(This note is not part of the Regulations)
These Regulations amend the Universal Credit Regulations 2013 (S.I. 2013/376) (the “Universal Credit Regulations”) in relation to the exception to the application of the benefit cap to a universal credit award in an assessment period where the claimant’s earnings (or if the claimant is a member of a couple, the couple’s combined earnings) exceed a specified threshold (the “earnings exception threshold”).
Regulation 2(2) amends regulation 6 (rounding) of the Universal Credit Regulations to provide that, when calculating the level of the earnings exception threshold in relation to a universal credit award, that amount is to be rounded down to the nearest whole pound.
Regulation 82(1)(a) of the Universal Credit Regulations provides that the benefit cap does not apply to a universal credit award in relation to an assessment period where the claimant’s earnings (or the couple’s combined earnings) are equal to or exceed the earnings exception threshold. Regulation 2(3)(a) of these Regulations amends this threshold from the existing fixed amount of £430 to a formula to calculate the monthly amount a person would earn whilst working 16 hours per week at the National Living Wage.
Regulation 82(1)(b), (2) and (3) of the Universal Credit Regulations also provide for a grace period of nine months in which the benefit cap does not apply even where earnings have fallen below the earnings exception threshold. The grace period starts to run at the point where earnings fall below the threshold on the condition that they have been equal to, or above it, for the previous 12 assessment periods (or months if outside a period of entitlement). Regulations 2(3)(b) and (c) of these Regulations amend these provisions in order to ensure that any entitlement to the grace period already accrued prior to the application of these Regulations to the universal credit award is not retrospectively affected by the amendment to the earnings exception threshold.
This instrument has no impact on business or civil society organisations. The instrument has no impact on the public sector.
