Apply the benefit cap to mixed-age couples on Universal Credit, and keep them off pensioner Council Tax Reduction

changelog.d/mixed-age-uc-benefit-cap-ctr.fixed.md

@@ -0,0 +1 @@
+Stop exempting mixed-age couples on Universal Credit from the benefit cap (UC Regs 2013 regs 79, 82 and 83 have no age exception), and stop treating them as pensioners for Council Tax Reduction (SI 2012/2885 reg 3, WSI 2013/3029 reg 3, SSI 2021/249 reg 3). The cap's age exemption now follows which Housing Benefit regulations apply (HB Regs 2006 reg 5), through the new `housing_benefit_pension_age_regulations_apply`; the CTR pensioner test is the new `council_tax_reduction_pensioner`. Both read the claimant and partner (`is_claimant_or_partner`), and a Universal Credit award counts only where one of them is under State Pension age, so a pensioner whose only younger member is an 18- or 19-year-old dependant keeps pensioner treatment, with or without `is_parent`. CTR amounts change only in England, where such couples move to the local working-age scheme; in Wales and Scotland CTR changes only through the capped Universal Credit counted as income. Outside the five English councils the model simulates (Newham, Merton, Kingston upon Thames, Westminster and Oxford), the working-age scheme uses reported CTR, so a household calculation for a mixed-age couple on Universal Credit in the rest of England now shows CTR of £0 unless a reported amount is entered.

policyengine_uk/tests/policy/baseline/finance/benefit/family/universal_credit/income/uc_state_pension.yaml

@@ -78,12 +78,16 @@
     uc_income_reduction: 9_000
     # 14,243.64 - 9,000. Before this fix the award was 14,243.64.
     universal_credit: 5_243.64
-    # The pension-age CTR income is State Pension plus UC:
-    # 9,000 + 5,243.64 = 14,243.64, below the applicable amount of
-    # 383.35 x 52 = 19,934.20, so council tax is met in full. Before this fix
-    # the inflated UC gave an income of 23,243.64 and CTR of
-    # 1,500 - 20% x (23,243.64 - 19,934.20) = 838.11.
-    council_tax_benefit: 1_500
+    # A couple with an award of Universal Credit is not a pensioner for
+    # Council Tax Reduction, though one member is over the qualifying age
+    # (SI 2012/2885 reg 3(1)(a)(ii)(bb)), so it claims under the council's
+    # working-age scheme, not the national pensioner scheme. The household is
+    # in England (region defaults to London) and in Maidstone (the default
+    # local authority), whose scheme the model does not simulate, so it keeps
+    # reported Council Tax Reduction: none here. The pensioner scheme would
+    # have met the 1,500 in full.
+    council_tax_reduction_pensioner: false
+    council_tax_benefit: 0
 
 - name: Same couple with the same amount of private pension instead gets the same UC
   period: 2026

policyengine_uk/tests/policy/baseline/gov/dwp/benefit_cap/benefit_cap_pension_age.yaml

@@ -0,0 +1,266 @@
+# The benefit cap and State Pension age.
+#
+# The Universal Credit cap (UC Regs 2013 regs 79, 82 and 83) turns on earnings
+# and benefit receipt, not age, so it applies to a mixed-age couple's joint
+# award (reg 3(2)(a)). The one age-based exception, SI 2014/1230 reg 60C,
+# covers only claims where every claimant has reached the qualifying age.
+# The Housing Benefit cap (HB Regs 2006 Part 8A) reaches only Housing Benefit
+# under the working-age regulations, which by reg 5 cover a claimant or partner
+# over the qualifying age for State Pension Credit only while either of them
+# is on Universal Credit, Income Support, income-based JSA or income-related
+# ESA. Housing Benefit under the pension-age regulations (SI 2006/214) has no
+# cap.
+#
+# The Universal Credit and Housing Benefit amounts before the cap are inputs,
+# so these cases test the cap alone. The couple cap in London is 25,323.
+
+- name: A mixed-age couple on Universal Credit is capped
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      older:
+        age: 70
+      younger:
+        age: 50
+      child_1:
+        age: 4
+      child_2:
+        age: 7
+    benunits:
+      benunit:
+        members: [older, younger, child_1, child_2]
+        universal_credit_pre_benefit_cap: 30_000
+        child_benefit: 3_000
+        uc_deductions: 0
+    households:
+      household:
+        members: [older, younger, child_1, child_2]
+        region: LONDON
+  output:
+    is_uc_entitled: true
+    housing_benefit_pension_age_regulations_apply: false
+    is_benefit_cap_exempt_other: false
+    is_benefit_cap_exempt: false
+    benefit_cap: 25_323
+    # 30,000 + 3,000 - 25,323
+    benefit_cap_reduction: 7_677
+    universal_credit: 22_323
+
+- name: The same couple is excepted when its earnings reach the reg 82 threshold
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      older:
+        age: 70
+      younger:
+        age: 50
+        employment_income: 20_000
+      child_1:
+        age: 4
+      child_2:
+        age: 7
+    benunits:
+      benunit:
+        members: [older, younger, child_1, child_2]
+        universal_credit_pre_benefit_cap: 30_000
+        child_benefit: 3_000
+        uc_deductions: 0
+    households:
+      household:
+        members: [older, younger, child_1, child_2]
+        region: LONDON
+  output:
+    is_benefit_cap_exempt_other: false
+    is_benefit_cap_exempt_earnings: true
+    is_benefit_cap_exempt: true
+    benefit_cap_reduction: 0
+    universal_credit: 30_000
+
+- name: A mixed-age couple on Housing Benefit and no working-age benefit is not capped
+  # Neither member is on Universal Credit or a legacy income-related benefit,
+  # so the pension-age Housing Benefit regulations apply (HB Regs 2006 reg
+  # 5(3)); they have no benefit cap.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      older:
+        age: 70
+      younger:
+        age: 50
+    benunits:
+      benunit:
+        members: [older, younger]
+        would_claim_uc: false
+        would_claim_housing_benefit: true
+        housing_benefit_pre_benefit_cap: 30_000
+    households:
+      household:
+        members: [older, younger]
+        region: LONDON
+  output:
+    is_uc_entitled: false
+    housing_benefit_pension_age_regulations_apply: true
+    is_benefit_cap_exempt_other: true
+    benefit_cap_reduction: 0
+    housing_benefit: 30_000
+
+- name: A mixed-age couple on income-based JSA has working-age Housing Benefit, which is capped
+  # HB Regs 2006 reg 5(1)(b): the working-age regulations, and so Part 8A,
+  # apply to a claimant over the qualifying age whose partner is on
+  # income-based JSA. The model stops paying income-based JSA from April 2026
+  # (gov.dwp.JSA.income.active), so this case is in 2025-26.
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      older:
+        age: 70
+      younger:
+        age: 50
+        jsa_income_reported: 4_000
+    benunits:
+      benunit:
+        members: [older, younger]
+        would_claim_uc: false
+        would_claim_housing_benefit: true
+        housing_benefit_pre_benefit_cap: 30_000
+    households:
+      household:
+        members: [older, younger]
+        region: LONDON
+  output:
+    jsa_income: 4_000
+    housing_benefit_pension_age_regulations_apply: false
+    is_benefit_cap_exempt_other: false
+    is_benefit_cap_exempt: false
+    benefit_cap: 25_323
+    # 30,000 + 4,000 - 25,323
+    benefit_cap_reduction: 8_677
+    housing_benefit: 21_323
+
+- name: A couple over State Pension age is not capped
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      older:
+        age: 72
+      younger:
+        age: 68
+    benunits:
+      benunit:
+        members: [older, younger]
+        would_claim_housing_benefit: true
+        housing_benefit_pre_benefit_cap: 30_000
+    households:
+      household:
+        members: [older, younger]
+        region: LONDON
+  output:
+    is_uc_entitled: false
+    housing_benefit_pension_age_regulations_apply: true
+    is_benefit_cap_exempt_other: true
+    benefit_cap_reduction: 0
+    housing_benefit: 30_000
+
+- name: A working-age couple on Universal Credit is capped, as before
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      older:
+        age: 45
+      younger:
+        age: 40
+      child_1:
+        age: 4
+      child_2:
+        age: 7
+    benunits:
+      benunit:
+        members: [older, younger, child_1, child_2]
+        universal_credit_pre_benefit_cap: 30_000
+        child_benefit: 3_000
+        uc_deductions: 0
+    households:
+      household:
+        members: [older, younger, child_1, child_2]
+        region: LONDON
+  output:
+    housing_benefit_pension_age_regulations_apply: false
+    is_benefit_cap_exempt: false
+    benefit_cap_reduction: 7_677
+    universal_credit: 22_323
+
+- name: A pensioner whose only younger adult is a qualifying young person is not capped
+  # Universal Credit needs a claimant or partner under the qualifying age (UC
+  # Regs 2013 reg 3(2)(a)), and the model's is_uc_eligible needs one too, so
+  # the award here is an input the family could not hold in law. The
+  # 18-year-old is a dependant, not a partner, so the award does not take the
+  # family out of the pension-age Housing Benefit rules, which have no cap.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      parent:
+        age: 70
+        is_parent: true
+      young_person:
+        age: 18
+        current_education: UPPER_SECONDARY
+      child:
+        age: 9
+    benunits:
+      benunit:
+        members: [parent, young_person, child]
+        universal_credit_pre_benefit_cap: 30_000
+        child_benefit: 3_000
+        uc_deductions: 0
+    households:
+      household:
+        members: [parent, young_person, child]
+        region: LONDON
+  output:
+    is_claimant_or_partner: [true, false, false]
+    is_uc_entitled: true
+    housing_benefit_pension_age_regulations_apply: true
+    is_benefit_cap_exempt_other: true
+    benefit_cap_reduction: 0
+    universal_credit: 30_000
+
+- name: Without is_parent the young person is still a dependant, so the award is not capped
+  # is_claimant_or_partner presumes a member under 20 and at least 16 years
+  # younger than the claimant to be their child when relationships are not
+  # given, so the 18-year-old is not a partner under State Pension age and
+  # the result matches the case above.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      parent:
+        age: 70
+      young_person:
+        age: 18
+        current_education: UPPER_SECONDARY
+      child:
+        age: 9
+    benunits:
+      benunit:
+        members: [parent, young_person, child]
+        universal_credit_pre_benefit_cap: 30_000
+        child_benefit: 3_000
+        uc_deductions: 0
+    households:
+      household:
+        members: [parent, young_person, child]
+        region: LONDON
+  output:
+    is_claimant_or_partner: [true, false, false]
+    housing_benefit_pension_age_regulations_apply: true
+    is_benefit_cap_exempt_other: true
+    is_benefit_cap_exempt: true
+    benefit_cap_reduction: 0
+    universal_credit: 30_000