Loss of income if transfer to UC

Kitty1

Does anyone know if we are able to challenge losing income from moving from legacy benefits to UC? I am still on legacy but have been trying to hold out for managed migration to UC in order not to lose income. I have not been able to claim Child tax credits for my special needs child since June 2021 and I am thinking that I will have to just claim UC soon as I can’t wait any longer. When I put it into ‘Entitled to’ the calculation came out £295 less per month on UC. This equates to a loss of £3,547 per year income for our disabled household. We now have credit card debt, which we didn’t have before from still having to provide for our Godson who we look after, despite not being able to access Child tax credit for him for so long. 

Surely, there must be some way to access income meant for a child to live on without losing disability premiums for ourselves? Thanks if anyone has any advice. 

calcotti

Kitty1 said:

Does anyone know if we are able to challenge losing income from moving from legacy benefits to UC? 

No. Some claimants who ‘naturally’ migrate from legacy benefits to UC will receive less - primarily those who receive Severe Disability Premium in the legacy benefits.

However I don’t understand what you mean by not being able to get extra money for your disabled child since June 2021 and that are holding out for managed migration.

If you have a child Tax Credit claim then it can be revised to take account of changes in circumstance. 

Managed migration matches your UC starting amount to your existing benefits, it doesn’t match you to something you don’t already get so if you are not getting Tax Credits then waiting for managed migration doesn’t make sense.

What benefits do you currently receive?

Kitty1

I did have a child tax credits claim where I received the basic plus the disability enhancement for my Godson but my partner moved into my house in May 2021 and joined my ESA claim so my child tax credits stopped and I should have gone over to UC but that would have meant losing the disability premiums and SDP as both myself and my partner receive them. 

I was planning on trying to wait for managed migration so that we wouldn’t lose anything. I do understand that if I am not getting CTC now, then transferring to UC would mean I could get the Child element but I still would lose on the disability premiums and we would have been better off not losing income on legacy. If we wait for managed migration we don’t lose any income I believe. 

We are receipt of ESA support group couple rate, we both have Pip- I have enhanced mobility and standard daily. My partner gets standard daily - he has just had a total shoulder replacement and is due for the other shoulder to be replaced in April 2023. We get HB, CTB, CA and Child Benefit. 

Thank you for replying. 

Kitty1

We have a complex case. Social care asked me to have my Godson due to his neglect and abuse at home. They called it a private fostering so I did not get an allowance. His alternative was a children’s home as none of his birth family would take him. I needed help so my partner moved in. We were being assessed for Special Guardians and the Judge said we would get some financial help. We thought that might help us until we were migrated over. We were positively assessed last November but the court case is having delays due to social care not wanting to offer any financial help. We had a free legal advice session and it seems that our Godson should have been a ‘looked after child’ which meant we should have received a fostering allowance but didn’t. We have used up all our savings and have tried to provide the best we can for our Godson but it’s getting harder. It just seems that the last few years everything has been stacked against us. Because we have taken on our Godson with no help we have been left in financial hardship. If we hadn’t have taken him on we could wait quite happily for managed migration. 

calcotti

You need to look at what you get now and what you would get if you switch to UC now. If UC would give you more then move now. If it wouldn’t then you can stay as you are until managed migration. Because your situation is slightly complex you may wish to get an advice agency to do a full benefits check so that you are confident that the comparison is correct.

Are you saying that if you switch now you would get less on UC  than you get now?  If you switch now you would get SDP transitional element with the child element and the disabled child element. 

If you are saying that UC will pay less than Tax Credits would have done, that is irrelevant.

Does the legal advice you have had suggest that you could have a complaint against the council regarding the fostering allowance?

Is the CA you get for looking after your godson? I assume the godson is the disabled child you refer to. What level of DLA does he receive.

Kitty1

I understand what you are saying as it’s irrelevant as we cannot claim tax credits now so we would be better off now if we claimed UC as then we would receive the Child payments but overall the move from legacy to UC still incurs a loss of annual income of £3,500 from a disabled household- and no doubt many others have also lost out this way. It is beyond belief really. 

I don’t know if a complaint could be made now. Yes it is my Godson that I get CA for. He gets low mob and high care. He has just had to move to a SEN Specialised school and is on a Child in Need plan. He has a social worker but she advised that we were not entitled to help. 

Thank you for your advice. I guess I either have to move to UC or wait until managed migration. It’s like being stuck between a rock and a hard place. 

poppy123456

Have you actually used a benefits calculator to see what the actual figures are? With a high rate care DLA award you would be entitled to the higher disabled child element of £414.88 as well as the child element of £290 if born before 6th April 2017 or £244.58 if born after that date. On top of that you would also be entitled to £405 SDP transitional protection. As well as all other elements depending on your circumstances.

Even without working out the actual figures, i don't see how you can be £3,500 per year worse off.

calcotti

Based on what you have said I estimate your existing ESA to be:

• Standard Allowance (couple) £121.05
• Support Group £40.60
• Enhanced Disability Premium (couple) £25.35
• SDP (x2) £138.80
• carer premium £38.85

Maximum ESA amount = £364.65

You receive Carer's Allowance £69.70 which is deducted from the ESA so 

ESA payable is £294.95/week which is equivalent to £1,278.12/month

Assuming we are talking one child on low rate DLA care, if you claim UC

• Couple allowance £416.45
• LCWRA element £354.28
• SDP transitional element £405
• Carer element £168.81 (see note 1 below)
• child element (if born before April 2017) £290.00 (see note 2 below)
• disabled child element lower rate £132.89 (see note 3 below)

Maximum UC £1,767.43

The CA is deducted at £302.03/month

UC payable is £1,465.40/month this is £187.28/month more than you currently get (£2,247.36/annum).

Notes

1. I have assumed that one of you gets LCWRA and the other gets the CA. If you are currently the ESA claimant and are also getting the CA you would need to get your partner to become the carer instead in order to get the carer element.

2. If he was born after April 2017 the child element itself will be lower at £244.58 which would reduce the UC by £45.42/month.

3. If he gets high rate care DLA the disabled child element would be the higher rate of £414.88 instead of £132.89 which means the UC would be an extra £281.99/month.

I have ignored PIP and CB because they are unchanged.

I have also ignored HB because I would expect UC to have housing element that equals the HB you currently get. 

----

Above is all indicative based on the basic information you have posted. As advised you need to make sure you are doing a proper comparison before making any decisions.

Kitty1

I used Entitled to. With not being able to claim CTC now if we were to move to UC now we would be better off.  But in comparing everything we should have been entitled to on both Legacy and UC the calculation comes out £295.65 less per month on UC. But as we cannot claim CTC it is a moot point I guess. But overall the change from Legacy to UC is a drop of £3547.80 per year. I understand that I cannot complain about what I cannot claim but it still feels like a hit. If we were allowed to stay on Legacy with full entitlement we would be £3547.80 better off a year.  Sadly, lots of people are in the same boat. 

poppy123456

Kitty1 said:

But overall the change from Legacy to UC is a drop of £3547.80 per year.

That's not correct if you take a look at calcotti's calculation above. Based on the information you gave you would be better off moving to UC. Please take a closer look at the calculation.

You are not currently claiming CTC so you can't compare the difference between what you would be entitled to because you can't claim it. You're comparing something that isn't there.

calcotti

poppy123456 said:

That's not correct if you take a look at calcotti's calculation above. ….

You are not currently claiming CTC so you can't compare the difference between what you would be entitled to because you can't claim it. You're comparing something that isn't there. 

OP is comparing what they would have got under Tax Credits system and under UC. As you say they are effectively comparing with something that isn’t there, or as they put it themselves 

Kitty1 said:

…. it is a moot point I guess. 

OP, waiting for managed migration is a red herring. All managed migration does is guarantee that you will not get less (on the date of transfer) than you currently get on legacy benefits. It doesn’t increase your amount to some notional amount if you were getting benefits you are not actually getting.

On the face of it you appear to have likely lost, and continue to be losing, money by not switching. However we don’t have all the facts so you need to either rely on online calculators into which you can put all of your details or go to an advice agency.

As an aside, I’m surprised at the figure OP says is the difference comparing UC and legacy benefits with Tax Credits but I’m not very good at doing Tax Credit calculations so I haven’t tried to check it.

Kitty1

It is quite correct in that I would be better off moving to UC now. I completely understand that. I understood it back in June 2021 when I made the decision to go without it. I understood that when I posted. I don’t think my question was about that. I think what I am saying is a full entitlement on Legacy is £3,500 more than a full entitlement on UC but unfortunately I cannot access a full entitlement now due to not being able to claim CTC. 

I was trying to go without it in the short term to try to keep the same amount of income that I would have had on a full entitlement Legacy ( ie: with the CTC) It is a drop overall between the two benefits of some significant sum. I was trying to avoid the drop for the longer term and I was asking if there was any way to challenge it as obviously it has affected lots of people as well as myself. 

I imagined that with managed migration I would not lose the disability premiums and then I would receive the Child element which would equate to the previous full entitlement to legacy. So I wouldn’t drop £3,500 per annum. Have I got that wrong? 

poppy123456

But not claiming UC means you are missing out on that much needed extra income, so i don't understand why you haven't claimed it if you knew you wouldn't be worse off.

Kitty1 said:

I imagined that with managed migration I would not lose the disability premiums and then I would receive the Child element which would equate to the previous full entitlement to legacy. So I wouldn’t drop £3,500 per annum. Have I got that wrong? 

Yes, you have got that wrong. You are comparing it to what you would be entitled to if you were claiming CTC.  As explained here by calcotti.

calcotti said:

OP, waiting for managed migration is a red herring. All managed migration does is guarantee that you will not get less (on the date of transfer) than you currently get on legacy benefits. It doesn’t increase your amount to some notional amount if you were getting benefits you are not actually getting.

You won't be decreasing your income by £3,500 anyway.

calcotti

Kitty1 said:

It is quite correct in that I would be better off moving to UC now. I completely understand that. I understood it back in June 2021 when I made the decision to go without it.

I’m finding this very confusing. On the one hand you say that you understood you would be better off moving to UC in June 2021. 

On the other hand you refer to losing £3500/annum by moving to UC. 

Kitty1 said:..what I am saying is a full entitlement on Legacy is £3,500 more than a full entitlement on UC but unfortunately I cannot access a full entitlement now due to not being able to claim CTC. 

You cannot and will never be able to access CTC so you do not have a full entitlement, as you put it, which includes CTC. It is pointless comparing your entitlement to UC with what you might have got if you were receiving Tax Credits. You aren’t getting Tax Credits and you cannot claim them so consideration of Tax Credits is irrelevant. 

Kitty1 said:. 

I was trying to go without it in the short term to try to keep the same amount of income that I would have had on a full entitlement Legacy ( ie: with the CTC) 

It is impossible for you to get that amount.

You can only only compare UC with the amount you get for the benefits you actually claim.

Kitty1 said:.. I was asking if there was any way to challenge it as obviously it has affected lots of people as well as myself. 

Governments are allowed to change regulations. Various legal challenges have been made to aspects of UC and some of these have resulted in changes but I think you need to take the answer to your question as no.

Kitty1 said:

I imagined that with managed migration I would not lose the disability premiums and then I would receive the Child element which would equate to the previous full entitlement to legacy. So I wouldn’t drop £3,500 per annum. Have I got that wrong? 

Yes you have got that wrong. As explained previously, managed migration will make sure that your UC will not be less than the total you currently get at the time of transfer. It simply says existing benefits equal X, UC calculation would be Y, if Y is less than X then an additional amount will be added to UC so that the UC payable = X. The calculation doesn’t protect individual bits of the calculation. 

As your UC entitlement appears to be higher than your existing benefits that managed migration guarantee is not relevant. 

(In fact under managed migration you might actually get less UC than if you naturally migrate because I think you might only get transitional migration protection and not the SDP transitional amount - however I’m not sure on that.)

Be aware that if you migrate now you will get SDP transitional protection of £405/month. This is a starting amount that reduces as other elements reduce.this means that even if benefits rise by 10% you would not get any increase because the increases to the other bits will be taken off the SDP element. Might need to do some calculations to see if, having missed it on 16 months already, it is better to claim now or to wait until mid April next year after benefit rates have increased (depending on what is announced on Thursday).

poppy123456

Looking back at the figures calcotti gave earlier your ESA amount is £1278.12/month.

Your UC would be £1747.39/month this figure is without any rent included, you would need to at your entitlement on top of this. It also includes the higher disabiled child element for your godson because you claim high rate care DLA for him.

That's a significant amount of money to have lost out on from June 2021. (almost £8,000)

The carers allowance would be paid separately with each of those calculations. This is based on the information you gave.

calcotti

poppy123456 said:

Looking back at the figures calcotti gave earlier your ESA amount is £1278.12/month.

Your UC would be £1747.39/month this figure is without any rent included, you would need to at your entitlement on top of this. It also includes the higher disabiled child element for your godson because you claim high rate care DLA for him.of those calculations. 

Obviously OP should check whether the AeSA calculation is correct,

That UC amount was with lower rate disabled child element because I’d missed the information confirming that high rate DLA care is payable. With the higher rate child disabled child element the UC would be £281.99 higher as per note 3 on the earlier post.

Whether or not the child element I included is appropriate depends on when he was born.

As per note 1 on the earlier post if OP is the person in ESA Support Group and is claiming CA then to get the carer element in UC to maximise income they need to switch the caring responsibility to partner.

poppy123456

calcotti said:

Obviously OP should check whether the AeSA calculation is correct,

Absolutely, the figures quoted are based on information given. No one should claim UC without being 100% certain they will be better off.

calcotti said:

That UC amount was with lower rate disabled child element because I’d missed the information confirming that high rate DLA care is payable. With the higher rate child disabled child element the UC would be £281.99 higher as per note 3 on the earlier post.

Yes, i did see that but was just quoting the figure again to include the higher disabled element. The purpose of my comment was because the OP seemed fixed on that £3,500 loss, despite saying they did understand.

calcotti

poppy123456 said:

…was just quoting the figure again to include the higher disabled element.

Sorry, misread the number (end of the day) and didn’t take in that the number was after the deduction for CA.

Have had a quick look at Tax Credit calculations and OP is correct about large difference between entitlement between UC entitlement and Tax Credits but for reasons stated during thread is irrelevant. I recall that on one of Osborne’s budgets when he was cutting benefits MP’s pressured him to reverse cuts on Tax Credits but not on UC and this may be behind the gap. Even at the time I thought MPs were missing the point given that Tax Credits were being phased out and replaced by UC.

calcotti

calcotti said: In fact under managed migration you might actually get less UC than if you naturally migrate because I think you might only get transitional migration protection and not the SDP transitional amount - however I’m not sure on that.

Have looked at that further. I think the situation is this

We calculated earlier your ESA amount is £1278.12/month (you can check whether or not this is correct).

Your UC with high rate disabled child element would be £1747.39/month (with some assumptions and ignoring housing costs). This figure includes £405 SDP element.

On current figures if you were going through managed migration you would not get the SDP element (because it's not, as I understand it, included in managed migration) so your UC calculation would be £1,342.39. This is still more than your existing ESA so the managed migration guarantee doesn’t kick in and the UC would be £1,342.39. 

Kitty1

Thank you for all information 

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