Welfare Reform Act 2012

Commentary on Sections

Part 1: Universal credit

Section 1: Universal credit

28. Part 1 creates the legislative framework for universal credit, a social security benefit available to people in and out of work.

29. Universal credit may include, depending on the claimant’s circumstances, a standard allowance, an amount for responsibility for children or young persons, an amount for housing costs and amounts for other particular needs or circumstances.

Section 2: Claims

30. Section 2 contains provisions about claims for universal credit. A claim may be made either by a single person or, in the case of a couple, jointly.

31. Subsection (2) enables the Secretary of State to make regulations setting out circumstances in which a member of a couple may make a single person claim. This may be used, for example, where one member of a couple does not have a right to reside in the UK, and so is not entitled to universal credit. The other member of the couple would then be able to make a claim as a single person.

Section 3: Entitlement

32. A single person is entitled to universal credit if they meet both the basic conditions and the financial conditions. For couples, both claimants must meet the basic conditions and they must jointly meet the financial conditions.

Section 4: Basic conditions

33. The basic conditions are that a person must be at least 18 years old, under the qualifying age for state pension credit, in Great Britain, and not receiving education. From April 2010 the qualifying age for state pension credit is increasing gradually from 60 to 65, in line with women’s state pension age. The claimant must also accept a claimant commitment, which contains the requirements that a claimant will be expected to meet in return for receiving universal credit. These requirements are set out in sections 15 to 18 and 23.

34. Subsection (2) allows for regulations to provide for exceptions to be made to the requirement to meet any of the basic conditions. In the case of joint claimants an exception may apply to either or both of the claimants.

35. Subsection (3) provides a regulation-making power to set out cases in which a different lower age limit will apply. This allows universal credit to be made available to people who are younger in specific circumstances, such as in the case of lone parents who are under 18 or young people who are estranged from their parents.

36. Subsection (5)(a) allows for regulations to specify whether or not a person is to be treated as being in Great Britain. For example, a person might be treated as being in Great Britain if they are employed on board a ship or working on an oil rig. Regulations may also specify when a person is to be treated as not in Great Britain because they are not considered to be habitually resident here. Subsection (5)(b) enables a claimant to continue to be entitled to universal credit if they leave the country temporarily. Subsection (5)(c) enables the universal credit provisions to be modified in relation to a person who leaves the country temporarily.

37. Under subsection (6), regulations may be made setting out how receiving education is to be defined in relation to universal credit and to allow for provisions to treat people in particular circumstances as receiving or not receiving education. Under subsection (7) a person may be treated as having accepted or not accepted a claimant commitment in prescribed circumstances. The first regulations made under subsection (7) will be subject to the affirmative resolution procedure.

Section 5: Financial conditions

38. Section 5 explains the financial conditions. Subsection (1) provides that entitlement is dependent on a claimant’s capital and income. Subsection (1)(a) provides for the capital thresholds for entitlement to universal credit to be set out in regulations. Subsection (1)(b) also allows for regulations to prescribe a minimum amount of universal credit that is payable, below which there is no entitlement. This could be used so that a person who would be entitled to only a very small amount of universal credit would not be entitled.

39. Subsection (2) provides that in the case of joint claimants their combined capital must be below the prescribed thresholds, and provides an equivalent power to prescribe a minimum amount that is payable.

40. The first regulations made under subsections (1)(a) and (2)(a) will be subject to the affirmative resolution procedure.

Section 6: Restrictions on entitlement

41. Section 6 allows the Secretary of State to place certain restrictions on entitlement to universal credit.

42. Under subsection (1)(a) regulations may specify circumstances in which a person will not be entitled to universal credit even though they meet the conditions of entitlement. This will be used to prevent entitlement to universal credit arising in specific situations (for example, where it would be inappropriate such as in the case of prisoners).

43. Subsection (1)(b) prevents a person from being entitled to universal credit if they only meet the conditions of entitlement for a short period, to be prescribed in regulations.

44. Subsection (1)(c) provides that a person may not be entitled to universal credit for a short time after meeting the conditions of entitlement. This period will be determined in regulations. This recreates the waiting days that currently apply in JSA and ESA, and is intended to avoid the administrative costs involved in making awards for very short periods of entitlement.

45. Subsection (2) ensures that the number of days prescribed under paragraphs (1)(b) or (c) can be no more than seven.

46. Regulations made under subsection (3) may set out circumstances in which the restrictions on entitlement in subsections (1)(b) and (1)(c) do not apply.

Section 7: Basis of awards

47. Section 7 provides that an award of universal credit is to be payable in respect of an assessment period. This period will be prescribed in regulations. Under subsection (3) regulations will also allow for universal credit to be payable in respect of part of an assessment period, for example to deal with a part-period at the beginning or end of an award.

Section 8: Calculation of awards

48. Section 8 sets out how the amount of universal credit a claimant receives will be calculated. For each claimant there is a “maximum amount” made up of the different elements (set out at greater length in sections 9 to 12). Sums may then be deducted from this maximum amount in respect of a claimant’s earned income, such as wages, and unearned income, such as pension income. Regulations will prescribe how income is calculated and taken into account for universal credit. Paragraph 4 of Schedule 1 contains further provisions about the calculation of income and capital. Under universal credit earned and unearned income will be treated differently.

49. The amount of universal credit will be reduced in respect of a claimant’s earned income. Claimants may be allowed to receive a certain amount of earned income before their universal credit award begins to reduce. The amount of income to be disregarded may differ depending on a household’s circumstances. The level of these disregards will be set in regulations under the powers provided in paragraph 4 of Schedule 1. Earnings disregards will be per household and where the conditions for more than one disregard are satisfied, people will get the highest disregard only.

50. Once earnings are above the level to be disregarded, the award of universal credit will be reduced at a constant rate for each extra pound earned. This rate will be determined in regulations made under subsection (3)(a). The first regulations made under subsection (3) will be subject to the affirmative resolution procedure.

51. Some unearned income, which may include income from other benefits such as disability living allowance or the new personal independence payment, may be completely disregarded and not affect the amount of a person’s universal credit award. Other unearned income may reduce a claimant’s award.

Section 9: Standard allowance

52. Section 9 provides for universal credit to include a standard allowance which will provide an amount for basic living costs. Essentially, the standard allowance for universal credit is intended to mirror the comparable standard rates currently in JSA and ESA.

53. Subsection (3) allows for circumstances where an award will not include a standard allowance. For example, a standard allowance will not be included for prisoners on remand (but an amount in respect of housing costs could be included in an award for such a claimant).

54. The first regulations made under subsections (2) (amount of standard allowance) and (3) (exceptions) will be subject to the affirmative resolution procedure.

Section 10: Responsibility for children and young persons

55. Section 10 provides that where claimants have responsibility for dependent children or qualifying young people, an amount per child in respect of extra living costs may be included in the universal credit award. Under subsection (2) an extra amount may be included in respect of a disabled child or young person. The rate of the amount for children and young persons, and any extra amounts for disabled children, including any amount for more severely disabled children, will be prescribed in regulations under subsection (3). Subsection (4) allows for regulations to set out circumstances where an award will not include an amount in respect of responsibility for a child or qualifying young person.

56. The first regulations made under subsections (3) and (4) will be subject to the affirmative resolution procedure.

57. A qualifying young person will be a person over the age of 16 who meets other conditions to be set out in regulations under subsection (5). This will allow families to continue to receive support for young people over the age of 16 who are part of the household and continue in full-time, non-advanced education.

Section 11: Housing costs

58. Section 11 provides for an amount to be included for housing costs. A person’s maximum amount may include an amount for housing costs if the claimant is liable to make payments on their home. This could be in the form of rent, mortgage costs or other housing-related costs. Where the amount for housing relates to a liability to pay rent, it is intended that the amount will be calculated with reference to a claimant’s household size and circumstances as well as their actual rent, as is the case currently in housing benefit. The detailed rules for calculating the amount will be set out in regulations under subsection (4).

59. Regulations under subsection (5) may allow for circumstances where an award will not include an amount for housing at all, as well as for an amount for housing not to be included until a prescribed time or for its inclusion to end after a prescribed period. This may, for example, be used to prevent a person from receiving support for mortgage costs for a period at the beginning of their claim, as is currently the case in income support, or to maintain the current limit on how long a claimant may receive support for mortgage costs.

60. The first regulations made under this section will be subject to the affirmative resolution procedure.

Section 12: Other particular needs or circumstances

61. Section 12 provides a regulation-making power to prescribe amounts to be included in the universal credit award for other needs or circumstances, which would be extra elements in addition to the standard allowance. The Government intends to use these powers to include additional amounts for people who are at risk of having longer durations out of work, where a person is assessed as having limited capability for work or limited capability for work-related activity because of their physical or mental condition. An amount may also be included for carers, such as claimants who have regular and substantial caring responsibilities for a severely disabled person. It is also the Government’s intention to provide an amount for working claimants who pay for formal childcare in respect of a qualifying child or children. Regulations may specify or provide for the determination or calculation of the rates of any such additional amounts.

62. Under subsection (4) additional amounts may be included in an award after a prescribed time or may not be included after a prescribed period. This may be used, for example, to prevent an award from including an amount in respect of limited capability for work or work-related activity until such time as a claimant has completed an assessment period and taken part in a work capability assessment. This is currently the case for the work-related activity component and the support component in ESA.

63. The first regulations made under this section will be subject to the affirmative resolution procedure.

Section 13: Work-related requirements: introductory

64. Section 13 sets out the four different types of work-related requirements. The requirements which any particular claimant may be expected to meet depend on which of four groups they fall into. Sections 15 to 18 define the four different types of work-related requirements, and sections 19 to 22 set out which of these requirements may be imposed on different groups of claimants.

65. The requirements a claimant may be expected to meet will vary depending on their circumstances and capability for work. These circumstances will include being a responsible carer for a child of a particular age.

Section 14: Claimant commitment

66. The responsibilities a claimant has to meet, including relevant work-related requirements, may be recorded in the claimant commitment, as set out in section 14. The commitment may be updated and changed as necessary. To be entitled to universal credit, a claimant will normally need to accept a claimant commitment when they claim and whenever the commitment is changed.

67. Information that may be recorded in the claimant commitment, in addition to any work-related requirements, includes any information prescribed in regulations under subsection (4) or any other information specified by the Secretary of State. This may, for example, include the general duty to report changes of circumstance which affect the claimant’s entitlement or rate of award.

Section 19: Claimants subject to no work-related requirements

68. Section 19 sets out the groups of claimants on whom the Secretary of State cannot impose any work-related requirements. These include:

• claimants who have limited capability for both work and work-related activity owing to a physical or mental condition. Section 37 contains further provisions on limited capability for work and work-related activity and their assessment (currently done through the work capability assessment);

• responsible carers of a child under the age of one; and

• any claimant with regular and substantial caring responsibilities for a severely disabled person.

69. Subsection (2)(d) allows for regulations to add additional categories of claimant to the group subject to no work-related requirements. This may include some groups who can currently claim income support and who are not required to prepare for work, such as people serving on a jury. The first regulations made under this subsection will be subject to the affirmative resolution procedure.

70. Subsection (3) provides that these regulations may identify additional categories of claimant by reference to hours worked, earnings, income or the amount of universal credit paid (or any combination of these factors). This can be used to establish a “threshold” relating to a claimant’s level of employment. Regulations may provide that where a claimant falls above any such threshold the Secretary of State may not impose any work-related requirements on them.

71. Subsection (4)(a) makes clear that for claimants in a couple any such regulations can either be framed in relation to the individual claimant (such as the hours the individual works) or to the couple together (such as the hours both members of the couple work combined). Subsection (4)(b) ensures that regulations can enable the Secretary of State to determine any relevant matters such as hours, earnings, or the amount of universal credit on the basis of an estimate or calculation. For example, where a claimant has a variable working pattern regulations may enable the Secretary of State to determine whether a claimant should be subject to no work-related requirements based on estimated earnings.

72. Subsection (6) of section 19 defines a responsible carer as either a lone parent or a member of a couple nominated as the lead carer. Regulations made under paragraph 5(2) of Schedule 1 may make provision about nominations.

Section 20: Claimants subject to work-focused interview requirement only

73. Section 20 sets out the groups of claimants on whom the Secretary of State may only impose a work-focused interview requirement. A claimant will fall into this group if they are the responsible carer of a child who is at least one but below a prescribed age which may not be less than three. Regulations may also specify other descriptions of claimants who would fall into this group.

Section 15: Work-focused interview requirement

74. Section 15 defines the work-focused interview requirement. These interviews are to discuss the steps that a claimant might take (immediately or in the future) to increase their chances of getting work, increasing the number of hours they work or getting work that is better paid. Regulations under subsection (2) will set out in more detail the purpose of work-focused interviews.

Section 21: Claimants subject to work preparation requirement

75. Section 21 sets out the groups of claimants on whom the Secretary of State may only impose work preparation and work-focused interview requirements. A claimant in this group may not be required to look for or be available for paid work. A claimant will fall into this group if it is determined that they have limited capability for work owing to a physical or mental condition, or if they fall into another description prescribed in regulations. Such regulations must include a responsible carer of a child aged three or four where such a person does not fall into the group which may only be subject to a work-focused interview requirement.

Section 16: Work preparation requirement

76. Section 16 defines the work preparation requirement as actions specified by the Secretary of State in order to increase a claimant’s chances (immediately or in the future) of getting work, increasing the number of hours they work or getting work that is better paid. Subsection (3) provides examples of the types of activities that could be specified, such as undertaking a work placement or work experience, participating in a training course or writing a CV, but this is not an exhaustive list. Regulations may set out other actions or provide more detail about the actions listed.

77. Subsection (4) makes clear that a work preparation requirement may include taking part in a work-focused health-related assessment. These will be carried out by a health care professional and will provide information about the claimant’s capabilities and steps which might be taken to improve their mental or physical health. Subsection (6) defines what is meant by a health care professional.

Section 22: Claimants subject to all work-related requirements

78. Section 22 provides that a claimant may be subject to all work-related requirements if they do not fall into one of the previous three groups. Except in prescribed circumstances a person in this group must always be subject to the requirements to search for work under section 17 and be available for work under section 18. This is similar to the entitlement conditions that JSA claimants must currently meet.

Section 17: Work search requirement

79. Section 17 defines the work search requirement. This requirement is in two parts: a general requirement to take all reasonable action to obtain paid work and a requirement to take any particular action specified by the Secretary of State, such as applying for a specific job or registering with a particular recruitment agency. Subsection (3) sets out examples of the kinds of actions a claimant may be required to undertake, and regulations may set out other actions or provide more detail about the actions listed. Subsection (2) allows the Secretary of State to specify an amount of time which must be devoted to an action.

80. Typically claimants in this group will be required to look for any reasonable employment. However, subsection (4) enables limitations to be placed on the work certain claimants in certain circumstances must look for. Limitations can either be indefinite or for a particular period. Subsection (5) includes examples of the types of limitations which may be applied. Limitations can be imposed through regulations or specified by the Secretary of State.

Section 18: Work availability requirement

81. Section 18 defines the work availability requirement. This is a requirement that the claimant is able and willing immediately to take up paid work, increase the number of hours they work or get work that is better paid. Subsection (3) allows for regulations to place limitations on the work a claimant must be available for. These may match any limitations imposed on the work search requirement under section 17. Again, limitations may be indefinite or for a particular period, and may be specified by the Secretary of State or imposed through regulations. Subsection (5) provides for regulations to define what is meant by being able and willing immediately to take up work, allowing the work availability requirement to be relaxed where it would not be possible for the claimant to take up work straight away. The first regulations under subsections (3) and (5) will be subject to the affirmative resolution procedure.

82. If a claimant moves from one group to another then any work-related requirements which may not be imposed on the group the claimant moves to automatically cease. For example, any work search, work availability and work preparation requirements would no longer apply if a claimant moves from the group subject to all work-related requirements to the group who may only be subject to work-focused interviews.

Section 23: Connected requirements

83. Section 23 provides for other requirements which can be placed on claimants in connection to the four work-related requirements. Subsection (1) allows the Secretary of State to require a claimant to participate in an interview at a particular time and place. This interview may be for any purpose relating to the imposition of a requirement, verification that a requirement is being met or helping the claimant to comply.

84. Under subsection (3) a claimant may be required to confirm their compliance in a particular way and provide evidence that requirements are being met. For claimants subject to work search and work availability requirements this can be used to require them to declare on a regular basis that they are meeting all the requirements placed upon them.

85. Subsection (4) provides that claimants may be required to report certain changes of circumstance which may affect the work-related requirements that are imposed on them, or that they should become subject to, such as leaving a job.

Section 24: Imposition of requirements

86. Section 24 contains provisions about the imposition of requirements on claimants. Subsection (1)(a) allows for regulations to prescribe circumstances in which specific requirements must or must not be imposed on certain claimants. Subsection (1)(b) does the same for any action which may be specified by the Secretary of State. This can be used to prevent the imposition of requirements where it would be inappropriate to do so. Subsection (1)(c) allows for regulations to set parameters around the detail of any action that may be required by the Secretary of State. This may be used, for example, to prescribe a maximum number of interviews a claimant could be expected to attend in any given period.

87. Subsection (2) provides that when deciding whether a work-focused interview requirement or a particular action under a work preparation or work search requirement should be imposed the Secretary of State must take regard of any matters prescribed in regulations.

88. Subsection (3) allows for any requirement imposed or action to be specified to be changed or withdrawn. If a requirement or a change to a requirement is not included in the claimant commitment, the Secretary of State may determine how a claimant is to be notified under subsection (4).

89. Subsection (5) allows for claimants who have been victims of, or threatened with, domestic violence within a prescribed period to be exempted for a period 13 weeks from any work-related requirements applying to them. Further details of how domestic violence is to be defined and the circumstances in which this exemption may apply will be set out in regulations under subsection (6).

Section 25: Compliance with requirements

90. Regulations under section 25 may set out the circumstances in which a person will be treated as having met or not met the requirements placed upon them. These regulations may set out, for example, the level of activity which the claimant will be required to demonstrate in order to be treated as meeting requirements (such as the time to be spent looking for work).  The regulations may also provide that where a claimant does not engage properly with the requirement (for example by being disruptive or violent in an interview or on a training course, or where a claimant’s behaviour or appearance undermines their chances of success in a job interview) they will not be treated as meeting that requirement.

Section 26: Higher-level sanctions

91. Section 26 provides for a reduction of the amount of a claimant’s award in the event of certain failures. A failure under this section may be sanctionable for up to three years.

92. Subsection (2) sets out the failures by those subject to all work-related requirements which may be sanctioned for up to this duration:

• failing to comply with a work preparation requirement to take part in a prescribed type of work placement, such as Mandatory Work Activity;

• failing to comply with a work search requirement to apply for a particular vacancy when required to do so;

• failing to comply with a work availability requirement to take up an offer of paid work; and

• leaving paid work or reducing pay voluntarily or because of misconduct.

93. Subsection (3) allows for a sanction to be applied under this section when a claimant who is in work at a level above a threshold set by regulations under section 19(3) leaves their job or reduces their pay through misconduct or voluntarily, and as a result moves into the group subject to all work-related requirements.

94. Subsection (4) allows for a sanction to be applied under this section when a claimant leaves their job or reduces their pay voluntarily and without good reason or as a result of misconduct, or fails to take up an offer of paid work without good reason, if such failures occur before they make a claim for universal credit and when the resulting award is made they fall into the group who may be subject to all work-related requirements.

95. In all cases (except leaving work through misconduct), a claimant will not be sanctioned if they can demonstrate that they had good reason for the failure. Regulations under paragraph 8 of Schedule 1 may set out the circumstances in which a person is to be treated as having or not having a good reason and the matters which are or are not to be taken into account in determining whether a claimant has good reason.

96. Under subsection (5)(a) regulations may prescribe circumstances in which a person is to be treated as not having ceased work or reduced pay voluntarily or because of misconduct. Subsection (5)(b) allows for reductions in pay below a prescribed level to be disregarded.

97. Regulations under subsection (6)(a) will set out the amount by which a claimant’s award will be reduced. Subsection (6)(b) allows for regulations to prescribe the duration of a sanction, up to the three year maximum for any single failure.

98. Subsection (7) provides that regulations setting the duration of sanctions under this section may in particular allow for it to be decided with reference to any other failures and the period between failures. For example, regulations may provide that second and third failures after a first will result in a longer-lasting reduction if they occur within a particular period of time after the previous one.

99. Subsection (8)(a) provides for regulations to prescribe circumstances in which a sanction will not be applied. Subsection (8)(b) makes provision for a sanction to be carried over if a person’s award ceases during the period of sanction and a new award is made within a prescribed period.

100. Regulations under subsection (8)(c) may allow for a sanction to be suspended or terminated in certain circumstances, such as if the work-related requirements that the claimant may be subject to change. Where a sanction is suspended, it may be reinstated in accordance with regulations.

101. To impose a sanction, a decision under section 10 of SSA 1998 will be made to supersede the original award decision so as to reduce the award amount for a particular period. This superseding decision will be appealable under section 12(1)(a) of that Act. Other determinations made before the sanction decision (such as the imposition of work-related or connected requirements, or whether the claimant has good reason for a failure) and which are made under the relevant sections of this Act, are not appealable. This is the case currently in relation to, for example, JSA.

102. The first regulations made under this section will be subject to the affirmative resolution procedure.

Section 27: Other sanctions

103. Section 27 provides for a reduction in the amount of a claimant’s award where they have failed without good reason to meet a work-related requirement or a requirement under section 23, such as participating in an interview with an adviser. Any failure which is sanctionable under section 26 cannot also be sanctioned under section 27.

104. The amount by which an award of universal credit may be reduced, and the duration of any reduction will be set out in regulations under subsection (4).

105. Subsection (5) provides that regulations under subsection (4) may allow for a reduction to continue until a claimant meets specified compliance conditions, or to last for a fixed period of up to 26 weeks (in relation to any single failure), or a combination of the two (for example, an open-ended period until the claimant meets the compliance conditions followed by a particular fixed period).

106. Subsection (6) defines a compliance condition to mean a condition to comply with the original requirement or a condition relating to future compliance with a requirement (for example, to comply with a new requirement or to take an action that should lead to the claimant meeting a requirement). The Secretary of State may specify that the claimant must meet more than one requirement and take more than one action to have met the compliance condition.

107. Subsection (7) allows a compliance condition to be varied or revoked, and enables the Secretary of State to notify a claimant of a condition in such manner as he determines.

108. Subsection (8) enables the duration of a fixed period sanction to be decided with reference to any previous failures and the period between the failures. For example, as with higher-level sanctions, the second and third failures after a first may result in a longer-lasting reduction if they occur within a particular period after the previous one.

109. Subsection (9) has the same effect as subsection (8) of section 26.

110. The first regulations made under this section will be subject to the affirmative resolution procedure.

Section 28: Hardship payments

111. Section 28 enables regulations to make provision for universal credit payments to be made to claimants who have been sanctioned under section 26 or 27 and can demonstrate that they are or will be in hardship. In particular, regulations may prescribe the circumstances in which a person will be treated as being in hardship, the amounts and duration of any payments and conditions which claimants will have to satisfy to become and remain eligible. It also enables regulations to make provision for such payments to be recoverable. Where such payments are recoverable section 105 (which amends the SSAA 1992) deals with the methods through which recovery can be made (for example, by deduction from future benefit payments).

112. The first regulations made under this section will be subject to the affirmative resolution procedure.

Section 29: Delegation and contracting out

113. Section 29 allows for contracted providers in the private and voluntary sectors to exercise functions of the Secretary of State relating to work-related and connected requirements.

114. It is envisaged that providers will be permitted to exercise such functions so as to deliver employment programmes such as the Work Programme. The Secretary of State, using the power to impose work preparation requirements under section 16, may require claimants to participate in the Work Programme. In reliance on section 29, Work Programme providers will be authorised to carry out the functions of the Secretary of State under sections 13 to 25 which relate to work-related and connected requirements. Work Programme providers will therefore be able to impose relevant requirements on claimants, for example a work-preparation requirement to participate in particular training.

115. Any functions contracted out in this way will be subject to the same restrictions that apply to the Secretary of State. For example, a person in the group subject only to work-focused interview and work preparation requirements could not be expected to search for work or be available to take a job.

116. Where a claimant fails to comply with a requirement imposed by a provider, the Secretary of State will determine whether a sanction ought to apply. Functions relating to sanctions cannot be contracted out.

Section 30: Supplementary regulation-making powers

117. Section 30 and Schedule 1 provide for further regulation-making powers relating to universal credit.

Schedule 1: Universal credit: supplementary regulation-making powers

118. Paragraph 1 enables regulations to provide for circumstances in which a couple may be entitled to universal credit without both members of the couple meeting the basic entitlement conditions.

119. Paragraph 2 allows for two periods of entitlement separated by a short gap to be treated as a single continuous period. This may be used, for example, to prevent a person having to go through a second qualifying period for an additional element. Regulations will prescribe the number of days allowable between periods of entitlement for linking rules to apply.

120. Paragraph 3 makes provision relating to couples. Regulations under sub-paragraph (1) may provide for circumstances in which a joint claim may be treated as a claim by either or both members of a couple as single people and where claims made individually by members of a couple may be treated as a joint claim.

121. Paragraph 3(2) provides regulation-making powers relating to claimants becoming or ceasing to be members of a couple. This provides that a joint award may be converted into one or two single awards, or a joint award with someone else, when a couple separate, without a new claim having to be made. It also enables a joint award to be made without a claim when a single claimant becomes a member of a couple. This may be used in cases where it is administratively simpler to continue the award and treat a couple separating or entering into a new relationship as a change of circumstance rather than requiring either party to make a new claim. Under sub-paragraph (2)(c), regulations may set out the procedure to be followed when an award is converted and the information that a claimant may be required to provide.

122. Paragraph 4 provides for regulations to set out how the income and capital of a claimant or joint claimants is to be calculated for the purposes of universal credit. The first regulations made under this paragraph will be subject to the affirmative resolution procedure.

123. The intention is that the treatment of capital will be similar to that under income support currently. Capital below a certain level will be fully disregarded. Where a claimant has capital above a certain level, they will not meet the financial conditions and will not be entitled to universal credit. If they have capital between the lower and upper limits a nominal income from this will be calculated and taken into account as unearned income, reducing the universal credit award accordingly. Earned income will reduce a claimant’s award at a constant rate for each extra pound earned, as set out in section 8.

124. Sub-paragraph (2) provides that regulations may allow income and capital to be calculated by reference to an average over a certain period. This could be used in cases where a claimant’s income fluctuates and cannot easily be taken into account otherwise.

125. Under sub-paragraph (3)(a) regulations may set out when a person is to be treated as having or not having capital or income. This may be used, for example, if a person deliberately disposes of capital to increase their entitlement to universal credit. Sub-paragraph (3)(b) provides for income to be treated as capital or capital as income. This allows for one-off payments to be dealt with in the most appropriate way. For example, a payment such as royalties would be considered capital but under this power could be treated as income. Sub-paragraph (3)(c) enables unearned income to be treated as earned or earned income as unearned, for example to allow for certain other benefits to be treated as earned income and taken into account with the earned income taper when calculating the amount of an award.

126. Sub-paragraph (3)(d) allows for regulations to prescribe an assumed level of income from a person’s capital. This will be used to reduce a claimant’s award of universal credit if they have capital above a certain level and below an upper limit. Sub-paragraph (3)(e) enables the capital or income of one member of a couple to be treated as being the other member’s.

127. Regulations may be made under sub-paragraph (4) specifying groups of people who may be regarded as having a certain level of income.

128. Sub-paragraph (5) provides that where there are joint claimants the income and capital of both will be taken into account, although under sub-paragraph (6) regulations may specify circumstances in which the income and capital of either member may be disregarded.

129. Paragraph 5 allows for regulations to specify when a person is to be regarded as responsible or not responsible for a child or qualifying young person, and makes provision in relation to a couple nominating which member is the responsible carer for a child (see section 19(6)(b)(ii)).

130. Paragraph 6 allows for regulations to provide for liability to pay all or part of an award to be discharged by the provision of a voucher. In such cases, entitlement to the amount of universal credit in relation to which the voucher is provided is extinguished.

131. Regulations may only provide for payment by voucher in cases where the calculation of the award includes an amount in respect of particular costs which the claimant may incur (referred to here as claimant costs). The amount of the award to be paid as a voucher may be determined in regulations but must not be more than the amount included in the calculation of the award in respect of claimant costs.

132. Vouchers under this paragraph may include not only physical documents but also any electronic code, authorisation or other non-cash means by which a claimant may meet claimant costs of a particular description.

133. A voucher may be limited in relation to the particular people who will accept it (such as authorised providers of services), the particular costs in relation to which it may be used and the period for which it will remain valid.

134. Paragraph 7 allows for regulations to provide that claimants who have a right to reside in the UK under EU treaties, and who would otherwise fall within sections 19, 20 or 21, may be treated as not falling into such groups, with the consequence that they will fall within section 22.

135. Paragraph 8 provides for regulations to set out the circumstances in which there is or is not to be good reason and the factors which must or must not be considered when determining whether or not a person had good reason for a particular act or omission, such as failing to meet a requirement placed upon them. A determination as to whether a claimant has good reason is not appealable, as is the case under the current benefits system.

Section 31: Supplementary and consequential amendments

136. Section 31 gives effect to Schedule 2.

Schedule 2 – Universal credit: amendments

137. Schedule 2 makes consequential amendments relating to the introduction of universal credit. This includes amendments to allow some universal credit claimants to receive other benefits such as free school meals or legal aid.

138. Paragraph 1 amends various provisions in the Children Act 1989 so that universal credit claimants in particular circumstances may be exempted from contributing to the costs of certain services provided by local authorities.

139. Paragraph 2 amends the Child Support Act 1991 so that where a person is paid universal credit and meets other prescribed conditions they will be taken to have no assessable income for the purposes of calculating maintenance payments.

140. Paragraphs 3 to 34 amend SSAA 1992 to apply the provisions that relate to other benefits in respect of claims and payments to universal credit and to make other consequential amendments.

141. In particular, paragraph 16 enables the Secretary of State to require rent officers to provide housing information for the purposes of universal credit or housing credit. Paragraphs 17 to 21 make further provision relating to the supply of information for universal credit purposes.

142. Paragraph 22 provides that rates of universal credit may be uprated annually by way of an uprating order. Under paragraph 23 the amount of an award may be altered as a result of uprating without a further decision being made by the Secretary of State. Similarly paragraph 24 allows for a person’s universal credit award to be increased due to them reaching a particular age without a further decision. Paragraph 25 makes consequential changes to existing financial provisions.

143. Paragraphs 32 to 34 amend the Local Government Finance Act 1992 so that in certain circumstances outstanding amounts of council tax owed to a local authority may be deducted directly from an award of universal credit.

144. Paragraph 35 amends section 2(3C) of JA 1995, as inserted by section 12(5) of WRA 2009, so that a person may be taken to have met the first contribution condition for contributory JSA in prescribed circumstances when they have been in receipt of universal credit.

145. Paragraph 36 contains amendments to the Housing Act 1996 which make provision relating to the functions of rent officers in relation to universal credit.

146. Paragraphs 37 to 39 make amendments to the Education Act 1996 relating to school trips and free school meals. Under section 457 of the Act a pupil’s parents are excluded from paying for board and lodging on school trips if they are in receipt of IS, income-based JSA or prescribed elements of tax credits. Paragraph 38 amends this so that eligibility will be based on receipt of universal credit and other prescribed circumstances. Paragraph 39 makes similar provision relating to free school meals and the right to request free milk at school.

147. Paragraphs 40 to 42 apply the provisions of the Social Security (Recovery of Benefits) Act 1997 to universal credit, so that if a person is awarded damages to compensate for wrongful dismissal or personal injury which has resulted in a claim to universal credit the amount of damages received may be reduced by the amount of benefit paid.

148. The amendments in paragraphs 43 to 51 apply provisions in SSA 1998 relating to the making, supersession and revision of benefit decisions to universal credit.

149. Paragraphs 52 to 54 make amendments to the Immigrations and Asylum Act 1999 so that people subject to immigration control cannot claim universal credit, except in prescribed circumstances.

150. Paragraph 55 amends the Child Support, Pensions and Social Security Act 2000 to enable local authorities to make discretionary housing payments to universal credit claimants.

151. Paragraphs 56 to 63 amend the SSFA 2001 to apply its provisions to universal credit.

152. Paragraph 64 amends the SPCA 2002 so that a member of a couple who has attained the qualifying age for state pension credit may not receive state pension credit if the other member of the couple has not attained that qualifying age. This is to ensure that all claimants who have not attained the qualifying age for state pension credit are required to claim universal credit and, if appropriate, be subject to work-related conditions of entitlement.

153. Paragraph 65 amends paragraph 1(5) of Schedule 1 of WRA 2007 so that a person may be taken to have met the first contribution condition for contributory ESA in prescribed circumstances when they have been in receipt of universal credit.

Section 32: Power to make supplementary and consequential provision etc

154. Section 32 enables the Secretary of State in relation to reserved or excepted matters, and Welsh ministers in relation to provision that falls within their devolved legislative competence, to make consequential, supplementary, incidental or transitional provision relating to universal credit. The power could, for example, be used to amend legislation under which a benefit or advantage of some kind is provided by another body, and which requires a person to be entitled to a benefit that is abolished by this Act (often called passported benefits), so as to substitute a requirement that a person is entitled to an award of universal credit on a particular basis. It could also be used to make related provision such as provision for the Secretary of State to provide information to another body so that it can assess whether a person is entitled to the benefit concerned under the new requirement.

155. Regulations under this section may amend, repeal or revoke any relevant primary or secondary legislation.

Section 33: Abolition of benefits

156. Section 33 provides for the abolition of income-based JSA, income-related ESA, IS, housing benefit, council tax benefit, child tax credit and working tax credit. Schedule 3 makes consequential amendments relating to the abolition of these benefits. Abolition will happen once all claimants have been transferred to universal credit, with the exception of council tax benefit, which will be abolished in favour of localised schemes from April 2013. The repeals in Part 1 of Schedule 14 are consequential on this.

Schedule 3 – Abolition of benefits: consequential amendments

157. Schedule 3 makes amendments consequential to the abolition of the benefits listed under section 33. For the most part these changes remove references to contributory ESA or JSA, as these will be unnecessary once ESA and JSA are contributory benefits only, and update references to other legislation which has been amended.

Section 34: Universal credit and state pension credit

158. Section 34 and Schedule 4 provide for a new housing credit element of state pension credit to replace housing benefit for claimants above the qualifying age for state pension credit.

Schedule 4: Housing credit element of state pension credit

159. State pension credit is currently made up of two elements: the guarantee credit and the savings credit. Schedule 4 amends SPCA 2002 to create a new credit to cover housing costs. This will provide support for people who have reached the qualifying age for state pension credit (for couples where both members have reached the qualifying age) once housing benefit is no longer available following the introduction of universal credit.

160. Paragraph 2 and 3 of Schedule 4 amend SPCA 2002 to provide that a person is entitled to state pension credit if, in addition to being in Great Britain and having attained the qualifying age, that person satisfies the conditions for entitlement to the new housing credit element. A person may be eligible for the housing credit without being entitled to either of the other elements of state pension credit, or may receive more than one element if they meet the relevant conditions.

161. Paragraph 4 inserts a new section 3A into SPCA 2002. Section 3A sets out the conditions of entitlement to the housing credit and provides the powers to set out the structure of the housing credit in regulations. Subsections (1) and (2) of section 3A outline the specific conditions which a claimant must meet along with basic conditions which need to be satisfied in order to be entitled to the housing credit. Subsection (1) provides that, as with housing benefit, a claimant must be liable to make payments in respect of the accommodation they occupy as their home. Subsection (2) provides that a claimant will not be entitled to housing credit if the amount payable is below a certain level, to be prescribed in regulations, once the claimant’s income and capital has been taken into account. This calculation will be specific to the housing credit and will not be the same as the income rules for the other elements of state pension credit.

162. Subsection (3) of the new section allows the Secretary of State to prescribe in regulations the method by which the rate of the housing credit will be determined or calculated. The amount may be zero to allow entitlement to be restricted in specific circumstances outside of the core entitlement conditions. The intention is that claimants will be entitled to broadly the same amount of support under the housing credit as they would have been entitled to by way of housing benefit.

163. Subsections (4) and (5) of the new section specify types of accommodation in respect of which a housing credit may be claimed and allow the Secretary of State to make provision through regulations to determine when a claimant is treated as liable or not liable for payments in respect of the accommodation. Subsection (6) enables different provision to be made for different areas.

164. Assessed income periods in state pension credit are set periods in which changes to retirement provision, such as income from retirement pensions, annuities or capital, do not need to be reported, thereby fixing the amount of retirement provision. Provision in respect of fixing a claimant’s retirement provision is provided by section 7 of SPCA 2002. Paragraph 5 of the Schedule amends section 7 so as to give the Secretary of State the power to prescribe in regulations circumstances in which retirement provision will not be fixed for the purpose of determining entitlement to the housing credit.

165. Paragraph 6 amends section 12 of SPCA 2002 to enable regulations to modify provisions relating to the housing credit where a claim is made by members of a polygamous marriage. Paragraph 7 inserts a definition of housing credit into the interpretation section of SPCA 2002.

166. Part 2 of the Schedule makes consequential amendments to other legislation as a result of the replacement of housing benefit with the housing credit.

Section 35: Universal credit and working-age benefits

167. This section and Schedule 5 make provision about the relationship between universal credit, JSA and ESA.

Schedule 5: Universal credit and other working-age benefits

168. Paragraph 2 of Schedule 5 enables the Secretary of State to make provision in regulations for circumstances where a claimant is entitled to universal credit and either ESA or JSA. After the introduction of universal credit, ESA and JSA will continue to be available as contributory benefits.

169. Sub-paragraph (1) allows for regulations to determine the amount of ESA or JSA payable where a claimant is entitled to universal credit as well as one of the contributory benefits. Under sub-paragraph (2) this may include paying no amount of ESA or JSA.

170. Regulations may also make provision for how work-related requirements and sanctions will apply where a person is entitled to either JSA or ESA and universal credit. This may include treating compliance with a requirement for the purposes of one benefit as compliance for the other, or not applying work-related requirements in certain circumstances.

171. Sub-paragraph (5) enables regulations to provide for the order in which sanctions are applied when a person is entitled to more than one benefit and provide that, if both benefits are payable, a reduction in one as a result of a sanction does not lead to an increase in the other.

172. Paragraph 3 allows regulations to provide that sanctions imposed on a universal credit claimant may be applied to an award of ESA or JSA if the award of universal credit ceases and the claimant moves onto one of these benefits.

173. Similarly, regulations may provide that sanctions imposed on JSA or ESA claimants may be applied to an award of universal credit. In certain circumstances, these rules may not apply (which may include, for example, certain changes in a claimant’s circumstances such as severe ill health).

174. Paragraph 4 allows for regulations under section 28 to provide for hardship payments to be made to a person who is subject to a sanction and is entitled to JSA or ESA and universal credit, or where a sanction imposed on a JSA or ESA claimant has been applied to a subsequent award of universal credit.

175. Paragraph 5 amends JA 1995 and WRA 2007 to allow for the introduction of an earnings taper, so that ESA and JSA will be reduced at a constant rate as earnings increase in the same way as universal credit. This rate will be prescribed in regulations.

Section 36: Migration to universal credit

176. Section 36 gives effect to Schedule 6 which makes provision relating to the replacement of the benefits that will be abolished under section 33, as well as any other prescribed benefits.

Schedule 6 – Migration to universal credit

177. Schedule 6 provides for the migration to universal credit. Paragraph 1(1) provides a general regulation-making power for this purpose, and the rest of the Schedule sets out illustrative examples of how this power may be used. The first regulations made under this sub-paragraph will be subject to the affirmative resolution procedure, where they are making provision under paragraphs 4, 5 and 6 of this Schedule. Paragraph 1(3) defines the ‘appointed day’, which is referred to in many of the illustrative provisions, as the day on which section 1 (and therefore the universal credit provisions) come into force.

178. Paragraph 2 contains provisions relating to claims made before universal credit provisions come into effect. Sub-paragraph (1)(a) enables a claim for universal credit to be made before the universal credit provisions are introduced. Sub-paragraph (1)(b) allows a claim for universal credit made before the appointed day to be treated as a claim for the appropriate existing benefits. This may be used if the person making the claim fell into a group which had yet to begin the transition process. Sub-paragraph (1)(c) allows for a claim for an existing benefit to be treated as a claim for universal credit.

179. Sub-paragraph (2) allows for an award of universal credit to be made in respect of a period before universal credit is introduced. This might be used if a person made a claim to one of the existing benefits shortly before the introduction of universal credit. In these circumstances, it could make sense to treat their claim as a claim to universal credit, making an award for the whole period.

180. Paragraph 3 contains provisions relating to claims made after the ‘appointed day’ on which the universal credit provisions come into effect. It allows for a phased transition from existing benefits to universal credit.

181. Claimants may not be able to move voluntarily from an existing benefit to universal credit. Sub-paragraph (1)(a) provides that regulations may exclude temporarily or permanently anyone receiving one of the relevant existing benefits from making a claim for universal credit. The power to exclude a person permanently could be used, for example, where a claimant is approaching state pension age and so will soon not meet the conditions of entitlement for universal credit.

182. Sub-paragraph (1)(b) allows for a temporary delay before a person can make a claim for universal credit. Sub-paragraph (1)(c) allows for a person to be excluded from entitlement for a temporary period.

183. Sub-paragraph (1)(d) allows claims for universal credit to be treated as claims for an existing benefit. This may apply particularly in cases where the claimant is excluded from claiming universal credit under sub-paragraph (1)(a). Sub-paragraph (1)(e) enables a claim for an existing benefit to be treated as a claim for universal credit during this transitional period.

184. Sub-paragraph (2) allows for an award of universal credit to be made in respect of a period before the universal credit provisions come into effect. This follows the provision in paragraph 2(2) with the same effect for claims during the transitional period.

185. Paragraph 4 enables regulations to make provisions relating to ongoing awards of the existing benefits and the making of awards for universal credit.

186. Sub-paragraph (1) allows for the termination of an award of an existing benefit and the making of an award of universal credit in its place. An award of universal credit may be made without the claimant having to apply.

187. Under sub-paragraphs (2)(a) and (b) regulations may require claimants to follow a certain procedure, provide information or undergo an assessment when the new award of universal credit begins, and to set out the consequences if a person fails to do so.

188. Sub-paragraph (2)(c) allows for regulations to temporarily or permanently alter the conditions of entitlement for people moving onto universal credit and determine the amount of their award. This means that some people who are entitled to an existing benefit but would not otherwise meet the conditions of entitlement for the universal credit could be entitled to universal credit.

189. The sub-paragraph also allows in certain circumstances for people who have taken a work capability assessment for the purposes of an existing benefit to be exempted from the requirement to undertake an assessment for universal credit.

190. Sub-paragraph (2)(d) enables regulations to make provision for the amount of an award. Sub-paragraph (2)(e) enables the fulfilment of certain conditions of entitlement for an existing benefit to be treated as fulfilment of the same condition for universal credit.

191. Sub-paragraph (3) allows for the amount of universal credit a claimant will receive to be linked to the amount of benefit they receive under the current system, so that their amount of universal credit is the same as or not more than a prescribed amount less that their current award. It also enables the amount of a person’s universal credit award to be linked to the amount of an existing benefit award even where there is a short gap in entitlement before their universal credit award begins.

192. Paragraph 5 includes transitional provisions relating to the imposition of work-related requirements and sanctions. This includes provisions under sub-paragraphs (2)(a) and (b) to allow claimant commitments or requirements that claimants have accepted in relation to JSA, ESA or IS to be treated as being for universal credit. Sub-paragraph (2)(c) allows compliance with a requirement for one of these benefits to be treated as compliance for universal credit. Under sub-paragraph (2)(d) requirements may also be withdrawn or not applied temporarily for the purposes of transition.

193. Sub-paragraph (3) makes provision relating to sanctions. In particular, sub-paragraph (3)(a) allows for a sanction applied to an existing award of JSA, ESA or IS to be continued when a person moves to universal credit. Under sub-paragraph (3)(c) provisions relating to universal credit sanctions may be disapplied temporarily.

194. Sub-paragraph (4) sets out the work-related requirements and sanctions to which these provisions may apply.

195. Paragraph 6 allows for any provision of TCA 2002 (or regulations made under it) to be modified as necessary for the purposes of transferring people from working tax credit and child tax credit to universal credit. This may be used to align certain tax credit rules more closely with universal credit in advance to facilitate the transition process. Paragraph 6 also provides for overpayments of tax credits to be treated as overpayments of universal credit.

196. Paragraph 7 provides for regulations which will allow these transitional provisions to operate even if there is a gap in entitlement which would otherwise mean that they could not be used.

Section 37: Capability for work or work-related activity

197. Section 37 provides powers relating to the determination of limited capability for work and limited capability for work-related activity owing to a physical or mental condition. A person’s capability for work may affect the amount of a claimant’s universal credit award and may determine the work-related requirements which may be imposed under chapter 2. The section allows for the same provision as for ESA in sections 8 and 9 of WRA 2007.

198. Subsections (1) and (2) define limited capability for work and limited capability for work-related activity for the purposes of universal credit. Regulations under subsections (3), (4) and (5) will set out how a person’s capability for work is to be determined and provides powers for an assessment to be carried out, including a medical examination if required. It is intended that the work capability assessment will continue to be used to determine limited capability for work and limited capability for work-related activity for universal credit, as is currently the case for ESA.

199. Under subsection (6) regulations may provide for a claimant to be treated as having or not having limited capability for work or work-related activity. In particular, a claimant may be treated as not having limited capability for work or work-related activity if they fail without good reason to provide any evidence or information requested in the prescribed manner or to attend a medical examination when required to do so. Provisions on good reason are contained in paragraph 8 of Schedule 1.

200. Subsection (8) enables a person to be treated as having limited capability for work before they undertake an assessment or a decision is made to treat them as not having limited capability for work (if, for example, they fail to attend a work capability assessment). This will allow a claimant’s work-related requirements to be decided initially on the basis of medical certificates while the assessment process is carried out. The intention is that this provision has the same effect as section 8(5) of WRA 2007.

201. Subsection (9) allows for an assessment of a person’s capability for work to be made whilst they are being treated under subsection (6) as having limited capability for work or work-related activity.

Section 38: Information

202. Section 38 ensures that, where there may otherwise be some doubt, certain information is to be considered social security information. The section covers information relating to a claimant’s work-related requirements (for example, information on employment which a claimant has given in the course of an interview) or medical information gathered on claimants whose capability for work or work-related activity has been assessed under section 37.

Section 39: Couples

203. Section 39 sets out how a couple is to be defined for the purposes of universal credit. Regulations under subsection (3) may prescribe circumstances in which a married couple are to be treated as single people and in which two people are to be treated as living together as man and wife or civil partners or treated as being or not being in the same household.

Section 40: Interpretation of Part 1

204. Section 40 provides details of how certain other terms are to be interpreted for the purposes of Part 1. In particular, regulations under this section may prescribe what is meant by disabled, severely disabled and regular and substantial caring responsibilities.

Section 41: Pilot schemes

205. Section 41 provides for pilot schemes of any regulations under Part 1 of this Act or regulations relating to universal credit under the SSAA 1992 or the SSA 1998. The purpose of these pilot schemes is to test whether the regulations would:

• make universal credit simpler to understand or administer;

• help people to remain in work, obtain work or increase their pay or hours; or

• affect the behaviour of claimants or others.

206. Pilot schemes under this section will in the first instance be limited to three years, although could be extended. Regulations under this section will be subject to the affirmative resolution procedure.

Section 42: Regulations: general

207. Section 42 makes provision about the ways in which the powers to make regulations included in this Part may be used.

208. Subsection (2) enables regulations to make different provision through regulations for different cases or purposes and in relation to all or some particular cases or purposes. Subsection (5) allows for any amount that is to be set in regulations under Part 1 to be zero. This will, for example, enable the rates of any of the amounts to be included in a person’s maximum amount to be zero or for the amount of a sanction to be zero. Amounts may be different for single people and couples or varied according to a person’s age, as a result of subsection (6).

209. Subsection (7) allows for regulations relating to the housing costs element or the element for other particular needs or circumstances to make different provision for different areas. For example regulations relating to support for housing costs will reflect the relative housing costs in different geographical areas in Great Britain.

Section 43: Regulations: procedure

210. Section 43 provides that regulations made under Part 1 are subject to the negative resolution procedure in the Houses of Parliament, with certain exceptions. Regulations made under specified provisions will be subject, in the first instance, to the affirmative resolution procedure. Regulations made by the Secretary of State may be subject to the affirmative procedure if they relate to a pilot scheme under section 41(1) or if they are combined in a single statutory instrument with any other provision attracting the affirmative procedure. Regulations made by Welsh Ministers will be subject to the affirmative procedure.

Part 2: Working-age benefits

Section 44: Claimant commitment for jobseeker’s allowance

211. The claimant commitment will be introduced across JSA, ESA and IS before the introduction of universal credit, and will be a record of the responsibilities the claimant has to meet, including any requirements relating to work. Accepting a claimant commitment will be a condition of entitlement for all three benefits.

212. Section 44 makes amendments to JA 1995, WRA 2009 and SSA 1998 to introduce claimant commitments for people claiming JSA, replacing jobseeker’s agreements.

213. Subsection (2) amends section 1(2)(b) of JA 1995 to make accepting a claimant commitment a condition of entitlement to JSA.

214. Subsection (3) substitutes a new section 9 into the JA 1995 which explains the claimant commitment. As in universal credit, the claimant commitment will be a record of the responsibilities a claimant has to meet. Subsection (2) of the new section 9 explains that the commitment must be prepared by an employment officer and may include information prescribed in regulations and any other information the employment officer or the Secretary of State considers it appropriate to include.

215. Subsection (3)(b) of section 9 provides that, in particular, the commitment may include details of any requirements placed upon a claimant under section 8 or section 17A of JA 1995, or under a jobseeker’s direction. Section 8 relates to attendance of interviews with advisers and provision of evidence that they are meeting the jobseeking conditions, and section 17A allows for claimants to be required to take part in employment programmes or schemes such as Mandatory Work Activity and the Work Programme.

216. Subsection (3)(c) of section 9 provides that the commitment may also contain details of the sanctions that result if any of the requirements are not met without good reason.

217. Subsection (4) of section 9 ensures that a claimant will only be asked to accept a claimant commitment if the employment officer is satisfied the claimant would meet the conditions of entitlement set out in section 1(2)(a) and (c) of JA 1995, to be available for employment and actively seeking employment, if they meet the requirements recorded within it.

218. Subsections (5) and (6) make provision for the employment officer to refer, or the claimant to request a referral, of a claimant commitment to the Secretary of State to determine whether the claimant would meet the requirements to be available for and actively seeking work if they comply with the proposed claimant commitment, and whether it is reasonable to expect the claimant to comply with the commitment in relation to meeting those conditions.

219. Subsection (7) enables the Secretary of State, following such a referral, to give directions about the terms on which the claimant commitment must be accepted and to direct that the proposed claimant commitment is to be treated as having been accepted by the claimant on a date specified in the direction (if the claimant has accepted the commitment).

220. Subsection (8) enables regulations to set out the matters which the Secretary of State must take into account when giving a direction to treat the claimant commitment as having been accepted on a certain date, and the persons who must be notified of the Secretary of State’s decision or any directions given by the Secretary of State.

221. Subsection (9) enables regulations to set out circumstances in which a person could be treated as having accepted a claimant commitment. This might be necessary if the claimant has satisfied all the other criteria, but is temporarily unable to formally accept the claimant commitment in the manner set out in regulations. In such circumstances, regulations could enable an adviser to treat the claimant as if they have met the condition of entitlement that they have accepted a claimant commitment. Payment of benefit could therefore begin immediately and the claimant could confirm acceptance in the prescribed manner as soon as they are able to do so.

222. Subsection (10) provides that a claimant must accept the most up-to-date version of a claimant commitment, and do so in the prescribed manner, to meet the relevant entitlement condition.

223. Subsection (4) of section 44 substitutes a new section 10 into JA 1995 to allow for the commitment to be varied by the employment officer. Only in the case of variations relating to the jobseeking conditions is there a right of referral.

224. Subsection (2) of the new section 10 makes equivalent provision to subsection (4) of new section 9 where an employment officer proposes to vary a claimant commitment.

225. If a variation to a claimant commitment is proposed relating to the jobseeking conditions, the employment officer must notify the claimant. The employment officer may, and if the claimant so requests, refer the proposed variation to the Secretary of State. The unvaried claimant commitment will continue to have effect until such time as the referral is concluded.

226. Subsections (5) to (7) of the new section 10 make equivalent provision to subsections (5) to (8) of new section 9 relating to referrals of proposed variations.  On a referral, the Secretary of State will have the same powers as under section 9 to give directions. Similarly, regulations may prescribe matters to be taken into account by the Secretary of State and who a determination or direction made under section 10 must be notified to.

Section 45: Interviews

227. Subsection (1) of section 45 amends section 8 of JA 1995, which allows the Secretary of State to require a claimant to attend at a certain time and place. The section amends this so that the Secretary of State may require a claimant to participate in an interview in other ways so allowing interviews to be conducted remotely.

Section 46: Sanctions

228. Section 46(1) inserts new sections 19, 19A and 19B into the JA 1995, to replace current sanctions provisions, and provide for a new sanctions system which may be applied to claimants or joint claimants of JSA in the event that they fail to meet requirements. It also inserts new section 19C which enables regulations to be made providing for hardship payments to be payable where JSA is reduced under sections 19 to 19B.

229. These changes will take effect until income-based JSA is superseded by universal credit.

230. New section 19 of JA 1995 provides for a claimant’s award of jobseeker’s allowance or joint-claim jobseeker’s allowance to be reduced for up to three years in respect of any one failure where they have failed to meet the most important requirements placed upon them.

231. The failures which may be sanctioned for up to this duration are:

• losing a job through misconduct or leaving voluntarily;

• refusing or failing to apply for or accept a job of which an employment officer has informed the claimant;

• neglecting to avail themselves of a reasonable opportunity of employment, (for example, people who do not take an opportunity to return to work after being temporarily laid off); and

• failing to participate in prescribed schemes to assist them to obtain employment under section 17A(1) of JA 1995, inserted by section 1 of WRA 2009.

232. In all cases except losing a job through misconduct, a claimant will not be sanctioned if they can demonstrate good reason for the failure. A person will be treated as not having left work voluntarily in prescribed circumstances, which will include cases where the person has accepted voluntary redundancy.

233. The amount by which a claimant’s award may be reduced, and the duration of any reduction will be specified in regulations under subsection (4) of the new section 19. A reduction for any single failure under this section may not last for longer than three years. The duration of a reduction may be determined by reference to previous failures within a prescribed period under subsection (5). For example, regulations may provide that second and third failures will result in a longer-lasting reduction if they occur within a particular period of time after the previous failure.

234. Regulations under subsection (6) may set out circumstances in which a claimant’s benefit will not be reduced despite a sanctionable failure, and may allow for a sanction to be transferred to a new award of jobseeker’s allowance if a claimant’s award is terminated.

235. Subsection (7) makes provision for cases where joint-claim jobseeker’s allowance is to be reduced under subsection (1), enabling a reduced amount of JSA to be paid to the other member of the couple where one member of the couple has been sanctioned for a failure.

236. New section 19A allows for a claimant’s or joint-claimants’ award to be reduced in the event that they fail to meet other requirements.

237. Failures which may be sanctionable under this provision are:

• failing to attend an interview or to provide information or evidence relating to the claimant’s circumstances, availability for work and efforts to find work under section 8(1) or (1A) of JA 1995;

• failing to participate in schemes to assist them to obtain employment under section 17A, other than any schemes prescribed under the new section 19;

• refusing or failing to comply with a reasonable jobseeker’s direction;

• neglecting to avail themselves of a reasonable opportunity to take part in a training scheme or employment programme;

• refusing or failing to apply for or accept a place on such a scheme which has been notified to him by an employment officer; or

• giving up a place or failing to attend a training scheme or employment programme, or losing a place through misconduct.

238. As with requirements under the new section 19, a sanction will not be applied if the claimant can demonstrate good reason for the failure (except in cases where the claimant loses a place on a training scheme or employment programme through misconduct). Any requirement which is sanctionable under section 19 cannot also be sanctioned under this section.

239. The amount of any reduction will be set out in regulations, along with the period for which a reduction is to apply. A sanction may be applied for an open-ended period until a claimant meets a particular compliance condition, for a fixed period up to a maximum of 26 weeks, or a combination of the two. The compliance condition may be to meet the original requirement; or relate to future compliance with a jobseeker’s direction or any requirement under section 8(1),(1A) or 17(A); or relate to future avoidance of a failure which would be sanctionable under sections 19A(2)(d) to (g). For example, a person may be required to attend a training course and ensure that they do not give up their place or lose it as a result of their behaviour. This condition may be revoked or varied, and will be notified to the claimant in such manner as the Secretary of State may determine.

240. Under subsection (8) of section 19A the duration of a fixed period sanction may be determined by reference to previous failures under this section and the period between these failures. It is envisaged that second and third failures will result in a longer-lasting reduction, up to a maximum of 26 weeks for a single failure, if they occur within a particular period after the previous failure.

241. Subsection (9) makes equivalent provision to that in section 19(6) so that regulations may provide for a reduction not to be applied despite a sanctionable failure, and for a reduction period to apply to a new award of JSA made within a prescribed period, if the original award is terminated for any reason.

242. Subsection (10) makes equivalent provision to that in section 19(7) relating to sanctions applied to joint-claim couples.

243. The new section 19B allows for regulations to specify circumstances in which a claimant or joint claimant’s award is to be reduced if, under a previous award as a single person or part of a joint-claim couple, they were disentitled for failing to comply with the jobseeking conditions to be available for and actively seeking employment.

244. The amount and period of a sanction will be set out in regulations. A reduction under this section cannot continue for longer than 13 weeks from the day on which the claimant’s previous entitlement ceased.

245. Under subsection (6) of section 19B the duration of a fixed period sanction may be determined by reference to previous failures under this section and the period between these failures. It is envisaged that second failures will result in a longer-lasting reduction.

246. Subsection (7) makes provision for a reduction period to apply to a new award of JSA made within a prescribed period, where the original award was terminated.

247. New section 19C enables regulations to make provision for payments of JSA to be made in cases where a claimant or joint-claimant’s award has been reduced under sections 19 to 19B and they can demonstrate that they are, or will be, in hardship. As with the universal credit provisions in section 28, regulations may provide for circumstances in which such payments will be recoverable. This replaces the current provisions for payment of hardship payments in circumstances where a person is subject to a sanction under the JA 1995.

248. Subsection (2) amends section 37 of JA 1995 to provide that the first regulations made under sections 19 to 19C will be subject to the affirmative resolution procedure.

249. Subsection (3) of the section inserts a new paragraph 14AA into Schedule 1 of JA 1995 to provide for regulations to prescribe factors to be considered when determining whether or not a person had good reason for a particular act or omission. This replaces current provisions in the JA 1995 and changes references to good cause to good reason to align with the rules for the universal credit. Regulations may also prescribe circumstances in which a person is to be treated as having or not having good reason.

250. Subsection (4) repeals provisions in Schedule 3 of SSA 1998. Schedule 3 lists decisions against which an appeal lies and includes decisions to impose a sanction pursuant to section 19 or 17A JA 1995. Sanctions imposed under the new provisions will still be appealable under section 12(1)(a) of SSA 1998.

Section 47: Procedure for regulation-making powers

251. Section 47 amends section 37 of JA 1995 so that regulations under sections 6 and 7, relating to the condition that a claimant must be actively seeking and available for employment, are no longer subject to the affirmative resolution procedure in the Houses of Parliament. The amendment would ensure that the Parliamentary procedure in relation to these aspects of JSA will be consistent with the similar regulations that may be made in relation to universal credit, so they will be subject to negative resolution.

Section 48: Consequential amendments

252. Section 48 gives effect to Schedule 7.

Schedule 7: Jobseeker’s allowance in interim period: consequential amendments

253. Schedule 7 makes consequential amendments relating to the interim changes made to JSA. In particular, paragraph 6 repeals sections 20C and 20D of JA 1995, inserted by section 25 of WRA 2009, which relate to sanctions for violent conduct in relation to a claim.

Section 49: Claimant responsibilities for jobseeker’s allowance

254. Section 49 replaces provisions in JA 1995 that relate to the responsibilities that JSA claimants must meet and the imposition of sanctions where JSA claimants fail to meet those responsibilities. These changes will be brought into force at the same time as universal credit and will relate only to contribution-based JSA.

255. The amendments ensure that the provisions to impose requirements on JSA claimants are the same as those for claimants who are subject to all work-related requirements in universal credit. The intention is that the provisions in this section and section 57 will create a single system of claimant responsibilities which are consistent across JSA, ESA and universal credit.

256. Subsection (2) repeals the provisions that make actively seeking and being available for work conditions of entitlement to JSA. This is to ensure parity with the approach under universal credit where claimants in the group subject to all work-related requirements are required to meet work search and work availability requirements (in all but prescribed circumstances) but these are not conditions of entitlement.

257. Subsection (3) inserts new sections into JA 1995 which mirror the provisions for universal credit in Chapter 2 of Part 1 other than where there are necessary changes. These replace the jobseeking conditions in sections 6 to 10 of JA 1995.

258. New sections 6B to 6E set out the work-related requirements that can be imposed on a JSA claimant: a work-focused interview requirement, a work preparation requirement, a work search requirement and a work availability requirement. Sections 15 to 18 make the same provision in relation to universal credit. Section 6F(1) provides that, in all but prescribed circumstances, claimants must be subject to work search and work availability requirements. Under section 6F(2) the Secretary of State may also impose work-focused interview or work preparation requirements.

259. Work-related requirements may be recorded in the claimant commitment under section 6A. Section 6G provides for other requirements which can be placed on claimants in connection to the work-related requirements, which include requiring claimants to participate in an interview with an adviser or providing evidence that they are meeting their work-related requirements. These provisions are the same as those which relate to universal credit in sections 14 and 23.

260. Sections 6J and 6K make equivalent provision to that in sections 26 and 27 which set out the sanctions which may result if a claimant fails without good reason to meet the requirements placed upon them. Section 6J covers the most serious failures, which may result in a sanction for up to three years. Section 6K allows for a claimant’s benefit to be reduced for other failures, for an open-ended period until a compliance condition is met, for a fixed period of up to 26 weeks or a combination of both.

261. Section 6L allows for functions relating to the imposition of work-related and connected requirements to be contracted out. This power does not extend to functions relating to sanctions. Section 6L replicates section 29 which allows for contracting out in relation to universal credit.

262. Section 37 of JA 1995 is amended to provide that the first regulations made under new sections 6J or 6K are subject to the affirmative resolution procedure.

Section 50: Dual entitlement

263. Section 50 inserts a new subsection (6A) into section 1 of WRA 2007 to ensure that people who have limited capability for work may be entitled to contributory ESA in some circumstances where they are, at the same time, a member of a couple entitled to joint-claim JSA.

264. Section 1(3)(f) of WRA 2007 provides that a person is not entitled to ESA if they are a member of a couple who are entitled to joint-claim JSA.

265. The new subsection (6A) ensures that, for the purposes of section 1(3)(f), the reference to a couple does not include any couple entitled to joint-claim JSA by virtue of regulations made under paragraph 8A of Schedule 1 to JSA 1995.

266. Paragraph 8A of Schedule 1 to the JSA 1995 allows for regulations to prescribe circumstances in which a joint-claim couple may be entitled to joint-claim JSA without both members meeting the basic conditions of entitlement for JSA (for example, if one member of the couple has limited capability for work).

267. Subsection (2) of the section has the effect that where ESA had been paid to a person before the amendment to section 1 of WRA 2007 came into force, and they were a member of a joint-claim couple by virtue of regulations made under paragraph 8A of Schedule 1 of the JSA 1995, the change should be treated as having already been in force. This will have the effect of regularising such payments, which should not have been made because the claimant was a member of a couple entitled to joint-claim JSA.

Section 51: Period of entitlement to contributory allowance

268. Section 51(1) inserts a new section 1A into WRA 2007. This provision limits an award of contributory ESA to a maximum period of 365 days.

269. New subsection (1) of new section 1A provides that a period of entitlement to contributory ESA shall not exceed the relevant maximum number of days, even if the period of limited capability for work exceeds this period. The “relevant maximum number of days” is defined (in subsection (2)) as being 365 days or a greater number of days if the Secretary of State so specifies by order.

270. Subsection (3) of new section 1A provides that where an award has ended due to new subsection (1), a person may begin a new period of entitlement to contributory ESA if they satisfy all of the national insurance contribution conditions in Part 1 of Schedule 1 to WRA 2007, and the two tax years for which the claimant satisfies these conditions (to give rise to this new entitlement) include at least one tax year which is later than the second of the two tax years which gave rise to the previous entitlement.

271. Subsection (4) of new section 1A provides that where a person is entitled to a contributory allowance by virtue of the third condition set out in Part 1 of Schedule 1 (ESA on the grounds of youth) the period of entitlement to contributory ESA shall not exceed 365 days. As with new subsection (2) of new section 1A, this number of days of entitlement may be increased by the Secretary of State to a greater number, by order.

272. New subsection (5) restricts the application of new subsections (1) and (4) in the case of claimants whose capability for work-related activity is most severely affected by their health conditions. It does this by specifying days which do not count towards the 365 day limit.

273. Subsection (5)(a) excludes days in which the person is a member of the Support Group. Subsection (5)(b) deals with the situation where a claimant successfully appeals a decision arising from their initial work capability assessment to place them in the work related activity group. In this case the days in respect of which the claimant was not in the support group, but is entitled to the support component as a result of the appeal, are excluded from the days counting towards the time limit. Subsection (5)(c) deals with the situation where, immediately following the assessment phase, the claimant is placed in the support group, or is entitled to the support component as a result of an appeal as mentioned above. In this case the days in the assessment phase are excluded from the time limit.

274. New subsection (6) provides that claimants who are already receiving contributory ESA (including those entitled on the grounds of youth) when the time limit is introduced will have the period that they have already spent on the benefit counted towards their 365 days of entitlement. For example, if a person had been entitled for six months before the introduction of the time limit then their entitlement would end after another six months.

275. Subsections (2) and (3) of section 51 amend sections 25 and 26 of WRA 2007 respectively, so as to provide that the order-making power mentioned above is exercisable by statutory instrument which will be subject to the negative resolution procedure.

276. Subsection (4) of the section amends Schedule 4 to WRA 2007 so as to allow regulations to modify the application of new section 1A when applied to ESA awards made to people previously entitled to an existing award of incapacity benefit or severe disablement allowance under transitional provisions in the WRA 2007. This regulation making power could be used, for example, to ensure that the 365 day time limit created by section 1A would also apply to those people who are transferred from incapacity benefit or severe disablement allowance to contributory ESA, including dealing with the point at which it would start.

Section 52: Further entitlement after time-limiting

277. Section 52 inserts a new section 1B after section 1A of the WRA 2007 (as inserted by section 51). This provides for further entitlement to an award of contributory ESA after time limiting under section 51.

278. New subsection (1) of new section 1B provides that where entitlement to contributory ESA (including on the grounds of youth) has ceased as a result of time limiting, a person may become entitled to a further award if since that cessation:

• the person has not ceased to have (or be treated as having) limited capability for work;

• the person satisfies the basic conditions; and

• the person has (or is treated as having) limited capability for work-related activity.

279. This means that where a person’s contributory ESA ceases as a result of time limiting, and their health condition deteriorates to such a degree that they are later placed in the support group, they will be able to re-qualify for an award of contributory ESA if the above conditions are satisfied.

280. The entitlement to the award only exists for as long as the person has (or is treated as having) limited capability for work-related activity (and so falls intp the Support Group). If the person goes through a subsequent work capability assessment and is placed into the work related activity group, then entitlement to an award arising by virtue of section 1B would cease.

281. New subsection (2) of new section 1B provides that this further entitlement is to be regarded as a contributory allowance.

282. Subsection (2) of section 52 inserts a reference to section 1B(2) into section 1 of WRA 2007 so as to clarify that the definition of “contributory allowance” in section 1(7) is to be read with section 1B(2) of WRA 2007.

Section 53: Condition relating to youth

283. Until the coming into force of section 53, it is possible for certain claimants to be entitled to contributory ESA on the grounds of youth (set out in full in paragraph 4 of Schedule 1 to the WRA 2007). This allows claimants to qualify for contributory ESA without meeting the usual paid National Insurance contribution conditions. A claimant must be under 20 (or in prescribed cases, 25) when the relevant period of limited capability for work began, not be receiving full-time education, must satisfy such conditions as may be prescribed with respect to residence or presence in Great Britain and must have had limited capability for work for 196 consecutive days.

284. Section 53 inserts a new subsection (3A) into section 1 of WRA 2007. This new subsection provides that no new claims for contributory ESA on the grounds of youth may be made after the coming into force of that section. This means that those claimants who would have been entitled on those grounds will instead be required to meet the usual National Insurance contribution conditions for a claim for contributory ESA as set out in paragraphs 1 to 3 of Part 1 of Schedule 1 to the WRA 2007, or the conditions of entitlement for income-related ESA.

Section 54: Claimant commitment for employment and support allowance

285. Section 54 amends WRA 2007 to introduce claimant commitments for people claiming ESA.

286. Accepting a claimant commitment is a condition of entitlement for ESA under subsection (2).

287. Subsection (3) inserts new section 1B into WRA 2007. Section 1B provides that the claimant commitment is a record of the claimant’s responsibilities and may contain particular prescribed information as well as any other information the Secretary of State considers it appropriate to include. This may include information about any requirement which can be imposed on a claimant of ESA, such as the requirement to take part in a work-focused interview or undertake work-related activity and the consequences of failing to comply with these requirements.

288. Subsections (2) and (5) of the new section 1B allow for the commitment to be reviewed and updated by the Secretary of State, and provide that to meet the conditions of entitlement the claimant must accept the most up-to-date version. Subsection (6) enables the Secretary of State to make regulations setting out circumstances in which a person may be treated as having accepted a claimant commitment.

289. Subsection (4) of section 54 amends section 15(2)(b) of WRA 2007, inserted by section 10 of WRA 2009, to enable the Secretary of State to include directions about work-related activity in the claimant commitment or in an action plan or communicate them in such other manner as the Secretary of State thinks fit.

290. Subsection (5) allows for any function relating to claimant commitments to be carried out by third party providers.

291. Subsection (6) inserts a new paragraph 4A into Schedule 2 of WRA 2007 to enable the Secretary of State to make regulations setting out circumstances in which a person can be entitled to ESA without having accepted a claimant commitment.

292. Subsection (7) amends WRA 2009 so that the wellbeing of any child affected must be considered when a claimant commitment is prepared.

Section 55: Work experience etc

293. Section 55 amends section 13 of WRA 2007 to make clear that a claimant with limited capability for work may be required to undertake work experience or a work placement. Any requirement imposed under this provision will need to be reasonable in the claimant’s circumstances.

Section 56: Hardship payments

294. Section 56 enables regulations to provide for circumstances in which payments will be made to a claimant where their benefit has been reduced as a result of a failure to take part in a work-focused interview, a work-focused health-related assessment, or work-related activity and they are or will be in hardship. In particular, regulations may prescribe the circumstances in which a person will be treated as being in hardship and the amounts and duration of any payments and conditions which claimants will have to satisfy to become and remain eligible. Hardship payments for ESA will not be recoverable.

Section 57: Claimant responsibilities for employment and support allowance

295. Section 57 makes equivalent amendments to WRA 2007 as section 49 does to the JA 1995. As with the changes to JSA, these will be introduced in respect of any claimant once ESA is only available to them as a contributory benefit as a result of universal credit coming into force.

296. Subsection (2) inserts new sections which replace sections 11 to 16 of WRA 2007. In general these new sections mirror the provisions for universal credit claimants who are assessed as having limited capability for work or limited capability for work-related activity. No ESA claimant will be required to look for or be available for work so the new sections do not include a work search or work availability requirement. As a result the higher level sanctions which apply under universal credit (set out in section 26), do not apply to ESA.

297. Sections 11B and 11C set out the work-related requirements which may be imposed on a claimant: a work-focused interview requirement or a work preparation requirement. These mirror the equivalent provisions in universal credit.

298. Sections 11D, 11E and 11F explain what requirements may be imposed on different groups of ESA claimants. Section 11D provides that the Secretary of State may not impose either requirement on any person with limited capability for work and limited capability for work-related activity, lone parents with a child under one and any other group prescribed in regulations. The first regulations made under new section 11D(2)(d) will be subject to the affirmative resolution procedure. Section 11E provides that lone parents with a child who is at least one but below a prescribed age which may not be less than three can only be subject to a work-focused interview requirement, as well as any other prescribed categories of people. Under section 11F the Secretary of State may impose a work preparation requirement and a work-focused interview requirement on any person who does not fall into section 11D or 11E. In effect this will be claimants who have limited capability for work (but not those with limited capability for work-related activity).

299. Work-related requirements may be recorded in the claimant commitment under section 11A. Section 11G provides for other requirements which can be placed on claimants in connection to the work-related requirements, which include requiring claimants to participate in an interview with an adviser or providing evidence that they are meeting their work-related requirements. These provisions are the same as those which relate to universal credit in sections 14 and 23.

300. Section 11J, which mirrors section 27, provides for a claimant’s award to be sanctioned if they fail without good reason to meet the requirements placed upon them. Claimants receiving ESA may be subject to a sanction for an open-ended period until a compliance condition is met, for a fixed period of up to 26 weeks or a combination of both. The first regulations made under this new section will be subject to the affirmative resolution procedure.

301. Section 11K allows for functions relating to the imposition of work-related and connected requirements to be contracted out. Section 11K replicates section 29 which allows for contracting out in relation to universal credit.

302. Subsection (3) of section 57 amends the piloting provision in WRA 2007 to the effect that the purpose of a pilot scheme must be to test whether the provision being piloted is likely to promote people increasing their hours or finding better-paid work, as well as remaining in or obtaining work, or being able to do so. This mirrors the purpose of pilot schemes in relation to universal credit, set out in section 30.

303. Subsection (7) inserts a new paragraph 10 into Schedule 2 of WRA 2007 which makes provision for regulations to set out the circumstances in which there is or is not be good reason and the factors which must or must not be considered when determining whether or not a person had good reason for a particular act or omission. This replaces similar provisions in WRA 2007 but changes references to good cause to good reason to be consistent with universal credit provisions.

Section 58: Entitlement of lone parents to income support etc

304. Section 58 amends provisions in WRA 2009 concerning lone parents.

305. Section 3(1) of that Act inserts provisions under new subsection (1A) of section 124 of SSCBA 1992 so that regulations must provide for IS to be available on grounds of lone parenthood where a lone parent has a child under seven. Subsection (2) amends section 3(1) to provide for IS to be available on the grounds of lone parenthood where a lone parent has a child under five. Lone parents who wish to continue receiving an income-replacement benefit after that point will need to claim JSA, if they are capable of work, or ESA, if they have limited capability for work, unless they qualify for IS on some other ground such as receiving Carer’s Allowance.

306. Section 8(1) of WRA 2009 requires that regulations which impose a requirement to undertake work-related activity on a lone parent with a child under seven are subject to the affirmative resolution procedure. This requirement applies to regulations made under section 2D(1) of SSAA 1992, section 18B of the JA 1995 and section 13 of WRA 2007 before 12 November 2014. Subsection (3)) amends this so that the requirement applies to regulations which affect a lone parent with a child under five.

Section 59: Claimant commitment for income support

307. Section 59 amends SSCBA 1992 and SSAA 1992 to introduce claimant commitments for people claiming IS.

308. Subsection (2) amends section 124 of SSCBA 1992 to make accepting a claimant commitment a condition of entitlement for IS. Regulations may allow for circumstances in which a claimant may be entitled without having accepted a claimant commitment.

309. Subsection (3) inserts new a new section 124A into SSCBA 1992 which provides that the claimant commitment is a record of the claimant’s responsibilities and may contain particular prescribed information as well as any other information that the Secretary of State considers it appropriate to include. This may include information about any requirement which may be imposed on a claimant of IS, such as a requirement to take part in work-focused interviews.

310. New subsection (2) provides that the claimant commitment may be reviewed and updated by the Secretary of State. Under new subsection (5) the claimant must accept the most up-to-date version of the claimant commitment to meet the condition of entitlement.

311. Subsection (6) of the new section 124A provides that regulations can set out circumstances in which a claimant is to be treated as having accepted a claimant commitment (and therefore meeting the relevant condition of entitlement).

312. Subsection (4) of the section amends section 2F(3)(b) of SSAA 1992 to the effect that directions about work-related activity for claimants of IS may be notified to a claimant in such manner as the Secretary of State thinks fit. This enables any such directions to be notified through the claimant commitment.

313. Subsection (5) amends section 2G of SSAA 1992 to enable functions relating to the claimant commitment to be contracted out.

Section 60: Claimants dependent on drugs etc

314. Section 60 repeals section 17C of, and Schedule A1 to, JSA 1995, section 15A of, and Schedule 1A to, WRA 2007, and section 11 of, and Schedule 3 to, WRA 2009. Part 6 of Schedule 13 makes minor consequential repeals to those Acts and the SSA 1998.

315. The repeals remove in their entirety provisions in, or inserted by, the WRA 2009 which apply to persons claiming JSA or ESA who are dependent on, or have a propensity to misuse drugs, where their condition affects their prospects of obtaining or remaining in work. These provisions include requirements placed on claimants to engage in certain activities and also provisions in relation to voluntary and mandatory rehabilitation plans.

Section 61: Entitlement to work: jobseeker’s allowance

316. Section 61 introduces a requirement for claimants of JSA to have an entitlement to work in the United Kingdom. The intention is to prevent people from accessing contributory benefits if they do not have a current entitlement to work in the United Kingdom. This requirement will apply after the introduction of the universal credit, once JSA is a contributions-based benefit.

317. Section 61 amends the JA 1995 to create a new condition of entitlement for JSA, requiring a claimant to be entitled to be in employment in the United Kingdom. Subsection (2) inserts this requirement into the conditions of entitlement for JSA set out in section 1(2) of JA 1995.

318. Subsection (3) inserts new subsection (3A) into JA 1995 which provides that a person is entitled to be in employment if they are either not subject to immigration controls or have leave to enter or remain in the United Kingdom which is not subject to any restrictions preventing them from taking up work.

319. Subsection (4) allows for regulations to prescribe circumstances in which exceptions may be made to this condition.

Section 62: Entitlement to work: employment and support allowance

320. Section 62 introduces a requirement for ESA claimants to have an entitlement to work in the United Kingdom. The intention is to prevent people from accessing contributory benefits if they do not have a current entitlement to work in the United Kingdom. This requirement will apply after the introduction of the universal credit, once ESA becomes a contributions-based benefit.

321. Subsection (2) inserts this requirement into the conditions of entitlement for ESA set out in section 1(3) of the WRA 2007.

322. Subsection (3) inserts new subsection (3A) into the WRA 2007 which provides that a person is entitled to be in employment if they are either not subject to immigration controls or have leave to enter or remain in the United Kingdom which is not subject to any restrictions preventing them from taking up work.

323. Subsection (4) allows for regulations to prescribe circumstances in which exceptions may be made to this condition.

Section 63: Entitlement to work: maternity allowance and statutory payments

324. Section 63 makes amendments to SSCBA 1992 to introduce a new condition of entitlement into statutory payments and maternity allowance, ensuring that a claimant must be entitled to be in employment in the United Kingdom.

Part 3: Other benefit changes

Section 64: Injuries arising before 5^th July 1948

325. Section 64 repeals the legislation that maintains the existence of two separate schemes for providing State compensation for work injuries occurring before 1948.

326. At present there is separate provision for State compensation to be paid for accidents and diseases at work occurring before 5 July 1948 through the Workmen’s Compensation (Supplementation) Scheme 1982 and the Pneumoconiosis Byssinosis and Miscellaneous Diseases Benefit Scheme 1983. These two schemes are known collectively as the “pre-1948 schemes”. This legislation was left in place when the Industrial Injuries scheme was introduced in 1948.

327. This section will mean that all claims for State ‘no-fault’ compensation for work injuries will be dealt with as claims under the main Industrial Injuries Disablement Benefit (IIDB) scheme regardless of when the disease or accident occurred.

328. Subsection (3) enables the Secretary of State to provide in regulations for all claims – new and outstanding – under the pre-1948 schemes to be treated as claims under the equivalent IIDB scheme. It is intended that such regulations will result in all claims being made, decided and appealed under the same rules that apply to IIDB.

Section 65: Trainees

329. Section 65 means that from the commencement date trainees will be paid under the main IIDB scheme rather than by the current separate ‘analogous’ scheme that exists solely for trainees.

330. As trainees are not ‘employed earners’ they are not currently entitled to IIDB through the main scheme. The Analogous Industrial Injuries (AIIS) scheme is a separate scheme for trainees who suffer an accident at work whilst participating in certain training schemes or courses that are funded out of public funds by the Young People’s Learning Agency and Skills Funding Agency in England (and equivalent bodies in Scotland and Wales).

331. Subsection (1) inserts a new section 95A into the SSCBA 1992 which will treat trainees as if they were in employed earner’s employment. This means that any trainees, who are injured by accident or disease whilst participating in prescribed training schemes or courses, will be able to access benefit under the main IIDB scheme, instead of the AIIS scheme.

332. Subsection (2) removes the powers in section 11(3) of the Employment and Training Act 1973 of the Secretary of State and Industrial Training Boards to make payments equivalent to those which might be paid for IIDB.

333. Subsection (3) enables the Secretary of State to provide in regulations for all claims – existing, and new - under the AIIS scheme to be treated as claims for industrial injuries benefits. It is intended that such regulations will result in all claims being made, decided and appealed under the same rules that apply to IIDB.

Section 66: Persons under 18

334. Section 66 will remove the significance of age 18 in Industrial Injuries Benefits legislation. This means all successful claims - existing and new - by under 18s will be paid at the normal IIDB scheme rate after the coming into force of the section.

Section 67: Restriction on new claims for industrial death benefit

335. Section 67 means that no claims can be made for Industrial Death Benefit (IDB) from the commencement date.

336. At present IDB is paid to widows or widowers in respect of industrial deaths occurring before 10 April 1988. Claims in respect of deaths in general after this date are paid under the Bereavement Benefit (BB) provisions. From the commencement date this section means claims for deaths due to industrial causes before 10 April 1988 will be considered under the BB legislation.

337. It is many years since any such claims have been made for IDB. New claims are now extremely unlikely as the death would have had to occur before 1988.

Section 68: Determinations

338. Section 68 abolishes the right to request an accident declaration. At present people are able to apply for a declaration that an industrial accident has occurred separately from making a claim for benefit and consequently may apply for IIDB many years after the accident occurred, relying on the accident declaration as evidence that a work-related accident occurred.

339. Subsection (1) repeals section 29(2) of the SSA 1998. This provides that people can apply for an accident declaration, confirming and recording an accident has occurred, even though they do not wish to claim Industrial Injuries Disablement Benefit (IIDB) at the time. Subsection (2) repeals the subsequent references to section 29(2).

340. The repeals mean that all accident declarations made prior to commencement remain final and that no further requests for an accident declaration can be made. If an accident causes disability at a later date, the status of the accident as an industrial accident will be investigated and decided in the usual manner by the decision-maker at the same time as the claim and the assessment of disability.

Section 69: Housing benefit: determination of appropriate maximum

341. Section 69 amends section 130A of the SSCBA 1992. Section 130A provides for the appropriate maximum housing benefit (AMHB) to be determined in accordance with regulations, including by reference to rent officer determinations. It is necessary to know the AMHB in a person’s case in order to determine whether they are entitled to housing benefit, and how much they are entitled to.

342. The amendments made by section 69 generalise section 130A to reflect the Secretary of State’s intention to exercise the powers in that section to provide for AMHB to be determined by methods other than by reference to rent officer determinations.

343. The Housing Benefit Regulations provide for AMHB to be determined by reference to a claimant’s eligible rent. Calculating a claimant’s eligible rent can involve treating the claimant’s liability to pay rent as something other than it actually is. The amendments made by section 69 generalise section 130A(5) and (6) to reflect the intention that regulations will provide for a claimant’s liability to pay rent to be treated as an amount other than the actual amount of the liability (whether that deemed amount is determined by reference to a rent officer determination or otherwise).

344. Using these powers the Secretary of State will bring forward regulations that will:

• set out that eligible rent may be determined by reference to either rent officer determinations or the rate of CPI. Currently local housing allowance (LHA) determinations are made by rent officers. The amendments made by section 69 will ensure the Secretary of State has the power to set LHA rates from April 2013, by reference to the lower of either the CPI or the bottom 30^th percentile of private sector rents.

• introduce size criteria into the calculation of housing benefit for working age tenants in the social rented sector. The Secretary of State will prescribe the amount by which the claimant’s actual rent liability is to be reduced to reflect the additional bedrooms within the property; the claimant’s eligible rent will be restricted if their dwelling is larger than they need. A percentage reduction will be made based on the numbers of extra bedrooms, which will be prescribed in secondary legislation.

345. The first regulations under section 130A(5) and (6) will be subject to the affirmative resolution procedure.

Section 70: Ending of discretionary payments

346. Section 70(1) repeals section 138(1)(b) of the SSCBA 1992, which provides for payments of crisis loans, community care grants and budgeting loans from the discretionary social fund. Community care grants and crisis loans other than those currently available to applicants pending payment of benefit (“alignment loans”) will cease. Instead, in England, new locally-administered assistance will be provided by local authorities. In Scotland and Wales the Devolved Administrations will decide the most appropriate arrangements for assistance. Budgeting loans and alignment loans will be replaced by payments on account (see section 101).

347. The Social Fund Commissioner heads the Independent Review Service (IRS) whose inspectors carry out independent reviews of decisions on applications for discretionary social fund payments. The Commissioner and the IRS will no longer have this role when section 138(1)(b) is repealed and subsection (2) makes provision for the abolition of the office of the Commissioner. Subsections (6) and (7) enable the Secretary of State to make provision by order for the transfer of property, rights and liabilities from the Social Fund Commissioner.

348. Subsections (3) to (5) make provision for the transfer of monies from the social fund into the Consolidated Fund as the social fund is wound down. The Secretary of State will be able to transfer unused social fund monies into the Consolidated Fund, as well as monies received into the social fund as repayments of loans or repayment of overpayments of social fund payments. Under subsection (5) the Secretary of State will continue to be able to re-allocate for crisis loans, community care grants or budgeting loans purposes any amounts which had previously been allocated for other payments under section 138(1)(b).

349. Subsection (9) introduces Schedule 8 which makes consequential amendments resulting from the repeal of section 138(1)(b), including in paragraph 3 providing for recovery of Northern Ireland payments to continue by deduction from benefits. Paragraph 4 makes consequential amendments as a result of the abolition of discretionary social fund payments and the ending of the office of the Social Fund Commissioner to ensure that the Social Fund Commissioner and other former officers remain subject to the penalty for disclosure despite the office having ceased to exist.

Section 71: Purposes of discretionary payments

350. Section 138 of the SSCBA 1992 makes provision for social fund payments. Subsection (1)(a) provides for payments of prescribed amounts in respect of maternity and funeral expenses, while subsection (1)(b) allows the award of discretionary payments by way of community care grants, crisis loans or budgeting loans to meet other needs, which suggests that needs covered by payments under section 138(1)(a) may not be met by discretionary payments. Pending abolition of the discretionary social fund this section makes an amendment to section 138 (and section 72 makes amendments to section 140). Section 71 amends section 138(1)(b) to enable payment of budgeting loans for maternity and funeral expenses. Thus a person who applies for a maternity or funeral payment under the prescribed scheme may be able to apply for a budgeting loan to meet costs also covered by the prescribed payment.

Section 72: Determination of amount or value of budgeting loan

351. Section 140(1A) of the SSCBA 1992 sets out the factors to which decision makers are to have regard when considering applications for payments by way of social fund budgeting loans. Section 140(2) provides that the decision maker shall determine questions in accordance with the directions issued by the Secretary of State. For budgeting loans, the decision maker is required by section 140(1A)(b) to have regard, subject to directions and guidance under subsection (2), to any relevant allocation made by the Secretary of State under section 168 of the SSAA 1992. Using this allocation, the Secretary of State sets a national loans budget, and issues directions and guidance to decision makers who are required to apply a baseline figure when calculating the amount of a budgeting loan.

352. Section 71(2) amends section 140 to state in subsection (4) that the amount of a budgeting loan may be restricted to a maximum sum as specified in a direction made by the Secretary of State and subsection (3) inserts new subsection (4ZA) to provide that directions may require the maximum sum to be arrived at by reference to the baseline figure which is described in new subsection (4ZB).

Section 73: External provider social loans and community care grants

353. Provision was made in the WRA 2009 for loans to be made by external lenders in place of loans from the social fund and for awards of community care grants to be of items covered by contracts entered into by the Secretary of State. These provisions have not been commenced and the Government does not intend to use them, given its intention to abolish the discretionary social fund (see section 69). Section 73 therefore repeals sections 16 to 21 of the WRA 2009. Budgeting loans and those crisis loans called “alignment loans” (which are available pending payment of benefit) will be replaced by payments on account (see section 101). The Government intends that, when community care grants and those crisis loans which are not alignment loans cease to exist, assistance will instead be administered locally. Local authorities in England will be free to deliver support in whatever form they consider is most appropriate. The Devolved Administrations will determine the most appropriate arrangements for Scotland and Wales.

Section 74: State pension credit: carers

354. Section 74 amends SPCA 2002 to change the entitlement conditions for the additional amount of the guarantee credit in respect of caring responsibilities, to remove the explicit link to carer’s allowance in that Act.

355. Currently a claimant is entitled to the additional amount if the claimant or their partner is entitled to carer’s allowance. Subsection (2) amends section 2(8) of SPCA 2002 so that a claimant is entitled to the additional amount if they or their partner have regular and substantial caring responsibilities. Subsection (3) amends section 17 of the SPCA 2002 to provide that the Secretary of State will prescribe what is meant by regular and substantial caring responsibilities in regulations. The intention is that this definition will cover, but not be limited to, people entitled to carer’s allowance.

Section 75: State pension credit: capital limit

356. When housing benefit is abolished, housing support for claimants above the qualifying age for state pension credit will be provided through the housing credit, by virtue of section 34.  While there is currently no capital limit for entitlement to state pension credit a claimant may only be entitled to housing benefit if they have capital below a certain level.  Section 75 allows for a capital limit to be applied to state pension credit. Section 19 of SPCA 2002 is amended to provide that the first regulations made under the new subsection 1(2)(d) inserted into SPCA 2002 will be subject to the affirmative resolution procedure.

Section 76: Calculation of working tax credit

357. Section 76 modifies regulation 7(3) of the Tax Credits (Income Thresholds and Determination of Rates) Regulations 2002 so as to change the rate at which working tax credit is withdrawn from 39 per cent to 41 per cent for the tax year 2011/2012. This modification corrects an omission in secondary legislation that amended the 2002 regulations. Subsection (2) ensures that decisions already taken by Her Majesty’s Revenue and Customs since 6 April 2011 on the basis of a 41 per cent withdrawal rate are treated as having been correctly made.

Part 4: Personal independence payment

358. The Act replaces disability living allowance with a new cash benefit called personal independence payment. The purpose of the benefit is to contribute to the extra costs of overcoming the barriers faced by long-term disabled people to leading full and active lives.

359. Personal independence payment will consist of two components – the daily living component and the mobility component. For each component there will be two rates – standard and enhanced. Entitlement to either of the components (and the applicable rate) will be determined with reference to a new objective assessment, the details of which will be set out in secondary legislation.

360. The new assessment will assess the ability of an individual to perform specified activities and will take into account the impact of physical, sensory, mental, intellectual and cognitive impairments on the individual in undertaking the specified activities.

361. Personal independence payment is to be a non-contributory benefit, and is neither taxable nor means-tested.

Section 77: Personal independence payment

362. Section 77 sets out the basic structure and certain conditions of entitlement to personal independence payment. Entitlement to personal independence payment may be an entitlement to either, or both, of the daily living and mobility components of the benefit. Subsection (3) provides that a person is not entitled to personal independence payment unless they satisfy prescribed conditions of residence and presence in Great Britain.

Section 78: Daily living component

363. Section 78 sets out the entitlement conditions to the different rates of the daily living component of personal independence payment.

364. Subsection (1) provides that a person is entitled to the standard rate of the daily living component if their ability to carry out daily living activities is limited by their physical or mental condition. If a person’s ability is severely limited by their physical or mental condition subsection (2) provides for that person to be entitled to the enhanced rate. Whether an individual has limited ability or severely limited ability will be determined by an assessment set out in regulations made under section 80. Sensory, intellectual and cognitive impairments may be relevant to a person’s physical or mental condition and therefore to the question of whether the person’s ability to carry out daily living activities is limited or severely limited.

365. Subsections (1)(b) and (2)(b) provide that to be entitled to either the standard or enhanced rate of the daily living component, the person must also meet the required period condition. This is outlined in the notes relating to section 81. The required period condition also applies where personal independence payment is subject to review, subject to certain exceptions which will be set out in regulations under powers in section 81.

366. Subsection (3) provides that the standard and enhanced rates are weekly rates which are to be specified in regulations.

367. Subsection (4) provides for the activities relating to the daily living component – “daily living activities” – to be prescribed in regulations. It is envisaged that these may include, but not be limited to, activities relating to accessing food and drink; managing personal health needs; managing personal care needs; and communication. The first regulations under this subsection will be subject to the affirmative resolution procedure.

368. Subsection (5) refers to sections 80 and 81 which set out how a person’s ability to carry out daily living activities is to be assessed and how the required period condition operates.

369. Subsection (6) makes clear that this section is subject to other provisions of Part 4, or to regulations under it, for example in circumstances when the person is terminally ill (see section 82).

Section 79: Mobility component

370. Section 79 sets out basic entitlement conditions to the different rates of the mobility component of personal independence payment.

371. Subsection (1) provides that a person is entitled to the standard rate of the mobility component if they are of or over an age prescribed in regulations and if their ability to carry out mobility activities is limited by their physical or mental condition. If a person’s ability is severely limited by their physical or mental condition and they are over an age prescribed in regulations subsection (2) provides for that person to be entitled to the enhanced rate. Whether an individual has limited ability or severely limited ability will be determined by an assessment set out under section 80. Sensory, intellectual and cognitive impairments may be relevant to a person’s physical or mental condition and therefore to the question of whether the person’s ability to carry out mobility activities is limited or severely limited.

372. Subsections (1)(c) and (2)(c) provide that to be entitled to either the standard or enhanced rate of the mobility component, the person must also meet the required period condition. This is outlined in the notes relating to section 81. The required period condition also applies where personal independence payment is subject to review, subject to certain exceptions which will be set out in regulations made under powers in section 81.

373. Subsection (3) provides that the standard and enhanced rates are weekly rates which are to be specified in regulations.

374. Subsection (4) provides for the activities relating to the mobility component – “mobility activities” – to be prescribed in regulations. It is envisaged that these may include, but not be limited to, activities relating to the ability of the individual to get around both inside and outside their home. The ‘mobility activities’ could include, for example, planning a journey or using transport. The first regulations under this subsection will be subject to the affirmative resolution procedure.

375. Subsection (5) refers to sections 80 and 81 which set out how a person’s ability to carry out mobility activities is to be assessed and how the required period conditions operate.

376. Subsection (6) makes clear that this section is subject to other provisions of Part 4, or to regulations under it. For example if a person is over pensionable age, it is not normally the case that they would be entitled to the mobility component.

377. Subsection (7) provides that regulations may specify when a person is not entitled to the mobility component for a period, despite fulfilling the eligibility requirements. For example, while a person in a coma or vegetative state clearly has severely limited mobility they would not be in a position to benefit from mobility assistance.

Section 80: Ability to carry out daily living activities or mobility activities

378. The section provides for the making of regulations to determine the main conditions of entitlement to the two components of personal independence payment. For the purposes of personal independence payment a new assessment and process will be developed. Subsection (1) provides for the questions whether an individual’s ability to carry out daily living activities or mobility activities is limited or severely limited by their physical or mental condition to be determined in accordance with regulations. This then determines which of the components a person is entitled to, and whether that person is entitled to the standard or enhanced rate for each component. Under subsection (2) regulations must also make provision for determining whether a person meets the required period condition. Further details on the required period condition can be found in section 81.

379. Subsection (3) provides for regulations to be made about what is considered during the assessment process to determine entitlement to each component and rate, and how the assessment is to be carried out. This will involve considering and weighting a person’s ability to perform prescribed activities. Prescribed thresholds will determine entitlement to each component and rate. The activities, how they will be measured, their weightings and the component thresholds will all be prescribed in regulations. Regulations may also provide for the assessment process not to be applied in prescribed circumstances.

380. As information and evidence will be required and sought at various stages in a claim, subsection (4) allows regulations to specify which sources of information are appropriate (for example, evidence or information from the individual themselves; the individual’s General Practitioner, supporting healthcare professionals, social workers etc.), along with details as to how and when information or evidence is to be provided. Most individuals will be asked to attend a face-to-face consultation with a trained independent assessor, such as a healthcare professional.

381. Under subsection (5) regulations can provide for the consequences of failure without good reason to comply with a requirement imposed under subsection (4) e.g. a failure to provide information or evidence or to participate in a face-to-face consultation. In the event of such a failure, a negative determination can be applied to an individual’s claim if there is no good reason for the failure. Regulations will provide for what is considered to be good reason.

382. Subsection (6) defines the term “negative determination” used in subsection (5)(a).

Section 81: Required period condition: further provision

383. Section 81 makes further provision about the making of regulations to determine whether a person meets the required period condition. The required period condition will generally be that it is likely that the individual would have met the condition of limited or severely limited ability to carry out daily living activities or (as the case may be) mobility activities during the three months before the date they would become entitled (the qualifying period) and that there is an expectation that they will meet that condition for a further nine months following that date (the prospective test). The qualifying period can include a period before the claim is made.

384. It is intended that the required period condition must be met both when a claim is made and at any review; this will be set out in regulations.

385. Subsection (4) allows for the required period condition to be altered in certain cases, for instance to allow the qualifying period to be disapplied where there has been a short break in entitlement.

Section 82: Terminal illness

386. Section 82 makes provision about entitlement for people who are terminally ill (as defined in subsection (4)) who make a claim to personal independence payment expressly on the grounds that they are terminally ill.

387. Subsection (2) automatically entitles a terminally ill person to the enhanced rate of the daily living component, as defined in section 78, and accordingly removes the requirement for them to undergo an assessment or to meet the required period condition. Subsection (3) disapplies the required period condition for the mobility component. However a terminally ill person is not automatically entitled to the mobility component and will have to satisfy the other conditions of entitlement for that component.

388. Subsection (4) defines a person as being terminally ill for the purposes of this section if the person can reasonably be expected to die from a progressive disease within the next 6 months.

389. Subsection (5) provides that where a claim is made on behalf of a terminally ill person, the terminally ill person is regarded as making the claim, notwithstanding that the claim is made without their knowledge or authority. The intention is to allow terminally ill people to be able to benefit from personal independence payment whether or not they know their prognosis.

Section 83: Persons of pensionable age

390. Section 83 concerns entitlement to the daily living or mobility components for persons of pensionable age. Subsection (1) provides that a person is not entitled to either the daily living component or the mobility component after they reach the relevant age. Subsection (2) defines the relevant age as the age of 65 or pensionable age (as defined in paragraph 1 of Schedule 4 to the Pensions Act 1995), whichever is higher.

391. Subsection (3) provides that regulations may specify exceptions to this. For example, regulations may provide that if a person is in receipt of personal independence payment before reaching the relevant age, they may continue to receive this benefit.

Section 84: No entitlement to daily living component where UK is not competent state

392. Section 84 provides that entitlement to the daily living component is limited to people for whom the United Kingdom is the competent state for payment of cash sickness benefits under either of the European Union Regulations mentioned in subsection (2).

393. This provision is intended to prevent a person who comes to the United Kingdom from another Member State of the European Economic Area or Switzerland, and for whom another Member State is the competent State for payment of sickness benefits (because the person is insured for sickness benefits there), being entitled to the daily living component of personal independence payment (irrespective of whether they meet the domestic entitlement conditions under the Act). This is primarily to prevent a person receiving double provision of benefits.

Section 85: Care home residents

394. Section 85 relates to the payability of personal independence payment when a person is a resident of a care home (which includes certain residential schools and colleges).

395. Subsections (1) and (2) provide that if a person is a resident in a care home, and receives “qualifying services” (as defined in subsection (4)), which are paid for to any extent out of public or local funds, regulations may provide that no amount of the daily living component of personal independence payment is payable to the person for the period in question. However, persons will retain an underlying entitlement to the benefit and payment can be reinstated when they leave the care home, providing they continue to satisfy the entitlement conditions.

396. Payment of the care component only ceases where the funding (in part or in full) comes from public funds or local funds. For example, it does not apply to people who pay all of the cost of their care and accommodation themselves or to those whose care costs are met by relatives or charities.

397. It is intended that the regulations will provide that generally for the first 28 days after a claimant becomes a resident in a care home, they will continue to receive the existing daily living component to cover continuing costs. This approach also avoids interference with a claimant’s award during short periods of respite care in a care home. Payment of any mobility component will continue as normal.

Section 86: Hospital in-patients

398. Section 86 relates to the payability of personal independence payment when a person is an in-patient of a hospital or similar institution.

399. Subsections (1) and (2) provide that if a person is receiving treatment as an in-patient in a hospital or similar institution and any costs of treatment or accommodation or related costs are borne from public funds, regulations may provide that no amount of the daily living or mobility components of personal independence payment is payable to the person for the period in question. However, persons will retain an underlying entitlement to the benefit and payment can be reinstated when they leave the hospital or similar institution, providing they continue to satisfy the entitlement conditions.

400. Payment of the respective components only ceases where the funding (in part or in full) comes from public funds. For example it does not apply to people who are private patients, or to those whose costs are met by relatives or charities.

401. It is intended that the regulations will provide that generally for the first 28 days after a claimant becomes an in-patient of a hospital or similar institution, they will continue to receive the existing benefit to cover continuing costs. This approach also avoids interference with a claimant’s award during short periods of hospitalisation.

Section 87: Prisoners and detainees

402. With a view to avoiding duplication of funding, section 87 provides that personal independence payment ceases to be payable to those imprisoned or detained in legal custody. Regulations may make exceptions to this general rule in certain circumstances.

Section 88: Claims, awards and information

403. Subsection (1) of section 88 sets out that a person cannot establish entitlement to personal independence payment for a period before they make or are treated as making a claim.

404. Subsections (2) and (3) set out that an award of personal independence payment will normally be for a fixed period except where the person making the award considers that a fixed term award would be inappropriate (in which case an award would be made for an indefinite period). The person making the award is required to have regard to guidance issued by the Secretary of State in deciding on the appropriateness or otherwise of a fixed term award. A fixed or indefinite period award applies to the benefit as a whole rather than to either component of it.

405. Subsection (4) ensures that all information supplied for the purposes of personal independence payment is social security information for the purposes of data-sharing. This subsection covers, for example, medical information relating to a claimant.

Section 89: Report to Parliament

406. Section 89 provides that the operation of assessments for personal independence payment (see section 80) will be the subject of two biennial independent reports prepared by a person appointed by the Secretary of State. The Secretary of State is required to lay the first report within two years of the regulations under section 80 coming into force, and the second within four years.

Section 90: Abolition of disability living allowance

407. Section 90 provides for the repeal of sections 71 to 76 of SSCBA 1992, which are the key provisions relating to disability living allowance. It does not provide for the immediate abolition of disability living allowance and will be brought into force on such day as the Secretary of State may appoint in accordance with section 140(3). There is no time period in which the disability living allowance provisions must be repealed, it will be done as and when the entire caseload moves over to personal independence payment.

Section 91: Amendments

408. Section 91 gives effect to Schedule 9 which contains amendments relating to Part 4.

Schedule 9: Amendments relating to Part 4

Transport Act 1982

409. Section 70 of the Transport Act 1982 allows the Secretary of State to make money available to people who apply for medical certificates in relation to exemptions from the obligation to wear seat belts. One such category of persons is those in receipt of disability living allowance. Paragraph 1 adds persons in receipt of personal independence payment.

Child Support Act 1991

410. Section 8 of the Child Support Act 1991 makes an exception to the limitations on courts making maintenance orders in relation to a child who receives disability living allowance. Paragraph 2 adds someone in receipt of personal independence payment to that exception.

Social Security Contributions and Benefits Act 1992

411. Paragraph 4 amends section 30B in relation to the benefit rate for incapacity benefit. This currently provides that those who terminally ill or in receipt of the highest rate of the care component of disability living allowance are entitled to a particular rate of incapacity benefit. The amendment extends this provision to include personal independence payment at a rate to be designated by regulations.

412. Paragraph 5 amends section 64 to provide that entitlement to attendance allowance is not permitted where a person is entitled to personal independence payment so that a person does not become entitled to both benefits.

413. Disability living allowance is a qualifying benefit for the purpose of eligibility for a Christmas bonus. Paragraph 6 amends section 150 so as to make personal independence payment a qualifying benefit for that purpose.

Social Security Administration Act 1992

414. Section 1 of SSAA 1992 provides that entitlement to benefits is dependent upon a person making a claim in such manner and at such time as the Secretary of State may prescribe. Paragraph 8 extends the scope of the benefits that are subject to this provision to include personal independence payment.

415. Section 5 of SSAA 1992 provides that specified benefits are subject to regulations in relation to claims, payments and the provision of information. Paragraph 9 extends the scope of the benefits that are subject to this provision to include personal independence payment.

416. Section 71 of SSAA 1992 provides that where a specified benefit has been subject to an overpayment through a misrepresentation or a failure to disclose information that overpayment may be recoverable by the Secretary of State. Paragraph 10 extends the scope of the benefits that are subject to this provision to include personal independence payment.

417. Section 73 of SSAA 1992 provides that benefit payment can be adjusted where another benefit is payable to a person or where a person is in hospital. Disability living allowance is such a benefit; paragraph 11 adds personal independence payment but excludes it from the provisions applying to hospitals as powers have already been taken at section 86 to adjust benefit in these circumstances.

418. Section 121DA of SSAA 1992 sets out the provisions that fall within the definition of “the relevant social security legislation” in Part 6 of the Act, which relates to enforcement. The provisions relating to disability living allowance fall within that definition; paragraph 12 extends the definition to include Part 4 of the Act.

419. Sections 122B and 122C of SSAA 1992 apply to the supply of Government information for various purposes including the prevention of fraud, the purpose of verification and the administration of benefits. Information supplied under those sections is, by virtue of the amendments made by paragraphs 13 and 14, to be capable of being further disclosed for the purposes of any civil or criminal proceedings relating to Part 4 of the Act.

420. Sections 124 and 125 relate to registrations of birth, marriage and death where evidence of such an event is necessary for the purpose of benefit administration. The provisions relating to disability living allowance are within the ambit of sections 124 and 125. Paragraphs 15 and 16 extend the ambit of those sections to Part 4 of the Act.

421. Under SSAA 1992, the Secretary of State has an obligation to review the amount paid in benefits, which allows for benefit uprating. Section 150 makes provision for which amounts are to be reviewed. For disability living allowance this is currently provided under section 150(1)(b); paragraph 17 extends this to provide the same for personal independence payment.

422. Section 159 of SSAA 1992 provides that if there is an alteration in the figures which affect a person’s income for the purposes of income support, then any consequent change in the amount of income support which is payable takes effect automatically without the need for a decision by an adjudication officer. Disability living allowance is relevant by virtue of the definition of “benefit income”; paragraph 18 adds personal independence payment to that definition.

423. Section 160 of SSAA 1992 extends the process begun by section 159 of taking routine adjustments in the amount of income support out of the ordinary mechanism for review. Paragraph 22 extends the scope to personal independence payment.

424. Sections 159A and 160A of SSAA 1992 have the same effect as sections 159 and 160 but relate to jobseeker’s allowance. Paragraphs 19 and 23 extend the scope of these provisions to personal independence payment.

425. Section 159B of SSAA 1992 has the same effect as section 159 but relates to state pension credit. Paragraph 20 extends the definition of “benefit income” to include personal independence payment.

426. Sections 159C and of 160B of SSAA 1992 have the same effect as section 159 and 160 but relate to employment and support allowance. Paragraphs 21 and 24 extend the scope of these provisions to include personal independence payment.

427. Section 165 of SSAA 1992 makes provision for adjustments between the National Insurance Fund and the Consolidated Fund. Paragraph 25 amends section 165(1)(a)(iii) so that it applies to personal independence payment.

428. Section 170 of SSAA 1992 makes provision for referring matters to the Social Security Advisory Committee, including consideration and advice on questions relating to the operation of any of the relevant enactments. Paragraph 26 makes an insertion to include personal independence payment under the definition of “the relevant enactments” and “the relevant Northern Ireland enactments”.

429. Section 179 of SSAA 1992 provides a power to make orders to modify or adapt legislation in its application to cases affected by agreements with the government of a country outside the United Kingdom in matters set out under this section. The modifications that may be made include in relation to the subject matter of disability living allowance; paragraph 27 makes an amendment to include the subject matter of personal independence payment.

430. Section 180 of SSAA 1992 enables the Secretary of State to pay travelling expenses in connection with requirements for claimants to attend interviews in connection with benefits. Paragraph 28 provides that personal independence payment will be relevant for this purpose.

431. Section 182B of SSAA 1992 provides that the Secretary of State or the Northern Ireland Department may require the Post Office to provide details relating to the redirection of post to either the Secretary of State or the Department for use in the prevention, detection, investigation or prosecution of offences relating to social security, or for use in checking the accuracy of information relating to benefits, contributions or any other matter relating to social security and amending or supplementing such information. Subsection (5) prohibits that information from being supplied to anyone else unless it could either be supplied under subsection (1) or (2) of that section, or where it is supplied for the purpose of civil or criminal proceedings relating to a range of legislation including SSCBA 1992 which includes provisions relating to disability living allowance. Paragraph 29 adds Part 4 of this Act to the list of legislation.

432. Section 184 of SSAA 1992 enables regulations to be made requiring persons to be examined periodically and to furnish information required for the purposes of such examination, in connection with suspension from or suitability for employment in an occupation where a person has been found to suffer from or to be at risk of pneumoconiosis. It also enables regulations to be made disqualifying a person from benefit if they fail without good cause to comply with such requirements. Paragraph 30 amends section 184(c) to include personal independence payment as a benefit that can be subject to disqualification under this section.

433. A person is prevented from assigning or charging benefit to a trustee or other person acting on behalf of the beneficiary’s creditors under section 187 of SSAA 1992. Paragraph 31 makes provision for personal independence payment to be included.

434. Paragraph 32 extends the definition of “benefit” in SSAA 1992 to include personal independence payment.

435. Part 1 of Schedule 7 to SSAA 1992 lists regulations which do not require prior submission to Social Security Advisory Committee. The weekly rates of disability living allowance are set out in regulations which do not need to be referred to the Committee; paragraph 33 adds a similar provision for the regulations which will set out the weekly rates of the components of personal independence payment.

Social Security (Recovery of Benefits) Act 1997

436. The Social Security (Recovery of Benefits) Act 1997 provides for the recovery of benefits paid to those who are injured or made ill from those who cause personal injury or disease. Paragraph 35 applies these provisions to personal independence payment.

437. Schedule 2 to the Act makes provision for how benefits should be taken into account for different heads of compensation. Paragraph 36 amends that Schedule to include references to personal independence payment.

Social Security Act 1998

438. Section 2 of SSA 1998 provides that decisions, determinations and assessments in relation to specified benefits may be issued by someone acting on behalf of the Secretary of State or by a computer that they are responsible for. Paragraph 38 extends the scope of the benefits that are subject to this provision to include personal independence payment.

439. Section 8 of SSA 1998 provides that decisions on any claim to a specified benefit or under a specified enactment are to be made by the Secretary of State. Paragraph 39 extends the scope of the benefits that are subject to these provisions to include personal independence payment. As a result of this amendment, provisions in relation to changing a decision (by way of revision or supersession) and rights of appeal are also extended to include personal independence payment.

440. Section 11 of SSA 1998 allows for provision to be made in regulations with respect to decisions made by the Secretary of State in relation to specified legislation. Paragraph 40 extends the scope of the legislation to include Part 4 of the Act.

441. Sections 27 and 28 of SSA 1998 allow for restrictions on entitlement to benefit made under specified enactments in circumstances relating to cases of error following an appeal to the Upper Tribunal or to the courts and correcting accidental errors or setting aside decisions where it appears justifiable to do so. Paragraphs 41 and 42 extend the scope of the legislation to include personal independence payment and the legislation under which it is created.

442. Schedule 3 to SSA 1998 makes clear that decisions on payability of the care component of disability living allowance when someone is in a care home are subject to rights of appeal. Paragraph 43 ensures that similar decisions for the purposes of personal independence payment under section 85 are also subject to rights of appeal.

Immigration and Asylum Act 1999

443. Section 115 of the Immigration and Asylum Act 1999 excludes certain people subject to immigration control from receiving certain benefits. One of these is disability living allowance, and the amendment in paragraph 44 extends the exclusion to personal independence payment.

Social Security Fraud Act 2001

444. SSFA 2001 makes provision in relation to obtaining and disclosing information, restricting payment of social security benefits in the case of persons convicted of offences relating to such benefits and for related purposes. These provisions currently apply to disability living allowance; paragraphs 46 and 47 provide that the same provisions will apply to personal independence payment so that it is included in the definitions of “disqualifying benefit”, “sanctionable benefit” and “social security benefit” for the purposes of particular provisions of that Act.

Income Tax (Earnings and Pensions) Act 2003

445. Section 677 and Part 1 of Schedule 1 of the Income Tax (Earnings and Pensions) Act 2003 provide that disability living allowance is wholly exempt from income tax. Paragraphs 49 and 50 similarly sets out that the personal independence payment is exempt from income tax.

Section 92: Power to make supplementary and consequential provisions

446. Section 92 enables regulations to make consequential, supplementary or incidental provision relating to Part 4 of the Act.

447. Regulations under this section may amend, repeal or revoke any relevant primary or secondary legislation already existing or amend or repeal any provision of an Act passed in the same Parliamentary session, and will be subject to the negative resolution procedure in Parliament.

Section 93: Transitional

448. Section 93 provides for transitional arrangements for the coming into force of Part 4 of the Act.

449. Subsection (1) provides a general power allowing the Secretary of State to make transitional arrangements through regulations such as he considers necessary or expedient. Subsection (2) gives effect to Schedule 10.

Schedule 10: Personal independence payment: transitional

450. Schedule 10 makes more detailed provision as to how the general regulation-making power in section 90 may be exercised.

451. Paragraph 1 allows regulations to make provision relating to the replacement of disability living allowance with personal independence payment. The “appointed day” means the date that section 75 comes into force.

452. Paragraph 2 contains provisions relating to claims made before the personal independence payment provisions come into effect. Sub-paragraph (1)(a) enables a claim for personal independence payment to be made before the appointed day. Sub-paragraph (1)(b) allows a claim for personal independence payment made before the appointed day to be treated as a claim for disability living allowance. This might be used if the person making the claim fell into a group which had yet to begin the transition process. Sub-paragraph (1)(c) allows for a claim for disability living allowance made before the appointed day to be treated as a claim for personal independence payment, which could be used if an individual submits a claim for disability living allowance shortly before the introduction of personal independence payment.

453. Sub-paragraph (2) allows for an award of personal independence payment to be made in respect of a period before the appointed day. This might be used if a person made a claim to disability living allowance shortly before the appointed day, and their claim was treated as a claim to personal independence payment and an award was made in respect of that period.

454. Paragraph 3 contains provisions relating to claims made after the appointed day. It allows for a phased transition from disability living allowance to personal independence payment.

455. Claimants may not be able to move voluntarily from disability living allowance to personal independence payment. Sub-paragraph (1)(a) provides that regulations may exclude temporarily or permanently anyone receiving disability living allowance from making a claim for personal independence payment. The power to exclude a person permanently could be used, for example, where a claimant is approaching state pension age and so will soon not meet the conditions of entitlement for personal independence payment.

456. Sub-paragraph (1)(b) allows for a temporary delay before a person can make a claim for personal independence payment. Sub-paragraph (1)(c) allows for a person to be excluded from entitlement temporarily or for a particular period.

457. Sub-paragraphs (1)(d) and (1)(e) allow for a claim for personal independence payment to be treated as a claim for disability living allowance and for a claim for disability living allowance to be treated as a claim for personal independence payment during the transitional period. This may apply particularly in cases where the claimant is excluded from claiming personal independence payment under sub-paragraph (1)(a).

458. Sub-paragraph (2) allows for an award of personal independence payment to be made in respect of a period before the appointed day. This follows the provision in paragraph 2(2) with the same effect for claims during the transitional period. It enables provision to be made on the conditions of entitlement to, and the amount of, an award, in such a situation.

459. Paragraph 4 enables regulations to make provision relating to ongoing awards of disability allowance and the making of awards for personal independence payment.

460. Sub-paragraph (1) allows for the termination of an award of disability living allowance and the making of an award of personal independence payment in its place. An award of personal independence payment may be made with or without the claimant having to apply.

461. Under sub-paragraphs (2)(a) and (b) regulations may require claimants to follow a certain procedure, provide information or undergo an assessment before a new award of personal independence payment begins, and may set out the consequences if a person fails to do so.

462. Sub-paragraph (2)(c) allows for regulations temporarily or permanently to alter the conditions of entitlement for people moving onto personal independence payment. This means that some people who are entitled to disability living allowance but would not otherwise meet the conditions of entitlement for personal independence payment could be treated as entitled to personal independence payment.

463. The sub-paragraph also allows for regulations temporarily or permanently to alter the conditions of entitlement for the assessment set out in subsections (1) and (2) of section 78.

464. Sub-paragraph (2)(d) enables regulations to make provision for the amount of an award of personal independence payment made by virtue of paragraph 4.

465. Paragraph 5 enables regulations to disregard any gap in entitlement to disability living allowance in cases where the exercise of the power to make transitional regulations would otherwise be prevented. Paragraph 5 also enables provision to be made modifying the operation of the “required period condition” in transitional cases.

Section 94: Regulations

466. Section 94 makes additional provision relating to the regulation-making powers in Part 4 of the Act. In particular, subsection (2) enables regulations to make different provision for different cases or purposes. It also enables provision to be made in relation to some or all of the cases or purposes within its scope.

467. The regulations may also make different provision for different ages, together with incidental or consequential provisions. This could include saving some provisions (for example, in relation to disability living allowance) where they continue to be required.

468. Subsection (7) provides that regulations under Part 4 are to be subject to the negative resolution procedure in the Houses of Parliament. Exceptions to this are set out in subsection (6).

Section 95: Interpretation of Part 4

469. Section 95 defines certain expressions for the purposes of Part 4.

Part 5: Social security: General

Section 96: Benefit cap

470. Section 96 provides for the amount of welfare benefits a claimant or a couple receives to be capped by reference to the average earnings of working households in Great Britain.

471. Subsections (1) to (3) allow for regulations to apply a cap to the total amount of welfare benefits an individual or couple receives. Where total entitlement is higher than the level of the cap, entitlement to benefits may be reduced by up to the excess.

472. Subsection (4) illustrates the way in which the power can be used. In particular, it enables regulations to specify how a person’s total entitlement to welfare benefits is to be calculated and how the amount of any reduction should be determined. Regulations may prescribe the benefits from which a reduction can be made, make provisions for the period over which it will be determined, provide for circumstances in which the cap will not apply and make provision for its relationship with any other reductions of benefit.

473. The level of the cap will be set in regulations under subsection (5), and must (as a result of subsection (6)) be determined by reference to the estimated average earnings of working households. Under subsections (7) and (8), the Secretary of State may determine how best to estimate average weekly earnings in Great Britain after tax and National Insurance Contributions.

474. Subsection (9) provides that the application of the cap may not reduce any welfare benefit which falls within the legislative competence of the Scottish Parliament or the National Assembly for Wales. The same applies to any welfare benefit which is provided for by the Welsh Ministers, the First Minister for Wales or the Counsel General to the Welsh Assembly Government.

475. Subsection (10) allows regulations to prescribe which benefits, allowances, payments or credits may be considered welfare benefits for the purposes of calculating and applying the cap, and defines other terms for the purposes of this section. Subsection (11) ensures that this list of welfare benefits may not include state pension credit or state retirement pensions.

Section 97: Benefit cap: supplementary

476. Section 97 makes supplementary provision relating to the cap on welfare benefits.

477. Subsection (1) allows regulations under section 96 to make different provision for different purposes or cases. This may, for example, allow for the level of the cap to differ for single people and couples. Subsections (2) and (3) provide that any regulations under section 96 will be made by statutory instrument which will be subject to the affirmative resolution procedure in the first instance.

478. Subsection (4) amends SSAA 1992 to provide that the level of the cap must be reviewed each tax year to see whether it has maintained its relationship with estimated average earnings. If the Secretary of State decides that it is appropriate to change the level of the cap, this may be done through an up-rating order.

479. Subsection (5) inserts a new paragraph 8A into Schedule 2 of SSA 1998 so that a decision that the benefit cap applies to a particular award of benefit may not be appealed. If the benefit cap is applied incorrectly, leading to an incorrect award of benefit, then that will be appealable to the usual extent, but whether or not the benefit cap is to apply will be a matter of law.

Section 98: Claims and awards

480. Section 98 amends section 5(1) of SSAA 1992, which makes common provision about claims for all relevant social security benefits dealt with under the Act.

481. Subsection (2) amends section 5(1)(d) of SSAA 1992. Section 5(1)(d) allows advance claims to benefit to be made. An advance claim may be made in a situation where a claimant does not presently but soon will meet the conditions of entitlement for a benefit. This might be used, for example, in cases where a person is working out a notice period and is shortly to become unemployed.

482. This amendment ensures that the power at section 5(1)(d) includes the power to make an advance award of benefit, where a claimant would not be entitled to benefit at the point of claim, but would become entitled at a prescribed time after the award were made. This provides for situations where a person may become entitled to a higher amount of benefit at a certain point in a benefit award, which would mean that an award became payable only at that stage. For example, a person with income above a certain level may not be entitled to income-related ESA during the assessment phase until they have completed the work capability assessment and become entitled to either the work-related activity or support components.

483. The effect of subsection (2) is that the power under section 5(1)(d) allows for a claim to be made and an award to arise at a future date where a claimant meets the conditions of entitlement at a prescribed time after the making of the award, or where other prescribed conditions are met.

484. Subsection (3) allows for an advance award to be reviewed if these conditions are not met. It is consequential upon the amendment made by subsection (2).

485. Subsection (4) amends section 5(1)(g) to allow regulations to provide for one member of a couple to make a claim for benefit on the behalf of both members jointly.

486. Subsection (5) amends section 5(1)(j) of SSAA 1992 to allow the Secretary of State to prescribe in regulations changes of circumstances that must be reported by claimants and others.

Section 99: Powers to require information relating to claims and awards

487. Section 99 amends SSAA 1992 to enable regulations to require prescribed people to supply information that is or could be relevant to potential or current claims and awards of relevant benefits. New section 5(1A) of SSAA 1992 will ensure that the Secretary of State can make regulations to obtain information.

Examples of how this might be used are:

• using information from other Government departments to enable DWP to undertake campaigns to ensure people are aware that they could receive particular benefits;

• using information held by other Government departments, agencies and service providers that could be used to determine entitlement to, and maintain accurate assessment of a social security benefit;

• to assist in the transition from existing benefits onto the universal credit;

• to obtain information and facilitate the localisation of benefits and services where it would be right for DWP to do so.

488. Subsections (2), (4) and (5) make consequential amendments resulting from these changes and repeal legislation replaced by the new section 5(1A). Part 10 of Schedule 13 contains consequential repeals.

489. Subsections (2), (4) and (5) make consequential amendments resulting from these changes and repeal legislation replaced by the new section 5(1A). Part 10 of Schedule 13 contains consequential repeals.

Section 100: Payments to joint claimants

490. Section 100 amends section 5 of SSAA 1992. The amendment will apply in respect of the payment of all relevant social security benefits dealt with under the Act.

491. The section inserts a new subsection (3B) into section 5 allowing regulations to set out the person to whom a benefit is paid where the benefit is awarded to a couple jointly. Subsection (3B) provides that the Secretary of State may determine that the couple should nominate a lead individual to receive payment of the benefit. Alternatively the Secretary of State may determine to which member of the couple the payment will be made.

Section 101: Payments on account

492. Section 101 substitutes section 5(1)(r) of the SSAA 1992, which makes provision for payments on account of benefit.

493. In its current form, section 5(1)(r) allows the Secretary of State to make payments on account on a discretionary basis in cases where a claim cannot be made or determined immediately (because further information is needed, for example); where a claim has been made and it is impracticable for the claim or an appeal, reference, review or application on it to be determined immediately; or where an award has been made but it cannot be paid immediately (when a national or local emergency prevents claims being handled normally, for example). New section 5(1)(r)(i) maintains this position. Payments on account are recovered from ongoing payments of benefit, or where this is not possible, directly from the claimant.

494. The substitution will allow for a payment on account to be made in additional circumstances. New section 5(1)(r)(ii) provides for a payment to be made where a claimant is in need – examples of how it might be applied include where benefit has been claimed, but the first payday has not yet been reached, or where a claimant is receiving benefit, but encounters difficulty in budgeting between benefit payments for example, where there is a change in their award. Regulations will make provision for the test of need.

495. New section 5(1)(r)(iii) will enable the Secretary of State to make a payment on account where, subject to criteria set out in regulations, it can reasonably be expected to be recovered. These recoverable payments are intended to help towards meeting expenses which are difficult to budget for out of normal benefit income (such as a fridge or cooker breaking down and needing fixing or replacing), or for which the claimant has been unable to save, or to deal with fluctuations in expenditure throughout the year, for example where children in the household who would normally have free school meals are on summer holidays. Such payments will replace the existing social fund budgeting loans – see section 70.

496. Section 22 of the WRA 2009 has not been commenced. Had it been, it would have extended the range of situations in which a payment on account could be made beyond existing section 5(1)(r) of the SSAA 1992. It would have extended making payments on account to situations similar to those that will be covered by new section 5(1)(r)(ii). As section 22 would not have provided for payments on account in those situations that will be covered by new section 5(1)(r)(iii), subsection (2) repeals it.

Section 102: Power to require consideration of revision before appeal

497. Section 12 of SSA 1998 makes provision for a claimant (or any other prescribed person) to appeal to the First-tier Tribunal against a decision of the Secretary of State. Although the claimant (or other person) could ask initially for the decision to be reconsidered with a view to revision (under section 9 of the Act), in practice many people do not do so and make an appeal from the outset.

498. In order to resolve more disputes with claimants through the internal reconsideration process before an appeal to the tribunal is made, subsections (2) and (3) of section 102 amend section 12 to enable the Secretary of State to make regulations setting out the cases or circumstances in which an appeal can be made only when the Secretary of State has considered whether to revise the decision.

499. New section 12(3B), which is inserted by subsection (3), contains examples of how the new power might be used. In particular, regulations may provide that there is to be a right of appeal only where the Secretary of State has considered whether to revise the decision as a result of an application having been made for that purpose.

500. In certain cases, the regulation-making powers under section 12 of SSA 1998 are exercisable by a person other than the Secretary of State (for example, functions relating to child benefit and guardian’s allowance are exercisable by HMRC). New subsection (3C), which is also inserted by subsection (3), makes it clear that in any particular case the new powers in section 12(3A) are to be exercisable by the person responsible for making regulations under section 12 in that case.

501. Where there is no right of appeal as a result of regulations made under the new provisions, subsection (4) enables provision to be made in regulations for treating any purported appeal as an application for revision.

502. Subsection (5) provides that regulations to be made under new subsection 12(3A) will be subject to the affirmative procedure.

503. Subsection (6) introduces Schedule 11 which makes equivalent provision in the case of certain other appeals. These relate to vaccine damage payments, child support, the recovery of benefits, housing benefit and council tax benefit, and payments in respect of mesothelioma.

504. Section 136(4)(b) enables regulations made under the new provisions to be brought into force in different areas at different times, which enables a phased implementation. The new regulations under section 12(3A) may need to be accompanied by changes to other regulations relating to decisions and appeals. But such other regulations cannot normally be made so as to apply only to a limited area. Subsections (7) to (9) of section 102, therefore, enable other provisions in legislation relating to decisions and appeals, if made in connection with regulations requiring consideration of revision before appeal, to apply only in relation to a limited area.

Section 103: Supersession of decisions of former appellate bodies

505. In November 2008 the Ministry of Justice legislated to abolish the old social security appeal tribunals, the Child Support and the Social Security Commissioners and transferred their functions to the new appeals system: the First-tier Tribunal and the Upper Tribunal.

506. Under the old system, the Secretary of State, local authorities and the Child Maintenance and Enforcement Commission (“the Commission”) could change (supersede) a decision of an appeal Tribunal or a Commissioner in limited situations set out in legislation. The ability to supersede decisions of the former appeal bodies is crucial so that decision-makers can properly adjust the person's award to take account of a change of circumstances or new facts which come to light after the appeal body's decision – which may be beneficial to the individual as well as disadvantageous.

507. Whilst the legislation ensured that the Secretary of State, local authorities and the Commission could supersede decisions made under the new appeals system, the need to supersede decisions made under the old system was inadvertently overlooked. The legislation changed references to the former appeal bodies in primary and secondary legislation to references to the new appeal bodies, when it should have contained a reference to both.

508. Section 103 introduces Schedule 12. This amends provisions in Acts by inserting references to the old appeals bodies. This, taken together with subsection (2)(a) of this section, ensures that the legislation is restored to the position that it should have been when the old appeal bodies were abolished and their functions transferred.

509. A regulation-making power is needed to correct the same errors in subordinate legislation concerning supersession decisions. It is envisaged that the regulations would, for example, insert references to the former appeals bodies in provisions relating to the cases or circumstances in which supersession decisions can be made. Subsection (2) enables regulations made possible by virtue of the amendments in Schedule 12 to take effect as if they too had come into force when the old appeals bodies were abolished.

Section 104: Electronic communications

510. Section 104 applies where regulations under SSAA 1992 or SSA 1998 require or authorise the use of electronic communications. Examples could be regulations which make provision about the manner in which a claim for benefit must be made or relevant information or evidence must be provided. Section 189(5) of SSAA 1992 and section 79(6) of SSA 1998 ensure that regulations made under those Acts may include incidental and supplementary provision.

511. This section makes it clear that these powers include, in the case of regulations to which this section applies, provision of a kind set out in sections 8(4), (5) and 9(5) of the Electronic Communications Act 2000. These cover, for example, provision as to:

• the form which electronic communications must take;

• the conditions under which electronic communications are allowed the use of intermediaries in the transmission or authentication of electronic communications; and

• the method of determining (and proving in legal proceedings) whether, when, where, and by whom an electronic communication was made.

512. The section also enables conditions or requirements concerning the use of electronic communications to be framed with reference to directions given by the Secretary of State.

Section 105: Recovery of benefit payments

513. Section 105(1) sets out provisions concerning the recovery of overpaid universal credit, JSA, ESA and the housing credit element of state pension credit (housing credit) that are inserted into the SSAA 1992.

514. New section 71ZB sets out the general provisions about the recovery of overpaid universal credit, JSA, ESA and the housing credit element of state pension credit.

515. Subsection (1) gives the Secretary of State the power to recover any amount of universal credit, JSA and ESA, which has been paid in excess of entitlement. It also gives the Secretary of State the power to recover any amount of the housing credit, which has been paid in excess of entitlement, except in circumstances that will be prescribed in regulations.

516. Subsections (2) to (4) make further provision about the deductions from benefits which can be made where an amount recoverable from a person under section 71ZB was paid to that person on behalf of another (for example where an amount is recoverable from a landlord).

517. Subsection (5) means that where another income or benefit that would affect the award of universal credit is paid late, any amount of universal credit which would not have been paid had the other income or benefit been paid on time, is treated as an overpayment and is recoverable from the universal credit recipient.

518. Subsection (6) allows for an amount paid to one member of an award which is made to persons jointly to be recovered from the other by any method (as listed in subsection (7)).

519. Subsection (7) provides that overpayments may be recovered by deducting from benefit, by deduction from earnings, through the courts, or by adjustment of subsequent payments of benefit.

520. New section 71ZC relates to recovery of overpayments under new section 71ZB by the method of deduction from benefit.

521. Subsection (1) provides that overpayments of universal credit, JSA, ESA and the housing credit can be recovered by making deductions from payments of prescribed benefits.

522. Subsection (2) provides that where universal credit, JSA, ESA or the housing credit is paid to a third party (for example a landlord) on the benefit claimant’s behalf, overpayments of those benefits may be recovered from:

• prescribed benefits to which the third party is entitled;

• ongoing payments of prescribed benefits to the third party being made on the benefit claimant’s behalf; or

• ongoing payments of prescribed benefits paid to the third party on other benefit claimants’ behalf (for example, if a landlord has other tenants who are in receipt of universal credit or housing credit).

523. Subsection (3) provides that in circumstances to be prescribed in regulations, where deductions are made from payments of prescribed benefits to the third party on the claimant’s behalf, the claimant’s obligations to the third party will be discharged, for example the landlord would not be able to put the claimant into arrears with their rent.

524. Subsection (4) provides that in all cases where deductions are made from payments of prescribed benefits to the third party on other benefit claimants’ behalf, the other claimants’ obligations to the third party will be discharged, for example the landlord would not be able to put the other claimants into arrears with their rent.

525. New section 71ZD relates to the recovery of overpayments under new section 71ZB by deduction from earnings.

526. Subsection (1) allows the Secretary of State to make regulations so as to allow amounts recoverable under new section 71ZB to be recovered by deduction from earnings.

527. Subsection (2) allows the Secretary of State to prescribe in regulations the definition of ‘earnings’ for the purpose of this section.

528. Subsection (3) describes the related issues for which the Secretary of State may prescribe in regulations under subsection (1). These include preventing an employer from making deductions from earnings where they would take earnings below a specified level, allowing for an employer to deduct a prescribed sum from earnings in respect of the employer’s administration costs, providing for a criminal offence for non-compliance with certain of the obligations under those regulations and legislating as to priorities of deductions from earnings made under these powers as against those made under other legislation.

529. New section 71ZE relates to recovery of overpayments under new section 71ZB through the courts.

530. Subsection (1) provides that overpayments are recoverable through the county court system for persons residing in England and Wales. Subsection (2) provides that overpayments are recoverable through the sheriff court system for persons residing in Scotland.

531. It is standard practice for the Secretary of State to seek to recover court costs when there is a court judgment in his favour. There is no mechanism at present however for the Secretary of State to recover any costs associated with civil recovery of overpayments in the same way as if they formed part of the overpayment debt, by deduction from benefits, or by adjustment of subsequent payments of benefit. Subsection (3) allows the Secretary of State to recover costs by the same method as the overpayment is recovered.

532. New section 71ZF relates to recovery of overpayments under new section 71ZB using the method of adjustment of subsequent payments of benefit.

533. It provides that the Secretary of State may prescribe in regulations that in certain circumstances, amounts paid but subsequently determined as not payable, can be treated as properly paid and be set against future payments of benefit or against certain payments to third parties.

534. New section 71ZG makes provision enabling the Secretary of State to recover any amount paid by way of payments on account.

535. Section 71ZG(2) provides that the payment on account is recoverable from the person to whom it was paid, or another prescribed person. This includes the benefit claimant and also the benefit claimant’s partner or an appointee who appropriates excess benefit for their own use.

536. Subsection (3) allows regulations to calculate or estimate, where appropriate, the amount of a payment on account to be recovered.

537. Subsection (4) allows for an amount paid to one member of an award which is made to persons jointly to be regarded as paid to the other. This will ensure that the payment on account can be recovered from either of them.

538. Subsection (5) enables the methods of recovery set out in new sections 71ZC to 71ZE of the SSAA 1992 to be applied to recover payments on account in the same way as they allow for the recovery of overpayments of benefit. While the Secretary of State may choose, in many cases, to recover payments on account from ongoing payments of benefit, there will be circumstances where other methods of recovery are necessary, for example, where a payment on account is made at the beginning of a benefit claim but the claimant ceases to receive benefit before the payment has been fully repaid to the Secretary of State.

539. New section 71ZH relates to the recovery of payments made to people in or facing hardship.

540. Subsection (1) provides that the new subsection applies to hardship payments which are recoverable. This may include payments made under section 28 of this Act to universal credit claimants who are subject to a sanction or under the equivalent provisions for JSA in section 19C of the JA 1995, inserted by section 55 of this Act. It may also apply to payments made to JSA claimants in cases where they are entitled to a prescribed rate of benefit despite not meeting the jobseeking conditions, or where their claim is yet to be determined. Any hardship payments made to claimants subject to a sanction for fraud under the listed sections of SSFA 2001 may also be covered by these provisions.

541. The amount recoverable may be determined in regulations, and may be recovered from the person the payment was made to or any other person specified in regulations. Subsection (4) provides that for the purposes of universal credit or joint-claim JSA a hardship payment paid to one member of a couple may be considered as paid to the other.

542. Subsection (5) enables the methods of recovery set out in sections 71ZC to 71ZF to be applied to hardship payments in the same way as overpayments of universal credit, JSA, ESA or the housing credit.

543. As overpayments of the housing credit will be recoverable in accordance with section 71ZB instead of section 71, section 105(2) makes the required consequential amendment to section 71.

544. Section 105(3) and (4) respectively make consequential amendments to sections 115A and 115B SSAA 1992 to ensure that the provisions relating to civil penalties apply where sums are recoverable under new section 71ZB.

545. Paragraph 9 of Schedule 1 to JA 1995 provides that regulations may provide for an income-based JSA to be payable at a prescribed rate and for a prescribed period in relation to cases where regulations under paragraph 8 provide for entitlement to JSA despite a claimant not meeting all of the jobseeking conditions, or regulations under paragraph 8A provide for a joint-claim couple to be entitled to a joint-claim JSA without both members of the couple meeting all of the conditions of entitlement in section 1(2B) of the Act, or in some circumstances without both members having to have made the claim. Section 105(5) amends paragraph 9 to allow the regulations to provide for the whole or part of such payments of JSA to be recoverable in prescribed circumstances.

546. Section 105(6) and (7) amend the SSA 1998 in two respects. Firstly, to ensure that any person from whom it is determined that an overpayment is recoverable under new sections 71ZB, 71ZG or 71ZH, has the same right of appeal against that determination as a claimant. Secondly, to provide that in respect of overpayments under section 71ZB (other than overpayments of the housing credit) and amounts recoverable under sections 71ZG and 71ZH, appeals lie only in relation to decisions as to the amount of the payment recoverable under those sections. In respect of overpayments of the housing credit, the amendments provide that appeals lie both in respect of the decision on whether the overpayment is recoverable and the amount recoverable.

Section 106: Deductions from earnings: other cases

547. Section 106 amends sections 71, 71ZA, 75 and 78 of the SSAA 1992 to provide for the recovery of social security debt not covered by the equivalent provisions in section 105 to be recovered by deduction from earnings.

Section 71

548. New subsection (9A) allows regulations to provide that amounts recoverable under section 71(8) (i.e. overpayments of benefits not covered by section 71ZB) may be recovered by deduction from earnings.

549. New subsection (9B) allows the Secretary of State to prescribe in regulations the definition of ‘earnings’ for the purpose of this section.

550. New subsection (9C) describes the related issues for which the Secretary of State may prescribe in regulations under subsection (9A). These include preventing an employer from making deductions from earnings where they would take earnings below a specified level, allowing for an employer to deduct a prescribed sum from earnings in respect of the employer’s administration costs, providing for a criminal offence for non-compliance with certain of the obligations under those regulations and legislating as to priorities of deductions from earnings made under these powers as against those made under other legislation.

Section 71ZA

551. New subsection (2A) is inserted into section 71ZA to allow for the recovery of overpaid discretionary social fund payments which are recoverable by virtue of that section to be recovered by deduction from earnings.

Section 75

552. New subsection (8) allows regulations to provide that overpaid housing benefit recoverable by virtue of section 75(4) may be recovered by deduction from earnings.

553. New subsection (9) allows the Secretary of State to prescribe in regulations the definition of ‘earnings’ for the purpose of this section.

554. New subsection (10) describes the related issues for which the Secretary of State may prescribe in regulations under subsection (8). These include preventing an employer from making deductions from earnings where they would take earnings below a specified level, allowing for an employer to deduct a prescribed sum from earnings in respect of the employer’s administration costs, providing for a criminal offence for non-compliance with certain of the obligations under those regulations and legislating as to priorities of deductions from earnings made under these powers as against those made under other legislation.

Section 78

555. New subsection (3C) allows regulations to provide that repayable social fund awards may be repaid by deduction from earnings.

556. New subsection (3D) allows the Secretary of State to prescribe in regulations the definition of ‘earnings’ for the purpose of this section.

557. New subsection (3E) provides for the same related issues for which the Secretary of State may prescribe in regulations under section 71(9C) to apply to those social fund amounts recoverable under section 78(3C).

Section 107: Recovery of child benefit and guardian’s allowance

558. Section 107 amends section 71(8) of SSAA 1992. Section 71 provides the statutory basis for dealing with overpayments of prescribed social security benefits (which include Child Benefit and Guardian’s Allowance) that have occurred where a person has misrepresented or failed to disclose anything relevant to their claim and the overpaid sum would not have been paid but for that misrepresentation or failure to disclose. Section 71(8) of SSAA 1992 allows overpayments made in those circumstances to be recovered from future payments of prescribed benefits. The amendment in section 107 will allow overpaid child benefit or guardian’s allowance to be recovered from future payments of those benefits (but not other prescribed benefits).

Section 108: Application of Limitation Act 1980

559. Section 9 of the Limitation Act 1980 (“the 1980 Act”) imposes a time limit of six years on any “action” to recover a sum recoverable by virtue of an enactment (in England and Wales). Section 108 amends the section 38 of the 1980 Act (interpretation) for the avoidance of doubt; references in that Act to “action” do not include recovery under social security and tax credits legislation by means other than proceedings in a court of law.

560. Section 108(2) and (3) puts beyond doubt that the Secretary of State may recover social security overpayments and social security debt (including social fund debts) under the SSAA 1992 or the SSCBA 1992, and that HMRC Commissioners may recover overpayments of tax credit under TCA 2002 and overpayments of child benefit and guardian’s allowance under the SSAA 1992, by means other than court action. Accordingly it secures that the time limits do not apply, for example, to recovery by deduction from benefit.

561. Subsection (4) provides that this amendment is to be regarded as always having formed part of the 1980 Act but this does not apply in respect of proceedings brought before the commencement of this provision.

Section 109: Recovery of fines etc by deductions from employment and support allowance

562. The introduction of ESA by the WRA 2007 required consequential amendments to other legislation. Section 109 corrects an error in those consequential amendments relating to deductions from benefit for the payment of fines. As a result of the error, secondary legislation which allowed deductions for fines from both the income-related and contributory elements of ESA was not supported by the primary legislation, which allowed deductions from the income-related element only. The effect of the section is to give retrospective legal authority to the secondary legislation.

563. Subsection (1) removes references in the Criminal Justice Act 1991 which allow deductions for fines to be taken from only the income-related element of ESA. Subsection (2) removes a corresponding reference in Schedule 3 to WRA 2007.

564. Subsection (3) provides that the repeals in subsections (1) and (2) have retrospective effect from 27 October 2008, the ESA implementation date.

Section 110: Powers to require information relating to investigations

565. Section 109B (power to require information) of the SSAA 1992 specifies from whom the Secretary of State can require information when investigating whether benefit is properly payable.

566. Section 110 inserts new subsection (2)(ia) into existing section 109B(2) to add a regulation making power to prescribe persons from whom an authorised officer under existing section 109B (1) can require information. An example of how this might be used would be to require information from those who presently are asked to provide information for tax credits (for example persons providing child care).

567. Section 110(b) amends existing section 109B(2)(j) to include new subsection (2)(ia). Existing section 109B(2)(j) states that the persons from whom the Secretary of State may require information under section 109B(2)(a) to (i) includes their servants and agents. The amendment allows it to extend to new subsection (2)(ia).

Section 111: Time limits for legal proceedings

568. Section 111 amends section 116(2) of the SSAA 1992 (legal proceedings). Section 116(2) permits the Secretary of State to issue a certificate allowing proceedings for a summary only offence to be commenced later than 12 months from the date an offence was committed if it is within the period of 3 months from the date on which evidence comes to the Secretary of State’s knowledge, and this evidence is, in his opinion, adequate to justify a prosecution for the offence.

569. The Secretary of State will now be able to issue a certificate to extend the period when proceedings may be commenced where: a claimant is to be prosecuted for a housing benefit or council tax offence; that benefit is administered by a local authority; and although the 12 month period after the offence was committed has expired, the date is within 3 months of the date on which evidence came to the Secretary of State’s knowledge that is, in his opinion, adequate to justify a prosecution.

Section 112: Prosecution powers of local authorities

570. Section 112 inserts a new section 116ZA (Local authority powers to prosecute housing benefit and council tax benefit fraud) into SSAA 1992 to restrict local authority powers to bring proceedings relating to housing benefit and council tax benefit offences following the introduction of the Single Fraud Investigation Service. The purpose of the new section is to prepare for the Single Fraud Investigation Service to assume sole responsibility for the investigation of all suspected benefit fraud.

571. New section 116ZA(2) provides that an authority may not bring a prosecution for suspected benefit offences unless certain circumstances apply.

572. Under new section 116ZA(2)(a), where a local authority has already started an investigation in relation to a suspected fraud of housing benefit and/or council tax benefit, the authority may prosecute that offence. Where there is an existing investigation by a local authority, under section 116ZA(2)(b) if it applies to housing benefit, and under section 116ZA(2)(c), if it applies to council tax benefit, the local authority can bring proceedings against the same person for a fraud in respect of the other benefit if necessary. These are subject to the power of the Secretary of State at new subsection (3) to direct that the local authority may not bring proceedings, even if an investigation has already started.

573. Section 116ZA(2) also includes a regulation-making power under 116ZA (2)(d) to prescribe circumstances in which the local authority can bring proceedings for housing benefit or council tax benefit fraud.

574. Where the Secretary of State has given specific authorisation, new section 116ZA(2)(e) provides that local authorities will be allowed to prosecute fraud concerning housing benefit and council tax benefit where the Secretary of State has authorised such proceedings. New section 116ZA(4) allows the Secretary of State to specify a specific authority or type of authority or particular proceedings or description of proceedings in a direction under new subsection (2)(e) or (3).

575. New section 116ZA(5) provides that where, for the purposes of this section, the Secretary of State prescribes conditions to be fulfilled in order for a local authority to bring proceedings, the local authority may only bring proceedings if those conditions are satisfied. New section 116ZA(6) makes equivalent provision to that in section 116A(4) which provides that the Secretary of State may, in prescribed circumstances take over proceedings a local authority has commenced in relation to an alleged benefit offence. This also gives the Secretary of State a power to discontinue proceedings in prescribed circumstances, including where he withdraws his authorisation that the local authority can commence proceedings

576. New section 116ZA(7) makes equivalent provision to that in existing Section 116A(5), which sets out, in the context of prosecutions by local authorities, the different circumstances in which a local authority must adhere to the Code for Crown Prosecutors issued by the Director of Public Prosecutions under section 10 of the Prosecution of Offences Act 1985.

577. New section 116ZA(8) provides a regulation making power to define, for the purposes of section 116ZA what would constitute “an investigation in respect of benefit fraud” so as to trigger subsections (2)(a) to (c) of new section 116ZA.

578. New section 116ZA(9) makes clear that new section 116ZA does not extend to Scotland. This is because only the Procurator Fiscal may prosecute benefit offences in Scotland and new section 116ZA therefore has no application to Scottish local authorities.

579. Subsections (3) to (6) amend section 116A (local authority powers to prosecute benefit fraud) of SSAA 1992. Section 116A applies in the case of local authorities prosecuting benefit fraud other than housing benefit fraud or council tax benefit fraud. Subsection (4) inserts the word “other” after “prosecute” to clarify that the section applies to benefit fraud other than that addressed by new section 116ZA. Subsection (5)(a) and (b) as amended makes clear that a local authority may bring proceedings for benefit offences other than housing benefit or council tax benefit fraud, only if the Secretary of State provides for this in regulations or where the Secretary of State has directed that a local authority may bring those proceedings. Subsection (6) substitutes the word “withdraws” for “gives” in section 116A (4)(b) so language is consistent given the changes made to section 116A so that it applies to limit all benefit prosecutions by local authorities unless the Secretary of State prescribes or directs they may be brought.

Section 113: Penalty in respect of benefit fraud not resulting in overpayment

580. Section 113 amends section 115A of SSAA 1992 (penalty as alternative to prosecution).

581. Existing subsection (1) of section 115A of SSAA 1992 provides for a penalty as an alternative to prosecution, in cases where the Secretary of State considers there is sufficient evidence to prosecute for benefit fraud. At present, the financial penalty may only apply if an overpayment of benefit has actually been obtained. Subsection (2) of this section inserts a new section (1A) to cover cases where a person has claimed benefit falsely but has not obtained a benefit overpayment.

582. This allows for a minimum financial penalty in all cases of false claims for benefit including where they are detected before any payment is made and therefore do not result in an overpayment of benefit.

583. Subsections (3) to (8) make consequential amendments in the remainder of Section 115A and in the loss of benefit provisions in SSFA 2001.

Section 114: Amount of penalty

584. Section 114 replaces subsection (3) of section 115A of SSAA 1992 (penalty as alternative to prosecution). The purpose is to provide for a minimum financial penalty to apply to all cases of benefit fraud where a claimant is offered the penalty to avoid prosecution.

585. New subsection (3) provides that in the event of a fraud resulting in an overpayment, the penalty will be £350 or 50% of the amount overpaid whichever is greater up to a maximum of £2000. Subsection (3A) provides that, in cases where there is no overpayment, the penalty will be fixed at £350.

586. New subsection (3B) gives the Secretary of State the power to amend, by order, either the percentage of the amount of overpayment, or the minimum and maximum amounts that can be offered as a penalty.

Section 115: Period for withdrawal of agreement to pay penalty

587. Section 115 amends sections 115A(5) and 115B(6) of SSAA 1992 to reduce the cooling-off period for agreeing to pay a penalty to avoid prosecution, from 28 days to 14 days. The cooling-off period is the time during which a claimant or, in section 115B, an employer, may withdraw from his or her agreement to pay the financial penalty. A withdrawal means that the penalty need not be paid, but also that the Secretary of State’s agreement not to prosecute will no longer apply.

Section 116: Civil penalties for incorrect statements and failures to disclose information

588. Section 116 inserts new sections 115C (incorrect statements etc) and 115D (failure to disclose information) into SSAA 1992. The purpose is to provide for a civil penalty where claimants fail to disclose information that would affect benefit entitlement or the amount of benefit payable, fail without reasonable excuse, to report changes of circumstances or negligently provide incorrect information.

115C Incorrect statements etc

589. New section 115C(1) sets out the circumstances in which a penalty can be applied under section 115C. It applies to a person negligently giving incorrect statements or representations, or negligently giving information or evidence either in connection with a claim for, or an award of a benefit, when the person does not take reasonable steps to correct the error. The act or omission must have resulted in an overpayment of benefit which is not being dealt with through fraud action.

590. New section 115C (2) provides for the amount of the penalty to be prescribed in regulations. Section 115C(2)(a) provides that a penalty imposed under section 115C may be imposed on the person who acted negligently in the various ways set out in section 115C(1)(a). Alternatively, in the case of a claim for benefit made jointly, under section 115C(2)(b) the penalty may be imposed on the other member of the joint couple. This is, however, subject to the limitation in section 115C(3) that it cannot apply if the other member was not, and could not reasonably have been expected, to be aware that the negligent statement, representation or incorrect information had been given by the other person.

591. Section 115C(4) provides for the penalty to be recoverable from the person on whom it was imposed under section 115C(2). Sections 71ZC to 71ZE of SSAA inserted by section 105 provide powers to provide for different methods of recovery by way of deduction from benefit, deduction from earnings and court action. New section 115C(5) allows the appropriate authority referred to in new section 115C (4) to recover penalties by these means.

592. New section 115C(6) provides definitions of “appropriate authority”, “overpayment” and “relevant social security benefit” for the purposes of new sections 115C and 115D.

115D Failure to disclose information

593. New section 115D allows for a penalty to be imposed where a person, without reasonable excuse, fails to provide information required either in relation to a claim or an award or to notify relevant changes of circumstances (defined in new section 115D (6)) that affect their claim, and the person does not take reasonable steps to correct the error. Both situations must result in an overpayment being made before the penalty would be imposed. The act or omission must have resulted in an overpayment of benefit which is not being dealt with through fraud action.

594. Subsections (1) and (2) of new section 115D set out the circumstances in which a penalty under section 115D may be imposed.

595. New section 115D(3) provides that in the case of a joint claim where both members of the joint claim couple fail to meet requirements described in new sections 115D(1) and (2), only one penalty will be imposed for the failure.

596. New section 115D(4) provides that the penalty is recoverable from the person on whom it was imposed. New section 115D(5) has the effect that the methods by which this can be done include, as with new section 115C, deduction from benefit, deduction from earnings and court action.

Section 117: Benefit offences: disqualifying and sanctionable benefits

597. Section 117 amends section 6A (meaning of “disqualifying benefit” and “sanctionable benefit”) of the SSFA 2001 for the purposes of sections 6B (loss of benefit in case of conviction, penalty or caution for benefit offence) and 7 (loss of benefit for second or subsequent conviction of benefit offence) of that Act.

598. Subsection (2) adds child tax credit and working tax credit to the benefits listed as a disqualifying benefit under section 6A. Benefit offences involving disqualifying benefits trigger a loss of benefit payment sanction. This sanction is applied against any benefits that are sanctionable. Sanctionable benefits are those which can be withdrawn or reduced.

599. Under section 6A, disqualifying benefits are sanctionable unless specified otherwise. Subsection (3) adds child tax credit and working tax credit to the list of benefits in section 6A(1) that are specified as non-sanctionable. As a result of the amendments to the TCA 2002 made by section 120, working tax credit will be sanctioned under that Act in appropriate cases.

Section 118: Benefit offences: period of sanction

600. Section 118 amends the SSFA 2001. It changes the benefit payment disqualification period for the purposes of section 6B (loss of benefit in case of conviction, penalty or caution for benefit offence) of the SSFA 2001.

601. Subsection (3) amends the definition of “the disqualifying period” in section 6B(11) changing the length of the disqualifying period from “the period of four weeks” to “the relevant period”. Subsection (4) inserts a new subsection (11A) into section 6B to define what the relevant period is.

602. New subsection (11A)(a) introduces a new 3 year loss of benefit sanction where the benefit offence is a relevant offence, defined at new subsection (14). Relevant offences will include serious organised fraud and serious identity fraud relating to social security.

603. New subsection (11A)(b) introduces a 13 week loss of benefit sanction for claimants who are convicted of a first benefit offence (presently a 4 week loss of benefit sanction).

604. New subsection 11A(c) retains the existing 4 week loss of benefit sanction for claimants who accept the offer of an alternative penalty rather than prosecution or are cautioned.

605. Subsection (5) inserts new subsection (14) into section 6B to provide a definition of ‘relevant offence’ which determines whether an offence falls into this category.

606. Subsection (6) gives the Secretary of State the power to amend, by order, the periods and amounts that are in new subsections 11A(a) to (c) and new subsections 14(b)(i) to (iii).

607. Subsection (7) inserts a new subsection (1A) into section 7 of the SSFA 2001 to ensure that convictions for relevant offences will always be dealt with under section 6B of that Act (attracting the 3 year loss of benefit sanction). This includes second and subsequent convictions which would otherwise be dealt with under section 7 of the SSFA 2001.

Section 119: Benefit offences: sanctions for repeated benefit fraud

608. Section 119 amends section 7 (loss of benefit for second or subsequent conviction of benefit offence) of the SSFA 2001 to increase the periods of benefit payment disqualification following repeated benefit fraud. The benefit payment disqualifications will escalate according to the number of offences that have been committed, rather than according to the number of convictions. This means where there is a conviction, earlier offences counting toward escalation of the benefit payment disqualification would include offences dealt with by an agreement to pay a penalty under section 115A of SSAA 1992 (or the corresponding Northern Ireland provision) as an alternative to prosecution or dealt with by a caution.

609. Subsection (5) lists the conditions which must be satisfied for a payment disqualification for repeated benefit fraud to apply.

610. Subsection (7) inserts a new subsection (6A) into section 7 to define the “relevant period” of benefit payment disqualification for section 7, which will differ according to the number of repeated benefit offences committed.

611. New subsection (6A)(a) introduces a three year loss of benefit sanction for claimants convicted of a benefit offence preceded by two previous offences (disqualifying events). It only applies where the earliest offence occurs within five years of the second offence (which must have occurred within five years of the current offence). New subsection (6A)(b) introduces a 26 week period, to apply in all other cases, meaning cases where a claimant is convicted of a benefit offence preceded by one disqualifying event within five years of the current offence.

612. Subsection (8) inserts new subsection (7A) and (7B) which provide for payments and adjustments where the agreement of a person to pay a penalty under section 115A of the SSAA 1992 (or the corresponding Northern Ireland provision) is taken into account for the purposes of section 7, but at a later date the agreement is withdrawn, or it is decided that the overpayment to which the notice relates is not recoverable or due, or the amount of the overpayment to which the penalty relates is revised and there is no new agreement in relation to the revised overpayment.

613. New subsection (8A) inserted by subsection (10), provides that where a person is convicted of more than one offence in a set of proceedings, those offences are only counted once as a disqualifying event for the purposes of section 7.

614. Subsection (11) inserts new subsections (10A) and (10B) so that the Secretary of State has the power, by order, to amend the period of the benefit payment disqualification and to provide for different periods of payment disqualification to apply according to the type of earlier disqualifying events.

Section 120: Loss of tax credits

615. Section 120 inserts various loss of tax credit provisions into the TCA 2002. The purpose of this section is to allow a more uniform imposition of penalties following convictions for benefits and tax credits fraud. The new provisions inserted into the TCA 2002 follow the loss of benefits regime under the SSFA 2001 (as amended by sections 117, 118, 119 and 121).

36A: Loss of working tax credit in case of conviction or penalty for benefit offence

616. The combined effect of subsections (1) and (4) is for payment of working tax credit to be withdrawn for the disqualification period where the offender has been convicted of one or more benefit offences in any proceedings, or accepted a penalty under section 115A SSAA 1992 (“an administrative penalty”) or a caution as an alternative to prosecution. In the case of a single claim, subsection (4) provides that the withdrawal will apply to the offender. In the case of a joint claim the withdrawal will apply to either member of the couple. Subsection (3) of new section 36A provides that where a person is convicted of one or more benefit offences, a sanction will not apply here if they are being sanctioned under new section 36C for repeated benefit fraud.

617. Subsection (5) allows HMRC to make regulations which prescribe how working tax payments to a couple may be reduced rather than withdrawn.

618. Subsection (6) of new section 36A defines the disqualification period for the purpose of this section. The disqualification period is the amount of time the benefit can be disqualified for and the length depends on the reason why the person was disqualified. The disqualification period begins at a prescribed time after conviction or the agreement of an administrative penalty or caution. The disqualification periods are set out in subsection (7). Subsection (7)(a) sets out the loss of benefit sanction for relevant offences defined in subsection (5) of section 118. This will result in a three year loss of benefit sanction, irrespective of whether it is a first, second or third offence. Subsection (7)(b) introduces a 13 week loss of benefit sanction for claimants who are convicted of a first benefit offence. Subsection (7)(c) introduces a four week loss of benefit sanction for claimants who accept the offer of an alternative penalty rather than prosecution.

619. Subsection (8) gives the Treasury the power to amend by order the periods of sanction that are in subsection (7)(a) to (c).

36B: Section 36A: supplementary

620. Section 36B provides for payments and adjustments to be made if necessary to take account of subsequent events such as when a conviction taken into account for the purposes of section 36A is later quashed or an agreement to pay a penalty under section 115A of the SSAA 1992 is similarly taken into account but is later withdrawn.

36C Loss of working tax credit for repeated benefit fraud

621. Subsection (1) of new section 36C lists conditions which must be satisfied for a loss of benefit sanction for repeated benefit fraud to apply. Where these are fulfilled, subsection (3) provides that other than for a relevant offence, working tax credit will not be paid during the disqualification period. In the case of a joint claim, this will apply to one or the other person.

622. The effect of subsection (2) is that persons convicted of a relevant offence defined in section 6B(14) of the Social Security Fraud Act 2001 (as inserted by subsection (5) of section 118) are subject to the three year loss of benefit sanction under section 36A, irrespective of the number of previous offences.

623. Subsection (4) allows HMRC to make regulations which prescribe how working tax payments to a couple may be reduced rather than withdrawn.

624. Subsection (5) of new section 36C defines the disqualification period for the purposes of this section. The disqualification period is the amount of time the benefit can be disqualified for and the length depends on the reason why the person was disqualified, and begins at a prescribed time (which will be defined in regulations). Subsection (6) of new section 36C defines what the relevant periods (time for which the benefit can be disqualified) are in relation to this. Subsection 6(a) of new section 36C introduces a three year loss of benefit sanction for claimants who are convicted of a benefit offence preceded by two previous offences (disqualifying events). It only applies where the earliest offence occurs within five years of the second offence (which must have occurred within five years of the current offence). Subsection 6(b) of new section 36C introduces a 26 week loss of benefit sanction for all other offence convictions.

625. Subsection (8) of new section 36C means that where a person is convicted of more than one offence in a set of proceedings, those offences are only counted once for the purposes of section 36C under the TCA 2002.

626. Subsections (9) and (10) of new section 36C give the Treasury the power to amend the period of sanction by order, and to specify different periods depending on previous disqualifying events.

36D Section 36C: Supplementary

627. Section 36D provides for payments and adjustments to be made if necessary to take account of subsequent events such as when a conviction taken into account for the purposes of section 36C is later quashed or an agreement to pay a penalty under section 115A of the SSAA 1992 is similarly taken into account but is later withdrawn.

Section 121: Cautions

628. Section 121 amends the SSFA 2001 and the TCA 2002 to remove all references in these Acts to the consequences of accepting a caution, as DWP will no longer offer cautions to benefit fraud offenders.

629. Subsection (2) of the section repeals references to cautions that appear in the loss of tax credits provisions which are being inserted by the Act into the TCA 2002. Those references are being included so that the disqualification of payment of working tax credit would apply in a case where a body with the power to prosecute a person for a benefit offence decides to administer a caution, notwithstanding DWP policy is no longer to give cautions. But the intention is to repeal the references when they are no longer required.

Section 122: Tax credit fraud: investigation

630. Sections 109A (authorisations for investigators), 109B (power to require information) and 109C (right of entry) of the SSAA 1992 provide a framework within which authorised persons can investigate whether social security benefit is properly payable.

631. As TCA 2002 is not social security legislation, tax credits are not classed as relevant social security benefits. Therefore the definition of benefit offence does not apply to them under the SSAA 1992. This means that, at present, the Secretary of State’s powers to investigate do not extend to investigating whether tax credit fraud is or has been committed.

632. Section 122 extends the Secretary of State’s powers of investigation to cover investigations in respect of the commission, or suspected commission, of tax credit fraud by inserting new subsection (9) into section 109A (authorisations for investigators). New subsection (9) also applies to sections 109B (power to require information), 109BA (power to require electronic access to information) and 109C (right of entry). To achieve this, new subsection (9) treats TCA 2002 as relevant social security legislation and also treats child tax credit and working tax credit as relevant social security benefits in defining what is meant by benefit offence.

Section 123: Information-sharing for prevention etc of tax credit fraud

633. Section 123 amends existing section 122B of SSAA 1992 (supply of government information for fraud prevention etc). Section 122B allows DWP to receive, from Government departments and those providing services to them, information listed in section 122B(1) for use in the prevention, detection, investigation or prosecution of offences relating to social security. The section extends section 122B(2) to include the prevention, detection, investigation or prosecution of offences relating to tax credits.

634. Section 122B(3) places certain limitations on the onward disclosure by DWP of information received under section 122B(2). Section 123 amends section 122B(3)(b) so that DWP’s ability to forward information that is being supplied for the purposes of any civil or criminal proceedings will include proceedings under TCA 2002 and to ensure that the limitations of section 122B(3) do not prevent DWP from sharing information with HMRC under the data sharing gateway being provided by section 127.

Section 124: Tax credit fraud: prosecution and penalties

635. Section 35 of the TCA 2002 provides a criminal offence where a person is knowingly concerned in fraudulent activity in connection with obtaining payments of tax credit.

636. Section 35 is presently triable either way, meaning it could be tried in the Magistrates’ Courts or in the Crown Court. This means that even low value tax credit offences must be tried in the Crown Court where a claimant elects to be tried there.

637. The purpose of section 124 is to provide, in certain circumstances, for tax credit offences to be summary only offences, tried before the magistrates.

638. New section 35(2) provides that tax credit offences involving payments of up to £20,000 will be summary only offences and tried before the magistrates. Upon conviction for this type of case, new sections 35(3) and (4) provide that the penalties applicable are a maximum of 51 weeks imprisonment for conviction in England and Wales, 6 months for conviction in Scotland or Northern Ireland and/or a fine not greater than level 5 on the standard scale. Subsection 35(8) provides that for England and Wales, the period of 51 weeks is to be read as 6 months until section 281(5) of the Criminal Justice Act 2003 (“the 2003 Act”) is commenced. When section 281(5) is commenced, it will increase the existing maximum terms of imprisonment for offences tried summarily only, to 51 weeks.

639. New section 35(5) provides that in all cases other than subsection (2), (meaning those where the payment involved exceeds £20,000), the tax credit offence provided under section 35(1) will be triable either way.

640. New section 35(6) sets out the penalties that will apply where a triable either way tax credit offence is convicted before either the magistrates’ Court (section 35(6)(a)) or the Crown Court (section 35(6)(b)).

641. As with subsection (3), the maximum term of imprisonment expressed in subsection (6)(a) is expressed for England and Wales by reference to a relevant provision of the 2003 Act; section 154(1) of the 2003 Act provides that the maximum term of imprisonment for summary conviction of a triable either way offence in England and Wales is to be 12 months. Section 154(1) has not yet been commenced. New section 35(9) therefore provides that until section 154(1) has been commenced, the 12 month maximum term of imprisonment is to be read in England and Wales as being 6 months.

642. New section 35(7) provides that in Scotland the maximum term of imprisonment for summary conviction of the triable either way tax credit offence is 12 months and for Northern Ireland it is 6 months. The maximum fine applicable in all three jurisdictions is the statutory maximum.

643. New section 35(10)(a) provides that the existing provision in section 116(1) of SSAA 1992 applies to proceedings where the tax credit offence is tried before the magistrates. This means that for tax credit offences tried before the magistrates in England and Wales, any person authorised by the Secretary of State may conduct any proceedings before a magistrates' Court although not a barrister or solicitor.

644. New section 35(10)(b) applies the time limits provisions for summary only offences in section 116 to the new summary only version of the tax credit offence in section 35(2) of the TCA 2002. Section 116 provides, in principle, for a time limit of 12 months from the date an offence was committed, allowing, however, for prosecutions after that date, if they are within 3 months of the date on which evidence, adequate in the opinion of the Secretary of State to justify a prosecution, came to his attention about a benefit offence. This ensures consistent time limits operate for summary only tax credit offences as for summary only social security benefit fraud offences.

645. New section 35(11) provides for the equivalent of the above time limits in relation to Scotland.

646. New section 35(12)(a) applies section 110 of the Social Security Administration (Northern Ireland) Act 1992 to tax credit offence proceedings, where appropriate. New section 35(12)(b) applies the time limits provisions for summary only offences in section 110(2)(a) and (3)(a) to the new summary only version of the tax credit offence in section 35(2) of the TCA 2002. It also provides that for tax credit offences tried before the magistrates the equivalent legislative provision in Northern Ireland to section 116(1), applies in relation to allowing a person to conduct the proceedings before a magistrates’ Court although not a barrister or solicitor.

Section 125: Unauthorised disclosure of information relating to tax credit offences

647. Section 125 makes an insertion into paragraph 1 of Part 2 of Schedule 4 to the SSAA 1992 (persons employed in social security administration or adjudication) so the scope of Part 1 of that Schedule includes the investigation or prosecution of offences relating to tax credits as well as social security benefits. Part 1 of Schedule 4 is relevant to section 123 of the SSAA 1992, which makes it an offence to disclose information unlawfully. This helps safeguard against inappropriate disclosure of information that DWP staff receive during the course of their employment.

Section 126: Tax credits: transfer of functions etc

648. The Commissioners for Revenue and Customs Act 2005 amended the Ministers of the Crown Act 1975 such that certain functions of the HMRC Commissioners could not be transferred by an Order in Council under the 1975 Act, including those relating to the payment and management of working tax credit and child tax credit. Section 126 removes this statutory bar in relation to tax credits. Further, it allows for an Order in Council to be made, transferring any tax credit function of the Treasury or the HMRC Commissioners to the Secretary of State, or directing that any such function shall be exercisable concurrently with the Secretary of State, or cease to be so exercisable.

649. An Order under this section may also make provision in connection with such a transfer or direction, and other provision including provision relating to the use or supply of information, combining any aspect of the payment and management of tax credits with any aspect of the administration of social security and applying social security legislation in relation to tax credits. Subsection (5)(a) allows new functions to be conferred on, or functions to be removed from, the Secretary of State, the Treasury, the HMRC Commissioners, a Northern Ireland Department or any other person. Under subsection (5)(b), the Order may authorise the Secretary of State and the HMRC Commissioners to arrange for the HMRC Commissioners to provide services to the Secretary of State in connection with tax credits.

650. Subsection (6) provides that provision under subsection (3) may extend an offence provided for under primary or secondary legislation or extend any conduct in respect of which a civil penalty may be imposed, but may not increase the scope of punishment for which a person may be liable or the maximum amount of a penalty.

651. Any Order may also make such consequential, supplementary, incidental or transitional provision as Her Majesty considers appropriate, such as transferring property, rights or liabilities. Subsection (9) enables the Order to amend, repeal or revoke primary or secondary legislation.

652. Subsection (10) provides that a statutory instrument containing an Order under this section is subject to the negative resolution procedure.

653. Subsection (14) amends the Ministers of the Crown Act 1975 to remove the statutory bar referred to above.

Section 127: Information-sharing between Secretary of State and HMRC

654. Section 127 provides for the sharing of data between the Secretary of State and the HMRC Commissioners.

655. Subsections (1) and (2) allow for information held for the purposes of HMRC functions by the Commissioners (or providers of services to them) to be supplied to the Secretary of State, a specified Northern Ireland Department or any providers of services to the Secretary of State or specified Northern Ireland Department (including, for example, those authorised to exercise the Secretary of State’s functions under section 29) for use for the purposes of departmental functions.

656. Subsections (3) and (4) allow for information held by the Secretary of State or the Northern Ireland Department (or providers of services to them) for the purposes of any departmental functions to be supplied to the Commissioners (or providers of services to the Commissioners) for the purposes of HMRC functions.

657. Subsection (7) defines the departmental and HMRC functions for the purposes of which data may be provided and specifies the Northern Ireland Departments which are included in these provisions.

658. Information supplied under this section must not be passed on to another person or body without the authority of the original supplier, as a result of subsection (5).

659. Once the information has been used for the purposes for which it has been supplied, subsection (6) allows this information to be used for any purposes for which information held for those purposes could be used.

660. Subsection (8) provides that the provisions in this section may apply to statutory payments, such as statutory sick pay or statutory maternity pay, as functions relating to such payments are functions relating to social security for the purposes of this section.

661. Subsection (9) ensures that the provision in this section does not limit other powers to supply information.

662. Subsection (10) amends section 3(1A) of SSA 1998 to add as a new matter information in relation to the investigation or prosecution of tax credit fraud.  This means that such information can be used for any of the matters referred to in section 3(1A) (for example social security or war pensions).

Section 128: Information-sharing between Secretary of State and DPP

663. Section 128 makes provision for information-sharing between the Department for Work and Pensions and the Crown Prosecution Service. This is intended to facilitate the sharing of information for the purposes of prosecution in England and Wales.

Section 129: Unlawful disclosure of information supplied under section 128

664. Section 129 prevents onward disclosure by the Crown Prosecution Service of information shared under section 128, except in the circumstances specified.

Section 130: Information-sharing in relation to provision of overnight care etc

665. Section 130 allows information to be used and supplied for the purpose of ensuring the correct amount of housing benefit is awarded in relation to people who are entitled to overnight care in their own homes; and for the purpose of assessing awards of benefit when a person is admitted or discharged from hospital or residential care.

666. Claimants of certain social security benefits have their benefit awards reassessed when they go into or are discharged from hospital or care. Claimants are already required to report such changes. This provision will allow local authority teams to use that information themselves, or supply the information to the Secretary of State, for purposes relating to the payment of benefits. Local authorities will therefore be able to inform the Secretary of State or their own teams dealing with a relevant benefit such as housing benefit and council tax benefit teams when a person has been, or is likely to be, admitted to or discharged from residential care or hospital. This will allow reassessment of benefit awards that are affected by these changes. Subsection (2)(c) also permits regulations to prescribe other information local authorities can supply to the Secretary of State relating to the funding regime covering a person’s residential care or hospital stay as this can affect for example, their rate of personal independence payment.

667. People who are disabled and require an overnight carer will also be able to qualify for a higher rate of housing benefit if they have an extra room which is used by a carer or team of carers. This provision will also allow local authority housing benefit teams to use information from local authority social services teams to confirm whether a person does or may require an overnight carer; if social services are providing the carer; and confirmation that the care has been provided.

668. Subsection (8) provides that regulations made under subsection (7) may not prescribe any benefit which falls within the legislative competence of the Scottish Parliament.

Section 131: Information-sharing in relation to welfare services etc

669. Section 131 replaces the information sharing gateway in section 42 of the WRA 2007 and broadens the scope of data sharing that is provided for under the existing section 42. It also extends these provisions to Scotland. It allows ‘relevant information’ to be shared between the Secretary of State, local authorities, and authorities administering housing benefit, while housing benefit continues, including their service providers and persons exercising their functions. It can be shared in relation to the provision of a welfare service, council tax and certain housing benefit purposes. It also allows the supply of relevant information in connection with the provision of assistance under arrangements made by local authorities in England or others once community care grants and crisis loans that are not alignment loans cease to be provided by the discretionary social fund (see section 70).

670. Welfare services are defined in subsection (12). Welfare services include Supporting People services in England and Wales (these provide counselling, help managing day to day life, and security alarms for people who live at home); Housing Support services in Scotland (similar to Supporting People); domiciliary care in the UK (covers support such as day care, meals, and home helps for people who live at home); and residential care in the UK (provided for people who cannot manage to live independently at home). For each of these types of welfare service there is a means tested charge.

671. In addition the definition covers other types of welfare service such as assistance provided once community care grants and those crisis loans that are not alignment loans cease. Examples of further services covered are the provision of: Disability Facilities Grants; Blue Badge parking permits; Discretionary Housing Payments; or assistance to families with multiple disadvantages.

672. Subsection (1) will allow the Secretary of State, or a person providing services to him, to supply relevant information to the persons or bodies listed in subsection (11) for certain purposes relating to a welfare service or council tax. This will, for example, help local authorities decide if a person is liable to pay towards a service such as a home help or day care, and if so how much they should contribute towards its cost. It will also help local authorities assess how much a person is able to pay towards the cost of residential care. The information may also be needed for decisions on whether to provide assistance under localised schemes, such as help with council tax.

673. Subsection (2) allows a local authority providing welfare services (and others such as service providers) to supply relevant information to the Secretary of State (or the Secretary of State’s service providers) in certain circumstances. This information can only be supplied for a prescribed purpose. This subsection may be used, for example, to allow local authorities administering Supporting People grants to advise DWP whether a person is vulnerable and requires housing costs to be paid direct to the landlord.

674. Relevant information is defined in subsection (12) as information relating to any relevant social security benefit, as well as welfare services.

675. Subsection (3) replaces and extends the regulation-making power in section 42(2). The power may be used to enable qualifying persons (the persons listed in subsection (11)) to use information held for one purpose for other purposes, subject to those purposes being purposes relating to welfare services, council tax or housing benefit. The power may also be used to enable information to be supplied to another such person for use in the same or another circumstance relating to welfare services, council tax or housing benefit. This will be used to allow the types of information exchange that take place between local authority Supporting People teams and Housing Benefit teams. These teams may use the information to help them decide if a person is entitled to free help from Supporting People, or when making certain decisions relating to a person’s housing benefit. It may also be used for the purpose of calculating any charges for a welfare service and to help decide whether to provide assistance once certain discretionary social fund payments cease. It will also be used to help local authorities assess whether a person is eligible for help with their council tax under any local scheme that may be available.

676. Subsections (6) and (8) provide that the Secretary of State must not use the power provided by subsection (3) to enable the supply for an excepted purpose of excepted information held by a Welsh body or a Scottish body. Subsections (7) and (9) define excepted information and excepted purposes for Wales and Scotland respectively.

Section 132: Unlawful disclosure of information

677. Section 43 of the WRA 2007 made it an offence for a person to disclose without lawful authority information supplied by virtue of section 42 of the WRA 2007. Section 132 creates a similar unlawful disclosure provision in relation to information received by virtue of section 131.

678. Subsection (2) sets out to whom this section applies. Relevant persons in DWP are not covered by this new section as there is an existing unlawful disclosure provision in section 123 of the SSAA 1992 which applies to them.

679. Unauthorised disclosure is an offence subject to a fine or imprisonment or both.

680. This section complements section 123 of the SSAA 1992.

Section 133: Sections 130 to 132: supplementary

681. Section 133 enables regulations under section 131 (data-sharing in relation to provision of overnight care etc) and section 132 (data-sharing in relation to welfare services etc) to make consequential, supplementary incidental, transitional or saving provision. It also provides a power to make different provision for different purposes, cases and areas.

682. Subsection (4) provides that all regulations under sections 131 and 132 will be subject to the negative resolution procedure in the Houses of Parliament.

Section 134: Information-sharing for social security or employment purposes etc

683. Section 134 amends section 72 of the Welfare Reform and Pensions Act 1999. This section, as amended by section 34 of the WRA 2009, enables the Secretary of State to make regulations allowing certain persons, including the Department for Work and Pensions, to share social security and employment and training information with other Government Departments and their service providers, certain types of local authorities and their service providers and with persons designated by an order. Regulations can also make provisions about the use of such information and its supply by such persons.

684. Subsection (2) inserts the words “(specifically or by description)” into section 72(2)(b) of the Welfare Reform and Pensions Act 1999 so that it now expressly provides for a Minister of the Crown by order to designate by description as well as retaining the ability to specify individual organisations. Organisations such as those delivering skills, employment and training services to Jobcentre Plus customers in England, Scotland and Wales are continuously changing. The express power to designate by description makes it absolutely clear the Secretary of State does not have to continually update the designation order.

685. Subsection (3) amends section 72(6) and repeals section 72(6A) of the Welfare Reform and Pensions Act 1999, to remove the restrictions relating to circumstances in which information may be used and supplied by county councils in England. Subsection (6A) allows social security information to be used and supplied by County Councils in England only where they are providing support services for 13-19 year olds and young adults aged 20-24 with learning difficulties. However, County Councils in England are increasingly involved in delivering employment, skills and training services to jobseekers at a local level. The repeal will remove the requirement that information is only shared where they are providing support services for 13-19 year olds and young adults aged 20-24 with learning difficulties, to allow the flexibility to be able to use and pass on information about persons falling outside of this group, to facilitate the provision of employment, skills and training services without having to seek written consent from customers.

Part 6: Miscellaneous

Section 135: Functions of registration service

686. Section 135 inserts section 19A, “Functions relating to transmission of information to Secretary of State” into the Registration Service Act 1953.

687. This section creates a function allowing the Registrar General, superintendent registrars and registrars of births and deaths to transmit information entered in a register of births or contained in a birth declaration to the Secretary of State, and to verify such information for the Secretary of State, for certain purposes.

688. Subsection (1) confers a new function on registrars of births and deaths, superintendent registrars and the Registrar General, that will enable them to transmit and verify information for the purposes of the service set out in subsection (2).

689. Subsection (2) specifies that the service referred to in subsection (1) is a service whereby individuals can pass birth information (which includes the fact that a birth declaration has been made or a birth has been registered and other information about that birth) to the Secretary of State, and the Secretary of State can pass that information on to other persons. The persons that the Secretary of State will pass the information to may include other government departments and Local Authorities. The service referred to in subsection (2) is also known as ‘Tell Us Once’.

690. Subsection (3) makes it clear that references to the Secretary of State include persons providing services to the Secretary of State for the purpose of the service referred to in subsection (2). It therefore includes any organisation providing that service on behalf of the Secretary of State.

691. Subsection (4) provides that nothing in the section authorises any disclosure which is otherwise unlawful.

692. The Tell Us Once programme provides a means by which the citizen can inform Government once about a birth or a death. It is a voluntary service, running alongside as an alternative to conventional notification channels. Tell Us Once shares the data, with the person’s consent, with other parts of the DWP and other organisations such as HMRC, Local Authorities’ Family Information Services and Library Services.

693. The policy intention behind this section is that the individual will inform Government (through the Tell Us Once service) once of a birth. Tell Us Once will, with a person’s consent, retrieve birth data from the General Register Office to share with other parts of DWP and other organisations. This will mean a person does not have to provide the same information to multiple organisations themselves. Drawing the data from the General Register Office enables those services to accept the birth registration and birth declaration information as verified for the purpose of assessing changes to entitlement to benefits and services and also removes the reliance on paper certificates.

694. The data that is transmitted would include the date of birth, full name and sex of the child and the registration district of the birth. It may include additional related data such as the full name of the mother of the child, and her usual address. Only data that is entered on the birth register or in a birth declaration will be transmitted.

Section 136: Supporting maintenance agreements

695. Section 9 of the Child Support Act 1991 makes clear that parents may make arrangements for child maintenance outside the statutory scheme, but that if they have done so, none of the parties to that agreement are then prevented from applying to the statutory scheme. The Government’s intention is to ask parents whether they could reach their own collaborative arrangements and to support them in doing so.

696. Section 136(1) inserts a new subsection (2A) into section 9 which allows the Child Maintenance and Enforcement Commission to take appropriate steps to encourage the making and keeping of family-based maintenance agreements. This includes the Commission inviting an applicant to consider with them whether it is possible to make such an agreement, before the Commission accepts an application. This will apply to applications from persons with care, non-resident parents and, in Scotland, a qualifying child aged over 12.

697. Subsection (2) amends paragraph 3 of Schedule 5 to the Child Maintenance and Other Payments Act 2008 which deals with the transfer of cases in the existing child support schemes to the new scheme, which is due to start for new customers in 2012. Where an individual decides that they wish to apply to the new scheme the amendment will ensure that they will also be invited to take consider along with the Commission whether it is possible to make a family-based arrangement first.

Section 137: Collection of child support maintenance

698. Section 4 of the Child Support Act 1991 provides that a person with care or a non-resident parent may apply for a maintenance calculation under that Act. Section 4(2) provides that once a calculation has been made, it is open to either the person with care or the non-resident parent to ask the Child Maintenance and Enforcement Commission to arrange for the collection of the maintenance payable.

699. Section 137(2) repeals some of the wording in section 4(2), and inserts a new subsection (2A). Taken together, the changes mean that if a person with care asks the Commission to collect the maintenance payable, the Commission will only do so if the non-resident parent agrees, or where it is satisfied that the non-resident parent is unlikely to make payments.

700. Section 137(3) makes corresponding amendments to section 7 of the Child Support Act 1991 which relates to an application for a maintenance calculation made by a child in Scotland.

Section 138: Indicative maintenance calculations

701. To support the making of maintenance arrangements outside the statutory scheme, the Government will provide a service which will give parents an indication of the amount of maintenance which would be payable under the statutory child scheme if an application were to be made. Section 138 therefore inserts new section 9A into the Child Support Act 1991 making provision for such a service. The provision will enable an application for an indicative maintenance calculation to be made to the Child Maintenance and Enforcement Commission by a person with care, non-resident parent or a qualifying child aged 12 or over in Scotland.

702. An indicative calculation will be made on exactly the same basis as a maintenance calculation would be were an application made to the statutory scheme, but will not create any liability to pay maintenance. Where parentage of the child or children is denied, section 9A(6) will prevent the Child Maintenance and Enforcement Commission from providing an indicative maintenance calculation, unless the person who denies parentage has been shown, through a DNA test, to be the parent of that child or children. Instead the applicant will be advised to make a full application to the statutory scheme.

Section 139: Recovery of child support maintenance by deduction from benefit

703. Currently section 43 of the Child Support Act 1991 makes provision for the recovery of child support maintenance by deduction from benefit. Subsection (2) of that section provides that the power of the Secretary of State to make regulations under section 5 of the Social Security Act 1992 includes power to secure payment of child support maintenance by a deduction from benefit.

704. Section 139 substitutes subsections (1) and (2) of section 43 of the 1991 Act with two new subsections. The new subsections continue to allow for the recovery of child support maintenance by deduction from benefit (including the recovery of arrears). They also allow for the recovery by deduction from benefit of fees payable under section 6 of the Child Maintenance and Other Payments Act 2008 (c. 6) (“the 2008 Act”) by the non-resident parent.

Section 140: Fees

705. Section 140 amends section 6 of the 2008 Act to further illustrate and clarify the scope of the regulation-making power within subsection (1). It clarifies that the power under subsection (1) can be used to make provision for the apportionment of fees and waiver (and matters to be taken in to account in determining any such apportionment and waiver).

Section 141: Review of fees regulations

706. Section 141 amends section 6 of the 2008 Act by inserting new paragraphs (3A) to (3D). These paragraphs require the Secretary of State to review the effect of the first regulations made under section 6(1) of the 2008 Act (regulations about the charging of fees by the Child Maintenance and Enforcement Commission in connection with its functions). The review must take place within 30 months from the date that those regulations come in to force. They also require the Secretary of State to make and publish a report after the review. The report should contain the conclusions of the review and a statement as to what the Secretary of State proposes to do in view of those conclusions. The Secretary of State must lay the report before Parliament.

Section 142: Exclusion from individual voluntary arrangements

707. An individual voluntary arrangement (IVA) is a legally binding arrangement supervised by a Licensed Insolvency Practitioner, the purpose of which is to enable an individual, sole trader or partner to reach a compromise with his creditors and avoid the consequences of bankruptcy.

708. Section 142(1) amends section 382 of the Insolvency Act 1986 (“bankruptcy debt etc.”), to make it clear that a liability under the Child Support Act 1991 to pay child support maintenance is not a debt or liability which can be included in an IVA. Thus a non-resident parent who owes arrears of child support maintenance will not be able to reduce his liability by means of an IVA.

709. Subsection (2) amends the heading to section 382 of the Insolvency act 1986 to more accurately reflect the content of the section after the amendment in subsection (1).

710. This measure will not apply in Scotland, as the Insolvency Act 1986 applies only to England and Wales.

Section 143: Standards of decision-making

711. Section 143 repeals section 81 of the SSA 1998 which places a duty on the Secretary of State and the Child Maintenance and Enforcement Commission to report on the standards achieved in the making of decisions which carry appeal rights.

Section 144: Use of jobcentres by sex industry

712. Section 144 inserts a new section, section 2A, into the Employment and Training Act 1973, removing the obligation for the Secretary of State, via Jobcentre Plus, to advertise certain types of vacancies or opportunities in the sex industry.

713. Under the Employment and Training Act 1973 the Secretary of State is obliged to help employers to fill vacancies and jobseekers to find jobs. Subsection (1) qualifies this obligation and states that the Secretary of State must not help employers to fill vacancies and jobseekers to find jobs in respect of employment for sexual purposes.

714. Subsection (2) sets out when a job would be considered as employment for sexual purposes. This includes vacancies which involve performing activities to sexually stimulate others, but would not cover, for example, jobs involved in the retail or manufacture of sexual products.

715. Subsection (3) enables the Secretary of State to make an order to provide exceptions to subsection (1), as necessary.

716. Subsection (4) states that regulations made under subsection (3) will be subject to the negative resolution procedure.

Section 145: Social Mobility and Child Poverty Commission

717. Section 145 introduces Schedule 13 which amends the Child Poverty Act 2010.

Schedule 13: Social Mobility and Child Poverty Commission

718. As originally enacted, the Child Poverty Act 2010 made provision for the establishment of a Child Poverty Commission. Schedule 13 amends the Act so as to establish instead a Social Mobility and Child Poverty Commission.

719. New section 8 provides for a ‘Social Mobility and Child Poverty Commission’ to be established. It also makes provision for the abolition of the Commission.

720. New section 8A requires the Commission to provide advice to a Minister of the Crown upon request, concerning how to measure socio-economic disadvantage, social mobility and child poverty. Any such advice must be published.

721. Subsections (1), (2) and (3) of new section 8B require the Commission to publish annual reports assessing the progress made towards improving social mobility and reducing child poverty in the United Kingdom. The reports must also describe the measures taken by the devolved administrations in Scotland, Wales and Northern Ireland in accordance with their devolved strategies. (In the case of Northern Ireland, this only applies after an appointed day (for which, see paragraph 11(4) of Schedule 13)). The first report has to be published within a year of the provision coming into force. Subsequent reports are required before each anniversary of the entry into force of section 8B.

722. Subsection (4) of new section 8B provides flexibility over the form that the annual report takes. For example, it would allow for one report covering social mobility and child poverty or two separate reports, one on social mobility and one on child poverty.

723. Subsection (5) allows a Minister of the Crown to delay the publication of any annual report by up to 9 months, at the request of the Commission. This is to allow for a situation where, for example, a delay to some relevant government statistics would prevent the Commission’s report from being as informative as it should be, if it were to be published in accordance with the deadline set out in section 8B(1).

724. New section 8C allows a Minister of the Crown to ask the Commission to undertake other activities relating to the goals of improving social mobility in the UK and reducing child poverty in the UK.

725. New Schedule 1 includes provisions on the structure and membership of the Commission, including terms of office, staff and facilities.

726. Paragraph 1 enables a Minister of the Crown to appoint a Chair, Deputy Chair and such other members as he may determine. In addition, it requires Scotland, Wales and Northern Ireland each to appoint a member of the Commission. In the case of Northern Ireland, this applies only after the appointed day.

727. Paragraphs 2 to 7 set out the terms of office for the Chair, Deputy Chair and members, including the length of term, provisions for resignation of Chair, Deputy Chair or members, provisions for the removal of members and provisions for re-appointment.

728. Paragraph 8 provides that a Minister of the Crown may provide the Commission with the staff and facilities necessary for the Commission to carry out its role. It also enables a Minister of the Crown, if requested by the Commission and if the Minister so chooses, to carry out or commission research. Such research has to be for the purpose of carrying out the functions of the Commission.

729. Paragraph 9 enables a Minister of the Crown to provide remuneration to Commission members as appropriate. This is to ensure that Commission members’ expenses can be covered and that there is provision for particular members to be paid if they are asked to carry out extensive analysis or research on behalf of the entire Commission.

730. Paragraph 10 gives the Commission the necessary power to undertake activities that it needs to do in order to carry out its functions.

731. Paragraph 11 confirms that the Commission is not a servant or agent of the Crown, and that it does not enjoy Crown status, privilege or immunity.

732. Paragraph 12 gives the Commission the power to establish sub-committees as it sees fit.

733. Paragraph 13 gives the Commission the power to regulate its own procedures and that of any sub-committee.

734. Paragraph 14 provides that any vacancy in the Commission or sub-committee or any defect in the appointment of a member will not affect the validity of proceedings.

735. Paragraph 15 provides that the functions of the Commission may be undertaken by a member or a sub-committee.

736. Part 2 sets out further amendments to the Child Poverty Act 2010.

737. Paragraph 5 repeals section 6(6)(b). This means that the consent of Commission is not required for the Secretary of State to change the definition of persistent poverty to be used for the persistent poverty target in section 6 (and as a consequence the target itself).

738. Paragraph 6 repeals section 10(1) to (3). This means that the Secretary of State will not have to request advice from the Commission and have regard to that advice when developing the UK Child Poverty Strategy.

739. Paragraph 7 repeals section 13(1) to (2). This means that Scottish Ministers and the relevant Northern Ireland Departments will not have to request advice from the Commission and have regard to that advice when developing their devolved child poverty strategies.

740. Paragraph 8 repeals section 14. This removes the requirement upon the Secretary of State to provide an annual report for Parliament detailing progress made towards the child poverty targets, progress made towards implementing the child poverty strategy, and the measures taken by Ministers in the devolved administrations, in accordance with their respective child poverty strategies.

741. Paragraph 9 amends section 15 so that the Secretary of State is required, after the end of 2020 (the “target year”), and after consultation with the devolved administrations, to produce a statement as to whether the targets have been met.

742. Paragraph 10 reflects the fact that the Commission will not have to provide advice on the UK, Scotland and Northern Ireland Child Poverty Strategies and provides that the Commission must take into account economic and fiscal circumstances when considering advice given to a Minister of the Crown under section 8A.

743. Paragraph 11 contains some consequential amendments to definitions in the Child Poverty Act 2010. Sub-paragraph (4) defines the “appointed day” for Northern Ireland as a day appointed by a Minister of the Crown with the consent of the Northern Ireland Assembly.

744. Paragraph 13 amends Schedule 2 of the Child Poverty Act 2010 to reflect the fact that the Secretary of State no longer has to produce a report after the target year, but has to provide a statement.

745. Part 3 of new Schedule 1 contains consequential amendments to other legislation.

Section 146: UK child poverty strategies

746. Section 146 amends section 9 of the Child Poverty Act 2010 to clarify the existing position that the requirements for a UK strategy can be met with a description of measures in narrative or policy terms.

Part 7: Final

Section 147: Repeals

747. Section 147 gives effect to Schedule 14 which makes provision for repeals resulting from provisions in the Act. The Schedule is divided into 13 Parts, as follows:

• Part 1 – Abolition of benefits superseded by universal credit

• Part 2 – Entitlement to jobseeker’s allowance without seeking employment

• Part 3 – Jobseeker’s allowance: responsibilities for interim period

• Part 4 – Jobseeker’s allowance: responsibilities after introduction of universal credit

• Part 5 – Employment and support allowance: responsibilities after introduction of universal credit

• Part 6 – Claimants dependent on drugs etc

• Part 7 – Industrial injuries arising before 5 July 1948

• Part 8 – Social fund: ending of discretionary payments

• Part 9 – Disability living allowance

• Part 10 – Powers to require information relating to claims and awards

• Part 11 – Recovery of benefit payments

• Part 12 – Loss of benefit: cautions

• Part 13 – Information-sharing between Secretary of State and HMRC

• Part 14 – Standards of decision-making

Section 148: Extent

748. Section 148 sets out the territorial extent of the Act, which is described in paragraphs 22 to 26 of these Notes

Section 149: Commencement

749. Section 149(1) provides that section 76, section 103 and Schedule 12, section 108, section 109, section 126 and Part 7 (with the exception of Schedule 14) will come into force on Royal Assent.

750. Subsection (2) lists those provisions which will come into force at the end of two months after the date of Royal Assent.

751. The remaining provisions will be brought into force by means of commencement orders made by the Secretary of State as a result of subsection (3). The orders may appoint different days for different purposes; appoint different days for different areas in relation to provisions in Part 1 (universal credit), Part 1 of Schedule 14, section 61 or 62 (entitlement to work: jobseeker’s allowance and employment and support allowance), provisions in Part 4 (personal independence payment) or section 102 (power to require consideration of revision before appeal); and make necessary or expedient transitory, transitional or savings provisions.