SW v Secretary of State for Work and Pensions

Where payment of the Limited Capability for Work and Work-Related Activity element is deferred under regulation 28(1) of the Universal Credit Regulations 2013, regulation 28(7) applies if the claimant would otherwise satisfy the financial condition for Universal Credit once that element is included. The claimant must then be treated as entitled to the prescribed minimum amount, currently 1p, during the waiting period. The nominal award may preserve entitlement to passported benefits. The relevant question is not whether income extinguishes entitlement calculated without the deferred element, but whether the claimant would have entitlement but for the statutory deferral.

The appellant and his partner made a joint claim for Universal Credit from 21 July 2023. The appellant was subsequently found to have limited capability for work and work-related activity, but the LCWRA element was deferred for the three-month relevant period. On a calculation using only the standard allowance, their income produced a nil award. Once the LCWRA element was included, however, they qualified for Universal Credit.

The Secretary of State refused to revise the decisions for the waiting period. The First-tier Tribunal dismissed the appeal. The Upper Tribunal considered whether regulation 28(7) applied where the claimant would have qualified for Universal Credit once the deferred LCWRA element was included.

1. Appeal allowed. The First-tier Tribunal’s decision involved an error of law. It was set aside under section 12(2)(a) and (b)(ii) of the Tribunals, Courts and Enforcement Act 2007, and the decision was re-made.
2. Under sections 3 and 5 of the Welfare Reform Act 2012, entitlement depends on satisfaction of the basic and financial conditions. For joint claimants, the income condition asks whether their combined income is such that, if they were entitled to Universal Credit, the amount payable would be at least the prescribed minimum in regulation 17 of the Universal Credit Regulations 2013.
3. Regulation 28(1) defers inclusion of the LCWRA element until the assessment period following the end of the relevant period. Regulation 28(7) addresses the resulting failure to meet the income condition. It applies where the claimant would be entitled to Universal Credit but for the deferral under regulation 28(1).
4. The First-tier Tribunal wrongly treated the joint income as extinguishing entitlement altogether because it calculated entitlement without the LCWRA element. Once that element was included, the income did not extinguish the award. The only reason for the lack of entitlement during the waiting period was regulation 28(1). Regulation 28(7) therefore required the appellant to be treated as entitled to 1p for each relevant assessment period.
5. The award was re-made at 1p from 21 July 2023 through 20 October 2023. That nominal entitlement could operate as a passport to other benefits, including Housing Benefit.

• First-tier Tribunal (Social Entitlement Chamber): On 14 January 2025, dismissed the appellant’s appeal against the Secretary of State’s decision that he was not entitled to Universal Credit between 21 July and 20 October 2023.
• Upper Tribunal (Administrative Appeals Chamber): Allowed the appeal, set aside the First-tier Tribunal’s decision for error of law, and re-made the decision.