TCM0219020 - Payment - Loss of Benefit Sanctions
Checklist
Before you follow this guidance make sure you
- have the correct user roles to follow this guidance.
- have access to the Loss of Benefit Sanctions Mailbox (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- have access to the relevant CAF
Background
A change in legislation under the Welfare Reform Act 2012 has given HMRC powers to implement Loss of Benefit Penalties. These penalties will be applied where a customer or their partner have been convicted of a benefit fraud offence or accepts an administrative penalty for such an offence.
The Department for Work and Pensions (DWP) will send notification to HMRC to apply the penalty to a claim for Working Tax Credit (WTC). This will mean that WTC will not be paid for a prescribed period of time. This depends on the level of the offence but could range from four weeks to three years. Child Tax Credit (CTC) will not be subject to a penalty. The customer or their partner will have received prior notification from DWP that a penalty is being applied.
Guidance
Step 1
If you are dealing with a new request to impose a sanction, go to Step 2.
If you are dealing with an expired BF date to impose a sanction, go to Step 5.
If you are dealing with an expired BF date to capture a new claim, go to Step 12.
If you are dealing with an expired BF date to re-input employment details, go to Step 13.
If you are dealing with an expired BF date to end employment details, go to Step 14.
If you are dealing with a change of circumstances to be applied during the sanction period, go to Step 15.
If you are dealing with a notification that a customer has claimed Universal Credit (UC), go to Step 16.
Step 2
Print out the LOB1 and log the entry on the Loss of benefit (LOB) LOB spreadsheet.
Check if the LOB1 has been completed correctly. For how to do this use TCM1000498.
If the LOB1 has been completed correctly, go to Step 3.
If the LOB1 has not been completed correctly
- contact the person named on the notification to obtain the information, then go to Step 3.
Step 3
Check NTC for the type of tax credits in payment. For how to do this use TCM1000052.
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
If WTC only is in payment
- update Household Notes with the retained message ‘UB23
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- go to Step 4.
If WTC and CTC are in payment
- update Household Notes with the retained message ‘UB23
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- go to Step 4.
If CTC only is in payment, go to Step 10.
If the claim is terminated or a nil award, go to Step 10.
If the claim is ceased, go to Step 11.
Step 4
Check the LOB1 and make a note of the earliest date that a sanction can be applied from, this is the determination date (shown on LOB1) plus 30 days.
Check ‘View Payment Schedule’ and make a note of the latest payment made.
If the latest payment date is earlier than the date that the sanction can be applied
- set a BF date of two working days prior to the day the next payment is due
- take no further action
If the latest payment date is after the earliest date that the sanction can be applied, go to Step 5.
Step 5
If you are dealing with a WTC only claim, go to Step 6.
If you are dealing with a WTC and CTC claim, go to Step 9.
Step 6
If you are dealing with a single claim, go to Step 7.
If you are dealing with a joint claim, go to Step 8.
Step 7
- apply a payment suspension with the reason ‘Manual Payment’, for how to do this use TCM1000232
- set a manual correspondence marker, for how to do this use TCM1000063
- take a screen print of the tax credits claim, for how to do this use TCM1000055
- calculate the sanction period
Note: the sanction start date is the day after the customer has been paid up to. The sanction end date will be the sanction start date plus the disqualification period. This period should then exactly equal the specified weeks for disqualification.
- calculate the sanction amount, for how to do this, use TCM1000499
- update Household Notes with the message UB22
- update the LOB spreadsheet
- set a BF date to end the customer’s employment the day before the date that you are applying the sanction from
Note: the BF date should be the day after the sanction end date.
- send TCC266 letter to customer
- take no further action.
Step 8
Check if you are dealing with a 50% benefit sanction or a 100% benefit sanction, the LOB1 will show this information.
If you are dealing with a 100% sanction
- set a manual correspondence marker, for how to do this use TCM1000063
- take a screen print of the tax credits claim, for how to do this use TCM1000055
- calculate the sanction period
Note: the sanction start date is the day after the customer has been paid up to. The sanction end date will be the sanction start date plus the disqualification period. This period should then exactly equal the specified weeks for disqualification.
- calculate the sanction amount, for how to do this, use TCM1000499
- update Household Notes with the messages UB22 and UB24
- update the LOB spreadsheet
- set a BF date to end the customers employment and their partner’s if they have one, the day before the date that you are applying the sanction from
Note: the BF date should be the day after the sanction end date.
- send TCC266 letter to the customer
- take no further action.
If you are dealing with a 50% sanction
- take a screen print of the tax credits claim, for how to do this use TCM1000055
- apply a payment suspension with the reason ‘Manual Payment’, for how to do this use TCM1000232
- set a manual correspondence marker, for how to do this use TCM1000063
- calculate the sanction period
Note: the sanction start date is the day after the customer has been paid up to. The sanction end date will be the sanction start date plus the disqualification period. This period should then exactly equal the specified weeks for disqualification.
- calculate the sanction amount
- calculate the manual payments due
- complete the manual payment stencil and email it to ‘DL-Manual Payments Query’
- add a Household Note for each payment request ‘MAN PAYMENT REF FORM ISSUED DD/MM/YY FOR CTC £XX.XX, WY+TC £XX.XX. Period covered DD/MM/YY to DD/MM/YY
- update Household Notes with the messages UB22 and UB24
- update the LOB spreadsheet
- set a BF date to re-input the employment details
- send TCC267 letter to the customer
- take no further action
Step 9
If you are dealing with a 100% sanction
- take a screen print of the claim form, for how to do this use TCM1000055
- end the customer’s employment and their partner’s if they have one, from the day before the date that you are applying the sanction from. For how to do this use TCM1000354
- calculate the sanction period
Note: the sanction start date is the day after the customer has been paid up to. The sanction end date will be the sanction start date plus the disqualification period. This period should then exactly equal the specified weeks for disqualification.
- calculate the sanction amount, for how to do this, use TCM1000499
- update Household Notes with the message UB22 and UB24
- update the spreadsheet
- set a BF date to re input the employment details
- take no further action
If you are dealing with a 50% sanction
- take a screen print of the claim form, for how to do this use TCM1000055
- end the customer’s employment and their partner’s if they have one, from the day before the date that you are applying the sanction from. For how to do this use TCM1000354
- calculate the sanction period
Note: the sanction start date is the day after the customer has been paid up to. The sanction end date will be the sanction start date plus the disqualification period. This period should then exactly equal the specified weeks for disqualification.
- calculate the sanction amount, for how to do this, use TCM1000499
- calculate the manual payments due
- complete the manual payment stencil and e-mail it to ‘DL-Manual Payments Query’
- add a Household Note for each payment request ‘MAN PAYMENT REF FORM ISSUED DD/MM/YY for CTC £xx.xx, WTC £xx.xx. Period covered DD/MM/YY to DD/MM/YY
- update Household Notes with the messages UB22 and UB24
- update the spreadsheet
- set a BF date to re input the employment details
- take no further action
Step 10
The loss of benefit sanction cannot be applied
- update the LOB spreadsheet
- take no further action
Step 11
Check if the claim ceased because the customer has claimed Universal Credit (UC), for how to do this use TCM1000500.
If the claim ceased because the customer has claimed UC
- complete the MGP1c (HMRC) to notify DWP that we have not applied the sanction and send this through the secure mailbox
- take no further action.
If the claim did not cease because UC has been claimed
- the sanction cannot be applied
- update the LOB spreadsheet
- take no further action.
Step 12
Using the screen prints you took earlier, capture the new claim form from the day after the sanction period ended. For how to do this use TCM0062140.
- update Household Notes with the message UB25
- update the LOB spreadsheet
- take no further action
Step 13
Using the screen prints you took earlier, re-input the employment details for the customer and partner, if applicable. The job start date will be the date after the sanction period ended. For how to do this use TCM0048140.
- update Household Notes with the message UB27
- take no further action
Step 14
Check the status of the claim, for how to do this use TCM1000025
If the claim is ‘award issued’
- end the customer’s employment and their partner’s if they have one, from the day before the date that you applied the sanction from. For how to do this use TCM1000354
- set an overnight BF date to recapture the claim
- take no further action.
If the claim has ceased due to Universal Credit (UC)
- end the customer’s employment and their partner’s if they have one, from the day before the date that you applied the sanction from. For how to do this use TCM1000354
- calculate the amount of sanction that has been applied
- update the LOB spreadsheet
- complete the MGP1c (HMRC) to notify DWP of the sanction amount that has been applied and send this via the secure mailbox
- update Household Notes with the message UB28
- take no further action.
If the claim ceased for any other reason
- end the customer’s employment and their partner’s if they have one, from the day before the date that you applied the sanction from. For how to do this use TCM1000354
- update household notes with the message UB28
- take no further action.
Step 15
If you have received a change of circumstances to be applied during the sanction period you will need to recalculate the award manually.
- use the SEES eligibility calculator to calculate the new award, for how to do this use TCM1000089
- re-calculate the manual payments due during the sanction period ensuring that you apply the 50% or 100% where applicable
- refer the new payment details to Manual Payments team
- update NTC with the change, follow the relevant change of circumstance guidance
- update Household Notes with the relevant change of circumstance message and UB26 message
- update LOB spreadsheet
- take no further action.
Step 16
When you receive a notification that the customer has claimed Universal Credit (UC) during a sanction period
- calculate the amount of sanction outstanding
- complete the MGP1c (HMRC) and return to DWP via the secure mailbox
- update the LOB spreadsheet
- take no further action.