When change of circumstances take effect

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    I have sent the following query to the Adelphi and will post their reply when I get it:

    “I am aware that the forthcoming amendment regs will correct an error in reg HB Reg 68B that frees up paras 5 and 6 from para 1. However, I think there is another drafting error in regulation 68B and I wonder whether anyone else has noticed it yet. These comments apply equally to CTB Reg 59B.

    Reg 68B(3)(a) is designed to cover the circumstances where HB decreases AND Pension Credit decreases AND the claimant fails to notify the Pension Service timeously of the change. In these cases Reg 68B(3)(a) appears to be designed to make sure that the claimant can not get more HB just by telling the Pension Service late.

    My first (and more minor) concern is about the word “timeously”. Can you please tell me where the definition of timeously can be found.

    My second concern is more serious. The word “because” links the reduction in Pension Credit to the failure to notify the change on time. I think this is a mistake. Let me use an example to illustrate the point:

    Claimant was getting £100 p/w Combined Guarantee and Savings Credit
    Claimant’s income increases in June but only tells the Pension Service in December
    Pension Credit award is reduced to £10 p/w back to June and now Savings Credit only is in payment

    The key question is WHY did the Pension Credit award reduce. I maintain that it was BECAUSE of the increase in the income. The reduction in the Pension Credit award was NOT because they failed to notify it timeously. The reduction in the Pension Credit award would have happened regardless of when it was notified. Therefore, it would appear that in HB Reg 68B(3)(a) will not apply. Reg 68B(3)(b) would apply instead and the claimant will have benefited from notifying the change of circumstances late.

    Please let me know if you agree.”

    This query is really only the start of my Reg 68B woes. The DWP have provided some contradictory answers in the external questions log to questions 291 and 293. They have now accepted that the answer to 293 was correct but the answer to 291 was wrong. The implications of this seem totally mad to me because it would mean that:

    1) Reg 68B only applies to changes in the Pension Credit award. Therefore decisions about whether HB/CTB is going up or down should ignore the impact of the change in the Assessed Income Figure.

    2) Reg 68B(2) can never take effect because it can only apply if Reg 68B(6) applies also.

    3) Reg 68B(3) can only matter where a combined Savings Credit/Guarantee Credit claim becomes a Savings Credit only claim or when Pension Credit entitlement ends completely.

    4) Changes to the Assessed Income Figure should effect HB according to provisions of HB Reg 68 (not 68B). Therefore, a change of circumstances that affects Pension Credit will often affect HB/CTB from 2 different dates – one because the COC is the AIF changing and another becasue the COC is the PC award itself changing.

    Can any of you inject some sanity into this thread?


    Mark, I’ll have a go and am quite prepared to be shot down in flames!.
    Firstly, I agree with you about the word ‘because’ in reg 68B(3)(a) – perhaps it should say ‘AND’.
    I have spent some time in the last week trying to come up with scenarios for each of the new change of circs rules.
    I disagree that reg 68B(2) can never take effect because it can only apply if reg 68B(6) applies also. It is possible that a Savings Credit and HB can increase without Guarantee Credit being awarded.
    Clmt is aged 67, partner aged 59. AIF is £187.00 made up of SRP £87.00, PP £40 and partner’s part time earnings of £70 (less £10 disregard).
    They do not get GC and qualify for £6.72 a week in SC.
    If we say, for argument sake that their max HB is £75.00 a week, they will get £62.83 (AIF + SC = 193.72 – app amt 175 = XSI £18.72 * 65% = £12.17).
    On 12 Nov, partner’s hours at work reduce to 10 hours a week – new earnings now £50 a week. Change is reported to the Pension Service on time. They recalculate the AIF (and they will because the change is something other than a change to retirement income). New AIF is now £167.
    Their income is still too high to get Guarantee Credit but their SC will go up to £14.72. Overall, this will also result in an increase in their HB (up to £70.63 a week)
    If we receive an ETD from the PS with the new AIF and new SC award details on 21 Nov (and here’s where I might be wrong), the change in the AIF is effected in the HB/CTB claim from Monday following the date of the change (or is it the Monday following the date we receive the AIF? – I’m not 100% sure here – any help would be gratefully appreciated!!). The increased SC will be affected in HB/CTB from 10 Nov 2003 (Monday of the week in which SC became payable at the new higher rate).

    I agree that reg 68B(3) only applies where SC/GC becomes SC only or that PC entitlement ends completely.

    Reg 68(5) applies where someone already getting HB/CTB who is not getting GC now but becomes entitled to SC (for example when they reach 65). Having said that, if someone makes an advance claim for SC, i.e. just before they reach 65, and the PS make the decision to award SC just after their 65th birthday, we will have 2 changes to action, the first will be the increase in their applicable amount from the Monday following their 65th birthday, the other will be to include the AIF and SC from the Monday following receipt of the AIF.


    Not sure I have helped you much Mark. But I would appreciate anyone telling me if I have got my dates right about when to use the AIF!!!!


    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.


    Thank you both for your considered replies. Jan’s argument is persuasive and I would love to agree with it – but I’m afraid I can’t. I bet that the DWP would love to agree with it too but I think the balls-up theory is better.

    Reg 68B clearly DOES say that it applies to various changes in the State Pension Credit. But it doesn’t say that it applies to any other changes – including changes in the AIF. Therefore, I am not suprised the DWP lawyers have said this.

    The plain fact is that Reg 68B is a total mess. It is certainly supposed to say what Jan wants it to but I just don’t think it does. The list of anomalies created by the DWP’s new advice is growing by the minute. For starters, how about the fact that if we received a copy of a notification of a change in the PC award from the claimant but not the Pension service we would be able to reassess HB/CTB to take account of the AIF but not to take account of the PC award itself! Jan’s observations about D&A Reg 8 are also interesting – not least because the reference in those regs to “a change of circumstances that is required by regulations to be notified” doesn’t actually say that this means the HB/CTB regs! So this opens a new debate about whether D&A Reg 8 could apply to AIF changes.

    I really hope that the DWP tell us that reg 68B is to be overhauled soon – because if not this is starting to look like the Tax Credit fiasco.


    Oh I agree Reg 68B is a balls-up, whichever way you look at it. I just prefer the strategy of interpreting it in the light of what it is clearly trying to say, rather than descending into the hell of two different effective dates under two different regulations for just one change of circumstances! That would be: a) crazy, even by the standards of HB Regs; b) unworkable, because we won’t even know when the income change occurred; and c) counter-productive, in that the whole policy intention – to ensure (blameless) claimants receive arrears when HB goes up but do not face overpayments when HB goes down – would be lost.

    The obvious solution is for the DWP to amend Reg 68B to make explicit what is already implicit – that it applies to both the PC and AIF aspects of a change.


    OK – here is the answer to my original questions to the Adelphi….and my reply…..


    Your first question – timeously means the same as it always has done for HB/CTB. The rules contained in the HB/CTB (Decisions and Appeals) Regs 2001, SI 2001/1002 apply.

    Your second question – I think that this is a question of semantics. The purpose of 68B(3)(a) is quite clear, if the Pension Credit is reduced and the claimant was late in reporting it any consequent HB reduction will be effective from the same week as the reduction in Pension Credit.”

    “Thank you for your reply. I suspect you guessed already that I would want to ask some follow up questions! I am prepared to admit that HB Reg 68B has pretty much got me stumped so I would very much appreciate some help. Perhaps it is easiest for me to list my comments and questions:

    1) I struggle to see that the notification time limits in SI2001/1002 can possibly apply to awards of Pension Credit. Surely, those regs apply to changes in HB/CTB not changes in Pension Credit. If it is the policy intention that the “1 month extendable to 13 months in special circumstances” rules apply to notifying things to the Pension Service for HB/CTB recipients I would expect the regs to say this explicitly.

    2) Semantics? Maybe – but I’m not sure all tribunal chairs will be so sure. Wouldn’t it just be a lot easier to change the wording so that no-one ever needs to decide whether it is semantics or not?

    3) I have read and re-read the amended answers to questions 291, 293 and 317 in the external questions log but I am still very confused. I understand that you are asking us to use Reg 68 to deal with changes in the AIF but reg 68B to deal with changes in a Pension Credit award. What I don’t understand is whether these things are TOTALLY separate. In other words, when considering whether there has been an increase or decrease in HB/CTB as a result of a Pension Credit award changing does this mean that we consider the impact of the AIF at that point or not? For example:

    Savings Credit only award changes from £10 to £5 because the claimant has £12.50 p/w increase in their income and they already had income over their appropriate amount

    AIF changes from £80 to £92.50

    Do we say that HB has increased because the Savings Credit has gone down – or do we say that HB has decreased because the combined effect of the Pension Credit and AIF change is that HB will increase? In other words, does 68B(4) apply or is it 68B(3) instead. I hope you will tell me that the answer is 68B(3) because if not then the special rules to stop people benefiting from reporting late changes won’t apply!


    Right then – ready for the next instalment? Here is the latest reply from the Adelphi and……err…ummmm…the next missive from me…


    Question 1. Sorry if I did not make this clear. The meaning of “timeously” is exactly the same for Pension Credit as it is for HB/CTB. The Pension Credit rules are contained in the Social Security and Child Support (Decisions and Appeals) Regulations 1999, SI 1999/991. They reflect those of SI 2001/1002.

    Question 2. The regs were drafted by lawyers and we (not being trained lawyers) must rely on them to provide what is, in their opinion, legislation that reflects the policy. If problems appear we can ask them to reconsider, but the final decision will be theirs.

    Question 3 – What needs to be born in mind here is that while the AIF and savings credit may have a direct connection in Pension Credit they are separate items as far as the HB/CTB calculation is concerned. So each must be treated separately. Changes to the savings credit must be considered under 68B because that regulation has been inserted specifically to deal with changes to HB because pension credit is payable. Changes to the AIF are changes to income. Therefore, they are not appropriate to 68B and must be dealt with using reg 68.

    The answer to your example is that the decrease to savings credit would be dealt with under 68B(4) and the increase in the AIF would be dealt with under 68(1). 68B(3) could not apply as the decrease in the savings credit has not resulted in a decrease to HB. If all this happened in the past the overpayment provisions would still apply.”

    “Thank you for your reply and your patience. I’m afraid that I can’t put this one to rest just yet. You answer appears to be unambiguous – the AIF is totally separate from the change to the PC award itself when considering whether HB/CTB has gone up or down. The problem is that 68B(3) and 68B(4) refer to situations where HB “is increased” or “was reduced”. In other words – the increase or decrease really did happen. But you appear to be saying that we need to imagine an increase or decrease that is not really there because of the impact of the change in the AIF under reg 68. Is this a correct interpretation?

    It is interesting that Regs 68B(5) and 68B(6) have now been amended so that the words “has resulted” have been changed to “would result”. I assume these changes were made to deal better with notifications of future changes – but the failure to make similar changes to 68B(3) and 68B(4) makes this imagining of increases or decreases seriously close to being outside of the law.

    I would also like you to clarify how we will work out the effective date of change in HB/CTB as a result of a change in the AIF. By using Reg 68 an HB/CTB award will be amended from the Monday after the change in the AIF (or Monday of the same benefit week if 68(4) applies). My question is – how will we know what date the AIF changed? If someone’s income increased in January but they notified the Pension Service in July will the January date be on the notification we receive from the Pension Service?

    Many thanks again for all your help.”


    Jan and Mark, you have been keeping up an heroic effort on this issue. I’ve been following it with great interest, but I haven’t had any time to contribute. For what it’s worth, here are some ideas that occurred to me:

    [b:d0788daaea]Relationship between AIF and SC[/b:d0788daaea]

    DWP’s reply says: [i:d0788daaea]”Question 3 – What needs to be born in mind here is that while the [b:d0788daaea]AIF and savings credit may have a direct connection in Pension Credit[/b:d0788daaea] (my emphasis – PB) they are separate items as far as the HB/CTB calculation is concerned. So each must be treated separately. Changes to the savings credit must be considered under 68B because that regulation has been inserted specifically to deal with changes to HB because pension credit is payable. Changes to the AIF are changes to income. Therefore, they are not appropriate to 68B and must be dealt with using reg 68.” [/i:d0788daaea]

    I disagree. It is extremely important that the council and DWP use the same figures in a SC case, because in this income range the combined withdrawal rate is 91p per £1 of additional income. One-stop verification for the customer is a spin-off advantage, but the real reason why you need an AIF is to ensure there are no worse-off traps arising from DWP and the council taking a different view about the same items of income and capital. The arithmetic of means-testing is very delicately poised in the SC income range. So I would argue the opposite of what DWP says: AIF and SC must always operate as a pair in HB, it makes no sense to separate them.

    [b:d0788daaea]What Reg 68B says/tries to say[/b:d0788daaea]

    Again, I would have to disagree with DWP’s comments about what the lawyers were trying to accomplish in the drafting here. I believe the lawyers envisaged there being only one effective date for the change in Pension Credit and the underlying change that caused it. Why? I offer two contrasting views of Reg 68B(3).

    [i:d0788daaea]First view[/i:d0788daaea]: The lawyers would not have believed it possible to achieve the outcome in Reg 68B(3) as a result of a change in PC alone. A reduction in the amount of Pension Credit cannot, of itself, lead to a reduction in HB, they would have thought. That outcome only ever results when PC is reduced in combination with some other change. So the very existence of Reg 68B(3) caters for a scenario that cannot happen if you restrict the Reg to changes in PC only. The provision must therefore have been drafted to cater for a reduction in PC coupled with another change in income or capital, both to be effective from the same date.

    [i:d0788daaea]Second view: [/i:d0788daaea]The lawyers intended Reg 68B to apply only to the change in PC and not to any other associated changes. They put para (3) in there because they knew that it is in theory possible for the following to happen:

    – a 64 year-old man is unemployed and getting £72.10 Guarantee Credit to top up his income from capital of £30 (he has £21,000 of savings). he has no other income.

    – on his 65th birthday a shedload of retirement income comes on stream and he only qualifies for £5 of Savings Credit.

    – taken on its own, the reduction in PC from £70.10 to £5 would actually reduce HB, because the capital would no longer be disregarded.

    – therefore a reduction in PC has directly resulted in a reduction in HB, even if you ignore all the other changes.

    The lawyers knew that the Regs had to cater for this unlikely scenario, hence Reg 68B(3) was included. This already dodgy view is further weakened by the fact that you have to accept the term “reduction” of HB includes a reduction from something to nothing: if it doesn’t, then there is no way at all in which a reduction in PC can directly cause a reduction in HB that leaves residual entitlement to HB.

    I think the first view suggested above is more likely to be correct. I would maintain that the policy intention, certainly among the people who drafted the legalese, was to apply a single date for both or all changes.


    I think the DWP’s comments on this are muddled. The only time limit that exists in the D&A Regs as far as I am aware is one calendar month to report an advantageous change (i.e. one that increases benefit). But Reg 68B(3) is concerned with changes that reduce Pension Credit, not increase it. I would suggest a different definition of “timeous”: in time to stop another payment going out at the wrong rate. This could be anything from a matter of hours to a complete payment cycle, depending on when you get paid and when the change happens; although you would think there should be some reasonable reaction time buiklt in. I doubt it will be as long as a month though.

    Finally, I would like to echo Mark’s comment in one of his enquiries to DWP: what on earth will the commissioners make of DWP’s suggestion that it is not the council’s place to try and interpret legislation? The gist of one of DWP’s replies seems to be that you administer the scheme the way the DWP tells you to and just accept that the lawyers have written what the DWP asked them to. It’s as if the legislation is just a necessary formality, there has to be some in the background, but the council should consult the Q&A log for definitive instructions on how to interpret the scheme.

    Keep plugging away you two.


    Right then – here’s the latest reply from the Adelphi:


    I assume that you do not want me to repeat the explanation of how to deal with changes to the AIF and changes to the savings credit as you have said that my answer is unambiguous.

    The answer to your question about how you will know what date the AIF increased. The answer is that it will be shown on the ETD notification – see appendix I of Part 1 to the HB/CTB Pension Credit Handbook.”

    I gave it my best shot folks but I now admit defeat. If anyone else wants to raise the mantle I would be more than happy to lend support. In the meantime I will go off and prepare the most convoluted and bizarre set of training materials ever produced. I might have to include pictures of natural disasters just in case anyone thinks I’m joking.


    What a shame.

    It could all have been so different. Reg 68B is rather well designed (subject to the drafting bugs you have been pursuing) if you read it sensibly to refer to [b:2a9c23dba0]both [/b:2a9c23dba0]the change in Pension Credit [b:2a9c23dba0]and [/b:2a9c23dba0]the underlying change that caused it: DMA advantageous time limits and blame for overpayments are built into the PC amendment date, and HB just follows that date. Works perfectly in all circumstances.

    But if you separate the underlying change from the consequent change in Pension Credit it ceases to make any sense at all and becomes a muddled mess. This is not some trivial piece of pedantry as the DWP seems to imply, it’s the difference between SC/AIF cases and end-of-GC cases being workable or not. Maybe they’ll change their mind when all the DWP error overpayments start to appear covering the inevitable week or two’s time lag between the change in the AIF and the Council’s discovery of it through ETD (income changes for PC claimants are non-notifiable by claimant, remember, therefore not his/her fault).

    And just for good measure, next Monday all standard pensioner claims will undergo at least one change of circumstance (the consolidation of personal allowance and pensioner premium). It takes effect from 6 October. Many of them will also start to receive Pension Credit from that date or within a couple of days. Apparently that won’t take effect from 6 October, because Reg 68B is not subject to the multiple change provisions, right?


    Well said Peter and thanks to everyone who has joined in this discussion. I doubt this will be the last we hear about the matter although the DWP’s ability to pretend that everything is OK when simple logic says otherwise is astounding. Trying to pretend that the policy intentions have been met when we’re confronted with this sort of rubbish is absurd in the extreme.


    OK – I lied – here’s another e-mail from me to the Adelphi:

    “I have checked the section of the handbook to which you refer but can find no reference to the date an AIF changes. I have looked through all 44 items that could be included in the RIS20212 report but can’t see it there. Please can you lead me to the exact section.”

    I wonder whether the following line of logic will now take place:

    a) Oh – it’s not there is it.

    b) Ah – maybe its because when the report was originially drafted it was realised that there is no need to have the date an AIF changes because the relevant date in HB/CTB will be the same as the date the PC award itself changes.

    c) Oh dear – I have been telling LA’s the wrong thing.

    d) Maybe I should refer this back to the lawyers to see if they want to make any changes.

    e) Quick – lets e-mail Mark to tell him that we have decided to look at this all again.

    f) (2 days later). Dear Benefit Manager letter rec’d stating that last minute amending SI is due out to fix reg 68B problems.

    Some hope! Anyway – for all you Sx3 users out there Peter’s point about when new SC and AIF figures get taken into account is absolutely correct. There is NO METHOD by which the DWP’s logic can be applied on Sx3 because you won’t be able to tell the system that the 2 changes in a week rule doesn’t apply to PC awards. So make you choice – underpay for w/c 13th Oct or overpay instead – there is no other option.


    Sorry – what I meant was – “overpay for w/c 13th October or underpay for w/c 6th October – there is no other option”.


    I think you can perm any combination of over- and underpayments in the first couple of weeks and still come up with a winning line.

    Julian was talking about elephants in another thread, and he got a very droll reply from DWP about the Benefits Serengeti.

    It is hard not to think of Commissioner Jacobs as a patient lion sitting quietly in the sunshine, with Reg 68B the lumbering wildebeest at the back of the herd.


    This discussion has continued into another thread…


    But here is the reply I received from the Adelphi to my last query:


    When the AIF increases you will receive an ETD notification. The change will be marked by an asterisk and a comment message will appear – see the notes at the end of the page containing a description of the entries.

    Hope this helps”.

    You can see from the other thread though that things appear to be a bit more advanced than this suggests and the Reg 68B armour finally has a few dents in it.

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