Count contributory ESA, Maternity Allowance, industrial injuries benefit and capped Carer Support Payment as UC unearned income

changelog.d/uc-unearned-reg66-benefits.fixed.md

@@ -0,0 +1 @@
+Count contributory Employment and Support Allowance, Maternity Allowance, industrial injuries benefit and (from 19 November 2023) Scottish Carer Support Payment as Universal Credit unearned income, as UC Regs 2013 reg. 66(1)(b)(ii), (viii), (ix) and (iiia) require. Carer Support Payment counts only its carer support payment component (not the Scottish Carer Supplement) and only up to a year of Carer's Allowance.

policyengine_uk/parameters/gov/dwp/universal_credit/means_test/income_definitions/unearned.yaml

@@ -8,6 +8,14 @@ metadata:
   reference:
     - title: The Universal Credit Regulations 2013 reg. 66
       href: https://www.legislation.gov.uk/uksi/2013/376/regulation/66
+    - title: The Universal Credit Regulations 2013 reg. 66(1)(b)(ii), (viii) and (ix) (contributory ESA, maternity allowance, industrial injuries benefit)
+      href: https://www.legislation.gov.uk/uksi/2013/376/regulation/66
+    - title: The Universal Credit Regulations 2013 reg. 2 (employment and support allowance and jobseeker's allowance mean the contributory allowances; industrial injuries benefit means benefit under SSCBA 1992 Part 5)
+      href: https://www.legislation.gov.uk/uksi/2013/376/regulation/2
+    - title: S.I. 2023/1218 art. 23(2) and (5) (defines carer support payment in reg. 2 and inserts reg. 66(1)(b)(iiia), from 19 November 2023)
+      href: https://www.legislation.gov.uk/uksi/2023/1218/article/23
+    - title: S.I. 2026/246 art. 25 (from 15 March 2026 carer support payment means the carer support payment component of carer support)
+      href: https://www.legislation.gov.uk/uksi/2026/246/article/25
     - title: The Universal Credit Regulations 2013 reg. 72
       href: https://www.legislation.gov.uk/uksi/2013/376/regulation/72
 
@@ -16,6 +24,21 @@ values:
   2013-04-29:
   - carers_allowance
   - jsa_contrib
+  - esa_contrib
+  - maternity_allowance
+  - iidb
+  - private_pension_income
+  - uc_tariff_income
+  - savings_interest_income
+  - dividend_income
+  - property_income
+  2023-11-19:
+  - carers_allowance
+  - uc_unearned_carer_support_payment
+  - jsa_contrib
+  - esa_contrib
+  - maternity_allowance
+  - iidb
   - private_pension_income
   - uc_tariff_income
   - savings_interest_income

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

@@ -0,0 +1,311 @@
+# Benefits that UC Regs 2013 reg. 66(1)(b) counts as unearned income, in full
+# and pound for pound (reg. 22(1)(a)):
+# - (ii) employment and support allowance, which reg. 2 limits to the
+#   contributory allowance (esa_contrib);
+# - (iiia) carer support payment, from 19 November 2023, "but only up to a
+#   maximum of the amount a claimant would receive if they had an entitlement
+#   to carer's allowance"; from 15 March 2026 reg. 2 limits it to the carer
+#   support payment component of carer support (S.I. 2026/246 art. 25), so
+#   the Scottish Carer Supplement is left out;
+# - (viii) maternity allowance;
+# - (ix) industrial injuries benefit (SSCBA 1992 Part 5, reg. 2), excluding
+#   the s. 104 and s. 105 increases.
+#
+# Hand calculations use the 2026-27 rates read in April 2026:
+# - couple standard allowance (one over 25): 666.97 a month = 8,003.64 a year;
+# - carer element: 209.34 a month = 2,512.08 a year;
+# - Carer's Allowance and the Carer Support Payment component: 86.45 a week,
+#   so 86.45 x 52 = 4,495.40 a year; Scottish Carer Supplement 11.70 a week,
+#   so Carer Support Payment is (86.45 + 11.70) x 52 = 5,103.80 a year;
+# - council rent of 6,240 a year is met in full by the housing costs element.
+# So a couple's maximum amount is 8,003.64 + 6,240 = 14,243.64, or
+# 16,755.72 with the carer element.
+
+- name: Contributory ESA counts as unearned income
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    esa_contrib: 5_000
+  output:
+    uc_unearned_income: 5_000
+
+- name: Reported contributory ESA flows through to unearned income
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    esa_contrib_reported: 5_000
+  output:
+    esa_contrib: 5_000
+    uc_unearned_income: 5_000
+
+- name: Maternity Allowance counts as unearned income
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    maternity_allowance: 3_000
+  output:
+    uc_unearned_income: 3_000
+
+- name: Industrial injuries benefit counts as unearned income
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    iidb: 4_000
+  output:
+    uc_unearned_income: 4_000
+
+- name: The added benefits sum with the other unearned income
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    esa_contrib: 5_000
+    maternity_allowance: 1_000
+    iidb: 2_000
+    private_pension_income: 1_000
+  output:
+    uc_unearned_income: 9_000
+
+- name: Couple renting from the council, contributory ESA reduces UC pound for pound
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: 40
+        esa_contrib: 5_000
+      partner:
+        age: 38
+    benunits:
+      benunit:
+        members: [claimant, partner]
+    households:
+      household:
+        members: [claimant, partner]
+        tenure_type: RENT_FROM_COUNCIL
+        rent: 6_240
+  output:
+    uc_maximum_amount: 14_243.64
+    uc_unearned_income: 5_000
+    uc_income_reduction: 5_000
+    # 14,243.64 - 5,000. Before this fix the award was 14,243.64.
+    universal_credit: 9_243.64
+
+- name: Same couple with the same amount of private pension instead gets the same UC
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: 40
+        private_pension_income: 5_000
+      partner:
+        age: 38
+    benunits:
+      benunit:
+        members: [claimant, partner]
+    households:
+      household:
+        members: [claimant, partner]
+        tenure_type: RENT_FROM_COUNCIL
+        rent: 6_240
+  output:
+    uc_unearned_income: 5_000
+    universal_credit: 9_243.64
+
+- name: Maternity Allowance reduces UC pound for pound
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: 30
+        maternity_allowance: 3_000
+      partner:
+        age: 32
+    benunits:
+      benunit:
+        members: [claimant, partner]
+    households:
+      household:
+        members: [claimant, partner]
+        tenure_type: RENT_FROM_COUNCIL
+        rent: 6_240
+  output:
+    uc_unearned_income: 3_000
+    # 14,243.64 - 3,000.
+    universal_credit: 11_243.64
+
+- name: Industrial injuries benefit reduces UC pound for pound
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: 50
+        iidb: 4_000
+      partner:
+        age: 48
+    benunits:
+      benunit:
+        members: [claimant, partner]
+    households:
+      household:
+        members: [claimant, partner]
+        tenure_type: RENT_FROM_COUNCIL
+        rent: 6_240
+  output:
+    uc_unearned_income: 4_000
+    # 14,243.64 - 4,000.
+    universal_credit: 10_243.64
+
+- name: Contributory ESA above the maximum amount removes UC entirely
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: 40
+        esa_contrib: 20_000
+      partner:
+        age: 38
+    benunits:
+      benunit:
+        members: [claimant, partner]
+    households:
+      household:
+        members: [claimant, partner]
+        tenure_type: RENT_FROM_COUNCIL
+        rent: 6_240
+  output:
+    uc_unearned_income: 20_000
+    # The reduction is capped at the maximum amount.
+    uc_income_reduction: 14_243.64
+    universal_credit: 0
+
+- name: Scottish carer on Carer Support Payment, only the component up to Carer's Allowance counts
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      carer:
+        age: 40
+        care_hours: 40
+      partner:
+        age: 38
+    benunits:
+      benunit:
+        members: [carer, partner]
+    households:
+      household:
+        members: [carer, partner]
+        country: SCOTLAND
+        tenure_type: RENT_FROM_COUNCIL
+        rent: 6_240
+  output:
+    carers_allowance: [0, 0]
+    # (86.45 + 11.70) x 52.
+    carer_support_payment: [5_103.80, 0]
+    # Capped at a year of Carer's Allowance, 86.45 x 52, which is also the
+    # carer support payment component without the supplement.
+    uc_unearned_carer_support_payment: [4_495.40, 0]
+    uc_unearned_income: 4_495.40
+    uc_maximum_amount: 16_755.72
+    # 16,755.72 - 4,495.40. Before this fix the award was 16,755.72.
+    universal_credit: 12_260.32
+
+- name: Same carer in England gets Carer's Allowance and the same UC
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      carer:
+        age: 40
+        care_hours: 40
+      partner:
+        age: 38
+    benunits:
+      benunit:
+        members: [carer, partner]
+    households:
+      household:
+        members: [carer, partner]
+        country: ENGLAND
+        tenure_type: RENT_FROM_COUNCIL
+        rent: 6_240
+  output:
+    carers_allowance: [4_495.40, 0]
+    carer_support_payment: [0, 0]
+    uc_unearned_carer_support_payment: [0, 0]
+    # Carer's Allowance alone, not counted a second time as Carer Support
+    # Payment.
+    uc_unearned_income: 4_495.40
+    uc_maximum_amount: 16_755.72
+    universal_credit: 12_260.32
+
+- name: Carer Support Payment below a year of Carer's Allowance counts in full
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    carer_support_payment: 3_000
+  output:
+    # Under the cap of 86.45 x 52 = 4,495.40.
+    uc_unearned_carer_support_payment: 3_000
+    uc_unearned_income: 3_000
+
+- name: Carer Support Payment above a year of Carer's Allowance is capped
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    carer_support_payment: 6_000
+  output:
+    # Capped at 86.45 x 52 = 4,495.40.
+    uc_unearned_carer_support_payment: 4_495.40
+    uc_unearned_income: 4_495.40
+
+- name: Carer Support Payment does not count in 2023-24
+  period: 2023
+  absolute_error_margin: 0.01
+  input:
+    carer_support_payment: 3_000
+  output:
+    # Reg. 66(1)(b)(iiia) starts on 19 November 2023, part-way through
+    # 2023-24. The yearly model takes each parameter's value on 30 April of
+    # the fiscal year (convert_to_fiscal_year_parameters), so Carer Support
+    # Payment first counts in 2024-25.
+    uc_unearned_carer_support_payment: 3_000
+    uc_unearned_income: 0
+
+- name: Carer Support Payment counts in 2024-25, before the Scottish Carer Supplement
+  period: 2024
+  absolute_error_margin: 0.01
+  input:
+    carer_support_payment: 3_000
+  output:
+    # Under the 2024-25 cap of 81.90 x 52 = 4,258.80.
+    uc_unearned_carer_support_payment: 3_000
+    uc_unearned_income: 3_000
+
+- name: Contributory ESA also counts in 2020-21
+  period: 2020
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: 40
+        esa_contrib: 5_000
+      partner:
+        age: 38
+    benunits:
+      benunit:
+        members: [claimant, partner]
+    households:
+      household:
+        members: [claimant, partner]
+        tenure_type: RENT_FROM_COUNCIL
+        rent: 6_240
+  output:
+    # The whole 5,000 is unearned income and comes off the maximum amount,
+    # which it does not exceed. (The maximum amount itself is not asserted:
+    # the 2020-21 standard allowance parameter holds the 2021-22 figures.)
+    uc_unearned_income: 5_000
+    uc_income_reduction: 5_000