Secretary of State for Work and Pensions v YN

Where childcare charges are paid in one Universal Credit assessment period, their attribution is governed by regulation 34A of the Universal Credit Regulations 2013, according to whether the childcare relates to that period or a previous period. Charges paid for childcare relating to a previous assessment period remain attributable to the period in which they were paid.

The childcare costs condition concerns whether charges were reported within the statutory notification period. Regulation 33(2) applies only to charges reported late within that statutory scheme. It cannot be used retrospectively to reallocate charges which were reported in time, even where applying the statutory maximum produces an unsatisfactory result.

The claimant received Universal Credit in monthly assessment periods. She made two childcare payments in November 2023: one relating to childcare provided from 30 September to 31 October and another relating to childcare provided in November. Both payments were reported within the following assessment period.

The Secretary of State treated both payments as attributable to the November assessment period and awarded the statutory maximum childcare costs element. The First-tier Tribunal accepted that decision was legally available but allowed the appeal, holding that regulation 33(2) permitted an alternative retrospective allocation to the October assessment period.

The Secretary of State appealed. The central issues were the correct attribution of the two payments under regulation 34A and whether regulation 33(2) could apply where the payments had been reported within the statutory notification period.

The Secretary of State’s appeal was allowed. The First-tier Tribunal’s decision involved errors of law and was set aside. The Upper Tribunal re-made the decision because the facts were undisputed and the appeal turned on statutory construction.

1. Attribution of the first payment. The payment made on 1 November 2023 for childcare relating to October was attributable to the November assessment period under regulation 34A(1)(b) of the Universal Credit Regulations 2013. The statutory scheme did not attribute it simply to the month in which the childcare was provided.
2. Attribution of the second payment. The payment made on 3 November 2023 for November childcare was attributable to the same November assessment period under regulation 34A(1)(a). Both payments therefore fell within one assessment period.
3. Statutory maximum. Applying regulation 34, 85% of the first payment produced £1,487.50. The second payment produced £1,147.50 when considered separately. Since the first amount had already been awarded, only £142.65 remained before the statutory maximum of £1,630.15 was reached.
4. Late reporting. Regulation 33(2) could assist only where charges had been reported late. Regulation 33(3), read with regulation 33(1)(za), defined the relevant notification period as ending on the last day of the assessment period following the period in which the charges were paid. Both payments were reported before 31 December 2023 and were therefore reported in time. Regulation 33(2) could not be used to reallocate them retrospectively.
5. The First-tier Tribunal consequently misdirected itself both on attribution under regulation 34A and on the scope of regulation 33(2). The claimant’s appeal was refused, the Secretary of State’s decision dated 7 December 2023 was confirmed, and the claimant was entitled only to the maximum childcare costs element for the November assessment period.

The judge noted, with regret, that the result appeared difficult to reconcile with the policy objective stated in the Explanatory Memorandum to the Universal Credit (Childcare costs and minimum income floor) (Amendment) Regulations 2019.

• Upper Tribunal (Administrative Appeals Chamber): appeal allowed; the First-tier Tribunal’s decision dated 3 December 2024 was set aside and the decision under appeal was re-made.
• First-tier Tribunal (Social Security and Child Support): claimant’s appeal allowed and the Secretary of State’s decision dated 7 December 2023 set aside, on the basis that a retrospective allocation under regulation 33(2) was available.