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New case law that affects UC

Case law confirms that a withdrawal of a UC claim does not necessarily mean that the UC claim then ceases to exist

This case (CTC/1276/2018) involved a claimant who had made a claim for UC 'by mistake' and therefore went on to withdraw the claim and hoped that their Tax Credit award would be re-instated.

However, because a stop notice had been issued to HMRC*, who therefore ended the Tax Credit award, there was no going back.

The Judge felt that even though the claimant had gone on to withdraw the UC claim, this could not rewrite history by pretending that the UC claim was never submitted in the first place.

Therefore the decision to close the Tax Credit award was the correct one.

*Reg 8 of the UC (Transitional Provision) Regulations state that a claim for Tax Credits, Housing Benefit and/or Income Support will be closed where the claimant makes a claim for UC and the DWP are satisfied that they meet the basic criteria for it (apart from agreeing a claimant commitment).

These are that they are:

  • Age 18 or over
  • Under Pension Credit age,
  • 'In GB', and
  • Not 'receiving education'.

The Judge felt that the issuing of the stop notice indicated that the DWP was satisfied that the claimant met these criteria.

What are the implications of this decision?

This has always been a grey area, ie. whether someone can withdraw their UC claim and have their Tax Credits, Housing Benefit or Income Support continue / re-instated.

This decision means that we have a clearer picture for those situations where a stop notice has been sent - the answer is 'No'.

So we have to make sure that making a claim for Universal Credit is the right option for the claimant, because once made (and the DWP can issue stop notices the same day) the claimant will not then be able go on to withdraw the claim and have their Tax Credits, Housing Benefit or Income Support continue / re-instated.

Link to the case law is available here.