gingerbread Fact Sheet on Benefit Sanctions
  22. the Gingerbread JSA Fact Sheet
  23. here
  24. In 2011 Minister Chris Grayling
  26. here
  27. this link
  28. Overnight Carer Case
  29. here
  30. DWP Discretionary Housing Payments
  32. Litigant In Person Guide
  33. Bar Council Litigant in Person Guide
  34. Legal Aid Tenders Archive
  35. Legal Aid Checker
  36. Rightsnet forum
  38. Turn2us Fact Sheets
  39. Latest ESA 50 questionnaire interactive guide
  40. Jobseeker's Allowance Regulations 1996
  41. Shelter Guide to Housing Benefit Appeals
  42. Shelter Homeless Help Families with Children
  43. PIP Regulations
  44. Jane Young on Motability Rules
  45. My PIP consultation response
  46. PIP consultation web page
  47. Two grades of PIP
  48. Disability premium cut from £54 to £27 pw
  49. here
  50. Carer’s Allowance
  51. More
  52. Responsibility Childcare School Holidays
  53. Contact a Family Guide to Tax Credits
  54. Tax Credits Case Law
  55. Gingerbread JSA Lone Parents
  56. HMRC Guide Childcare Tax Credits
  57. DWP benefit changes info archived
  58. Gingerbread Fact Sheet JSA
  59. Gingerbread Fact Sheet Tax Credits
  60. Gingerbread Fact Sheet Income Support
  61. Legal Challenge Against Benefit Cap Fails
  62. Phased Introduction Benefit Cap
  63. MWA Regulations 2011
  64. MWA + Lack Suitable Childcare
  65. PIP Regulations
  66. PIP Regulations Transitional Provisions
  67. UC Regulations
  68. PIP Regulations 2013
  69. UC Transitional Provision Regulations
  70. Welfare Reform Act Commencement + Transitional Provisions
  71. Turn2Us UC Overview