The transitional element in practice – an update

Owen Stevens examines further information provided by the DWP about the approach being taken to the calculation of the transitional element for claimants managed migrated to universal credit (UC).

An article in Bulletin 297 (December 2023) summarised information provided by the DWP at a meeting held with the intention of addressing concerns among advisers about the DWP’s unexpected approach to calculating the UC transitional element.1The transitional element in practice Bulletin 297, December 2023 The DWP took some questions away to be answered later. At the end of January (at least five months after these matters were first raised with the DWP, and three months after the meeting intended to address concerns), the DWP provided a document to stakeholders responding to selected adviser questions. This article aims to summarise new information provided in that document.2Readers may also be interested in the written evidence to the Public Accounts Committee’s inquiry into Implementing UC, some of which also covers this topic: committees.parliament.uk/work/8152/progress-in-implementing-universal-credit/publications/written-evidence

The DWP is content for the information to be summarised, but stakeholders have been asked not to share the document itself outside our networks.3The document was circulated by email to NAWRA members on 8 February 2024. The DWP hopes to publish more information on gov.uk in due course. The DWP’s covering email stated that, while much of the information will be relevant to other cohorts, the document is focused on tax credit managed migration.

Stakeholders expressed concern that, since parts of the DWP’s approach seem incompatible with the legislation, some claimants could receive large overpayments were the DWP’s approach to change. The DWP’s covering email states that the document does not respond to questions regarding a future change in the DWP approach, as it is ‘not probable’. While this statement is welcome, the DWP has not categorically ruled out a change in approach and has not ruled out recovering any resulting overpayments.

The December Bulletin article set out the DWP’s approach, as described to stakeholders, on the housing costs and carer elements. According to the document shared in February, the DWP’s approach on these is now that:

These positions appear to be contradictory.4The DWP’s justification for these apparently contradictory positions can be found at: rightsnet.org.uk/forums/viewthread/19528/P105/#93970 And, as was also noted in the previous article, the DWP’s approach on inclusion of the housing costs element in the indicative UC amount appears to lead to arbitrary windfalls (including to those who would anyway be better off on UC), and the possibility of perverse and potentially risky incentives.

At the time of writing, the DWP had not responded to stakeholder questions about the various ways that their interpretation of the regulations could potentially incentivise risky actions.

There may be other situations in which individuals will be worse off as a result of the DWP’s position. For example, people who do not have permission to occupy premises and who are receiving HB in respect of ‘mesne profits’ (or, in Scotland, ‘violent profits’) will presumably, on the DWP’s interpretation, have their indicative UC amount calculated with a housing costs element included, even though they will not receive a housing costs element in their actual UC award – leaving such individuals very much worse off immediately on migrating to UC.

DWP’s document states that a notified person who has claimed personal independence payment (PIP) can either choose to claim UC or request that the DWP extend the deadline for migrating to UC.

The document goes on to state that where a PIP claim pre-dating migration to UC is determined after migration, then the DWP can (using regulation 62 of the Universal Credit (Transitional Provisions) Regulations 2014) amend the transitional element calculation. While the DWP’s (helpful) operational approach is worth noting, CPAG is not satisfied that the regulation itself provides this power. Arguably, the regulation needs clarifying in this respect.

Claimants with children aged 19 in non-advanced education are currently deferred from being managed migrated to UC.5The most up-to-date version of the ‘exclusions and deferrals’ guidance can be found at whatdotheyknow.com. This important guidance is not routinely made public by the DWP. In a number of cases, people with children aged 19 have received migration notices. The DWP‘s document states that its data feed with HMRC does not identify the age of the child.6It is unclear why this information could not be provided. This means that individuals with children approaching 19 could receive a migration notice. The DWP’s ‘exclusions and deferrals’ guidance states that a migration notice cancellation is considered when a claimant is identified as falling into a deferral or exclusion category (assuming no claim for UC has yet been made).

The document provided by the DWP states that the transitional SDP element is only available to claimants who naturally migrate to UC. This is incorrect. The transitional SDP element may be paid to a person who managed migrates to UC so long as they do not qualify for the managed migration transitional element.7Sch 2 para 7 Universal Credit (Transitional Provisions) Regulation 2014 No.1230

It is possible that internal DWP messaging with decision makers may also routinely get this wrong. Advisers should be alert to this as a potential problem area.

The DWP’s document also contained some information on forms of transitional protection besides the transitional element.

It states that while couples who live apart but receive tax credits as a couple and who will not be a couple for UC will not qualify for a transitional element, these couples will potentially be able to qualify for a transitional capital disregard. However, claimants seeking to make use of this provision should act with caution – regulation 51 of the Universal Credit (Transitional Provisions) Regulations 2014 appears to mean that a tax credits couple in this situation would both need to make their single claims for UC on the same day in order to both have a transitional capital disregard, or alternatively to both claim within the month following the expiry of their initial deadline for claiming UC.

The document also states that, in the event that a claimant with a tax credits nil award only (despite a general intention that these claimants will be excluded from managed migration) receives a migration notice and claims UC, then they will be considered for transitional protection.

The DWP says that tax credits couples, one of whom has a no recourse to public funds condition attached to their immigration leave, will not qualify for a transitional element.

In other news, there has been helpful caselaw regarding issues discussed in an earlier article on ‘erosion’ of the transitional element.8Erode to nowhere, Bulletin 286, February 2022 The immediate complete erosion of the element for UC claimants moving from temporary or specified accommodation into mainstream rented accommodation has been held to be discriminatory.9SSWP v JA (UC) [2024] UKUT 52 (AAC) (see p12 of this Bulletin). At time of writing, it remained to be seen whether the Secretary of State would seek to appeal. The failure immediately to include the limited capability for work-related activity (LCWRA) element in UC awards to certain mixed-age couples has been held to be discriminatory.10PR v SSWP [2023] UKUT 290 (AAC) (see Bulletin 298, February 2024, p12) And a case concerning erosion, as applied to carers subsequently assessed as having LCWRA, is currently before the Upper Tribunal.11Tribunal appeal number: UA-2023-000561-USTA