Change of circumstances
Q. When both advantageous and disadvantageous changes of circumstances are reported at the same time, but late, how are they dealt with under the new legislation?
A. The decision maker should decide each change and decide the date from which each change of circumstance occurs.
The decision maker should form a view as to whether the change in question is advantageous or disadvantageous. This is because the decision maker needs to know whether to apply the regulation 8(3) of the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations ("HB/CTB (D&A) Regulations") exception (1) to regulation 79 of the HB Regulations to decide the date the change occurred. Either treating the change as having occurred on the date it was notified or when it factually occurred.
Having determined the dates on which the changes occurred the decision maker can then decide in which order to conduct the supersessions.
The decision maker should apply the provisions of regulation 79 of the HB Regulations and regulation 8(2) & (3) of the HB/CTB (D&A) Regulations to determine the effective date of the superseding decisions.
Three changes of circumstance are notified together on 19 October 2009:
- Change 1 occurred on 6 July 2009 and was a decrease in the claimant’s wife's part time income.
- Change 2 occurred on 6 August 2009 and was an increase in the claimant’s earnings.
- Change 3 occurred on 6 September 2009 when a non dependant left the household.
There is no good reason for any of the changes to be notified late.
The result is:
- Change 1 being an advantageous change will be treated as having occurred on 19 October 2009, the date on which it was notified.
- Change 2 a disadvantageous change occurred on 6 July 2009, this will in effect become the first superseding decision.
- Change 3 an advantageous change will be treated as having occurred on 19 October 2009, the date it was notified.
- Change 1 and Change 3 will be reflected in the same superseding decision.
Q. Where an award of DLA or any relevant benefit is made to someone already in receipt of HB how far back is it taken into account? And when are any appropriate premiums taken into account?
A. Where someone is in receipt of HB and is subsequently awarded DLA (any relevant benefit) the decision awarding HB can be superseded effective from the date from which DLA (relevant benefit) arises.
HB/CTB (D&A) Regulations, reg 7(2)(i) and 8 (14)
Where an award of DLA is made, and the claimant becomes entitled to a disability premium, the award of the premium is not a change of circumstances in itself, and the disability premium paid from the same effective date as above.
Q. What happens when an award of Child Benefit is awarded to someone already in receipt of HB?
A. Unlike the award of DLA, where there is only one change of circumstances, where Child Benefit is awarded there are, possibly, two separate changes.
The first change would be the increase in the household because of the birth of the child and the second the payment of ChB. Any applicable amount or premium in respect of the child are normally awarded to the person who is treated as being responsible for the child, and the ChB is taken into account as the income of that person. Normally these are one and the same but could be different:
- If the ChB is awarded to a person with whom the child is not living then the HB of that person would be affected as they now have income that is taken into account.
- At the same time applicable amounts/premiums in respect of the child should be awarded to the person who is responsible for the child.
The decision maker will have to establish the facts of the situation before making the appropriate superseding decisions.
Q. What happens when a rent increase is notified more than one month after the date of the increase?
A. Provided that the claimant notifies the increase in their rent within one month of having been notified of the increase by their landlord then the rent increase will be taken into account from the date of the increase. This is because it is not possible for the claimant to notify the change in their rent before they know what it actually is.
(HB (General) Regulations, reg 79(2))
If the claimant notifies outside the one month time limit the decision maker will have to consider whether the late application provisions are appropriate in deciding the effective date of the increase in rent.
Q. Regulation 104 of the HB (General) Regulations requires the calculation of underlying entitlement when an overpayment is calculated. Does this still apply where an advantageous change was notified late without good reason and the change is treated as occurring on a later date?
A. Yes it does. Where an overpayment is calculated the provisions of regulation 104 should still be applied to that calculation, the amount of the overpayment should reflect the circumstances of the person as they would have been if the change had been notified timeously.
This means that the person is penalised for the late notification in that they will not receive the additional benefit which would have been due had they notified at the correct time. However, they are not penalised twice by the change not being offset against an overpayment.
26 week deferral of non-dependant deductions: when to make the decision
Q. How do we deal with the change of circumstance when the 26 week deferral of non-dependant deductions rules apply?
A. Regulation 59 of the HB(Persons who have attained the qualifying age for state pension credit) Regulations, SI 2006/214, and regulation 50 of the CTB (Persons who have attained the qualifying age for state pension credit) Regulations, SI 2006/216 provide that when:
- there is an existing HB/CTB claim,
- the customer or the customer’s partner has attained the age of 65,
- a non-dependant moves into the customer’s home or an existing non-dependant has an increase in income, that would increase the non-dependant deduction,
the deductionor increase in the existing deduction will not take effect until 26 weeks after the change happened.
Customers should be notified of the decision and given full appeal rights at the same time the decision is made.
Non-dependant moves in on 12 October 2008. The customer tells the LA on 13 October 2008. The LA processes the change on 20 October 2008.
- The date of change is 12 October 2008.
- The date that the decision is made and the notification issued to the customer is 20 October 2008.
- The notification tells the customer that HB/CTB will reduce because of the change; how much the reduction will be; and the date the reduction will be implemented. The customer should also be reminded that they must let the LA know if there are any other changes in respect of the non-dependant before the reduction takes effect.
- The date the reduction takes effect is 12 April 2009, ie 26 weeks after the date of change, not the date of the decision.
In the above example, a change of circumstances for MIS purposes should be logged as being notified on 12 October and cleared on 20 October 2008. The time taken to make the decision should be shown as 8 days that is 13 - 20 October 2008.
When the 26 week point is reached, and assuming there have been no other relevant changes since the non-dependant moved in, the HB/CTB should be reduced. There will be no need to count this as a change of circumstances as the decision was made on 20 October 2008.
Q. What if there is an increase in the non-dependant's income during the 26 week deferral period?
A. Regulations 59 and 50 also provide that any further changes in respect of the non-dependant:
- that happen in the 26 week deferral period, and
- would also reduce HB/CTB,
shall not be effective until the end of the 26 week period, already set for the first change. However, exactly the same principles would apply to processing the second change.
The non-dependant in example 1 has an increase in income on 9 January 2009, the claimant tells the LA on 12 January 2009. The LA processes the change on 16 January 2009.
- The date of change is 9 January 2009.
- The date that the decision is made and the notification issued to the customer is 16 January.
- The notification tells the customer that HB/CTB will reduce because of the change; how much the reduction will be; and the date the reduction will be implemented. The customer should also be reminded that they must let the LA know it there are any other changes in respect of the non-dependant before the reduction takes effect.
- The date the reduction takes effect is 12 April 2009, ie the date set when the first change happened.
In this example, a change of circumstances for MIS purposes should be logged as being notified on 12 January 2009 and cleared on 16 January 2009. The time taken to make the decision should be shown as 5 days that is 12-16 January 2009.
When the 26 week point is reached the HB/CTB should be reduced. There will be no need to count this as a change of circumstances as the decision was made on 16 January 2009.
Q. What if there is a decrease in the non-dependant's income during the 26 week deferral period?
A. If the same non-dependant’s income had reduced on 9 January 2009 rather than increased, the same dates and principles for processing the change, as set out in Example 2, would apply, but the reduced amount of the deduction will be taken into account from 12 April 2009.
Q. What if the non-dependant leaves the household before the end of the 26 week period?
A. If the same non-dependant had left the household on 9 January 2009 the deduction, due to be made on 12 April 2009, would no longer be appropriate. Again, the same dates and principles for processing the change, as set out in Example 2, would apply. However, in this situation the decision will be that the change will mean that the deduction, due to be made on 12 April 2009, will no longer apply.
Q. When does the 26 week deferral not apply?
A. The 26 week deferral does not apply where a dependent child in the household becomes a non-dependant.
Q. Does a non-dependant deduction apply when a non-dependant is in receipt of ESA(IR)?
A. Normally in Housing Benefit, a non-dependant deduction does not apply where a non-dependant is under age 25 and in receipt of Income Support or income-based Jobseeker’s Allowance. Once the non-dependant reaches age 25 or over, the lowest rate of deduction applies.
However, the situation with non-dependants in receipt of income-based Employment & Support Allowance (ESA (IR)) is different.
If the non-dependant is in receipt of ESA (IR), and completes the work capability assessment and becomes entitled to the 25 plus rate of ESA (IR), the lowest rate of deduction will apply irrespective of the non-dependant’s age. This can happen even if the non-dependant is aged under 25.
In CTB, no deduction is taken if the non-dependant is in receipt of Income Support, income-based Jobseeker’s Allowance or ESA(IR).
Q. Why don’t pensioners qualify for the Extended Payment Scheme?
A. In State Pension Credit there are no restrictions on the number of hours that can be worked. Customers could continue to receive State Pension Credit up to the time they receive their first wages therefore removing the need for an Extended Payment (EP).
Income Support, income-based Jobseeker’ Allowance and Employment and Support Allowance are different. Here, the “remunerative work” rule determines the access to those benefits.
Q. Can you combine Incapacity Benefit/Severe Disablement Allowance/contributory Employment and Support Allowance (IB/SDA/ESA(C)) as a qualifying benefit for 26 week period with Income Support/income-based Jobseeker’s Allowance/income-related Employment and Support Allowance (IS/JSA(IB)/ESA(IR))?
A. A customer must fulfil the relevant qualifying conditions for an EP for each Scheme.
Where for example a customer was getting IS and IB (or SDA) together, and then moves onto IB (or SDA) only, the IB (or SDA) can be counted towards the 26 week qualifying period for the EP (qualifying contribution benefits) Scheme, irrespective of the fact that it was paid alongside IS at an earlier stage.
However, if the customer was in receipt of IB (or SDA) only then went onto IB (or SDA) and IS, then the only way they could get an EP would be under the EP (qualifying income-related benefits) Scheme provided they completed 26 weeks on IS. You cannot add together the IS and IB/SDA periods.
ESA will operate in a similar way, for example if a customer was in receipt of:
- ESA (IR) and ESA(C) together and then moves onto ESA(C) only. In these cases, the ESA(C) can be counted towards the 26 week qualifying period for the EP (qualifying contributory benefits) Scheme, irrespective of the fact that it was paid alongside ESA (IR) at an earlier stage;
- ESA(C) only, then went onto ESA (C) and ESA (IR), then the only way they could get an EP would be under the EP (qualifying income-related benefits) Scheme provided they completed 26 weeks on ESA(IR). In these circumstances, you cannot add together the ESA (IR) and ESA(C) periods.
Q. Can a move into work be treated as a change of circumstances on the existing HB/CTB claim if the customer is entitled to an EP?
A. The answer is yes, from 6 October 2008. From then, the Local Authority must consider whether the customer is entitled to an EP when the customer starts work as part of a normal change of circumstance. The LA should check whether there is entitlement to “in work” Housing Benefit (HB) and Council Tax Benefit (CTB).
Q. Does the customer have to make a new claim for Housing Benefit and Council Tax Benefit at the end of the Extended Payment period?
A. From 6 October 2008 customers will no longer have to make a new claim for HB/CTB at the end of the EP. At the end the EP period, the customer can move into “in-work” HB/CTB provided they are entitled to it.
Q. Does Jobcentre Plus certify that the qualifying period has been completed and benefit has ceased?
A. From 6 October 2008, Jobcentre Plus will no longer have to certify to the LA that the 26 week qualifying period has been completed. The LA will obtain the necessary details from the Customer Information System (CIS).
Q. Who is responsible for the calculation and payment of the Extended Payment if the customer moves LA?
A. It will be the responsibility of the original LA to calculate and pay the EP even if the customer has moved to another area.
Q. From what date do you award an EP In the IS/JSA (IB) Scheme?
A. Provided all the relevant criteria for an EP have been fulfilled EP is awarded when HB/CTB ends.
HB/CTB would be paid up to the last day of the benefit week in which the qualifying benefit ceases:
If IS ends on a Monday 25 May 2009 (that is to say the last day of entitlement is Sunday 24 May 2009) then HB should be paid up to and including the end of benefit week Sunday 31 May 2009. The EP would start from 1 June 2009.
If IS ends on a Sunday 24 May 2009 (that is to say the last day of entitlement is Saturday 23 May 2009) then HB should be paid up to and including the end of benefit week Sunday 24 May 2009. The EP would start from 25 May 2009.
Q. What happens if a customer is entitled to an EP just before 6 October 2008? Would the EP be calculated under the new rules?
A. No. Their EP would be assessed using the old EP rules even if the EP period spans 6 October. Regulations are not retrospective and the new rules would apply to people moving off benefit and into work from 6 October 2008.
EP period begins 22 September 2008 for 4 weeks and spans 6 October. The EP is assessed under the old scheme, which means the customer has to make a new claim for Housing Benefit (HB)/Council Tax Benefit (CTB) at the end of their EP period.
Q. What happens if there is no entitlement to in-work HB during the first week of their EP period but entitlement exists for in-work HB for weeks 2-4 of the EP period?
A. Reg 72D (1) helps to preserve the current HB claim in the background whilst the EP is in payment. The EP rate would be payable for the first week of the EP period, whilst entitlement to in-work HB is nil. The current HB claim still exists and allows a comparison to be made with the EP rate and in-work entitlement.
Original HB rate is £60.00. Customer moves into work and EP rate is £60.00 based on rate of HB paid in week before the qualifying benefit ends.
In-work HB entitlement for week 1 is nil. EP is payable at £60.00 for week 1.
In-work HB for weeks 2-4 is assessed at £50.00 (applying the normal change of circumstance rules under Reg 79). The EP rate is higher than in-work HB, so EP is payable at £60.00 for the rest of the EP period.
Q. Does Jobcentre Plus have to certify to the LA that the customer has fulfilled 26 weeks in receipt of the income-related qualifying benefit and that the work is expected to last 5 weeks or more?
A. No. From 6 October 2008, Jobcentre Plus (JCP) no longer has to certify to the LA that the customer has been in receipt of an income-related benefit and that the benefit has ceased, or that the work is expected to last at least 5 weeks. In the IB/SDA EP scheme, the LA is already responsible for checking whether the customer has fulfilled all the relevant conditions for the award for an EP, and does not rely on any confirmation from Jobcentre Plus.
The reform of the EP scheme took account of LAs’ views about data confirmation from JCP. The IB/SDA EP scheme already took this into account and removed the confirmation requirements, so this is scenario is nothing new. It is up to the LA to use whatever method it feels is appropriate to confirm that it is satisfied that the customer has fulfilled all the conditions for an EP.
Q. If a customer notifies a change of circumstance 8 weeks after starting work, would the change of circumstance be implemented from the date they started work and would they still be entitled to an EP?
A. There is no longer a requirement for the customer to notify the LA/DWP that they have started work within 4 weeks of doing so. The general rules on changes of circumstance apply. The move into work is a detrimental change of circumstance which would reduce the customer’s rate of HB. If s/he satisfies the conditions for an EP, this will be an advantageous change of circumstance, which means the EP is payable when there would otherwise be a reduced rate of benefit.
Reg 79(1) is also subject to DMA Reg 8(3) of the Decisions & Appeals Regulations. This provides that an advantageous change that is notified more than one month after it occurs, takes effect from the date of the notification (subject to there being no reason to extend this under DMA Reg 9).
Since the EP can only be paid for up to 4 weeks from the beginning of the benefit week after entitlement to the qualifying benefit ceased, this would mean there is no entitlement to an EP.
Mr A begins work and his entitlement to JSA (IB) ceases on 5 November 2008. He satisfies the conditions for an EP, which is payable from 10 November until 7 December. Mr A has one month to notify an advantageous change, so provided he does this anytime until 5 December, he can take advantage of the full 4 week EP because the change takes effect from the date of the notification.
Under DMA rules Mr A has one month to report the change of circumstances.
Q. What happens when a customer moves to another LA during EP period?
A. See the examples.
Customer is entitled to an EP from 6/10 to 2/11 at £40.00 per week. He is not entitled to any in-work HB due to his earnings. During the EP period the customer moves to a new LA on 18/10. His EP continues to the end of the EP period at £40.00 per week and is paid by the first LA. He is not entitled to in-work HB in the original LA at the end of the EP period.
Customer is entitled to an EP from 6/10 to 2/11 at a rate of £50.00. He is entitled to in-work HB at £60.00 from 6/10 onwards. His EP is increased to the in-work rate of HB of £60.00. During the EP period he moves address on 18/10 to a new LA (LA (B)). Customer notifies that he has moved on 18/10.
Under Reg 72C (movers) the amount of the EP would be the rate in payment in the week before the qualifying benefit ceased - here £50.00, paid by the original LA for the duration of the EP period even though the customer moved to LA (B)’s area on 18/10.
Provided the customer makes a new in-work claim for HB at LA (B), this will be calculated based on the new liability at the new address and the earnings. If LA (B) calculates the new claim for in-work HB at a lower rate than the EP e.g. £40.00, then there would be nothing for LA (B) to pay until the end of the EP period.
Q. What happens if a customer changes address during the EP period to a new property within the same LA?
A. See paras 38-41 of A12/2008 for guidance about where a customer moves address during the EP period within the same LA.
EP is paid at £60.00 per week. Customer moves to new property in same LA area effective from week 3 of the EP. Rate of in-work HB entitlement at that property is £80.00 per week. Therefore the EP rate is 2 weeks at £60.00, followed by 2 weeks at £80.00. At the end of week 4 of EP period, customer moves onto in-work HB at £80.00 per week.
EP is in payment at £60.00 per week. Customer moved to new property in same LA effective from week 3. Rate of in-work HB entitlement at new property is £40.00 per week. Therefore EP rate remains at £60.00. At end of EP period, the customer moves onto in-work HB at £40.00 per week.
Q. Do changes of circumstance (for example a non-dependant leaves the household) affect an EP?
A. The move into work is now treated as a change of circumstance on the existing claim. Changes of circumstance are ignored for the EP payment for the duration of the EP period under Reg 72D (2)/60D (2).
However, the current HB claim continues in the background, allowing a comparison of in-work entitlement with the EP entitlement.
Reg 72B deals with the amount of EP. When a customer moves into work, the LA is required to consider not just whether the customer has fulfilled the conditions for an EP, but also whether they are entitled to normal in-work HB (Reg 72B). Normal HB allows for changes of circumstance for example non-dependants leaving or arriving.
The EP rate is based on the amount of benefit in payment in the week before the qualifying benefit ceased and the customer moved into work. If this rate included a non-dependant deduction this would be the rate that is used to set the EP. But if the rate of in-work HB turns out to be higher than the EP rate, then the in-work HB rate is used as the EP rate.
EP rate is £50.00 (which is net of 2 non-dependant deductions).
Customer qualifies for in-work HB. In-work HB is calculated and includes non-dependant deductions. In-work HB is calculated at £30.00. So, EP rate is higher than in-work HB rate so for weeks 1 and 2 - EP is paid at £50.00 per week.
Non-dependant moves out of the household which affects level of in-work HB under normal change of circumstance provisions (Reg 79). The change does not affect EP rate of £50.00, but the in-work HB is reassessed to take account of the non-dependant moving out increasing it to £40.00. The existing EP rate is still higher, so EP is paid for week 3 at £50.00.
Second non-dependant leaves the household and in-work HB is reassessed and the new rate is £60.00. This is higher than the original EP rate of £50.00. Provided the change of circumstances has been notified within 4 weeks of it occurring (i.e. under normal DMA rules), the EP rate would be adjusted from the Monday following the date of the change (Reg 79(1)).
So for week 4 the EP is paid at the in-work HB rate of £60.00. This is classed as an EP payment. The rate of the EP is increased to the level of the in-work HB.
At the end of the EP period, the customer moves on to in-work HB at £60.00 with no need for any new claim to be made.
Q. What is the classification of an EP if the EP rate is increased from its original rate to the level of in-work HB?
A. All payments made under Reg 72B(1) should be classified as an EP regardless of whether the EP is made under Reg 72B(1)(a), (b) or (c).
This is because Reg 72B (1) states that “the amount of the EP payable shall be the higher of (a), (b) or (c)”.
Q. How do Regs 72(4), 60(4) and 73(2) and 61(2) work?
These are equivalents of the previous rules, for example 72(1) (b) in HB Regulations (S.I.2006/213)
A. These are an easement which allows an EP to be paid where the change of address would affect the entitlement of HB before the qualifying benefit ends. For example new Reg 72(4)(b) refers to the circumstances where the customer vacated the dwelling – either in the week in which entitlement to a qualifying income-related benefit ceased, or in the preceding week.
These provisions allow you to treat the customer as entitled to HB under the normal rules, which then allow you to pay the EP. Reg 74B (4) then allows you use the last full week’s worth of HB at the old address to set the EP rate.
Q. Does the customer need to notify the LA that they have started work/increased their hours under the new scheme?
A. The EP can be paid without the need to end the current HB claim. However, the customer has an obligation to report changes of circumstance that would affect entitlement to in-work HB under Reg 88. The relevant changes would be those under identified under Reg 72(1)/Reg 73(1) in the normal course of events.
The LA must satisfy itself that the work is expected to last at least five weeks and all the other conditions for the EP have been satisfied.