Universal credit: defective claims and withdrawals

Issue 262 (February 2018)

Martin Williams looks at when a ‘claim’ for universal credit (UC) might not result in the claimant transferring to UC from current awards of legacy benefits.

Preventing unnecessary transfers to universal credit

The roll-out of the full service of UC is scheduled to gather pace during 2018, with the full service expected to be nationwide by the end of the year. That will leave an extensive mopping-up exercise of transferring whoever is still left on ‘legacy benefits’ (ie, income-related employment and support allowance (ESA), income-based jobseeker's allowance (JSA), income support (IS), housing benefit (HB) and tax credits) under the promised managed migration from 2019 onwards.

For existing claimants of legacy benefits who would receive less on UC due to the lack of transitional protection when they undergo ‘natural’ migration’ to UC (for example, due to the lower amounts paidunder UC as compared with tax credits for children getting disability living allowance other than for those on highest rate care component), then avoiding ending up on UC is important. If such claimants can remain on legacy benefits until they are subjectto ‘managed migration’, they will benefit from the promised (but not yet legislated for) transitional protection of their existing rates of entitlement. Unfortunately, the experience from areas where the full service is already rolled out is that claimants are frequently wrongly told by the DWP that they must claim UC in situations where they could remain on legacy benefits. One common example of this is where ESA ceases due to failure of the work capability assessment. In many cases, if the claimant challenges that decision and appeals, then s/he is entitled to ESA pending appeal without the need for a claim and thus there is no need to claim UC.

However, in many cases, the first contact advisers have with a claimanton UC is after the point at which steps have already been taken to claim UC. In these situations, advising on whether it is still possible to return to legacy benefits demands a precise knowledge of how the various legal provisions which commence UC and prevent a return to legacy benefits function.

Abolition of income-related ESA and income-based JSA

The Welfare Reform Act 2012 abolishes income-related ESA and income-based JSA. However, the point at which that occurs, for an individual claimant, is determined by commencement order. Article 4(1) of the relevant order1 triggers this abolition. It does so where a claim for UC (essentially, this means a claim for UC made by a claimant who lives within a postcode area where full service exists) or ESA or JSA is made. The date from which income-related ESA and income-based JSA are abolished is set by paragraph (3):

(3) The day appointed [...] is the first day of the period in respect of which the claim [for UC, ESA or JSA] is made.

Regarding a claim for UC, because income-re- lated ESA and income-based JSA only cease to exist from the first day of the ‘period in respect of which’ the claim is made, they cannot end unless and until that date can be worked out. To do that, we must look at the Universal Credit, Personal Independence Payment, Jobeeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013, SI No.380. Regulation 26 provides that, unless the limited provisions on backdating apply, then the period in respect of which a claim is made is the date of claim. Regulation 10, broadly speaking, says that the date of claim is the date on which a valid claim is treated as made under regulation 8.

Where a claim is not valid (ie, is defective), then it only becomes a valid claim from the date on which it is presented if it is properly completed within a month (or such longer period granted by DWP) of the claimant being notified of the defect. Thus, until a valid claim for UC is made, then it is impossible to determine the date of claim for UC and therefore the first day in respect of which the claim is made: that means that no day is yet appointed in the case of that claimant.

Thus, in any case where the claim for UC is defective, a claimant has not yet lost the opportunity to return to those benefits.

Ending awards of tax credits, housing benefit and income support

Tax credits, housing benefit (HB) and income support (IS) are not abolished by the Welfare Reform Act 2012. Instead claimants are excluded from access to these benefits by a series of provisions in the Universal Credit (Transitional Provisions) Regulations 2014, SI No. 1230. For example:

  • regulation 5 prevents a claimant from being entitled to these benefits if s/he is entitled to (ie, has an award of) UC;
  • regulation 6 prevents a claimant from being able to claim these benefits if s/he has made a claim for UC (whether or not that is determined).

However, it is regulation 8 that causes existing entitlement to tax credits, HB and IS to end where a claim for UC is made. Regulation 8 provides:

  • at paragraph (1), for the circumstances in whichtheyend: these are where (a) a ‘claim’ for UC is made and (b) the Secretary of State is satisfied that the claimant meets the first four basic conditions for UC (those are the rules about age, being in Great Britain and not being in education); and
  • at paragraph (2), for the date on which they end: ‘on the day before the first date on which the claimant is entitled to [UC]’ or (if not entitled) ‘on the day before the first date on which […] would have been entitled’ had s/he met all financial and basic conditions. Thinking about the case of defective claims for UC in relation to this rule, then we can again say that the first date on which a claimant is, or would have been, entitled to UC cannot be determined unless and until a valid claim has been made. So until that happens, these benefits should also not end.

Satisfied that the basic conditions are met

Note that the Secretary of State is required to have satisfied herself that the four basic conditions of entitlement are met (in practice, that means a decision maker must have determined this). CPAG has seen several cases where the DWP has notified local authorities and HM Revenue and Customs (HMRC) to terminate HB and tax credits under this rule and then refused the claim for UC on the grounds that the claimant does not have a right to reside – ie, is to be treated as not in Great Britain, hence not meeting one of the first four basic conditions. The Secretary of State cannot, in such cases, have previously satisfied herself that the claimant does meet those basic conditions, and hence should not have notified HMRC or the local authority that she has done so. It would be possible for a claimant in this situation to challenge the decision that her/his legacy benefit must be terminated (although if s/he genuinely has no right to reside, then thatwould provide another basis on which HB or child tax credit might have to end).

When is a UC claim defective?

Given that it is only when a valid claim for UC is made that the various provisions terminating existing awards or HB, tax credits and IS and abolishing income-related ESA and income-based JSA can operate, it is important to understand what counts as a ‘valid’ claim for UC. That is a question not just of the law but also of how the claim process is designed administratively. Electronic claims for UC are considered properly made when completed in accordance with the instructions on the electronic claims system (regulation 8(3) of the Universal Credit (etc.) (Claims and Payments) Regulations 2013). The online claim does not ask the claimant to provide any documents proving identity before the point at which the claimant’s journal notifies it that the claim details have been submitted. Instead, once the claim details are submitted, the claimant has an instruction on her/his journal that s/he must verify her/his identity (which can be done online, or if that does not work, at an appointment at the job centre which must be booked by calling the UC helpline). It is at this stage that the claimant provides a national insurance (NI) number – thus although having provided, or having applied for, an NI number is still a condition of entitlement to UC, doing so no longer appears to be part of making a valid claim.

Given this design of the online claim process, it seems that a claimant will count as having made a valid claim once s/he has answered all the questions on the online form (indicated by getting to the point at which a claimant can post on her/his journal). There may be situations where a claimant gives incorrect information deliberately to get to that stage (eg, entering incorrect rent details) and then puts a note on her/his journal to say the information is incorrect and s/he will provide it when s/he can – there it is arguable that the claim is still defective at that point.

In summary, it seems likely that, in most cases, the arguments that a claim is defective and thus that legacy benefits should notbe terminated will work only up to the point before the online journal records that the claim has been submitted. Advisers should be cautious with arguments to the contrary, as it is likely that in the future it will be in claimants’ interest more generally to argue for the widest possible conception of when a valid claim counts as having been made.

Withdrawing claims

Perhaps a more common situation advisers will face is in advising claimants who would be worse off on UC, and who could remain on legacy benefits but who have already made a valid claim for UC. In cases where that claim has not yet been decided, then it is possible for the claim to be withdrawn (regulation 31 of the Universal Credit (etc.) (Claims and Payments) Regulations 2013). Withdrawals of claims take effect by operation of law2 as soon as they are received by the DWP (in other words, there is no need for a decision maker to make a decision that a claim is withdrawn).

In a case where a claim is withdrawn in this way, then it is arguable that it is, for all purposes, as if the claim had never been made. Thinking about this in terms of whether income-related ESA and income-based JSA are abolished and whether existing awards of tax credits, HB and IS should terminate:

  • a decision as to the first day of the period in respect of which a claim for UC was made, necessary in order to set the date from which income-related ESA and income-based JSA are abolished, cannot be made (there is no claim in existence in respect of which that can be determined);
  • similarly, there is no claim before the Secretary of State for Work and Pensions in respect of which she needs to satisfy herself that the four basic conditions of entitlement are met and so no triggering of termination of tax credits, HB and IS. Furthermore, regulation 8(2) does not allow a determination of an end date for these benefits in this case – the claimant is not entitled to UC and the reason s/he is not entitled is not because s/he does not meet all the basic and financial conditions but rather because s/he has withdrawn her/his claim.

Caution will be needed in advising claimants to withdraw a UC claim before determination as there is a risk the local authority, HMRC or DWP will not accept these arguments and decide that the UC provisions are triggered. However, that is a risk a properly advised claimant, who is a significant net loser on UC, may be prepared to take.


Please be aware that welfare rights law and guidance change frequently. Older Bulletin articles may be out of date. Use keywords or the search function to find more recent material on this topic.

  • 1. For example, Welfare Reform Act 2012 (Commencement No.23 and Transitional and Transitory Provisions) Order 2015, SI No.634
  • 2. Reg 31(2) Universal Credit, Personal Independence Payment, Jobseeker's Allowance and Employment and Support Allowance (Claims and Payments) Regs 2013, SI No.380