UNIVERSAL CREDIT (UC) LEAVING PAID WORK OR LOSING PAY VOLUNTARILY (LV) OR THROUGH MISCONDUCT

Transcription

1 Memo ADM 17/17 UNIVERSAL CREDIT (UC) LEAVING PAID WORK OR LOSING PAY VOLUNTARILY (LV) OR THROUGH MISCONDUCT Contents Paragraphs Introduction 1 Reduction of benefit 2-3 Conditionality group 4 Claimant subject to NWRR due to earnings 6 Claimant has final earnings 7 Claimant is in the re-award period (live service areas only) 8 Failure occurs before the claim to UC ( Pre-claim failure) 9 Duration of sanction 10 When the reduction is to have effect 11 Illustrative examples 14 Annotations Contacts INTRODUCTION 1 This memo is to clarify the guidance for decision makers in consideration of sanctions in respect of UC claimants who leave paid work or lose pay 1. voluntarily and for no good reason or 2. through misconduct. REDUCTION OF BENEFIT

2 2 Legislation 1 provides that an amount of an award of UC is to be reduced at the higherlevel where the claimant 1. falls within the all work-related requirements (AWRR) conditionality group 2 and 2. ceases paid work or loses pay 2.1 voluntarily and for no good reason or 2.2 through misconduct 3. Note: For guidance on conditionality groups where a claimant leaves paid work see paragraphs 4 to 9. For guidance on higher-level sanctions, the meaning of leaving voluntarily and misconduct see ADM Chapter K3. For guidance on good reason see ADM Chapter K2. 1 WR Act 12 s 26(1); 2 s 22; 3 s 26 (2)(d) 3 There are two types of failure for LV and misconduct. Failures that occur before a claim to UC is made ( pre-claim failures) and those that occur during the award of UC. The DM has to decide 1. when the failure has occurred and 2. whether the failure falls before the UC claim is made (i.e. occurs pre-claim ) and 3. whether the claimant falls into the AWRR conditionality group at the 3.1 date of the sanctionable failure for non pre-claim failures or 3.2 time the award of UC is made for pre-claim failures (see guidance at paragraph 9). The guidance at paragraph 2 sets out the basic legal provisions 1 to be able to sanction for LV and Misconduct failures. These would apply to UC claimants who are employed and also entitled to UC and then leave their job or reduce their earnings Note: A failure that occurs during an award of UC (non pre-claim ) still attracts a sanction at the higher-level. The claimant has become a burden (or increased their burden) on the welfare state due to leaving paid work or losing pay, it is just not subject to the further refinements afforded to failures which occur pre-claim (see paragraph 9). 1 WR Act 12 s 26(2)(d))

3 CONDITIONALITY GROUP 4 Unless it is a pre-claim failure (see paragraph 9), in order to impose a sanction for LV or misconduct the claimant must fall in the AWRR conditionality group at the time of the failure 1. It is therefore important that the claimant is in the appropriate conditionality group in respect of the relevant claim to UC for the DM to be able to consider a higher-level sanction (see further guidance at paragraph 5). 1 WR Act s 26(2) 5 ADM J2120 provides guidance on AWRR and J2121 provides that, unless a determination has been made otherwise, claimants are subject to AWRR and this will apply from the first day of the first Assessment Period in relation to the award. See further guidance where the claimant has left paid work or lost pay and they 1. are subject to NWRR due to earnings (see paragraph 6) or 2. have final earnings which equal or exceed the CET (see paragraph 7) or 3. are in the re-award period (live-service areas only) (see paragraph 8). Note: Where the failure occurs pre-claim see guidance at paragraph 9. Claimant subject to NWRR due to earnings 6 Those claimants who 1. are subject to no work-related requirements (NWRR) solely because of 1.1 hours worked 1.2 earnings or income or 1.3 the amount of UC and 2. leave paid work or lose pay through 2.1 misconduct or 2.2 voluntarily and for no good reason cease to be in the NWRR group and fall in the AWRR group instead from the first day of the Assessment Period in which the change of circumstances occurred 1. Note 1: This provision covers those claimants who have an existing UC award and

4 are in the NWRR group because they (or their partner) are working enough, i.e. UC is reduced due to earnings but they still receive some UC. If they stop working or reduce their hours or pay so their earnings fall below their CET they will go back into AWRR conditionality and can face a sanction for leaving work or losing pay voluntarily or through misconduct. Note 2: This provision however does not cover a claimant who loses UC entitlement through earnings and then either stops working or reduces hours or pay so they are entitled to UC again. Where there is nil entitlement no conditionality applies. 1 WR Act 12, s 26(3) Claimant has final earnings 7 Where final earnings equal or exceed the CET but the claimant retains some entitlement to UC then 1. those earnings can be disregarded for conditionality purposes and 2. the claimant can be placed in the AWRR group 1. Note: For full guidance on conditionality groups and where the claimant receives final earnings see ADM Chapter J2. 1 UC Regs, reg 90(6)(b) Claimant is in the re-award period (live service areas only) 8 If a claimant is in a re-award period they 1. keep the same assessment period as the previous award and 2. are allocated to a conditionality group from the date they accept their claimant commitment. Where an award is made without a claim, a person is treated as having accepted a claimant commitment from the first day of the first assessment period in relation to the award 1. Any claimant leaving work or losing pay who returns to UC through the reaward process (live service areas only) should be placed in the AWRR group from that same date (i.e. the first day of the relevant award). Note 1: In these cases the claimant was not in the AWRR or the NWRR at the date of the sanctionable failure as no conditionality can be applied to a period of nil entitlement and it is not a pre-claim failure as no claim is required, so no sanction for LV or Misconduct can be applied.

5 Note 2: In full service (digital) areas the claimant has to make a claim to return to UC. There is no automatic re-award process therefore if the claimant leaves work or loses pay, the failure will be a pre-claim failure and falls to be considered in the normal way (see guidance at paragraph 9). 1 UC Regs, reg 15(2) FAILURE OCCURS BEFORE THE CLAIM TO UC ( PRE-CLAIM FAILURE) 9 Certain refinements are added within the legislation 1 where the failure occurs before the claim to UC (i.e. is a pre-claim failure). Those refinements provide that a higherlevel sanction can be imposed on a claimant 1. who is in the AWRR conditionality group at the time the award of UC is made and 2. leaves paid work or loses pay 2.1 voluntarily for no good reason or 2.2 through misconduct 1. Note 1: If the failure does not occur pre-claim (i.e. it occurs during a claim) see guidance at paragraph 3. Note 2: Claimants are subject to AWRR and this will apply from the first day of the first Assessment Period in relation to the award (see full guidance on AWRR in ADM Chapter J2). However also see paragraph 7 if the claimant has final earnings. 1 WR Act 12, s 26(4) DURATION OF SANCTION 10 Regulations 1 determine the duration of a higher-level sanction (see full guidance in ADM Chapter K3). It is only when the failure occurred pre-claim that the sanction 1. cannot count towards escalation to the next penalty level 2 and 2. reduces by the number of days between the date of the failure and 2.1 the date of the relevant claim 3 or 2.2 when the work was due to end if for a limited period 4.

6 Note: It is only if the previous sanctionable failure was not a pre-claim failure it can count towards escalation. This does not preclude a sanction from being imposed, where a subsequent pre-claim failure without good reason occurs within 365 days, it just does not escalate to the next level. 1 UC Regs, reg 102(2); 2 reg 102(3); 3 reg 102(4)(a); 4 reg 102(4)(b) When the reduction is to have effect 11 Regulations 1 determine when the reduction is to have effect. Where no other reductions are running the reduction period starts either in the 1. assessment period in which the decision to make the reduction is made or 2. following assessment period 1. Note 1: Where other sanctions are already running, subject to the total outstanding reduction period limit, a new reduction period starts on the expiry of the existing one (see full guidance in ADM Chapter K8). Note 2: A claimant cannot be sanctioned for a period where there is no entitlement to UC but also see the guidance at paragraph 12 where an award of UC terminates and there is a sanction already running. Note 3: If the award is reduced to nil due to a sanction there is no UC personal allowance in payment but there is still entitlement to benefit and a sanction would apply to that period as normal (see further guidance in ADM Chapter K8). 1 UC Regs, reg If an award of UC terminates and there is an outstanding reduction period, subsequent days count as if an actual daily reduction of benefit were being applied, thus having the effect that periods of no entitlement to UC are deducted from the reduction period and count as days served 1. 1 UC Regs, reg Where the determination to sanction is not made before the claimant leaves benefit the reduction period starts as if the decision had been made on the day before the previous award terminated 1 (see Example 6 at paragraph 14 and further guidance in ADM Chapter K8). 1 UC Regs, reg 107(2)

7 Illustrative examples 14 The following are examples of LV cases for illustrative purposes only to clarify the application of the guidance in this memo. Example 1 Mia is in full time employment and leaves her job on for no good reason. On she claims UC. After applying waiting days, Mia s Assessment Period runs from the 21st of each month. Mia receives final earnings on and has nil entitlement to UC for her first Assessment Period from to Mia is awarded UC from The failure on is a pre-claim failure. Mia has left full time work voluntarily and with no good reason before the claim to UC. Mia is placed in the AWRR group from , the date when UC is awarded. This is Mia s first higher-level sanctionable failure and on the DM determines a 91 days reduction is to apply. A period of 2 days is deducted from the 91 day reduction period, for the period from (the day after the date of failure) to (the day before the date of claim to UC). The balance of the reduction period (i.e. 89 days) would be applied commencing from the first day of the Assessment Period in which the DM determines the sanction (i.e. from ). Example 2 On Sebastian leaves his job for no good reason and he claims UC that day. After applying waiting days, Sebastian s Assessment Period runs from the 5th of each month and his first Assessment Period runs from to The failure on is a pre-claim failure and Sebastian would fall in the AWRR group from Sebastian receives a payment of final earnings on Whilst the final earnings do not reduce his UC award to nil entirely for that Assessment Period, they are above the CET and would normally place him in the NWRR group for that Assessment Period. As there remains some entitlement to UC and Sebastian does not have a new job to move into in the near future, the DM disregards his final earnings in order to place him in the AWRR group from

8 Within 365 days there has been a previous higher-level failure for which a 91 day sanction was imposed which was also a pre-claim failure and so cannot count when deciding on the duration of the reduction period for the failure on On the DM decides a 91 day sanction is appropriate for the LV failure on A period of 6 days is deducted from the 91 days for the period (the day after the date of failure) to (the day before the date of the relevant award of UC). The balance of 85 days is applied and starts in the Assessment Period from Example 3 Dev is in receipt of UC and his Assessment Period runs from the 1st of each month. On Dev begins a job in which his earnings take him above the AET but below the CET. The change takes place in the Assessment Period running from to Dev remains in the AWRR group whilst working but no work availability or work search requirements are imposed upon him (i.e. a light-touch regime). He agrees a new claimant commitment on reflecting his changed circumstances and has a set requirement to notify losing pay or leaving paid work within 5 days. On Dev leaves his job with no good reason and receives a payment of final earnings which do not reduce his UC award to zero in that Assessment Period. The change takes place in the Assessment Period running from to and Dev reports the change on (see guidance in ADM K5077 for guidance to also consider a low-level sanction if the claimant fails to report the change within 5 days). Since Dev has been employed and also entitled to UC and then has left his job this is not a pre-claim failure but the DM still considers a sanction for LV. Dev is already in the AWRR conditionality group but with light touch requirements due to his employment. He left his job voluntarily and for no good reason, he does not have a job to move into shortly. The DM decides to disregard Dev s final earnings and also places him into the intensive regime AWRR group from (the first day of the assessment period in the relevant award). This is Dev s first higher-level sanctionable failure and so a 91day sanction is appropriate. On the DM applies a 91 day sanction to start in the assessment period to Example 4

9 Viola leaves her employment voluntarily for no good reason on and makes a claim for UC on After waiting days have been served her Assessment Period runs from the 7 th of each month. She then obtains further employment from to but still remains entitled to an award of UC throughout. On the DM considers whether a sanction can be applied for the LV on The failure on is a pre-claim failure and from Viola falls in the AWRR group even though due to her earnings in her new employment from she would be placed into the NWRR as her earnings are above the AET but below the CET. There are no previous higher-level sanctionable failures within 365 days. The DM determines a 91 day sanction would apply, less time already served by Viola between leaving her job on and making the claim for UC on (i.e (the day after the date of the failure) to (the day before the date of the relevant UC claim) = total of 55 days already served. The balance of the sanction (i.e. 36 days) would commence from the Assessment Period that includes the date of the DMs decision. Example 5 Michelle is in receipt of UC (live service area). Her Assessment Period runs from the 20th of each month. On Michelle begins a job and her earnings reduce her UC award to nil. Michelle s UC award ends on and she enters the re-award period. On Michelle reports that she lost her job on and received final earnings on that day which reduce her UC award to nil in the first assessment period ( ) of the re-award. As Michelle is within the re-award period she retains the same assessment period as in her previous award and the failure cannot be a pre-claim failure. Where an award is made without a claim a person is treated as having accepted a claimant commitment from the first day of the assessment period of the re-award and so Michelle is placed in the AWRR conditionality group from At the time of the failure, , Michelle was not in any conditionality group as she had nil entitlement and the failure cannot be a pre-claim failure as she is not required to make a new claim to receive UC, therefore no sanction can be applied.

10 Example 6 Casey leaves his job voluntarily and without good reason on (employment A), and then makes a claim for UC from (claim A). After waiting days have been served the first Assessment Period runs from to and he is placed in the AWRR group. Casey obtains full time employment for the period to (employment B) during which he is not entitled to an award of UC on account of his earnings. Employment B ended on as it was a short period contract and Casey is reawarded UC from (claim B). The award of UC from is not as a direct result of the claimant leaving employment A on but is as a result of employment B ending. To clarify : Claim A on is as a result of employment A ending on Casey left his job voluntarily for no good reason and Claim B on is as a result of employment B ending the contract of employment ended. The LV failure on is a pre-claim failure and Casey is in the AWRR group at the time the award of UC is made (i.e ). As the DM failed to make a determination to sanction before the claimant s relevant award of UC (claim A) terminated on the date of determination becomes the day before the last award terminated (in this case ) and the reduction is applied to the Assessment Period in which the determination is made therefore it would apply in the Assessment Period However Casey started work (employment B) on and so that award ended There are no previous higher-level sanctionable failures and a 91 day sanction would be appropriate. A period of 55 days would be deducted between the date of the failure and the date of claim A (i.e to ) which would leave a balance of 36 days to be served. The balance of 36 days would run from to in the background so all the days Casey was not entitled to benefit are days served. Therefore when he returns to UC on (Claim B) a balance of 6 days is left to be served of the sanction incurred in claim A. Example 7

11 Sunny is in full time employment and is suspended due to misconduct on He claims UC on After waiting days have been served the first assessment period runs from to but there is nil entitlement to UC due to earnings. On Sunny is sacked due to gross misconduct. The failure therefore falls in the first assessment period relevant to the award of UC where there is nil entitlement to UC and it is not a pre-claim failure. Sunny therefore does not fall in any conditionality group at the date of the failure and it is not a pre-claim failure so no sanction can be applied for the misconduct. ANNOTATIONS Please annotate the number of this memo (ADM Memo 17/17) against the following ADM paragraphs: J2093, J2120, K3024, K3026, K3028, K3032, and K3201 CONTACTS If you have any queries about this memo, please write to Decision Making and Appeals (DMA) Leeds, 1S25, Quarry House, Leeds. Existing arrangements for such referrals should be followed, as set out in Memo DMG 03/13 - Obtaining legal advice and guidance on the Law. DMA Leeds: May 2017

12 The content of the examples in this document (including use of imagery) is for illustrative purposes only