Housing Benefit and Council Tax Benefit Circular. For information

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1 Housing Benefit and Council Tax Benefit Circular Department for Work and Pensions The Adelphi, 1-11 John Adam Street, London WC2N 6HT HB/CTB A18/2008 ADJUDICATION AND OPERATIONS CIRCULAR WHO SHOULD READ All Housing Benefit (HB) and Council Tax Benefit (CTB) staff ACTION For information SUBJECT Guidance on the content of The Employment and Support Allowance (Miscellaneous Amendments) Regulations SI 2008/2428 Guidance Manual The information in this circular does not affect the content of the HB/CTB Guidance Manual. Queries If you want extra copies of this circular/copies of previous circulars, they can be found on the website at have any queries about the - technical content of this circular, contact Christine Watkins Christine.Watkins@dwp.gsi.gov.uk - distribution of this circular, contact Corporate Document Services Ltd Orderline orderline@cds.co.uk Crown Copyright 2008 Recipients may freely reproduce this circular.

2 Contents para Guidance on the content of The Employment and Support Allowance (Miscellaneous Amendments) Regulations SI 2008/2428 Introduction... 1 Coming into force... 3 Background... 4 When a component should be awarded... 6 The component to be awarded The Enhanced Disability Premium easement Awarding HB prior to the customer occupying the dwelling Other amendments Removing the provision in respect of non-dependant deductions The effect on the non-dependant deferral provisions General tidying amendments... 25

3 Guidance on the content of The Employment and Support Allowance (Miscellaneous Amendments) Regulations 2008 SI 2008/2428 Introduction 1 This circular provides you with details of the Employment and Support Allowance (Miscellaneous Amendments) Regulations 2008, SI 2008/2428. The SI contains amendments to The Employment and Support Allowance (Consequential Provisions) Regulations 2008 (SI 2008/1082) (The ESA(CP) Regulations) which themselves contained amendments to HB/CTB to take account of the introduction of ESA on Please note that the changes in SI 2008/2428 are made to confirm the original policy intention; there are no policy changes to those detailed in HB/CTB Circular A11/2008. However, there is one new provision which relates to the regulation for awarding HB prior to the customer moving into the dwelling. Coming into force 3 Like the ESA(CP) Regulations and the ESA Regulations themselves, SI 2008/2428 will come into force on 27. Background 4 Circular A11/2008 contained guidance on the effects of the introduction of ESA on HB/CTB. Following its issue we have identified areas where the regulations could be interpreted in a way that would not deliver the policy intention. The areas are when a component should be awarded the component to be awarded, and to whom the easement in respect of the Enhanced Disability Premium should apply SI 2008/2428 contains amendments to confirm the original policy intentions 5. SI 2008/2428 also includes a provision allowing receipt of a component to act as a substitute for receipt of a disability premium. This is in provisions for determining when HB can be awarded prior to the customer moving into the dwelling, and makes general tidying up changes to the ESA(CP) Regulations, in particular - by removing an unnecessary provision for determining the effective date of deduction in respect of a non-dependant, aged less than 25, who is awarded main phase ESA(IR) continued

4 - to the references to limited capability for work and main phase employment and support allowance by adding references to limited capability for work-related activity and contributory employment and support allowance When a component should be awarded 6 HB/CTB Circular A11/2008, para 65 et seq included guidance on the effective date in HB/CTB of the changeover from assessment phase to main phase ESA. The basic rule is that the effective date of the change is the start of the first benefit week following the date entitlement to an ESA component begins, or if entitlement to an ESA component begins on a Monday, that same Monday 7 The policy intention is that the component awarded in ESA should be awarded in HB/CTB and the increased amount of ESA taken into account, all at the same time. 8 Normally this would be from week 14 of the ESA claim. However, the wording of the ESA(CP) regulations could be interpreted to mean that the component could be awarded in HB/CTB from the date the decision was made in ESA that a customer had entitlement to a component. If, as is the policy intention, that decision is made before the end of the assessment phase, it would mean that the component would be awarded in HB/CTB from the date of that decision, but the increased amount of ESA would not be taken into account until it was paid. Example Decision that the Work Capability Assessment threshold is met made on 6 January 2009, the assessment phase is due to end on 5 February The existing provisions could be interpreted to mean that the component should be awarded in HB on 12 January 2009 and the increased ESA taken into account on 9 February Regulation 26 of SI 2008/2428 replaces the provisions in the ESA(CP) Regulations to secure the original policy intention that the HB/CTB applicable amount should be increased and the increased ESA taken into account from the start of the benefit week in which ESA main phase is awarded if the decision is made on a Monday or the start of the following benefit week if the decision is made on any other day of the week In the example above the effective date would be 9 February 2009.

5 The component to be awarded 10 HB/CTB Circular A11/2008, para 45 et seq contain guidance on which component should be awarded where the customer has a partner and neither is aged 60 or over. Para 47 provides that when both members of a couple are ESA(C) or credits only customers and both have entitlement to a component, the component appropriate to the customer must be awarded. 11 However the wording of the provision in the ESA(CP) Regulations could be interpreted to mean that either component could be awarded and that need not be the one appropriate to the HB/CTB customer. 12 Regulation 31(c) of SI 2008/2428 replaces the provisions in the ESA(CP) Regulations for awarding a component to put beyond doubt that only the component relating to the customer may be awarded in HB see the revised para 22. The CTB equivalent is in regulation 39(c). The Enhanced Disability Premium easement 13 HB/CTB Circular A11/2008 para 61 et seq included guidance on when the easement allowing automatic entitlement to the Enhanced Disability Premium applies and explains that, in line with the ESA policy, the easement can only apply where the HB/CTB customer is entitled to the support component. 14 The wording of the existing provision in the ESA(CP) Regulations could be interpreted to mean that the easement could apply where either the customer or partner is entitled to the support component. 15 Regulation 31(b) of SI 2008/2428 replaces the new sub-paragraph 15(1)(a) of Schedule 3 to the HB Regulations to make clear that the easement can only apply where the customer has or is treated as having limited capability for work-related activity. Regulation 39(b) contains the CTB equivalent. Awarding HB prior to the customer occupying the dwelling 16 Generally, HB cannot be awarded before the customer moves into the dwelling. However, it may be awarded prior to moving in where the move was delayed pending the outcome of an application for a social fund payment to meet a need arising out of the move or in connection with the setting up the home in the dwelling, and the customer s applicable amount includes a Disability Premium See HB regulation 7(8)(c)(ii).

6 17 As you know the amendments made by the ESA(CP) Regulations included provisions where receipt of a component acts as a substitute for receipt of the Disability Premium; eg receipt of a component means entitlement to the 20 earnings disregard. However, the ESA(CP) Regulations did not contain an amendment to regulation 7(8)(c)(ii) so that a component would act as a substitute for the Disability Premium. 18. Regulation 28 of SI 2008/2428 contains such an amendment. The effect is to ensure that ESA customers are not disadvantaged compared with their IB counterparts. It does not produce an exact match but that is because the structure of ESA is different. Other amendments Removing the provision in respect of non-dependant deductions 19 The policy in respect of non-dependant deductions from HB is that where a nondependant aged less than 25 moves on to main phase ESA(IR), a deduction should be made from week 14 of the non-dependant s ESA(IR) claim if the decision to award main phase is made before the 13 week assessment phase has ended or from the week following the decision to award main phase is made if the decision is made after the 13 th week of the claim 20 This is because the ESA(IR) personal allowance will increase to the age 25 or over rate at that point. HB/CTB Circular A11/2008 para 109 et seq contain more detailed guidance. The provision was in regulation 3 of the ESA(CP) Regulations which inserted paragraph (16) into the HB/CTB (Decisions and Appeals) Regulations The provision was unnecessary because the existing provisions in the HB/CTB(D&A) regulations and the HB and HB(SPC) regulations deliver the policy intention. Therefore, paragraph (16) has now been removed. 22 There will only be a change of circumstances in HB when the non-dependant aged less than 25 is awarded main phase ESA(IR). If the decision to award main phase is made during the assessment phase, there will be no change to HB until week 14 when the main phase rate becomes payable. Under the provisions of the HB/CTB(D&A) Regulations the effective date is determined using HB reg 79 or HB(SPC) reg 59 and will be the start of the benefit week immediately following the date the change occurred. Example 1 Non-dependant aged 21 is awarded ESA(IR) assessment phase rate from 17 December On 5 February 2009 the Secretary of State decides she is entitled to a support component. Main phase ESA(IR) will start from 18 March The change actually occurs on 18 March 2009, the effective date for the HB deduction will be 23 March 2009.

7 23 If the decision to award main phase is made after the end of the assessment phase, there will be no change to HB until main phase ESA becomes payable and that will be the date the decision is made. Again, under the provisions of the HB/CTB(D&A) Regulations, the effective date is determined using HB reg 79 or HB(SPC) reg 59 and will be the start of the benefit week immediately following the date the change occurred. Example 2 The same non-dependant but the decision to award main phase ESA(IR) is delayed until 16 April The date the change to HB occurs is the date the decision to award main phase ESA is made (16 April 2009), the effective date is 20 April The effect on the non-dependant deferral provisions 24 If the HB customer is aged 65 or over, the deferral provisions in respect of the nondependant deduction would apply. The 26 week deferral period would start from the date the change occurred. In Example 1 the period would start on 18 March 2009, in Example 2 on 16 April The deferral provisions are in HB(SPC) Regulation 59(10) (13). General tidying amendments 25 The other amendments made by SI 2008/2428 are to simplify references and make general tidying up changes. The main ones are including a definition of limited capability for work and limited capability for work-related activity in the interpretation provisions of the HB and CTB regulations aligning the definition of main phase employment and support allowance across all four sets of HB/CTB regulations inserting the definition of contributory employment and support allowance, already in the HB, CTB and CTB(SPC) regulations, into the HB(SPC) Regulations