Extra! Extra! Transitional SDP element additions

Henri Krishna looks at new rules regarding the universal credit (UC) transitional SDP element.

From February, UC has increased for certain claimants entitled to the ‘transitional SDP element’. For claimants on UC with assessment periods starting on or after 14 February 2024, The Universal Credit (Transitional Provisions) (Amendment) Regulations 2023 (SI No.1238) (‘TP (Amendment) Regs 2023’) amend the Universal Credit (Transitional Provisions) Regulations 2014 (SI No.1230) (‘TP Regs’) to award extra amounts of the transitional SDP element. These amendments are not an uprating of the transitional SDP element itself, but rather additional amounts included for claimants meeting certain conditions entitled to the transitional SDP element after migrating to UC.

On 21 January 2022, the High Court handed down its decision in TP and Anor, R (On the Application Of) v Secretary of State for Work and Pensions [2022] EWHC 123 (Admin). This was the third judicial review by Leigh Day solicitors on behalf of ‘TP and AR’ and concerned the amount of transitional SDP element paid to claimants who migrated to UC. In short, what was in dispute was the transitional SDP element not making up for the full loss of entitlement by the appellants on migration to UC, as no account was taken of the enhanced disability premium (EDP) they had been entitled to in addition to the severe disability premium (SDP).

TP and AR are the same claimants whose earlier cases had led first to the introduction of the ‘SDP gateway’ and then the transitional SDP element (initially called ‘the transitional SDP amount’) in recognition of how worse off they were when they migrated to UC. In this latest case, they were joined at the High Court by ‘AB and F’, whose case raised similar issues where on migration to UC they were worse off receiving the lower rate of the disabled child addition, having got the lower rate disabled child element with child tax credit (CTC).

While the High Court found the DWP’s policy in relation to all the joined cases unlawful, it did not say what the Secretary of State for Work and Pensions (SSWP) had to do to make it right. The SSWP did not appeal, but for a long time neither was there any indication of what action was being taken. Finally, on 20 November 2023, 22 months after the High Court’s decision, the TP (Amendment) Regs 2023 appeared, coming into force on 14 February 2024, implementing the SSWP’s remedy. This delay has received criticism by the House of Lords Secondary Legislation Scrutiny Committee.1House of Lords, Secondary Legislation Scrutiny Committee Fifth Report, 7 December 2023, HL Paper 24, paras 21-35, available at publications.parliament.uk/pa/ld5804/ldselect/ldsecleg/24/2404.htm#_idTextAnchor009

The TP (Amendment) Regs 2023 add Schedule 3 to the TP Regs. The new Schedule applies where a claimant:

Much like the transitional SDP element rules, the claimant(s) must have been entitled to a relevant benefit/CTC with the appropriate premium/element, or part of a couple where one was, when they made their UC claim – or was in the month before their UC award started –provided they continued to meet the qualifying conditions for the premium/element up until the UC award started. In relation to claimants who were entitled to a child disability premium with a relevant benefit or a lower rate disabled child element with CTC, they must also only have been awarded the lower rate disabled child addition with UC to get the appropriate additional amount.

If claimants meet the above conditions, they get additional transitional SDP element amounts of:

An additional amount is added for each of the conditions met – so claimants can get all three additional amounts added, as well as the main transitional SDP element itself. If the main transitional SDP element has already eroded away, the additional amounts can still be awarded. But like the main transitional SDP element, these additional amounts will erode over time, or the claimant may stop being entitled to them altogether, in the same way as any other transitional element – eg, if other UC elements increase or are added (other than childcare costs), or the current UC award ends. Having the additional amounts added to an award will not erode the main transitional SDP element itself.

Note that despite what the Explanatory Memorandum to the TP (Amendment) Regs 2023 might suggest,2Para 2.2 - https://www.legislation.gov.uk/uksi/2023/1238/memorandum/contents anyone who meets the new criteria in schedule 3 is entitled to the additional amounts, no matter when the UC claim was made. They are not only awarded to those making new UC claims which include a transitional SDP element from 14 February 2024 onwards – they should be awarded to anyone who is getting, or would be getting other than for erosion, a transitional SDP element (or transitional SDP amount), regardless of when the UC claim was made.3At the DWP’s Operational Stakeholder Engagement Forum (OSEF) on 16 January 2024, the DWP stated that, using the SSWP’s powers under para 6 to the new schedule 3, initially only new claimants will be paid the additional amounts, with the SSWP at the time still developing policy to ‘backdate’ payments to existing claimants. But they will not be awarded to anyone going through managed migration who otherwise qualifies for a ‘transitional element’ in their UC, as they do not qualify for a transitional SDP element.

Entitlement to the new additional amounts is dependent on first qualifying for the transitional SDP element. As such, they provide no protection to anyone who was entitled to a premium/ element covered with a relevant benefit/CTC, unless it was in addition to the SDP.

Also, if someone had been entitled to a transitional SDP element (or transitional SDP amount) with their UC but is not anymore for a reason other than it being eroded away, they will not get the additional amounts. That will include claimants who were initially entitled to a transitional SDP element, but it stopped because they had to make a joint UC claim when a partner moved in with them or they had to make a new single claim when they split up with their partner.

As well as anyone who is not or is no longer entitled to a transitional SDP element not being entitled to the additional amounts, the TP (Amendment) Regs 2023 do not deal with any financial loss prior to 14 February 2024. Unlike the amendments that initially introduced the transitional SDP element, these additional amounts are not backdated to when the claimant’s UC award first started. Anyone who would be entitled to an additional amount from the start of their UC award but for the amendments only awarding them for assessment periods starting on or after 14 February 2024 can seek financial compensation directly from the DWP for their losses.4See previous note – it is not clear whether the proposed SSWP policy covers amounts for claimants prior to 14 February 2024 or just making payments to existing claimants from that date. If it is the former, that would appear to require further amendments or ex-gratia payments. If appropriate compensation is not made by the DWP, they can formally complain and escalate their complaint if necessary.