New provision has been made for inclusion of a transitional SDP element in the calculation of universal credit (UC) awards. Owen Stevens examines these provisions.
What is it?
The transitional SDP element is an extra amount of UC, paid in qualifying cases where person entitled to the severe disability premium (SDP) undergoes natural migration from legacy benefits to UC.
It is treated ‘as if’ it were an element included in the UC award calculation. The element is treated as if it were an amount included in the UC maximum amount before the deduction of the claimant’s income.
The payment is introduced by a new version of Schedule 2 (‘Claimants previously entitled to a severe disability premium’) of the Universal Credit (Transitional Provisions) Regulations 2014, No.1230 (‘the UC (TP) Regulations’), which applies where UC begins on or after 27 January 2021. That has been inserted1By the Universal Credit (Transitional Provisions) (Claimants previously entitled to a severe disability premium) Amendment Regulations 2021, No.4
so as to replace the Schedule previously inserted in 2019.2Inserted by The Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regulations 2019, No.1152
That preceding version introduced the very similar (but not identical) ‘transitional SDP amount’.
A saving provision ensuring that the preceding version of Schedule 2 continues to apply to awards of UC where the first day of the award falls before 27 January 2021 – ie, so as to continue the transitional SDP amount in such cases.
There are two conditions that must be met by the claimant, or each of the joint claimants, for a transitional SDP element to be included in the calculation of the UC award.
The first condition is that the UC award was not made as a consequence of the claimant becoming a member of a couple with someone already entitled to a UC award.3In which case, the couple are treated as having made a claim under reg 9(8) Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013, No.380 (‘UC Regs 2013’).
The second condition is that the claimant must:
•have been entitled (or been part of a couple where one member was entitled) to an award of income support (IS), income-based jobseeker’s allowance (JSA) or income-related employment and support allowance (ESA) that included an SDP within the period of a month preceding the first
day on which s/he became entitled to UC;
•continue to meet the eligibility conditions for the SDP up to and including the first day of the UC award.
Once someone has met these conditions, s/he continues to have the element included in her/his calculation regardless of whether or not s/he continues to satisfy the conditions for an SDP (subject to the provisions described below).
The UC award is not to include a transitional SDP element where the claim is a qualifying claim (ie, a claim made by notified person(s) on or before their final deadline for claiming UC4Regs 2 and 48 UC (TP) Regs
) as part of the UC managed migration process and the award is to include a managed migration ‘transitional element’ as a result.
The amount of the transitional SDP element in the first assessment period is set at the highest of whichever of the following amounts applies:
•£405, in the case of joint claimants if the higher SDP rate was payable;
•£285, in the case of single or joint claimants if the limited capability for work-related activity element is not included in the award; or
•£120, in the case of single or joint claimants if the limited capability for work-related activity element is included in the award.
These amounts are the same as those in the preceding version of the Schedule – ie, they are the same as for the ‘transitional SDP amount’. The DWP says the payments reflect the rate of the SDP in legacy benefits while taking into account the increased value of the limited capability for work-related activity element in UC. The amount of £120 was an increase on the £80 initially included in the draft of the preceding version of the Schedule. That lower rate had been successfully challenged in the High Court, a judgment upheld by the Court of Appeal.5AR and SXC, R (on the application of) v SSWP  EWCA Civ 37
However, the £120 rate results in awards lower than some claimants might otherwise have been entitled to in legacy benefit6
and was, as of July 2020, subject to further challenge.7
Second assessment period onwards
In the second, and each subsequent, assessment period, the transitional SDP element is treated, under specified regulations in the UC (TP) Regulations, as if it were a transitional element included in the award as the result of managed migration.
Regulation 55(2) of the UC (TP) Regulations provides for the amount of the transitional element to be the amount it had been in the previous assessment period minus any ‘relevant increases’. A ‘relevant increase’ is an increase in the allowances or elements included in the UC maximum amount (including any included for the first time) apart from the childcare costs element. This means that over time the transitional SDP element will erode, as benefits are uprated or new elements are included in the award, so that it gradually aligns with the amount of UC to which a new claimant would be entitled.
Regulation 56 sets out the circumstances in which transitional protection ceases. Firstly, transitional protection ceases:
in the case of a single claimant who was earning equal to or more than the single administrative threshold8The amount specified in reg 99(6)(a) UC Regs 2013. The single administrative threshold is found by taking the total of £5 and the applicable amount of the personal allowance of income- based JSA for a single person aged 25 or over, multiplying by 52, and subsequently dividing by 12.
in the first assessment period of her/his award, s/he is in the assessment period following three consecutive assessment periods in which the claimant’s earned income was less than that threshold; or
in the case of joint claimants whose combined earned income was equal to or more than the couple administrative threshold9The amount specified in reg 99(6)(b) UC Regs 2013. The couple administrative threshold is found by taking the total of £10 and the applicable amount of the personal allowance of income-based JSA for a couple both of whom are aged 18 or over, multiplying by 52, and subsequently dividing by 12.
in the first assessment period of their award, they are in the assessment period following three consecutive assessment periods in which their combined earned income was less than that threshold.
A person is treated as earning more than her/his threshold in any assessment period in which s/he is affected by the minimum income floor (or would be so affected were it not for the minimum income floor start-up period).
Secondly, transitional protection ceases in the event of a couple forming or breaking up (other than where a single claimant becomes a member of a couple but may continue claiming as a single person under regulation 3(3) of the Universal Credit Regulations 2013, No.376).
Regulation 57(1)(a) applies (regulation 57(1)(b) is not applicable) where a UC award with a transitional element included terminates. In such a case, no transitional element is to be included in any subsequent award. An exception applies if the award terminated due to the level of the claimant’s earned income and s/he becomes entitled to an award within three months of the last day of the month which would have been the final assessment period of the previous award (had it not terminated) – the explanatory memorandum rephrases this as a claim ‘made within four months of the universal credit award ending’. Where this exception applies, the new award is to be treated, for the purposes of regulations 55 and 56, as if it were a continuation of that award.
Separated and bereaved partners
Partners who are not actual claimants of legacy benefits themselves, but separate (or are bereaved) from legacy claimants are no longer excluded from accessing extra UC for loss of the SDP. The Explanatory Memorandum to the Universal Credit (Transitional Provisions) (Claimants previously entitled to a severe disability premium) Amendment Regulations 2021, No.4 states:
‘7.9 Previously, this was not the case. Due to the administration of legacy benefits, even where both couple members meet the criteria for the SDP and they receive the higher rate of the SDP, only one member is classed as the claimant who is eligible for the benefit which includes the SDP. […] The amendments in the 2021 regulations ensure that where a couple separate, both partners are treated equally when being considered for a transitional SDP element […]’
However, people whose UC began before 27 January 2021 continue to be excluded – ie, because they do not come under the new rules. Further, a person separating from a pension credit claimant (or the surviving bereaved partner) would not qualify for the transitional SDP element.