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Thread: Housing Benefit Guide: Changing circs with SDP

  1. #1

    Housing Benefit Guide: Changing circs with SDP

    In conjunction with the "Working Tax Credit" post i did, I also looked into Housing Benefit. Specifically how much I would be getting if I started to work. Key point - SDP is paid into either ESA or Housing Benefit. If yours is in ESA, and you earn "too much" when you start work thereby losing entitlement to HB, you will also lose SDP.

    Not easily found:

    WTC and Housing Benefit are based on "low income". So how much can you earn before you lose it?

    Housing Benefit is based on your Net Income, not Gross.

    Step 1. Calculate net income:

    Gross income (wages, premiums and WTC) minus tax, minus NI, minus 50% of any pension you pay into while working.
    There are various UK salary calculators online that will do the tax, NI and pension sums for you. You then just add any premiums and Working Tax Credit you get with what's left.

    Step 2. Calculate Disregarded Income


    There are 2 lists featured. List one gives amounts for different things. List two has a set amount - if you satisfy anything is that list you get that amount.

    Example:

    List 1 - If you are single, you get £5 disregarded. Disabled? - £20. Only the highest amount in the first list of "disregarded income" is taken - they don't get added together. So single and disabled? Total £20 disregarded.

    List 2 - You can get a further £16.85 disregarded if you satisy any criteria in the 2nd list. These include things like, over 25 and working more than 30 hours or claimant gets disability premium and works more than 16 hours.

    Step 3. Calculate Applicable Amount

    Applicable Amount
    The government view of how much you need to live on each week.

    The Applicable Amount is made up of:
    • Personal Allowance
    • Premiums

    Step 4. Calculate the Reckonable Income


    Reckonable Income
    Actual Wages and Premiums minus the disregards.

    (Disregarded Capital)

    Capital
    • <£6000 ignored
    • <£16,000 means no (main) council tax benefit or Housing Benefit, unless on ESA Income-related
    • Between these amounts, £1 per £250 is deducted if under state pension age
    Disregarded Capital
    • Capital of anyone on ESA income related
    • Arrears of DLA for 12 months (or longer if >£5000)
    • Arrears of WTC for 12 months



    Is the Reckonable Income more than the Applicable Amount?

    If yes, you are eligible for full council tax and HB.

    If no, then.....

    Housing Benefit = Eligible Rent minus 65% of (Reckonable Income - Applicable Amount)

    Eligible Rent is the LHA rate.
    If you are disabled and under 35 and get SDP you an get the 1 bed rate. If you need another person to stay overnight at times, you can get the 2 bed rate (you must have a separate bedroom for them).

    Example (rounded up/down figures): Under 35. Single. Living in City of Wesminster. Working and in receipt of all disability premiums.

    Personal Allowance = £12,500
    Applicable Amount = £18,500
    Net Income = £17,500
    Disregarded Income p.a. = £1,900
    Premiums p.a. = £6,000
    Working Tax Credit = £2,500

    Reckonable Income = Net + Prems + WTC - Disregards
    = £24,100

    Disability circumstances mean eligibility for LHA 2 bed rate. HB for a 2 bed in Westminster borough is MAX £395 per week. Actual amount is calculated below.


    Housing Benefit = LHA - 65% of (Reckonable Income - Applicable Amount)
    =297.47 p/w

    (Only if PIP and premiums stay the same. If you lose any when you start work, you will have to factor that into the new LHA and income calculations before doing a HB calcualtion). If you don't know if you will lose any. Work out both sets of circumstances - worst case scenario/best case scenario.

    Again, I hope this is accurate. Feel free to amend
    Last edited by quest; 30-06-20 at 13:45.

  2. #2
    Senior Member nukecad's Avatar
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    Not clued up on WTC, you need an advisor who is familiar with WTC disability elements, but-

    I don't believe that you can have SDP (with ESA) and the WTC Severe Disability Element.

    You have to have IR ESA to get the SDP included.
    You can't have ESA if you are working over 16 hrs a week.
    You have to be working more than 16 hrs a week to get WTC (so the WTC severe disability element).

    If you do start work then you would have a month of remaining SDP gateway to get a WTC claim going after the ESA & SDP stops, otherwise it's going to be a UC claim.
    (Or stop ESA, get SDP added to your HB, start work and claim WTC).

    You may be able to get the entitlement to SDP added to HB, but that would usually mean closing your ESA claim, getting the SDP entitlement added to HB, then starting work and claiming WTC.

    Calculations like this are always going to be awkward because WTC is on it's way out (as is HB and IR ESA) and will be migrated to UC anyway.

    Probably more importantly trying to change benefits from non-working to working like that is going to be doubly awkward because the staff will no longer understand all the elements/tweaks with legacy benefit new claims - especially as WTC is administered by HMRC and not by the DWP.
    HMRC will have very few staff dealing with new WTC claims, because only those who had SDP in the past month can make one and there won't be many with SDP moving straight from ESA with SDP into work.
    Last edited by nukecad; 30-06-20 at 15:08.
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  3. #3
    Quote Originally Posted by nukecad View Post
    Not clued up on WTC, you need an advisor who is familiar with WTC disability elements, but-

    I don't believe that you can have SDP (with ESA) and the WTC Severe Disability Element.

    You have to have IR ESA to get the SDP included.
    You can't have ESA if you are working over 16 hrs a week.
    You have to be working more than 16 hrs a week to get WTC (so the WTC severe disability element).

    If you do start work then you would have a month of remaining SDP gateway to get a WTC claim going after the ESA & SDP stops, otherwise it's going to be a UC claim.
    (Or stop ESA, get SDP added to your HB, start work and claim WTC).

    You may be able to get the entitlement to SDP added to HB, but that would usually mean closing your ESA claim, getting the SDP entitlement added to HB, then starting work and claiming WTC.

    Calculations like this are always going to be awkward because WTC is on it's way out (as is HB and IR ESA) and will be migrated to UC anyway.

    Probably more importantly trying to change benefits from non-working to working like that is going to be doubly awkward because the staff will no longer understand all the elements/tweaks with legacy benefit new claims - especially as WTC is administered by HMRC and not by the DWP.
    HMRC will have very few staff dealing with new WTC claims, because only those who had SDP in the past month can make one and there won't be many with SDP moving straight from ESA with SDP into work.
    You can't. Sorry thought that was clear. Lose ESA, get WTC. Move SDP from ESA to HB.

    You are right, it is incredibly complex and DWP are not known for their understanding of it. That's why I put this all up. Know before you ask as otherwise it's the blind leading the blind.

    All legacy benefits are on the way out - unless you get SDP. The government aren't sure what to do with those who get it after various court rulings. Time will tell. In the meantime, I hope this helps others who might be in similar situations with SDP, HB and ESA
    Last edited by quest; 30-06-20 at 16:21.

  4. #4
    Senior Member nukecad's Avatar
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    Even benefits that include SDP will be migrated to UC - once 'Managed Migration' eventually starts.

    There is no legal problem with that, and the legislation is already in place.

    It's only 'Natural Migration' that is blocked by the SDP gateway, which had to be imposed following the first High Court ruling.

    It was the difference in treatment of SDP Transitional Payments between Natural and Managed migrations that was ruled discriminatory, and thus unlawful.
    Stopping Natural Migration (but not Managed Migration) for those with SDP removed that discrimination.

    The two further High Court cases have been because the DWP were still discriminating against those who had already Naturally Migrated and so lost SDP.

    The Saga continues:

    Despite 3 clear HC rulings now, the DWP are still discriminating against those previously Naturally Migrated by not giving full Transitional Payment for SDP, which those who are later Managed Migrated will get.
    It's estimated up to 13,000 are still missing out / being discriminated against by not getting full Transitional Payment for their previous SDP.

    A class action (4th Court case) has now been launched by 275 UC 'migrants' who have lost SDP and are not getting full TP in UC: https://www.leighday.co.uk/News/Pres...y-Premium-laun
    Last edited by nukecad; 01-07-20 at 06:05.
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