Lcwra & backpay

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Cake
Cake Online Community Member Posts: 3 Listener
edited April 2022 in Universal Credit (UC)
Hi all,

Went through three years of hell with the dwp where I was only claiming base UC. After the tribunal however I got awarded LCWRA.

Now my question is this, I was awarded back pay of over £8000 for the three year period. However this puts my savings over £10k currently.

Does the lump sum actually count towards the saving threshold, or is it mute due to the error by law of them not paying me over the years.

In my mind I would think the 8k is treated as not being applied to my savings for the remainder of my claim, as due to an error of law of not being paid.

But wanted to check, as I have looked around and some say it is only not classed for one year.

Kind regards.

https://ibb.co/bX7tcwp

The link to information I found on this.

Comments

  • poppy123456
    poppy123456 Online Community Member Posts: 64,463 Championing
    Hi,
    The backdated money is disregarded for 1 year. It's not classed as an official error so it's not disregarded for the life of your claim.
  • calcotti
    calcotti Online Community Member Posts: 10,001 Championing
    edited April 2022
    I'm not sure of the answer on this one.

    The general 12 month rule is here UC Regs 2013 Schedule 10https://www.legislation.gov.uk/uksi/2013/376/schedule/10
    Capital to be disregarded
    18.—(1) A payment received within the past 12 months by way of arrears of, or compensation for late payment of—
    (a) universal credit;
    (b) a benefit abolished by section 33 of the Act; or
    (c) a social security benefit which is not included as unearned income under regulation 66(1)(a) or (b).
    (2) “Social security benefit” means a benefit under any enactment relating to social security in any part of the United Kingdom and includes armed forces independence payment under the Armed Forces and Reserve Forces (Compensation Scheme) Order 2011.

    The extension for amounts over £5,000 is contained in

    Social Security (Treatment of Arrears of Benefit) Regulations 2018 Regulation 8

    https://www.legislation.gov.uk/uksi/2018/932/made

    which amends the Universal Credit (Transitional Provisions) Regulations 2014

    After regulation 10 of the Universal Credit (Transitional Provisions) Regulations 2014 insert the following—

    “Arrears of benefit disregarded as capital

    10A.—(1) This regulation applies in relation to the calculation of an award of universal credit (the “current award”) where the claimant has received a payment of arrears of benefit, or a payment made to compensate for arrears due to the non-payment of benefit, of £5,000 or more, and the following conditions are met—

    (a) the payment—

    (i) is received during the current award; or

    (ii) was received during an award of an existing benefit or state pension credit (the “earlier award”) and the claimant became entitled to the current award within one month of the date of termination of the earlier award;

    (b) in the case of a payment falling within sub-paragraph (a)(i), it would be disregarded from the calculation of the claimant’s capital if the claimant were entitled to an existing benefit or state pension credit;

    (c) in the case of a payment falling within sub-paragraph (a)(ii), it was disregarded from the calculation of the claimant’s capital for the purposes of the earlier award; and

    (d) the period of entitlement to benefit to which the payment relates commences before the first date on which, by virtue of section 33 of the Act (abolition of benefits), no claimant is entitled to an existing benefit.

    (2) Where this regulation applies, notwithstanding anything in the Universal Credit Regulations, the payment is to be disregarded from the calculation of the claimant’s capital for 12 months from the date of receipt of the payment, or until the termination of the current award (if later).”

    My reading of this is that arrears of benefit of a legacy benefit due to official error and over £5,000 and received during a UC award would be disregarded until the end of the UC award.

    I am not clear that it applies to arrears of UC itself.

  • Sue_Alumni
    Sue_Alumni Scope alumni Posts: 484 Empowering
    Hi @Cake
    I agree with @calcotti.  Where a person has received a payment of arrears of benefit of £5000 or more during their current UC award that capital is disregarded for 12 months from the date of receipt of the payment or termination of the UC award, whichever is the later. 
    There are some examples  to situations similar to yours given in ADM Chapter H2: Capital Disregards (publishing.service.gov.uk) see paras 1091 and 1092.
    I think the reference in these paragraphs to "official error" is misleading as it implies there has been an overpayment whereas this is a payment of arrears.   I've been trying to find some clarification of this but without success but these examples refer to "official error" where the decision was superseded at Tribunal ie, an arrears situation. 
  • calcotti
    calcotti Online Community Member Posts: 10,001 Championing
    edited April 2022
    Sue_Scope said:
    I agree with @calcotti.  Where a person has received a payment of arrears of benefit of £5000 or more during their current UC award that capital is disregarded for 12 months from the date of receipt of the payment or termination of the UC award, whichever is the later. 
    That's not what I said. I am not clear that for arrears of UC itself the disregard can extend beyond 12 months.
    calcotti said:I am not clear that it applies to arrears of UC itself.
    See if you can make sense of this explanatory memorandum
    The Social Security (Treatment of Arrears of Benefit) Regulations 2018 (legislation.gov.uk)
  • Cake
    Cake Online Community Member Posts: 3 Listener
    Thanks for the replies, I have also sent the question to the dwp and will let you know when a reply is received. Thankyou for the information all.
  • Sue_Alumni
    Sue_Alumni Scope alumni Posts: 484 Empowering
    Hi
    I couldn't make sense of the memorandum which is why I referred to the DWP's own guidance to its decision makers - ADM H2 - Capital Disregards.  Paragraph H2091 specifically refers to UC among the list of  benefits where arrears are disregarded for capital purposes in the manner previously discussed.
  • calcotti
    calcotti Online Community Member Posts: 10,001 Championing
    edited April 2022
    Sue_Scope said:
    Hi
    I couldn't make sense of the memorandum which is why I referred to the DWP's own guidance to its decision makers - ADM H2 - Capital Disregards.  Paragraph H2091 specifically refers to UC among the list of  benefits where arrears are disregarded for capital purposes in the manner previously discussed.
    Paragraph 2091 refers to the 12 month disregard. There is no doubt about that.
    What is not clear to me is whether the longer disregard for arrears over £5,000, which is what OP is asking about, as referred to in H2092 is applicable if those arrears are arrears of UC.
  • Cake
    Cake Online Community Member Posts: 3 Listener
    Hey all sorry to revive my old thread. Just still never got an answer to this. And unfortunately it's coming upon a year's time. I have asked other charities etc and awaiting responses, just wondered if anyone else had any upto date input.
  • Alex_Alumni
    Alex_Alumni Scope alumni Posts: 7,538 Championing
    I'm sorry you haven't managed to find an answer as yet @Cake and I'm afraid I'm no expert. If I can help with anything else in the meantime, let me know- for now I will bump up your discussion :) 

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