Draft regulations published.
by Gareth Morgan on June 17, 2012
The government have published the first detailed draft regulations for Universal Credit and is formally consulting the SSAC about them.
I’ve started building the detail into our Future Benefits Model (FFBM) and there are substantial changes to previous announcements. Some of them are simplifications, such as the earnings disregard rules now discarding the formula for reducing them by increased housing costs in favour of a simple two tier system based on having any housing costs. Others clarify the options so that we know now that there will be no mortgage interest support for those with any earnings at all. Other tweaks include the disregard of 100% of pension contributions, instead of the current 50%, when deriving net earnings … and much else.
This does, of course, mean rewriting and remodelling, my paper which was nearly finished, but it will be rather better for it.
Some of these changes, such as the mortgage interest rule, destroy the governments claim that people will always be better off in work under UC. Someone losing £100 a week mortgage support because they get a couple of hours work a week paying £20 will be substantially worse off.
The change in earnings disregard rules is likely to lead to more cliff edge effects.
I’ll put some more detailed looks at the effects together shortly.
Comments
Thank you for this Gareth. Universal Credit is here and happening now, all elucidation is helpful as the UK sleep walks into the destruction of the only society that most have ever known.
Hi there, was just wondering if you could help me out with a point about the draft regulations.
The regulations provide for exceptions when someone is allowed to be a student and still claim universal credit. I was wondering, how would such a person ever be able to fulfil the requirements of work availability?
I can only think of one possible case – if the person’s partner earns enough to put them both in the “no work-related requirements” section. But is that the only way it’d be possible for them to receive UC?
Hi Shay
You’re quite right. Normally someone in ‘education’ can’t get Universal Credit.
The Welfare Reform Act says so, in section 4, where it lays down the conditions for getting Universal Credit:
Basic conditions
(1) For the purposes of section 3, a person meets the basic conditions who—
(a) …
(d) is not receiving education
Education is defined in the draft regulations in Regulation 12.
12.—…
(2) In any other case “receiving education” means—
(a) undertaking a full-time course of advanced education; or
(b) undertaking any other full-time course of study or training at an educational
establishment for which a student loan or grant is provided for the person’s
maintenance.
(3) In paragraph (2)(a) “course of advanced education” means—
(a) a course of study leading to—
(i) a postgraduate degree or comparable qualification,
(ii) a first degree or comparable qualification,
(iii) a diploma of higher education,
(iv) a higher national diploma; or
(b) any other course of study which is of a standard above advanced GNVQ or equivalent,
including a course which is of a standard above a general certificate of education
(advanced level), or above a Scottish national qualification (higher or advanced
higher).
which seems clearly to exclude students.
BUT …, as is often the case, the rules then lay down exceptions to the rule and these are found in Regulation 14
Exceptions to the requirement not to be receiving education
14. A person does not have to meet the basic condition in section 4(1)(d) of the Act (not receiving education) if—
(a) the person—
(i) is undertaking, a full-time course of study or training which is not a course of
advanced education,
(ii) is under the age of 21, or is 21 and reached that age whilst undertaking the course,
and
(iii) is without parental support (as defined in regulation 8(3));
(b) the person is entitled to attendance allowance, disability living allowance or personal independence payment and has limited capability for work;
(c) the person is responsible for a child or a qualifying young person;
(d) the person is a single person and a foster parent with whom a child is placed;
(e) the person is a member of a couple, both of whom are receiving education, and the
other member is—
(i) responsible for a child or qualifying young person, or
(ii) a foster parent with whom a child is placed; or
(f) the person—
(i) has reached the qualifying age for state pension credit, and
(ii) is a member of a couple the other member of which has not reached that age.
So some people are still able to get Universal Credit even though in advanced education. Generally those with children or disabilities will be the biggest groups affected.
Thanks for confirming that. Am I correct in thinking that such a person is still required to sign a claimant commitment? If yes (which, to me, appears to be the case), how could they possibly do that, being in full time education, and are not availabe for work?
In the main, these people will have children or disabilities.
If you look at Regulation 88 you will see that their expected hours will take account of their circumstances, even if they fall into the full conditionality group.
Expected hours
88.—(1) The “expected number of hours per week” in relation to a claimant for the purposes of determining their individual threshold in regulation 90 or for the purposes of regulation 95 or 97 is
35 unless some lesser number of hours applies under paragraph (2).
(2) The lesser number of hours is—
(a) …
(b) where the claimant is a responsible carer for a child under the age of 13, the number of hours that the Secretary of State considers is compatible with the child’s normal school
hours (including the normal time it takes the child to travel to and from school); or
(c) where the claimant has a physical or mental impairment, the number of hours that the Secretary of State considers is reasonable in light of the impairment.
Regulation 89 however excludes many people from the work condition.
Claimants subject to no work-related requirements
89.—(1) A claimant falls within section 19 of the Act (claimants subject to no work-related requirements) if—.
…
(e) the claimant does not have to meet the condition in section 4(1)(d) of the Act (not receiving education) by virtue of regulation 14 and—
…
(ii) has student income in relation to the course they are undertaking which is taken into account in the calculation of the award
Many others, because of disability or childrens’ ages will fall into a lower conditionality group anyway.
Thank you, hadn’t thought of that!
Only problem I can still think of is the exception made in regulation 3(2)(b) which applies to someone who is expected to work.
By the way, I’m sorry for using your blog to ask my questions, but I can’t sign up for rightsnet, since I don’t belong to an organisation providing benefits advice. Looking at the forum on that site, I noticed you are extremely knowledgable on this topic, so decided to ask you! Thanks.
3(2)(b) applies to couples and, in many ways, mirrors today’s benefit rules. Broadly students who are members of couples can have their ‘benefit unit’ entitled to UC where there are children or disabilities and one or both are students or they can get UC on the basis of the non-student meeting their commitments.
Is this a personal interest or are, even if not employed by an organisation, advising?
(I suppose I should say, to protect myself, that nothing I post here is advice or should be relied on.)
Yes, but how can the non-student meet the committment for the student to be available for work? (Unless the non-student earns enough to put them both in the “no work-related requirements” section).
I am interested in the British welfare system, and investigate it purely as a hobby. (I’m particularly interested in the legislation used.)
But, as a result I do (try to) advise family and friends about their entitlements.
The commitments are individual, so the conditions and exclusions mentioned above still apply, but both have to be met.
Can I ask you a couple of other questions:
How is the government intending to use regulation 99(6)?
I vaguely remember reading somewhere that it is not intended to require 35 hours immediately – is that what this is for? If so, what requirements do they intend to start with?
Secondly, what’s the point of the minimum income floor for self-employed? Won’t it lead to some people affected by it stopping working? Why isn’t it enough to just require such people to look for better paid work?
a) I don’t know; perhaps some flexibility around 90(1).
b) There is some evidence that some self-employed people under report earnings. There are also some, occasionally referred to as hobby workers who may find that self-employment is a way of avoiding the requirements of job-seeking while still relying on benefit for income.