Simon Osborne answers some common questions about universal credit (UC) and the work capability assessment (WCA).
UC insist that the fact that my client was getting employment and support allowance (ESA) before claiming UC is irrelevant, and that they must ‘start again’ as far as the WCA is concerned. Is that right?
Basically, no, because the relevant law, as applied by official guidance, says otherwise.1 Reg 19 Universal Credit (Transitional Provisions) Regulations 2014, No.1230 (‘UC(TP) Regs’), referred to at para M6190 and following of Vol M6 Advice for Decision Making (ADM)
UC can reapply the WCA to your client. Apart from that however, ESA entitlement is certainly relevant. In particular:
an ESA recipient who had limited capability for work (LCW) on the date that s/he claimed UC is to be treated as having LCW for UC purposes;2 Reg 19(2) UC(TP) Regs and ADM, para M6192
an ESA recipient who had limited capability for work-related activity (LCWRA – ie, was in the support group) on the date that s/he claimed UC is to be treated as having LCWRA for UC purposes.3 Reg 19(4) UC(TP) Regs
In essence, therefore, a new WCA is not necessary for your client to be treated as sick for UC purposes when they claim UC, even though a new WCA can still be applied. Official guidance clarifies that ESA entitlement at the point of the UC claim can be established retrospectively – ie, as a result of mandatory reconsideration or appeal.4 ADM, paras M6315-6
Further, a claimant who was in the support group for ESA when s/he claimed UC is entitled to have the LCWRA element included in her/his UC from the beginning of the first assessment period.5 Reg 19(5) UC(TP) Regs
A claimant who was entitled to the LCW element in her/his ESA when s/he claimed UC is entitled to have the LCW element included in her/his UC from the beginning of the first assessment period. But remember that the LCW element was abolished from 6 April 2017 for new claimants, so in practice this applies only in ‘transitional’ cases – ie, essentially, to people entitled to ESA from before that date.6 Reg 19(3) UC(TP) Regs, applied in transitional cases by the Employment and Support Allowance and Universal Credit (Miscellaneous Amendments and Transitional and Savings Provisions) Regulations 2017, No.204
These rules mean that your client is entitled to UC as someone with LCW or LCWRA at the point of transfer from ESA to UC. However, they do not mean that UC cannot decide that the WCA is to be reapplied to your client. The rules say specifically that, ‘…the Secretary of State may at any time make a fresh determination as to these matters, in accordance with the Universal Credit Regulations’.7 Reg 19(7) UC(TP) Regs
My client was a ‘credits only’ case – ie, was not entitled to employment and support allowance (ESA) itself, but had passed the WCA when he claimed UC. Should he be treated as passing the WCA for UC purposes?
Yes – although as seen above, UC can still decide to reapply the WCA to him in the future. There is a rule specifically providing that someone who had limited capability for work (LCW) for national insurance contribution credits is to be treated as having LCW for UC purposes.8 Reg 21(1) and (2) UC(TP) Regs
Similarly, someone who would have had limited capability for work-related activity (LCWRA) had s/he been entitled to ESA itself is to be treated as having LCWRA.9 Reg 21(1) and (4) UC(TP) Regs
Again, however, there is nothing to stop UC from reapplying the WCA.10 10 Reg 21(8) UC(TP) Regs
Does UC have a ‘permitted work’ (or ‘therapeutic earnings’) rule, like that which operates in employment and support allowance (ESA)?
No. Unlike ESA, UC can be paid to a claimant whether or not s/he has limited capability for work (LCW), and whether s/he is working or not. Hence, there is no general rule saying that you cannot get UC if you work, and no need for a ‘permitted work’ style exception to such a general rule.
However, that does not mean that working has no relation to whether or not your client has LCW for UC purposes. The main relevant rule here is regulation 41 of the Universal Credit Regulations 2013 (SI No.376). This complex rule is headed ‘When an assessment may be carried out’. So, in general, a WCA can be applied where:
•it ‘falls to be determined for the first time’ whether a claimant has LCW or limited capability for work-related activity (LCWRA); or
•it has been determined before but the Secretary of State (ie, UC) ‘wishes to determine whether there has been a relevant change of circumstances…’ or whether there was a mistake about or ignorance of a ‘material fact’.
But regulation 41 has more to say about where a claimant has earnings from work. This is where the rule gets particularly convoluted. In effect, if a claimant has earnings equal to or above a threshold (set at the adult hourly national minimum wage rate for 16 hours a week, converted to a monthly amount – ie, currently £542.88 a month), then a WCA cannot be applied (or reapplied) to the claimant, and s/he is to be treated as NOT having LCW unless:
•s/he is already automatically treated as having LCW or LCWRA – eg, because of terminal illness, pregnancy, ‘substantial risk’ to health if s/he were found not to have LCW or LCWRA; or
•s/he is entitled to attendance allowance, disability living allowance or personal independence payment; or
•s/he has previously passed a WCA applied for the purposes of UC or for ‘new-style’ ESA – ie, contributory ESA under the UC system. Put shortly, a claimant who earns at or above the threshold will be treated as not having LCW unless any of these exceptions apply. If any of those exceptions do apply, then the work will not automatically result in her/his being treated as not having LCW – but s/he may well have the WCA reapplied to her/him.
What about a claimant transferring from ESA who has being doing permitted work? The law is silent. In many cases, the earnings (which always count as income) will be below the threshold in regulation 41 and/or the claimant will have a disability benefit, so s/he should not be treated as not having LCW. Otherwise, the law is especially unclear. But the official intention and usual practice seems to be that any such transfer claimant is still to be treated as having LCW (ie, as someone who had LCW for ESA purposes), and a new WCA is arranged.11 Reg 41 of the Universal Credit Regulations 2013, No.376 (‘UC Regs’) and the permitted work rule at reg 45 of the Employment and Support Allowance Regulations 2013, No.379 (‘ESA Regs’) are similar, but an unintentional gap between the thresholds may result from the absence of rounding in the former; ADM, para M6192 says that in any case a claimant who transfers from ESA with LCW is to be treated as having LCW for UC
.Note, however, that in any case loans for mortgage interest are not payable in the case of any UC claim where there is any kind of earned income – there seems to be no transitional protection in transfer cases.
My client was getting contributory employment and support allowance (ESA) when he claimed UC. What happens to that? Is it automatically regarded as ‘new-style’ ESA even though it was claimed before he started on UC?
The contributory ESA continues and is now regarded as ‘new-style’ ESA. Unlike income-related ESA, it is not abolished by the UC claim, and there is nothing else in the law to bring entitlement to it to an end. (Contrary to what some have been told by UC staff, it is perfectly possible to get contributory ESA under the UC system. Where it is paid under the UC system, it is usually called ‘new-style’ ESA. For official guidance to the public, see www.gov.uk/guidance/new-style-employment-and-support-allowance
Under the various UC Commencement Orders (which one applies depends on where your client lives), when a claim for UC (or ESA or jobseeker’s allowance) is made, one of the results for the claimant is that those parts of the Welfare Reform Act 2012 that abolish income-related ESA and refer to any remaining contributory ESA just as ‘ESA’ come into effect.12 The provision is usually under Art 4 of the Commencement Order concerned. Some may make complicated cross reference to Art 4 of a preceding Commencement Order.
The remaining (ie, contributory) ESA is called ‘new-style’ ESA. That ESA is now covered by the Employment and Support Allowance Regulations 2013 (SI No.379) – ie, rules that apply in any case that follows the abolition of income-related ESA and which make no reference at all to income-related ESA. When the UC rules refer to the ‘ESA Regulations’, by definition that means the 2013 regulations, and not the 2008 ‘old-style’ ESA regulations.13 See the definition of ‘ESA Regulations’ in reg 2 UC Regs.
My client is getting both UC and ‘new-style employment and support allowance (ESA)’. If he is reassessed under the WCA, does the decision automatically apply to both benefits?
In effect, yes in many cases. But there are some exceptions. A finding that the claimant does have limited capability for work (LCW) or limited capability for work-related activity (LCWRA) for new-style ESA will automatically apply to UC (note that this is about actually satisfying the WCA, not being treated as satisfying it, where there are some slight differences between UC and ESA).14 Reg 39(1)(a) UC Regs; see also official guidance at ADM, paras G1005-1006
A finding that the claimant does not have LCW or LCWRA for new-style ESA does not in fact automatically apply to UC – there is no such rule. However, for a claimant who does not already have LCW for UC purposes, it will mean that no WCA is applied to the UC claim at all, unless ‘there is evidence to suggest’ that there has been a relevant change in circumstances or that the ESA finding was made on the basis of a mistake about, or ignorance of, a material fact. For a claimant who already has LCW for UC purposes, the ESA finding will enable (on the same grounds) a new WCA to be applied. The same outcome as for ESA may be thought likely, but is not mandatory.15 Reg 41(4) UC Regs is about when the WCA is applied but not about outcomes.
Where a claimant entitled to UC has LCW for UC, that applies to new-style ESA. Also, having LCWRA for UC automatically applies to new-style ESA.16 Regs 16(1)(h) and 31(1)(d) ESA Regs 17 Regs 27(4) and 31(3) ESA Regs
In any case, it might be expected that evidence from the UC assessment would be used ESA assessment, with the same outcome likely though not mandatory.
Failing the WCA for UC is only automatically applied to new-style ESA where that failure was ‘within the six months preceding the date of claim for employment and support allowance’, and it appears that the determination was not based on a mistake about, or ignorance of, a material fact and that there has not been a relevant change of circumstances.17 Regs 27(4) and 31(3) ESA Regs
Once again, it may be thought likely that the evidence from the UC assessment would be used in an assessment for ESA, with the same outcome likely though not mandatory.
My client is on income-related employment and support allowance (ESA) and has recently moved into supported accommodation. Someone at the DWP has said that he has had a change of circumstances and so his ESA is ended and he must now claim UC instead of ESA. Is that right?
No, and if possible your client should complain about the wrongful advice and bring it to the attention of his MP. If the DWP has indeed purported to ‘end’ his ESA then, unless he particularly wants to claim UC instead, he should challenge that on the basis of error of law. Putting in a claim for UC (or jobseeker’s allowance – JSA), on the other hand, will indeed abolish his entitlement to income-related ESA.
There is simply no rule that says that just because you have had a ‘change of circumstance’ your ESA ends and/or that you must now claim UC instead. So, for example, mov- ing into supported accommodation does not mean that any of the basic rules for ESA are no longer satisfied. Failing the WCA is an example of a change thatmeans thatentitlementto ESA is lost – ie, because the basic ESA requirement to have limited capability for work is not satisfied. But even then claimants have the option of challenging that and avoiding transfer to UC by not claiming UC or JSA in the meantime.
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