Guidance

Chapter 10: Payment validation

Updated 10 May 2023

Applies to England and Wales

Data Protection Legislation and Data Sharing

You must ensure that you follow the requirements around Data Protection Legislation and General Data Protection Regulation (GDPR) taking into account your Contract Terms & Conditions.

In relation to the sharing of data, providers should also adhere to all requirements as laid out in Generic Provider Guidance Chapter 8 – Information Security.

General Information

10.01. You must ensure that you only submit accurate information for payments, or receive payments, to which you are entitled. Where you are aware that a Participant has started employment, or received income, such as tax refunds, Wages in Lieu, Holiday pay (that relate to employment prior to IPES) which cannot be counted towards an Employed Outcome in accordance with your Contract (for example, any Non-Qualifying Period) you must inform the Department for Work and Pensions (DWP) to avoid incorrect payments being made. You must also notify DWP where a participant has started work with you or your supply chain – see Chapter 7.

10.02. DWP will, to the extent it deems necessary, undertake checks on claims for payment and/or associated fees to establish their validity and ensure you are being paid appropriately for the Outcomes you have achieved.

10.03. You are required to maintain, on an ongoing basis, a robust system of internal records and controls, sufficient not only to support any Outcome claims you make but also to allow you to undertake internal management checks and enable independent testing and validation by DWP and other external bodies.

10.04. Your records must document how and when the appropriate supporting evidence was obtained and must be accurate at the point any validation is to or does take place.

10.05. The risk of records being inaccurate and/or incomplete is wholly borne by you.

Validation Overview

10.06. The validation of job Outcomes will be determined by the type of employment; either the Participant is employed by an employer, or the Participant is self-employed.

10.07. For IPES, DWP will be paying Employed Outcomes automatically, based on His Majesty’s Revenue and Customs (HMRC) (PAYE) earnings data. The determination of Outcomes will be solely based on this data, with the exception of those gained by SCR [Special Customer Records] Participants which you should claim clerically [details further in this Chapter].

10.08. For Self Employed Outcomes, you must submit a claim to DWP via PRaP. An Off Benefit check (OBC) will be undertaken by DWP to identify if the Participant has a relevant period where they have not been in receipt of primary benefits including those where Universal Credit was in payment. Claims passing this check will be subject to further validation to verify the self-employment.

10.09. DWP may, at its absolute discretion, vary its approach to validation to ensure ultimately it pays only legitimate outcomes.

10.10. If DWP changes its approach to validation to include post-payment sampling, each such sample will be drawn from a population of similar claims paid within a defined period. Where, when checking any such sample, DWP identifies Outcomes have been paid incorrectly/in error, the error rate will be extrapolated across the population of claims from which the related sample was drawn, and associated monies overpaid will be recovered from the Provider.

Employed Outcomes

10.11. An Employed Outcome Payment will be triggered when a Participant earns during the period for which the Participant is receiving IPES provision:

• Earnings equivalent to 8 hours per week for 182 days, at the adult rate (aged 25 or over) of the National Living Wage (NLW). This currently stands at £1,976, (the ‘lower threshold outcome’) and will be uprated in line with NLW; and,

• At a higher threshold calculated at 16 hours per week for 182 days at the adult rate (aged 25 or over) of the NLW. This currently stands at £3,952 (the ‘higher threshold outcome’) and will be uprated in line with NLW.

10.12. The Lower Threshold takes into account that some Participants may fall out of employment due to fluctuating health conditions or not be able to work enough hours for the Higher Threshold to be reached.

10.13. An outcome will be achieved when earnings become equal to or surpass the NLW adjusted threshold appropriate on the date of the payment which caused cumulative earnings to trigger the threshold. Cumulative earnings below the threshold which are paid prior to threshold uprate will not be prorated towards the increased threshold – their value will remain and contribute towards the new threshold which will have to be met in full.

For example, cumulative earnings accrued up to 31 March meet the threshold at £3,257. Participant has cumulative earnings of £3,100, and an earnings payment of £200 due on 01 April will surpass the threshold by £43 and trigger the outcome payment. However, NLW is uprated to £3,500 on 01 April so the earnings payment on that day will now not be sufficient to equal or surpass the threshold, with a shortfall of £200. The cumulative earnings will continue to accrue until the uprated threshold of £3,500 is equalled or surpassed

NB: The amounts in this example are illustrative figures only and do not represent actual or planned uprates to the NLW.

10.14. Participants in employment will be identified by DWP solely using HMRC PAYE on-line earnings data submitted by employers, subject to the notification by you of any Non-Qualifying Earnings and/or SCR provision for clerical claims. This data is submitted to HMRC each time an employee is paid by an employer.

10.15. You will be paid for Employment Outcomes based on the information contained within this HMRC PAYE on-line earnings data. (See – Chapter 7: Funding Model and Outcomes).

10.16. DWP will track Participant earnings from HMRC PAYE data for a maximum period of 639 calendar days from the Participant’s Start Date and will continue to look for earnings received in the 639 calendar days. Only earnings received within that period will count towards an Employed Outcome.

10.17. Where a Participant exits the programme early, DWP will end the registered interest with HMRC. Where a Higher Threshold Employed Outcome is achieved, DWP will also end the earnings interest with HMRC.

10.18. Earnings from the Start Date will be cumulative up to the maximum time on provision of 639 calendar days. This could be made up of earnings from one employer or a number of employers at the same time or a number of employers during the 639-calendar day period. Earnings prior to the Start Date will not count towards an Outcome. Earnings from any Non-Qualifying Period will also not count towards an Outcome. For the avoidance of doubt, this includes all earnings during a Non-Qualifying Period, regardless of the source of the earnings.

10.19. As Employed Outcomes and Employed Outcome Payments occur you will be able to generate a report in PRaP which details this information. This report will also contain information about when first earnings are registered for a Participant once they have started on the programme. DWP will not supply the name or address of a Participant’s employer.

10.20. The process for the identification and payment of Employed Outcomes is automated. Once an Outcome has been paid, or 639 days have elapsed from the Participant’s Start Date, the payment line will be automatically closed. You will not have a right to appeal or request reconsideration of Employed Outcomes.

Self-Employed Outcome - Validation Process

10.21. You are responsible for claiming Self Employed Outcomes. To enable a successful Self Employed Outcome claim, you must hold sufficient evidence for the entire claim period (up to and including the last date of the claim period) that satisfies IPES Outcome requirements and proves that the Participant is self-employed. In addition, you must provide current, accurate and valid contact details for the Participant that enable DWP to gain a response from the Participant and allow full validation to take place. You must also ensure the Participant is off-benefit before submitting the claim, with the exception of those Participants on Universal Credit (UC).

10.22. For the avoidance of doubt, any Self-Employed Outcome claim with out of date, inaccurate or invalid contact details for the Participant (NB: the information must be accurate at both the point of submission and the point of validation), including but not limited to, not known at this address responses, dead letter boxes and unobtainable or out of date telephone numbers, will result in a claim being categorised as an Outcome Fail.

10.23. DWP does not prescribe the way in which you should track Participants or record information about their self-employment activity but, in addition to current, accurate and valid contact details for each Participant, you must obtain evidence to confirm the Participant has been self-employed for the relevant period.

This could include: (Note: this list is neither prescriptive nor exhaustive)

• HMRC registration
• proof of benefit claim closed (letter issued to Participant by the Jobcentre)
• bank statements showing details of recent transactions/earnings
• invoices or purchase orders received/sent recently which are clearly in relation to the running of a business

10.24. You will need to retain a suite of evidence to corroborate the totality of the trading period prior to making a claim.

10.25. There is specific information that you are required to input to the Job Details Screen within PRaP when you submit a Self-Employed Outcome claim:

• current, accurate and valid contact details, including the current address, contact name, full business telephone number and email address (where applicable). Please note, a valid telephone number is always required as this is the contact method used when validating a Self-Employed Outcome, unless in exceptional circumstances another method is used through your prior agreement with DWP
• the Participant’s contact details, where different from above
• start date of self-employment
• end date of self-employment (where already known)

10.26. Where DWP identifies that there are a significant number of Self-Employed Outcome claims but the start and end dates, as submitted, are unaligned, DWP may review your internal assurance processes and the evidence of self-employment.

10.27. For self-employed Participants an entitlement to an outcome would be triggered when a Participant achieves:

• a cumulative period of not less than 91 days’ self-employment (the “lower threshold self-employed outcome”); and
• a cumulative period of not less than 182 days’ self-employment (the “higher threshold self-employed outcome”)

10.28. Any period of self-employment can only be counted once regardless of whether the Participant has one or multiple self-employed occupations during that period.

10.29. It could be possible for Providers to receive payments for outcomes where a Participant starts in paid employment and moves to self-employed work [or vice versa] during the programme. However, only one lower-threshold and one higher-threshold payment per Participant will be paid to the provider and each will need to meet the criteria for that job outcome.

10.30. An outcome cannot be a mix of self-employment and paid employment

Self-Employment off-benefit check

10.31. All Self-Employed Outcome claims are subject to a pre-payment off-benefit check (OBC). This check is an interface between PRaP and DWP’s systems that hold benefit history details. The check is to determine whether the Participant has remained off-benefit for the period you have advised. The check is against the main working age benefits and UC. Where Participants continue to receive UC whilst self-employed, further checks will be conducted to ensure the Participant is meeting UC requirements. If 90 days has been exceeded between Date 2 (in PRaP) and the date the claim has been submitted, the claim will automatically go on hold, manual checks will be undertaken, and the claim may be classified as a Fail if the conditions for claiming have not been met. Please refer to Chapter 7 of this IPES guidance for further information.

10.32. Claims passing the OBC will be subject to further validation and payment will be released/approved if they pass the validation or they are part of the claims DWP has been unable to conclusively validate/invalidate prior to the end of 30 days from the claim being made, where current, accurate and valid contact details are held.

10.33. Please note - if your claim passes the OBC but fails validation, you are only allowed two further attempts (three attempts in total). If the third claim fails it will remain a Fail and be recorded as an Outcome Fail. At this point the payment line in DWP’s IT systems will be closed. If an Employed Outcome is later achieved, this will be identified and paid as part of the settlement process.

10.34. Providers will, in relation to each self-employed outcome for each Participant and in relation to each outcome for each Special Customer Record Participant, be afforded up to three attempts to submit a valid claim [for example, 3 attempts for a lower outcome and 3 attempts for a higher outcome]. Where the Provider submits three individual/separate claims for an outcome, be that the higher or lower threshold outcome, which do not pass validation or are removed at the provider’s request, the provider will relinquish any and all rights to that outcome payment including any associated performance. If a Provider attempts to submit a third claim for that Participant it will be subject to a final reassessment, overseen by a senior member of DWP staff, to ensure all procedures have been followed correctly. DWP will monitor the number of failed claims for assurance and performance management purposes. For the avoidance of doubt, 3 attempts by a Provider to claim a self-employed outcome in respect of a Participant will not prevent the conditions for an employed outcome being met in respect of that Participant.

10.35. All OBC passes will be subjected to manual validation – either in the UC system, to determine if they are/were declaring work to Jobcentre Plus (JCP) for the duration, and/or validating directly with the Participant. For further information on the Self-Employed Gateway Interview and Gainfully Self-Employed, please refer to chapter 7 of this IPES guidance

10.36. For those claims being subjected to manual validation there are three possible validation results – Pass, Fail, or Unable to Validate:

• pass: Information held or secured by DWP confirms the necessary period of self-employment, which is consistent with the conditions for payment as set out in the Self-Employment Outcome validation definition, has been met
• fail: Validation checks have confirmed the outcome definition and or associated requirements have NOT been met. For the avoidance of doubt, where current, accurate and valid contact details for the Participant are not supplied, this will result in a claim being a Fail
• Unable to Validate (UTV): DWP has either not been able to obtain a response from the Participant using the contact details supplied by you or the Participant is unable or unwilling to provide the information required to validate the Outcome.

10.37. Where validation is conducted through contacting the Participant, the primary method for this contact is via the telephone. By exception, for any individual Outcome claim, DWP may consider alternative contact methods to this approach by prior agreement. In cases where DWP is experiencing difficulty making contact with the Participant via the telephone, DWP may at its discretion contact you to confirm the details you have supplied in PRaP. If you fail to respond, or if your full and compliant response is not received by the deadline stated, your claim may fail validation.

10.38. You are required to hold and supply correct information which is accurate at both the point of submitting an Outcome claim and at the point of validation of that Outcome and which enables DWP to gain a response from the Participant. If you do not provide sufficient detail with the claim that enables DWP to validate the Outcome, the claim will fail validation.

Unable to Validate Action

10.39. You will be notified when a Self-Employed Outcome claim has been paid but remains as Unable to Validate and therefore subjected to apportionment at the end of the relevant cohort.

10.40. In these cases, DWP may continue to undertake validation activity on the Self-Employed Outcome after the payment date.

Apportionment

10.41. The UTV claims will at the closure of the cohort be apportioned in line with the pass/fail rate for Self-Employed Outcomes.

10.42. Prior to the apportionment a final check may be made to determine if an Employed Outcome had been achieved in the period and would therefore remove the UTV from the apportionment.

10.43. The check will take into account the pass and fail rates and the performance achieved by the cohort. The apportionment results will be shared with you and a financial recovery total will be made as and when required.

Settlement

10.44. DWP will conduct a check of the start cohort taking into account factors which may have impacted upon the total figures such as apportionment. If necessary, DWP will recoup any-overpayments or make any final payments at this time.

10.45. The last Outcome payment claim that could qualify should be made by DWP to Providers no later than 700 days after the last Participant Start on provision. DWP has no obligation to pay outcomes to the Provider after the end of the “Payment Tail Period”, the Payment Tail Period meaning the period of 791 days starting immediately after the date of the last Participant Start.

Management Checking

10.46. In addition to the validation activities set out above, DWP may at its discretion conduct additional management checks to further verify the validity and robustness of Self-Employed Outcomes claimed or paid.

10.47. Management checks may not form part of the standard validation process; they will aid DWP in identifying potentially fraudulent activities.

Special Customer Records (clerical claim process)

10.48. The majority of claims for payment must be submitted via PRaP however, where you have a Participant who is granted Special Customer Records (SCR) status (as determined by HMRC) due to the very sensitive nature of data to be held on the individual for example, witness protection, you are required to submit a claim following the SCR clerical claim process. Where DWP identifies that SCR status is not granted the claim will be rejected.

10.49. Where you have a SCR claim, you are required to print off the PRaP 11 form and complete manually.

You must only submit claims on these forms on the rare occasions that SCR status is granted.

10.50. This clerical process will seek to replicate the PRaP automated process, however as DWP will be unable to monitor earnings/duration of self-employment on an on-going basis you will be required to track these and then invoke the clerical claim process at the point the employed earnings/duration threshold has been met. The Provider Payment Validation Team will conduct a clerical off-benefit check and validate employment with employers and/or Participants. Incomplete forms will not be acted upon and will be returned.

10.51. Where you have a SCR claim, you will need to follow a clerical process. If you receive an SCR2 clerical referral you must only submit claims on the PRaP 11 forms after tracking a Participant’s employment and confirming an outcome has been achieved.

10.52. Guidance to assist you in the completion of the form can be found in the form by opening the excel form and placing the cursor over the small red corners of the relevant cells.

10.53. For SCR employed outcomes where you submit a clerical claim, DWP will attempt manual validation of the claim. If the claim cannot be validated it will become classed as Unable to Validate and subjected to apportionment, at the end of the 700-calendar day period from the date the participant started IPES.

10.54. You should send your fully completed claim form to:

Provider Payment Validation Team (PPVT)
Department for Work and Pensions
Finance Group - Contracted Employment Provision Directorate
Floor 1
1 Hartshead Square
Sheffield
S1 2FD

10.55. All clerical documents carrying personal information should be retained securely in line with the GDPR and Data Protection Act principles. However, please refer to your contract for retention dates.