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Chapter K8: When a reduction is to have effect

Contents
K8001:Introduction
K8005:Start of the reduction
K8011:Reduction period to continue where award terminates
K8016:Award terminates before determination made
K8021:Suspension of a reduction where a fraud penalty applies
K8031:When a reduction is to be terminated
K8033:Self-employed

Chapter K8: When a reduction is to have effect

K8001 Introduction

This Chapter provides guidance on when a reduction is to have effect and how to
determine :
1.
the start date of a reduction period :
2.
the reduction period where the award of UC terminates :
3.
the suspension of a reduction where a fraud penalty applies :
4.
when a reduction is to be terminated

[K8002-K8004]

K8005 Start of the reduction

The reduction period takes effect from :
1.
the first day of the assessment period in which the DM determines that a
reduction should be imposed or :
2.
if the UC award is not reduced as in 1., the first day of the next assessment
period or :
3.
if the UC award is already subject to a reduction as in 1. or 2., the first day for
which the award is no longer subject to a reduction (1).
Note: For the definitions of sanctionable failure, previous sanctionable failure and
the general principles for calculating reduction periods see ADM Chapter K1
(General Principles).
Note
2: For detailed guidance on assessment period see ADM Chapter E2 (Awards,
benefit unit and maximum amounts).
1 UC Regs, reg 106

Example

Nazir has been entitled to UC since 8.5.13. His assessment period runs from the 8th
of each month.
He fails for no good reason to attend a MWA work placement on 23.6.14, and on
1.7.14 the DM imposes a higher-level sanction for 91 days. The reduction takes
effect from 8.6.14.
Nazir fails to attend for his fortnightly interview on 13.8.14. He comes in to the
Jobcentre on 15.8.14, saying that he forgot about the interview, and provides
evidence of his fortnight's work search and work availability. The DM decides to
impose a low-level sanction for a reduction period of 9 days (2 days non-
compliance, followed by a 7 day fixed period).
Nazir's 91 day higher-level sanction is due to finish on 6.9.14. The payment due on
7.9.14 only has one day not affected by the higher-level sanction, so the low-level
reduction starts on 7.9.14. The remaining 8 days reduction period take effect in the
next assessment period starting on 8.10.14.

[K8006-K8010]

K8011 Reduction period to continue where award terminates

If an award of UC terminates while there is an outstanding reduction period, the
reduction period continues to run as if a daily reduction were being applied. If the
claimant becomes entitled to a new award of UC before the period expires, that
award is subject to a reduction for the remainder of the total outstanding reduction
period (1).
Note 1: All sanctions run consecutively, i.e. one sanction period follows immediately
after the other, see detailed guidance on total outstanding reduction period in ADM
Chapter K1 (General Principles).
Note
2: For detailed guidance on assessment periods see ADM Chapter E2
(Awards, benefit units and maximum amounts).
1 UC Regs, reg 107(1)

Example 1

Jonathan is entitled to UC and has a 91day reduction period imposed on his UC
award from 12.5.14 - 10.8.14.
On 2.6.14 Jonathan starts a 2 month temporary work contract and receives his first
earnings on 13.6.14. His award of UC terminates from 12.6.14 (the first day of the
assessment period in which his earnings exceed his individual threshold to UC).
He finishes work on 1.8.14 and re-claims UC on 4.8.14. However as Jonathan
worked for less than 6 months he will be paid UC from 12.7.14 (i.e. the beginning of
the assessment period in which the change occurred).
A 30 day reduction period will be imposed on his new award for the balance of the
outstanding reduction period as follows:
1. sanctionable days already served 12.5.14 - 11.6.14 = 31 days.
60 days in total outstanding reduction period minus
2. period off UC 12.6.14 - 11.7.14 = 30 days
30 days balance in total outstanding reduction period to be imposed on the new
award of UC from 12.7.14.

Example 2

Judy is entitled to UC and has 273 days total outstanding period imposed on the
award which is due to run until 7.4.15. Judy's assessment period starts on the 2nd of
each month.
On 3.11.14 she moves in with her boyfriend who is in full time work and her UC
award terminates from 2.11.14. (the first day of the assessment period in which she
moved in with her boyfriend).
On 5.1.15 Judy reclaims UC as she has separated from her boyfriend.
A 93 day sanction is imposed on her new claim for the outstanding reduction period.

[K8012-K8015]

K8016 Award terminates before determination made

If an award of UC terminates :
1.
before the DM determines that the award will be subject to a reduction and :
2.
that determination is made after the claimant becomes entitled to a new
award of UC
the reduction period in relation to that failure is to have effect as if the determination
had been made on the day before the previous award of UC terminated (1).
Note 1: In effect the decision to sanction is delayed or `reserved' because the
claimant does not have a current claim to UC, but anytime away from benefit is
treated as served towards the reduction period if when the claimant re claims UC a
sanction is appropriate.
Note
2: The date the reduction period starts will depend on whether the claimant has
already been paid (2).
1 UC Regs, reg 107(2); 2 reg 106(b)

Example

Josie makes a new claim to UC on 16.10.14. Her previous award of UC terminated
on 30.7.14. When her previous award terminated there was an outstanding
determination for a failure to apply for an advertised vacancy. The DM determines
that a 91 day reduction period would have been appropriate. A 91 day reduction
period is calculated from 29.7.14 - 27.10.14. Josie will serve a 12 day reduction
period on her new claim to UC which will start at the beginning of her next
assessment period.

[K8017-K8020]

K8021 Suspension of a reduction where a fraud penalty applies

A reduction period for a sanctionable failure is suspended for any period during
which a fraud penalty also applies to that award of UC (1).
Note: For detailed guidance on fraud penalties see ADM Chapter B2 (Restrictions
on payment of benefit). For the definition of sanctionable failure see ADM Chapter
K1 (General Principles).

1 UC Regs, reg 108(1)

K8022

The reduction :
1.
ceases to have effect on the day on which the period of the fraud penalty
begins and
2. begins again on the day after that period ends (1).
1 UC Regs, reg 108(2)

Example 1

On 8.12.14 Mo fails without good reason to comply with a work preparation
requirement and the DM decides to impose a low-level sanction for a reduction
period of 9 days (2 days non-compliance, followed by a 7 day fixed period) for a first
low level failure.
Mo already has a fraud penalty imposed on his UC of 26 weeks which is due to
expire on 4.3.15. The reduction period is suspended and can be imposed from
5.3.15.

Example 2

Mary has a 182 day reduction period imposed on her UC from 6.1.15. On 15.4.15 a
fraud penalty of 26 weeks is imposed on her claim to UC. The reduction period is
suspended from 15.4.15 - 13.10.15. An 83 day reduction period will be imposed,
which is the balance of the reduction period still to be served, from 14.10.15, the day
after the fraud penalty ends.

[K8023-K8030]

K8031 When a reduction is to be terminated K8032 K8032

A reduction imposed for a sanctionable failure will be terminated where
1. since the date of the most recent sanctionable failure which resulted in a
reduction being imposed, the claimant has been in paid work for
1.1 a period of at least 26 weeks or
1.2 at least one period of employment where the total of those periods
amounts to more than 26 weeks and
2. the claimant's weekly earnings during each period, or periods, was equal to or
exceeded the
2.1 claimant's individual threshold (also see K8033 where the claimant is
self-employed) or
2.2 threshold where the claimant is employed under a contract of
apprenticeship (1).
Note: For detailed guidance on paid work and earnings thresholds see ADM
Chapter J3 (Work-related requirements) and ADM Chapter H4 (Earned income:
self-employed earnings).

1 UC Regs, reg 109(1)

K8032

The termination of the reduction has effect from the beginning of the
1. assessment period in which the conditions in K8031 fall or
2. first assessment period in relation to any subsequent award where the
conditions in K8031 fall outside a period of entitlement to UC (1).
1 UC Regs, reg 109(2)

Example

On 18.11.14 Adok fails without good reason to comply with a requirement to attend
his MWA placement and the DM determines a 1095 day reduction period is to be
imposed on his award of UC as this is Adok's third higher level failure. The reduction
period is imposed from 4.12.14 - 2.12.17.
On 2.1.15 Adok starts work. When he receives his first wage at the start of February,
his award of UC terminates because the level of his earnings mean that no UC is
payable.
On 1.10.15 Adok makes a further claim to UC. His contract of employment ended on
30.9.15.
The balance of the previous sanctionable failure outstanding on the previous award
of UC cannot be applied to his new award as Adok has been in employment for
more than 26 weeks and his earnings from that employment exceeded his individual
threshold for UC.

K8033 Self-employed K8031

Where a claimant is treated as having earned income at the level of the minimum
income floor from gainful self-employment, that claimant is to be taken to have
weekly earnings equal to their individual threshold in respect of any week falling in
that assessment period (1).
Note: For detailed guidance on gainful self-employment and minimum income floor
see ADM Chapter H4 (Earned income: self-employed earnings).
1 UC Regs, reg 109(3)

Example

Graham works S/E as a picture framer. The DM has decided that, for the purposes
of UC, Graham is in gainful self-employment and is subject to the minimum income
floor. Graham's expected number of hours per week is 35.
The DM has determined that the minimum income floor appropriate to Graham for
an assessment period is 874.66 and even though Graham's actual earnings may
be below this level (see ADM Chapter H4).
However, Graham's individual threshold is 216.65 per week and this was calculated
by multiplying the appropriate NMW level to Graham by 35 which is Graham's
expected number of hours per week. For the purposes of when a reduction is to be
terminated, Graham is treated as having earnings of 216.65 for each week in an
assessment period.