The Universal Credit (Surpluses and Self-employed Losses) (Digital Service) Amendment Regulations 2015

JurisdictionEngland & Wales
CitationSI 2015/345

2015 No. 345

Social Security

The Universal Credit (Surpluses and Self-employed Losses) (Digital Service) Amendment Regulations 2015

Made 23th February 2015

Laid before Parliament 26th February 2015

Coming into force 6th April 2016

The Secretary of State for Work and Pensions, in exercise of the powers conferred by section 42(2) and (3) of, and paragraph 4(1), (3)(a) and (4) of Schedule 1 to, the Welfare Reform Act 20121, makes the following Regulations:

In accordance with section 172(1) of the Social Security Administration Act 1992, the Secretary of State has referred the proposals for these Regulations to the Social Security Advisory Committee.

S-1 Citation and commencement

Citation and commencement

1. These Regulations may be cited as the Universal Credit (Surpluses and Self-employed Losses) (Digital Service) Amendment Regulations 2015 and come into force on 6th April 2016.

S-2 Carry forward of surplus earnings

Carry forward of surplus earnings

2.—(1) The Universal Credit Regulations 20132are amended as follows.

(2) After regulation 54 (calculation of earned income – general principles) insert—

S-54A

Surplus earnings

54A.—(1) This regulation applies in relation to a claim for universal credit where—

(a)

(a) the claimant (or either of joint claimants) was entitled to an award of universal credit that terminated within the 6 months ending on the first day in respect of which the claim is made (“the old award”); and

(b)

(b) there were surplus earnings in the assessment period in which the old award terminated.

(2) Where this regulation applies, the amount of any surplus earnings in a month—

(a)

(a) that would have been an assessment period for the old award had it continued (including the month which is the assessment period in which the old award terminated); and

(b)

(b) is the last such month preceding the first assessment period for a new award,

is to be treated as earned income for the purposes of determining whether there is entitlement to a new award or, if there is entitlement to a new award, calculating the amount of the award.

(3) Whether there are surplus earnings in the assessment period in which the old award terminated or in any of the subsequent 5 months that would have been assessment periods for the old award (had it continued), is to be determined as follows.

Assessment period in which the old award terminated

There are surplus earnings in the assessment period in which the old award terminated if the total earned income for that assessment period exceeds the relevant threshold (“the original surplus”).

Month 1

There are surplus earnings in the first month after the assessment period in which the old award terminated if the original surplus, combined with the total earned income for that month, exceeds the relevant threshold.

Month 2

There are surplus earnings in the second month after the assessment period in which the old award ended if the earned income for that month, including any surplus earnings from the previous month, exceeds the relevant threshold.

Months 3, 4 and 5

Surplus earnings for the third, fourth and fifth month are to be calculated in the same way as for the second month.

(4) For the purposes of paragraph (3)—

(a)

(a) where, in the case of a joint claim, there is an old award for each claimant (because each claimant was previously entitled to universal credit as a single person or as a member of a different couple) the surplus earnings are to be calculated separately in accordance with paragraph (3) as if the claimant were a single person and, if there is an amount of surplus earnings in relation to both old awards, both amounts are to be treated as earned income for the purposes of a new award; and

(b)

(b) if—

(i) a single claimant in relation to a new award was entitled to the old award as a joint claimant, or

(ii) either of the joint claimants in relation to a new award was entitled to the old award as a member of a different couple,

the original surplus is to be apportioned so that the amount to be attributed to the claimant bears the same proportion to the whole of the original surplus as the claimant’s earned income in the assessment period in which the old award terminated bears to the total earned income in that assessment period.

(5) A person is not to be treated as having earned income by virtue of this regulation if, at the time that person makes a claim for universal credit, he or she has recently been a victim of domestic violence (within the meaning of regulation 98).

(6) In this regulation—

“total earned income” is the earned income of the claimant or, if the claimant is a member of a couple, the couple’s combined earned income, but does not include any amount a claimant would be treated as having by virtue of regulation 62 (the minimum income floor);

“the nil UC threshold” is the amount of total earned income above which there would be no entitlement to universal credit, expressed by the following formula—

where—

M is the maximum amount of an award of universal credit3;

U is unearned income4;

WA is the work allowance5,

and, in determining those amounts in relation to the first and any subsequent months after the termination of the old award, the Secretary of State may make such assumptions as to the claimant’s circumstances as the Secretary of State considers appropriate;

“the relevant threshold” is the nil UC threshold plus £300.”.

(3) In regulation 62 (minimum income floor)6after paragraph (4) insert—

S-4A

“4A Where this regulation applies in respect of an assessment period in which surplus earnings are treated as an amount of earned income under regulation 54A (surplus earnings), that amount is to be added to the claimant’s earned income before this regulation is applied and, in the case of joint claimants, it is to be added to the earned income of either member of the couple so as to produce the lowest possible amount of combined earned income after this regulation is applied.”.

S-3 Self-employed earnings – treatment of losses

Self-employed earnings – treatment of losses

3.—(1) The Universal Credit Regulations 2013 are amended as follows.

(2) In regulation 57 (self-employed earnings) for paragraphs (2) and (3) substitute—

S-2

“2 A person’s self-employed earnings in respect of an assessment period are to be calculated as follows.

Step 1

Calculate the amount of the person’s profit or loss in respect of each trade, profession or...

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