These Regulations amend the Universal Credit (Transitional Provisions) Regulations 2014 (S.I. 2014/1230) (“the 2014 Regulations”), which make provision for the replacement of certain “existing benefits” by universal credit, a new benefit established by the Welfare Reform Act 2012 (c.5). The existing benefits include housing benefit, working tax credit and child tax credit.

Regulation 3 makes amendments to reflect a new concept of “specified accommodation”, for which the universal credit housing element is not payable under the Universal Credit Regulations 2013 (S.I. 2013/376). It extends provisions of the 2014 Regulations which previously allowed for dual entitlement to universal credit and to housing benefit in respect of “exempt accommodation”, so that they apply in respect of the additional categories of accommodation falling within the definition of “specified accommodation” (which includes exempt accommodation).

The amendments to the 2014 Regulations made by regulation 4 provide for the amount of a tax credit to which a claimant is entitled to be finalised before the end of the tax year in which the award terminates, if the claimant has claimed universal credit during that tax year. Normally, entitlement to tax credits is finalised after the end of the tax year in question. New regulation 12A(1) and (2) of the 2014 Regulations, along with the new Schedule to those Regulations, provide for modification of the Tax Credits Act 2002 (c.21) and regulations made under that Act, to allow for in-year finalisation. New regulation 12A(3) gives a discretion to the Commissioners for Her Majesty’s Revenue and Customs to finalise entitlement to a tax credit after the end of the tax year in any case, or category of cases, where they consider that it is not reasonably practicable to apply the modified legislation.

The amendments made by regulation 5 relate to universal credit claimants who are also entitled to incapacity benefit or severe disablement allowance (or to national insurance credits on the basis of incapacity for work or disability). The Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) (No.2) Regulations 2010 (S.I. 2010/1907), which were made under the Welfare Reform Act 2007 (c.5), provide for a process of conversion of awards of incapacity benefit and severe disablement allowance into awards of employment and support allowance (“the ESA conversion process”). Regulation 22 of the 2014 Regulations is extended to apply to claimants who are entitled to incapacity benefit or severe disablement allowance, provided they have not started the ESA conversion process. This means that where their capacity for work is assessed under the Universal Credit Regulations 2013 (S.I. 2013/376), entitlement to the limited capability for work (“LCW”) or limited capability for work-related activity (“LCWRA”) element will be backdated to the start of the universal credit award. The amendments to regulation 23 of the 2014 Regulations provide for universal credit claimants who have already started the ESA conversion process to be assessed for entitlement to the LCW or LCWRA element in universal credit on the basis of the assessment for ESA conversion.

Amendments to regulation 26 of the 2014 Regulations have the effect that universal credit claimants who are entitled to national insurance credits on the basis of their incapacity for work and are approaching pensionable age, may also have entitlement to the LCW or LCWRA element backdated once they have been assessed under the Universal Credit Regulations. Previously, regulation 26 provided for this only in cases where the claimant is also entitled to another benefit indicating their incapacity for work.

Regulation 6 inserts new regulations 37 and 38 into the 2014 Regulations. Regulation 37 provides for a penalty applied to an award of working tax credit to continue where the claimant moves to universal credit during the period of the penalty. Regulation 38 ensures that, where a claimant is entitled to both working tax credit and to another existing benefit when they move to universal credit, the total penalty transferred to the award of universal credit does not exceed the amount of the claimant’s standard allowance.

An assessment has been made of the impact of the introduction of universal credit. Copies of the impact assessment may be obtained from the Better Regulation Unit of the Department for Work and Pensions, 2D Caxton House, Tothill Street, London SW1 9NA or from the DWP websitehttp://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/welfare-reform-act-2012/impact-assessments-and-equality/.