Advice needed please

Hattie23

Hi my son (age 14) receives DLA high rate care, low rate mobility, he has a very rare chromosome deletion and I am his full time carer. I receive Legacy benefits, Income support, child tax credits, carers allowance and housing benefit. I work 5 hours one evening a week, I have done so for a number of years.. My wages are deducted from my IS (first £20 ignored) I receive the additional IS amount due to caring for my son.  Last week myself and my colleagues recieved a one off £50 bonus. I was not aware of this until my wages were placed in my account, I queried this with my manager as I was aware this could take me over what I am allowed to earn and was assured that a bonus would not be considered ‘earnings’. My wage slip also states ‘bonus £50’. Unfortunately income support have now stopped my claim as the bounus took me £6.28 over my limit. I rang up and asked for a mandatory consideration. The IS advisor on the phone stated now my IS has been stopped my Child tax credits and housing benefit will stop and advised me to claim UC. So I am now in a situation where if I claim UC I will have to get a substantial 5 week advance that I will have to pay back for the next 24 months simply because I received £6.28 too much due to a one off bonus I was not even aware I was getting. I am unsure on what step to take next, will my child tax credit and housing benefit be stopped immediately? How long does a mandatory consideration take as I’m aware that once I claim UC that will be it. Thank you for your help.  

calcotti

I am not convinced that the Tax Credits with stop. However I am familiar with IS.

One point to bear in mind is that a UC claim can only backdate for a maximum of one month and is different to backdate at all. 

Have you used a benefit calculator to see if UC would actually pay you more anyway?

Hattie23

Yes i have done a benefit calculation, it seems as though I will get roughly £55-£60 a month more then I get now, so when I take into consideration the UC advance for the 5 week wait I will need I estimate I will have to repay around £50 a month for 24 months. I will more or less get the same as I get now, however if I have to include my rent in the advance as I’m unsure how that stands I would end up being around £30 a month worse off. I also established that for 2 months out of 12 I will be paid my wages 3 times in a month so will have quite a shortfall for those two months.

Yes I’m unsure about the child tax credits, not very much information available, seems as though from what I have read the child tax credits 
ends if you make a UC claim, yet advisor  stated it will end now I am no longer eligible for IS.

Seems a ridiculous situation, why does the DWP give the option of a mandatory reconsideration if I am effectively forced to claim UC whilst awaiting their decision as it’s likely my HB will stop and possibly my Child tax credits. Once UC is claimed I would no longer be eligible for either regardless of the mandatory decision. 

MW123

Dear Hattie,

Calcotti’s advice sounds hopeful for you. Your Manager was wrong  bonuses are categorised as income and are generally subject to taxation. If you had received a £50 gift card from your boss, it would have been considered a gift rather than a bonus and would not have appeared on your payslip.  It truly saddens me to witness a system that is overly complex and leads to such distress and hardship for numerous individuals.  

Hattie23

Unfortunately as I never had prior knowledge of the bonus I had no time to look into it, if I had I certainly would have asked not to be given it.

The entire system is so complex that it fails those that need it most as they are unable to navigate the system. My son will never be able to understand the complexity of pip forms etc, luckily he has myself to do these things for him but what happens to those that do not. 

poppy123456

Tax credits will not stop because IS stopped. Housing benefit maybe suspended because of your IS stopping so you will need to ring your local Authority to tell them and then it will restart. I don't know how the extra £50 will affect that.

If you claim UC your housing benefit will continue for 2 weeks and then stop. Once you claim UC then your tax credits will end. You will eventually receive your final tax credits award notice.

calcotti

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/535096/dmgch25.pdf
I think that DWP have been incorrect to take the bonus into account in one sum. It looks as if because the period for which a bonus is not identifiable they should spread it out. See paragraph 25060

25060 If the period cannot be identified, the DM should calculate the amount to be taken into account1. Where the payment is

1. earnings, by dividing the claimant's net earnings (see DMG Chapter 26) by the total of the

   1. 1.1  weekly amount of IS to which the claimant would have been entitled had the payment not been made and

   2. 1.2  amount of any disregard that would have been made on the earnings or

2. income other than earnings, by deducting any tax paid on the income, and dividing the result by the total of the

   2.1  weekly amount of IS the claimant would have been entitled to had the payment not been made and

   2.2  amount of any disregard (other than on tax) that would have been made on the income.

   If the calculation does not result in a whole number of weeks, the balance of the payment should be taken into account for a corresponding fraction of a week6.

   Note: See DMG Chapter 26 if the payment is made because employment has ended.

Example 2

Freddie is paid a one-off bonus of £150. The period for which the payment was made is not identifiable. £5 of a weekly payment of the income would be disregarded. Freddie would be entitled to £65 IS a week without the payment. The £150 payment is divided by £70 (£65 IS plus £5 disregard). The DM determines Freddie's income is £70 a week for a period of 2 1/7 weeks (two weeks and one day).

I confess however that I can't fully understand it!

If you do request an MR I suggest that you refer to this document and paragraph.

It difficulty that the moment is the length of time IS are likely to take to carry out an MR.

If the Tax Credits, HB (and of course the CA) are continuing the income you will be going without during the MR will be the IS itself - but the outcome is of course not guaranteed.

calcotti

Hattie23 said:

 I also established that for 2 months out of 12 I will be paid my wages 3 times in a month so will have quite a shortfall for those two months.

I infer that you are paid fortnightly, more information here
https://www.gov.uk/government/publications/universal-credit-different-earning-patterns-and-your-payments/universal-credit-different-earning-patterns-and-your-payments-payment-cycles#if-youre-paid-every-2-weeks

Hattie23 said:

Yes I’m unsure about the child tax credits, not very much information available, seems as though from what I have read the child tax credits ends if you make a UC claim, yet advisor  stated it will end now I am no longer eligible for IS.

It is correct that Tax Credits will end if you claim UC. The Tax Credits will stop on the day you claim UC.
I can't see why IS stopping would stop Tax Credits.
(Nor can I see why IS stopping when automatically stop Housing Benefit either - expect you local authority may suspend the HB while they gather  information to review your entitlement.) 

Regardless of what you do now you will have to switch from IS to UC by the end of 2024 under the current timetable.

Hattie23

Thank you all for the information, very much appreciated. 

Hattie23

I get paid fortnightly so they divided the bonus over two weeks, it resulted in my income being £6.30 too much.

calcotti

Hattie23 said:

I get paid fortnightly so they divided the bonus over two weeks, it resulted in my income being £6.30 too much.

That isn't the mechanism suggested in that guidance that I quoted.

Hannah_Alumni

Hello @Hattie23

I'm so sorry that just by going over by £6.30 you have to go through all of this! I just wanted to check in and ask if you have support around you? I can see members of our community have given great advice already  

Hattie23

I do thank you Hannah_Scope. Yes they certainly have, it’s a great thing you guys all do here.