Guidance

LA Welfare Direct 4/2020

Updated 11 December 2020

Contact

If you have queries about the:

• technical content of this bulletin then contact details are given at the end of each article
• general content and distribution of this bulletin, contact:
  housing.correspondenceandpqs@dwp.gov.uk

Who should read

All Housing Benefit staff.

Action

For information.

Editorial

Writing this editorial is probably the first ‘business as usual’ activity I have been involved in for a few weeks. The Department for Work and Pensions (DWP) has been put on a war footing to deal with the huge surge in Universal Credit (and other) claims. Whilst the department has been really quick to respond with additional measures to support claimants, the downside of this is that they have been produced with less time than usual to allow for processes of assurance and production of detailed guidance. However, we have as far as possible continued to consult with members of our local authority (LA) consultation forums to anticipate issues. I am very grateful to them for responding at very short notice at a time when I know LAs are also dealing with other increased pressures related to coronavirus (COVID-19).

We are changing our approach to performance management to reflect the current circumstances. Whilst we have consulted on whether or not Verify Earnings and Pensions (VEP) Alerts should continue to be sent, there was no consensus on this. We have decided to continue to send them and allocate the funding – this enables LAs to decide their approach locally. We do however stand ready to support any LA on VEP processes and any other aspects of performance. The focus of our conversations with you over the next few months will be on understanding the impact of the pandemic on your services and the associated costs.

You’ll see below that we have changed the name of our division to Local Authority Partnership, Engagement and Delivery (LA-PED). This reflects the direction we have been moving in to become more of a front face of the department on welfare issues at a national level. The effective delivery of Housing Benefit (HB) remains our top priority and will continue to be so, but we hope you agree the new name is a better reflection of what we do and how we do it.

In LA-PED, we have been collecting and responding to all the issues and questions raised by LAs through a COVID-19 specific issues log. We have been working at pace to ensure we get clarity on questions asked as quickly as possible and get the information out to you as soon as we can. Please do continue to feed your issues and questions to us. We have already logged over 150 different points.

Lastly but not least, thank you to you all for all your efforts supporting some of the most vulnerable people at this difficult time.

Clare Elliott Head of Local Authority Partnership, Engagement and Delivery division (LA-PED)

Change of divisional name

1. Readers will be familiar with the name Housing Delivery Division (HDD), led by Clare Elliott. This has been the longstanding name of a team of just under 100 people in DWP, who support LAs in the delivery of HB across the UK.

2. After careful consideration, from the 1 April 2020, we have changed our name to the Local Authority Partnership, Engagement and Delivery (LA-PED) division. We have made this change as we believe the new name better reflects what we do currently and what we plan to do more of in the future. For a long time, we have done more than just work on the subject of housing, such as our wider data shares with LAs and other third parties and work on Universal Credit.

3. Importantly, we have an increasing role representing the collective views of LAs across the whole of DWP, in a whole range of subject areas. Whether that be in relation to reminding colleagues about the New Burdens doctrine, emphasising the importance of engaging LAs early in the policy making process, or impressing the need to work with LAs as a partner in welfare delivery for vulnerable claimants.

4. While we are sad to be losing the old familiar HDD brand, we hope that the new LA-PED brand will soon become familiar too. More than that, we hope that by including ‘LA’ within our new name, it demonstrates an increased emphasis on representing you within DWP.

Reaching State Pension age for claimants in receipt of Universal Credit

5. We have received several queries of how to handle claims when claimants are reaching State Pension age and they are in receipt of Universal Credit.

6. When a claimant reaches State Pension age they are no longer entitled to Universal Credit. Any payment the claimant has received from Universal Credit after they have reached State Pension age is not paid in respect of a legal entitlement. In other words, it is an extra statutory payment. As such it is not a bar to HB entitlement which means a claim for HB can be accepted even though the Universal Credit claim hasn’t been terminated. The Universal Credit payments can be disregarded when calculating the HB award as they are extra statutory.

Future changes to Universal Credit run-on for pensioners

7. The Secretary of State for Work and Pensions announced in a written statement to Parliament on 5 March 2020 that amendments will be made to Universal Credit regulations later in 2020. his will allow Universal Credit to be paid to the end of the assessment period in which a claimant reached State Pension age. This will create a Universal Credit run on for pensioners and ease the transition from Universal Credit to Pension Credit and/or HB for pension age customers. More information about these changes will be issued at a later date.

Update: Transfer Your File - stage 2

8. Further to the update given in LAWD11/2019, we are pleased to inform you of our plans to start sharing SHBE (Single Housing Benefit Extract) and Housing Benefit Matching Service (HBMS) files through Transfer Your File (TYF).

9. We also advised in a communication placed on Glasscubes on 5 March 2020 that we have added new roles to the Employee Authentication Service (EAS), to enable LAs to access and allocate them to designated LA users. LAs should have taken this action by end of March 2020.

Rollout plans

10. From week commencing 13 April 2020, all LAs must start submitting their SHBE files through TYF (DWP in line with the timetable provided in Annex B of circular HB A5/2020). From this date, all LAs should stop using the PGP email to send SHBE files to the DWP. The PGP encrypted option will only be acceptable where an LA is not able to use TYF. This flexibility will be available for up to a month after go live.

11. From the beginning of May 2020 the HBMS files containing the following documents will be issued on your scheduled dates through TYF:

• HBMS Referral Core file (.txt format)
• HBMS Referral Additional Information file (.txt format)
• HBMS referral (.rtf format)
• HBMS referral (0.01 format)
• Risk Score Review file (RSR)
• NINo/PDVR report customer file
• NINo/PDVR report non-customer file
• HBMS MI spreadsheet

Guidance

12. The following guidance is available:

• the EAS Guidance for adding and removing users is available on Glasscubes.

• the TYF User Guidance detailing how to access and use TYF is also available on Glasscubes.

13. If you have any questions relating to this update you can email lads.deliveryteam@dwp.gov.uk

Update: Collection of IP address data for HB claimants

14. Further to the article in LAWD2/2020, we can confirm the capture of IP (Internet Protocol) addresses for online HB claims is now live, and the necessary SHBE and National Benefit schema changes have been made.

15. We have been working with LA IT suppliers and online claim providers to facilitate this. There is no action or impact for LA system users, as the IP address is collected behind the scenes for fraud and error purposes.

16. If you have any questions about this project you can email the lads.deliveryteam@dwp.gov.uk

##Publication of refresh HB Assurance Process modules

17. DWP has recently refreshed the following Housing Benefit Assurance Process (HBAP) modules in respect of the 2019 to 2020 assurance period:

• module 1: DWP reporting framework instruction (applicable to England only)

The Standard Engagement Terms for HBAP, including standard checks on the subsidy claim form and links to other modules

• module 2: uprating checklist

DWP benefit uprating checklist

• module 6: approach and testing strategy (applicable to England only)

The detailed testing requirements which provide reporting accountants and LAs with instructions required by DWP to complete the HBAP.

18. If you have any questions regarding the content of this article you can email hb.assurancequeries@dwp.gov.uk

Extension to deadline for procuring a reporting accountant

19. Module 1 provides the Standard Engagement Terms for the HBAP relating to the April 2020 to March 2021 assurance period. The module specifies the DWP requirement that each LA will procure a reporting accountant by 1 March 2020, prior to the commencement of the financial year 2020-21 and notify DWP by that date.

20. In respect of the assurance period April 2020 to March 2021, DWP have received 48% of the required notifications providing details of the appointment of a reporting accountant.

21. However, DWP acknowledge that at this time the resourcing and procurement of a reporting accountant will be uncertain and delays in confirming an appointed audit firm could occur. Therefore, we have extended the notification deadline from 1 March 2020 until 30 June 2020.

22. Notifications should be forwarded to hb.assurancequeries@dwp.gov.uk

Introduction of Job Start Payment

23. On 23 March, the Scottish Government introduced Job Start Payment (JSP) for young people aged 16-24 years old (inclusive) who have been out of paid employment for six months or more, and have been in receipt of a qualifying means-tested benefits for at least 6 months. JSP will also be paid to care leavers who will be eligible until their 26th birthday and will only need to be in receipt of a qualifying benefit at the time of the job offer. It is a single payment of £250 or £400 if the claimant has responsibility for a child.

24. As JSP is being paid under powers in section 2 of the Employment and Training Act (1973) JSP should fall within existing capital disregards in HB regulations, which stipulate that certain payments made under section 2 of the Employment and Training Act (1973) can be disregarded for 52 weeks from date of receipt.

25. You can find more information at mygov.scot

Verify Earnings and Pensions service 2020-21

26. Clare Elliott’s letter to LA revenues and benefits managers and chief executive officers on 20 March 2020 explained we would keep you updated on the availability of the VEP service.

27. LA-PED can now confirm that we will continue to provide the VEP service during the current crisis and VEP alerts will remain available for LAs to draw down and action.

28. As notified in our letter of 3 March 2020, we can confirm that funding for the administration of your VEP alerts will still be paid to your LA in a single upfront payment in April 2020.

29. We previously advised that until further notice we are suspending our current approach to performance management. This includes LA-PED Performance Development Team’s [PDT] monitoring and engagement with LAs related to VEP activities.

30. Do note, PDT’s performance relationship managers are still available to LAs to discuss any concerns you may have on the management of your VEP Alerts or any other aspect of delivering your HB services. They can be contacted at hdd.pdtprm@dwp.gov.uk

Current advice for Working Tax Credit claimants

31. HM Revenue and Customs (HMRC) colleagues have advised they will be updating their advice by 20 April 2020 relating to Working Tax Credit (WTC). In the meantime, current advice for claimants is as follows:

• claimants are advised not to update their working hours if they have reduced due to COVID-19, as HMRC are treating this as a temporary and exceptional change

• claimants should continue to report changes in income and increases in hours worked in the normal way – they must also continue to tell HMRC if their childcare has stopped, reduced or increased

• if, after 8 weeks, claimants have not returned to their normal hours they should search GOV.UK for the most up-to-date advice

32. Guidance on the application of the additional earnings disregard for Working Tax Credit cases and furloughed employees can be found in HB Circular A7/2020.

Coronavirus (COVID-19) – treatment of self-employed income and the new Self-employment Income Support Scheme: impact on HB

Support for claimants who are self-employed

33. The Chancellor announced on 26 March 2020 the coronavirus (COVID-19) (SEISS) for the self-employed. This scheme will allow self-employed workers to claim a taxable grant worth 80% of their trading profits – up to a maximum of £2,500 per month for the next 3 months, to cover the period March to May 2020. HMRC will pay the grant directly in one instalment in June 2020. The scheme might be extended if needed.

Eligibility

34. Self-employed workers can apply for SEISS if they are a self-employed individual or a member of a partnership and they:

• have submitted a Self-Assessment tax return for the tax year 2018-19
• traded in the tax year 2019-20
• are trading when making an application, or would be except for COVID-19
• intend to continue to trade in the tax year 2020-21
• have lost trading/partnership trading profits due to COVID-19

35. Self-employed trading profits must also be less than £50,000, and more than half of their income comes from self-employment. This is determined by at least one of the following conditions being true:

• having trading profits/partnership trading profits in 2018-19 of less than £50,000 and these profits constitute more than half of total taxable income
• having average trading profits in 2016-17, 2017-18, and 2018-19 of less than £50,000 and these profits constitute more than half of average taxable income in the same period

36. HMRC will use data on 2018-19 returns already submitted to identify those eligible and will risk assess any late returns filed before the 23 April 2020 deadline in the usual way. Self-employment can continue to be carried out even if the grant is paid.

Impacts on HB

37. No changes to HB regulations are required as the SEISS grant remains a payment of taxable income received from self-employment. The SEISS payment is part of the self-employed income assessment for the tax year in which it is received.

Reductions to self-employed income

38. Until payments of SEISS are made, self-employed claimants may experience and then report reductions in their self-employed income.

39. It is recommended that you treat these changes in income in the usual manner and recalculate ongoing self-employed income based on the claimant’s new statement of income and expenditure.

Treatment of grant income received from SEISS

40. The SEISS grant remains a payment of taxable income received from self-employment.

41. Therefore, following receipt of any SEISS grant payments (due in June 2020), claimants will need to report any change in circumstances to income and expenditure. We recommend that you treat these changes in income in the usual manner and recalculate ongoing self-employed income based on their new statement of income and expenditure which should include SEISS payments.

Coronavirus (COVID-19) Job Retention Scheme

Support for claimants who are employed

42. The Chancellor announced on 20th March 2020 the coronavirus (COVID-19) Job Retention Scheme (CJRS) for employed workers who remain on payroll, but are temporarily not working because their employer’s operations have been severely affected by coronavirus (COVID-19). The scheme allows employees of any UK employer to keep their job. The scheme is open for at least 3 months starting from 1 March 2020.

Eligibility

43. If an employee and employer both agree, employers may retain employees on their payroll if they’re unable to operate, or have no work because of coronavirus (COVID-19). This is known as being ‘on furlough’.

44. The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020 and have a UK bank account. Employers can only claim for furloughed employees that were on their PAYE payroll on, or before 28 February 2020. Employees hired after 28 February 2020 cannot be furloughed and claimed for in accordance with this scheme.

45. Employers could pay 80% of an employee’s regular wages through the CJRS, up to a monthly cap of £2,500. An employer can choose to top up their employee’s salary from their own funds, but they do not have to.

46. The employee is still paid by their employer and will still pay the taxes they normally pay out of their wages.

47. To be eligible for the grant, when on furlough, an employee cannot undertake work for, or on behalf of the organisation. This includes providing services or generating revenue.

48. More detail is available on GOV.UK

Impacts on HB and treatment of income

49. No changes to HB regulations are required as CSJR enables employers to continue to make payments to their employees of taxable earned income, which continue to be treated as earned income in HB. This continues to be based on the number of hours the employee normally works, which enables the additional earnings disregard in HB to remain applicable. HMRC have confirmed that any WTC will initially remain in payment for the first 8 weeks. We will update you if this position changes.

50. Therefore, claimants will continue to report changes in circumstances as their earned income changes, which should be processed in the usual manner.

Cornavirus (COVID-19): changes to earned income

51. We have received queries about how to treat changes to earned income due to coronavirus (COVID-19) related circumstances – both where an employer has increased the rate of pay, or included bonuses, and where an employer has reduced the number of working hours.

52. No changes to the HB regulations are planned and such increases, decreases or bonuses should be applied to a claim in the usual manner for the period they relate to. This advice applies to both temporary or permanent changes to earned income.

Coronavirus (COVID-19): childcare costs

53. The following guidance is supported by existing HB legislation and has been written in response to LA requests for advice, in cases where claimants who usually pay childcare costs, cease to do so as a result of the pandemic.

54. The HB regulations remain unchanged in terms of treatment of childcare costs. For claimants who are no longer paying a childcare provider to care for their child, we recommend they treat these changes in the usual manner and remove childcare costs from their benefit claim. However, any additional amounts paid as part of a Tax Credit claim for childcare continue to be treated as income for HB purposes.

Discretionary Housing Payments information on LA websites

55. The Discretionary Housing Payments (DHP) scheme enables LAs to support vulnerable people who may be affected by welfare reforms and who are now facing a shortfall in meeting their housing costs in either Universal Credit or HB. The DHP guidance manual was updated in August 2019 and includes guidance on publicising DHP.

56. A recent survey of information on LA websites revealed that in 60% of cases, information on the qualifying conditions were incorrect and receipt of HB cited as the only qualifying condition. In a further 20% of cases Universal Credit was mentioned, but it was not made clear that the claimant must be in receipt of housing costs in Universal Credit. LAs are encouraged to review information on their websites to ensure accuracy of the qualifying conditions.

European Court of Human Rights decision

J.D. and A v. The United Kingdom

57. On 25 February 2020 the European Court of Human Rights (ECtHR) rejected a DWP application to refer the judgment of the First Chamber in the above case. The decision was handed down in October 2019 is therefore final. The full judgment can be found here.

58. This case was a challenge to the Removal of the Spare Room Subsidy (RSRS) policy by two applicants, JD and A. JD lives in a property specifically constructed to meet the disability needs of her adult disabled daughter and A lives in a property adapted under the sanctuary scheme. Under the RSRS policy both are deemed to under-occupy their homes and have their HB reduced accordingly.

59. The ECtHR decided that the UK government was not in breach of its obligations under the European Convention on Human Rights (ECHR) in respect of JD but it had violated its obligations under the ECHR in relation to A and ordered that the UK should pay A €10,000 for non-financial damages.

60. The court found that, in the case of A, there is a conflict between the government’s aim of allowing victims of domestic violence to remain in their homes through the sanctuary scheme and the aim of the RSRS is to incentivise claimants to move. Therefore, treating her in the same way as others subject to the RSRS could not be justified and was therefore discriminatory.

Effect of the judgment

61. The department is carefully considering next steps in relation to the Court judgment and will notify LAs once a decision has been taken.

62. DHP remain the appropriate means for providing support where there is an under-occupancy deduction because of a sanctuary room, or sanctuary scheme. Awards should continue to be made in appropriate cases having regard to, the published guidance for LAs in England and Wales, which suggests an LA should consider victims of domestic abuse or sanctuary scheme users for a DHP. The guidance can be found on GOV.UK

63. If you have any questions regarding the content of this article you can email housing.benefitenquiries@dwp.gov.uk

The receipt and cascading of our communications within LAs

64. During this crisis, it is particularly vital that LAs ensure arrangements are in place at all times to access their single inbox, so that important messages can be quickly shared with appropriate LA staff.

65. To ensure this is happening, we asked LAs to confirm receipt of a communication we issued on 26 March 2020 via a reply to us from their single inbox. We also placed an article in a more recent communication asking each LA to ensure our communications are being cascaded as appropriate on receipt. Unfortunately, we have only received 188 single inbox confirmations to date. We are continuing to receive feedback from individual LA members of staff that their LA is either not receiving any of our communications, or that they are obtaining sight of our communications received within their authority by chance.

66. As a temporary measure we will be posting our bulletins on Glasscubes. However, it is imperative that single inboxes are maintained as the main route into LAs for all our communications. Therefore, if you are aware that your LA is either not receiving our communications or they are not being cascaded as appropriate on receipt, we ask that you email housing.correspondenceandpqs@dwp.gov.uk to let us know. We will then send you the single inbox address we have for your LA so you can establish how it is being maintained in your LA and ensure its continuity.

Publication of HB Debt Recoveries statistics

67. The HB Debt Recoveries statistics were published on 4 March 2020. The 2019-20 statistics reflect reported performance for quarters 1 (April to June 2019) and quarter 2 (July to Sept 2019).

68. Key points:

• the total HB debt outstanding at July 2019 stood at £2.07 billion, a decrease of £37 million (2%) at the same point in 2018-19

• the total value of HB overpayments identified in the first 2 quarters was £329 million, a decrease of £40 million (11%) compared to 2018-19

• the total value of HB overpayments recovered during the first 2 quarters was £297 million, a decrease of £33 million (10%) compared to 201819

• the total value of HB overpayments written off during the first 2 quarters was £37 million, a decrease of £2 million (6%) compared to 2018-19

• there has been a 16% drop in the HB caseload in the 12 months ending November 2019. Inevitably this will impact on all HB debt measures

• all debt measures have continued to decrease

HB decisions by the Upper Tribunal

69. Decision Making and Appeals (DMA) Leeds is aware of the following HB cases that have been decided by the Upper Tribunal (UT):

• CH/1222/19: Remit - Overpayment of HB, First-tier Tribunal (FtT) breached the rules of fair procedure in the failure to offer the claimant a hearing closer to home, also no real analysis or discussion of the issues in Regulation 100(2) of the 2008 Regulations

• CH/595/17: Issue under appeal, whether claimant had a Right to Reside for the purposes of his claim to HB. Tribunal considered effects of WRS and Gubeladze, and ultimately concluded it was reasonable for the LA to decide that working 17 hours a week for 15 days would not amount to “genuine and effective” work and the claimant would not have acquired a worker status as a result

• CH/2773/18: Self-employed earnings. Appeal dismissed. Tribunal correctly addressed the period of assessment used in the calculation

• CH/257/18: Claimant appeal upheld. Meaning of shared ownership tenancy clarified

• CH/845/16: Appeal dismissed. No substantive dispute between the parties

70. A selection of decisions of the UT are published on their website. Do be aware that there is an undefined time lapse between decisions being issued and their appearance on the website.

71. If you have any queries about cases before the UT judges or courts, please contact us by email at quarryhouse.dmaleedscustomersupportservices@dwp.gov.uk

New legislation

72. The following Statutory Instruments (SIs) have been laid:

• 2020 No. 193 The Social Security Revaluation of Earnings Factors Order 2020. Came into force on 6 April

• 2020 No. 234 The Social Security Benefits Up-rating Order 2020. Made on 10 March

• 2020 No. 235 The Guaranteed Minimum Pensions Increase Order 2020. Came into force on 6 April

• 2020 No. 266 The Social Security Benefits Up-rating Regulations 2020. Came into force on 6 April

• 2020 No. 287 The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2020. Came into force 13 March

• 2020 No. 288 The Housing Benefit (Transitional Provision) (Amendment) Regulations 2020. Came into force on 4 April

• 2020 No. 405 The Social Fund Funeral Expenses Payment (Coronavirus)(Amendment) Regulations 2020. Coming into force on 8 April

73. Copies of SIs can now be downloaded

What’s new on our HB pages on GOV.UK

75. The following items can be found on the website link shown:

Document Type	Subject	Link
LAWD 3/2020	Forthcoming audit/compliance check of Employee Authentication Service MGP1LA enhancements HB Matching Service Update DWP Support pack for local authorities Reminder: Rents for Social Housing from 2020-21 and the impact on HB subsidy for LAs in England Publication of HB Speed of Processing Statistics LA Welfare Steering Group and Practitioners’ Operational Group Decisions with the Upper Tribunal New Legislation What’s new on our HB pages on GOV.UK LA Data Sharing and IT Forum Forthcoming audit/compliance check of EAS Service	LAWD3/2020
S2/2020	2020-21 Discretionary Housing Payments government contribution for English and Welsh local authorities	S2/2020
S3/2020	Rent Rebate Subsidy Limitation information 2020-21	S3/2020
S4/2020	New Burdens funding to meet the costs for the administration of the Severe Disability Premium changes in 2019-20	S4/2020
A4/2020	Performance Framework	A4/2020
A5/2020	HBAA Initiatives (in progress)	A5/2020
A6/2020	State Pension Adult Dependency Increase (ADI) ending	A6/2020
A7/2020	The Social Security (Coronavirus)(Further Measures) Regulations 2020	A7/2020