Reply To: When change of circumstances take effect


The poor drafting of Reg 68B is causing great difficulty. I am unable to agree with the latest DWP advice (Q293 and Q317) that changes in the SC and the AIF should be dealt with separately under different regulations. That way madness lies. Fortunately I don’t think we have to go down that road. I think they are both covered by Reg 68B.

Changes in the rate of the guarantee credit (as opposed to new awards of GC) will have no effect on HB entitlement. So let’s focus on changes in the rate of PC in savings credit only cases, and start with the basic observation that changes in income will tend to move SC and HB in the same direction. A decrease in income will tend to increase both SC and HB. An increase in income will tend to decrease both SC and HB.

It is in this sense, I think, that an increase in SC can be said to ‘result’ in an increase in HB (paragraph 2) or a decrease in SC to ‘result’ in a decrease in HB (paragraph 3). The wording leaves much to be desired of course, because it would be much clearer to identify the underlying change in income as the causal factor resulting in the change to both benefits. Nevertheless, to make sense of these paragraphs at all I think we must interpret them as applying to the combined effect of the AIF/SC change, rather than the SC change viewed in isolation.

Some examples may help.

If income goes down by £1, SC will rise by 40p. The Pension Service will report a new AIF (£1 lower) and a new SC figure (40p higher) to the LA. The LA must modify the AIF to include the SC. Thus the net effect is a 60p decrease in income. This will result in an increase in the rate of HB payable. Reg 68B(2) applies.

If on the other hand income goes up by £1, SC will fall by 40p. The Pension Service will report a new AIF (£1 higher) and a new SC figure (40p lower) to the LA. The LA must modify the AIF to include the SC, resulting in an income figure which is 60p higher than before. This will result in a reduced rate of HB. Reg 68B(3) applies.

(There will be rare occasions when a change in income could send PC and HB in opposite directions. This is because of discrepancies in disregards. So the award of a war pension, for example, would reduce SC but would be neutral for HB if the LA disregards the whole amount. The reduction in SC would therefore increase HB. Reg 68B (4) applies.)

So, in conclusion, I reject the argument that changes in the AIF must be dealt with under Reg 68 rather than Reg 68B. But even if I accepted it, how on earth would one put it into practice? (I sympathise with Simon’s difficulties in trying to do so!) Reg 68, in conjunction with Reg 8 of the D&A Regs, deals with changes that must be reported to the LA. The effective date for HB is based either on the date the change actually occurred or the date it was notified to the LA. These regulations are simply inapplicable to changes in the AIF, which must be reported to the Pension Service not the LA.