4. Mr W complains that DWP failed to tell him that if he made a claim for UC, his WTC from HM Revenue and Customs (HMRC) would automatically stop and he would not be able to get them again.
5. Mr W tells us his income dropped significantly and this caused him and his severely disabled partner a lot of distress. Mr W would like DWP to compensate him for what he lost financially.
6. Mr W was self-employed and his work was badly affected by the COVID-19 pandemic. Until March 2020 he and his partner were getting WTCs. When Mr W had to stop work, on 28 March 2020 he and his partner submitted a joint claim for UC.
7. The next day DWP issued a ‘Stop Tax Credit Notification’ to HMRC, which instructs it to stop paying WTC and to tell the customer.
8. Mr W reported a change of income to DWP on 1 April 2020, stating he became self-employed from 28 March. The Jobcentre called Mr W on 6 April to discuss the self-employment, but no record of what was said is still available.
9. In a call on 29 April, Mr W complained to DWP that he was over £400 worse off since getting UC. He said he should have been told this was going to be the case and that he could not go back to getting WTCs. The reason he was worse off is because he was over the UC income threshold, so was not entitled to UC himself.
10. Mr W asked his MP to write to DWP on his behalf, which they did on 8 July 2020. Mr W sent a written complaint to the Secretary of State about the issue on 9 July. DWP wrote to Mr W on 5 August in response to his complaint and explained the legislation said he could not claim WTCs once he had claimed UC.
13. UC was introduced by the Government in April 2013 to ‘simplify the benefits system by moving from the current benefit structure to a simple streamlined payment. and to migrate recipients from the current benefits and tax credits systems onto the Universal Credit starting in 2013 and finishing in the next Parliament’. This was explained in the 2010 DWP public statement.
14. The current plan is for everyone who is claiming WTCs to be transferred to UC by the end of 2024.
15. On 28 March 2020 Mr W and his partner submitted a joint online claim for UC. They did so because Mr W was unable to work as a self-employed driving instructor because of COVID-19 restrictions.
16. Mr W and his partner were already getting WTCs when they made this claim. On 29 March, DWP told HMRC, who manages WTC payments, about the claim for UC and this meant Mr W and his partner lost their entitlement to WTCs.
17. The current guidance for claimants explains:
‘After you’ve applied for Universal Credit, you’ll get a letter from HMRC (called your ‘award review’). This will tell you when your tax credits claim ended.
After your tax credits stop, you cannot claim tax credits again.’
18. We will now look at what information was available to Mr W when he made the UC claim on 28 March 2020.
19. Mr W told us that when he applied for UC there was nothing to suggest he would lose his WTCs. He says the DWP website did not say this would happen and no DWP staff told him.
20. Based on the evidence we have seen, Mr W is correct to say the DWP website did not specifically say that once a UC claim was made there would be no option to claim WTCs again. We note that in a letter dated 5 August 2020, DWP told Mr W that the DWP website for UC said ‘If you get tax credits, they will stop when you or your partner applies for Universal Credit’. The evidence shows this information was not added to the website until May 2020.
21. The letter also went on to say that after a number of complainants told DWP that they did not know their WTCs would stop once they claimed UC, DWP added more warnings to the claim process.
22. DWP did not have to provide that specific warning, as it is the responsibility of claimants to make sure they know what they are applying for. ICE explained this to Mr W in its report when it said:
‘Legislation places the responsibility on individuals to determine which benefit they wish to claim. Parliament takes the view that it is a customer’s own responsibility to take reasonable steps to find out about their entitlement to benefits or pension […] I consider it was your responsibility to establish if you would still be entitled to WTCs before you submitted your online UC application on 28 March 2020, and if you were unclear after reading the available information you could have contacted DWP before making that claim’.
23. DWP has a responsibility under its customer charter to publish information about benefits and services online and explain clearly how to contact it in other ways.
24. We can see from the evidence available that the DWP website did provide a link to a selection of benefits calculators. These allow a claimant to work out how they would be affected financially by claiming UC.
25. The Government also provided a website called ‘undertsandinguniversalcredit.gov.uk’ and this gave advice on making a claim.
26. Finally, a website giving guidance on UC and tax credits explained in Section 1 ‘How tax credits are affected’ that:
‘Tax credits are being replaced by Universal Credit for most people.
If you lose your job and you claim Universal Credit, your tax credits will stop. You cannot receive Universal Credit and tax credits at the same time.
HMRC will stop your tax credits and contact you to finalise your current award.’
27. Based on the evidence we have seen, there was information on the UC claim website, as well as other websites, that explained UC was a replacement for WTCs. This information was provided to let claimants know they would no longer get WTCs if they claimed UC.
28. We should also add that DWP makes decisions on benefits once someone has applied and it has considered the evidence available to it. This means it cannot tell someone what the outcome of their benefit application will be until someone actually makes a claim. It also cannot advise someone what benefits they should apply for. What it can do is give claimants general information about how tax credits and UC work. It could have given Mr W general information if he had asked before making his application.
29. We do not think DWP failed to act in line with its customer or that it failed to warn Mr W what would happen if he made a UC claim.
30. Mr W also complains he spoke to someone by phone at the Job Centre after he applied for UC and they did not tell him or his partner they would lose their WTCs.
31. Mr W’s partner called the Job Centre on 1 April 2020 to give it information to process the UC claim. This is called the Initial Evidence Interview (IEI). Mr W was scheduled to call the Job Centre on 6 April to do the same, but by that date he had returned to being self-employed and so the call was about that.
32. The online document ‘Universal Credit and You’ gives information to claimants about the UC process. The section ‘Claiming Universal Credit’ says:
‘In most cases, Universal Credit claims are made online. You will then meet your work coach at an interview in your local jobcentre [this was done by telephone during lockdown]. The work coach will be able to guide and support you and, where appropriate, help you into work by providing personalised advice using their knowledge of local work opportunities.’
33. The Government website ‘Universal Credit: how it helps you into work’ says:
‘Support from your work coach
Universal Credit provides you with personal support from a work coach to help you move into work, find a better job, or build a career. Your work coach can give you advice about things like: • job opportunities and training suitable for you • improving your CV and making successful job applications • increasing your hours or earning more • help available to pay towards childcare costs • where to get help with managing your money’
34. There is no suggestion that the role of the work coach is to advise on what happens to other benefits when a UC claim is made. We have not seen that DWP gave Mr W any reason to expect that the work coach should have given his partner information about WTCs. The work coach acted in line with their role and DWP acted in line with its charter commitment to follow processes correctly.
35. There is no record of the content of the call Mr W had with the person who discussed his self-employment. Mr W says there was no mention of WTCs. As the call was about the UC process, there is no reason why DWP staff would have discussed anything other than UC.
36. We recognise there was a lot of uncertainty at that time Mr W made his claim and not knowing if he would be able to return to employment must have been very stressful. He told us his and his partner’s mental health suffered and their income decreased by over £100 per week, making life difficult.
37. We appreciate that a loss of income would have been distressing and learning that they could not go back to WTCs would have added to that. We cannot say this experience was caused because of mistakes DWP made.
38. Claimants have a responsibility to find out about which benefits are right for them before making a claim. The evidence available shows Mr W told ICE he and his partner had made a UC claim as they were feeling ‘panicked.’ We must be clear that the stressful position they were in did not change their responsibility to make informed decisions about the benefits that were right for them.
39. We have seen there was a lot of information available explaining that UC was replacing WTCs and calculators were available to help Mr W or anyone in his position to decide if claiming UC was the best option. If in any doubt, Mr W could have called DWP to check he understood how UC works and whether it would affect his WTC.
40. We have not seen evidence that DWP did anything wrong. We know Mr W and his partner feel frustrated and upset by the outcome of their complaint and we hope we have clearly explained the reasons for our decision.
1. The Parliamentary and Health Service Ombudsman has carefully considered Mr W’s complaint about the Department for Work and Pensions (DWP). We are sorry to hear of the distress and frustration he describes as a result of his contact with DWP.
2. We have not seen any signs of mistakes in the way DWP handled Mr W’s Universal Credit (UC) and Working Tax Credit (WTC) concerns. This is because we can see the person making a claim has responsibility to make sure they are claiming the correct benefit and to get help if they are unsure. This includes getting advice on what the effects of claiming a specific benefit might be.
3. With this in mind, we will take no further action on Mr W’s complaint. We hope the statement below clearly explains how we have reached our decision and gives Mr W reassurance that his complaint has been considered independently. We know he is very worried about his financial situation and feels strongly about this complaint.