Apply the UC minimum income floor only to claimants subject to all work-related requirements

changelog.d/uc-mif-work-related-groups.added.md

@@ -0,0 +1 @@
+Add `uc_work_related_group_apart_from_earnings`, `uc_is_responsible_carer`, `uc_expected_hours`, `uc_youngest_child_age` and `uc_is_in_gainful_self_employment`; the inputs `uc_has_limited_capability_for_work`, `uc_is_in_pregnancy_or_post_confinement_period`, `uc_is_adopter_in_first_year`, `uc_is_student_with_no_work_related_requirements`, `uc_is_responsible_foster_parent_of_child_under_one`, `uc_is_foster_parent_or_new_friend_or_family_carer` and `uc_is_ineligible_partner`; and the parameters under `gov.dwp.universal_credit.work_requirements` for the responsible carer's child ages and expected hours and the 16-hour threshold, with `gov.dwp.universal_credit.means_test.minimum_income_floor.no_requirements_partner_hours` and `gov.dwp.universal_credit.means_test.minimum_income_floor.ineligible_partner_hours` (the 35 hours of reg. 90(3)(b)(ii)). Without a recorded nomination, `uc_is_responsible_carer` takes the joint claimant who works fewer hours (`hours_worked`), then the elder; `hours_worked` defaults to 0, so set `uc_is_responsible_carer` (or each member's hours) for a couple with a child entered without hours.

changelog.d/uc-mif-work-related-groups.fixed.md

@@ -0,0 +1 @@
+Apply the Universal Credit minimum income floor only to claimants who would otherwise be subject to all work-related requirements (UC Regs 2013 reg. 62(1)(b)): not to claimants with limited capability for work or work-related activity, carers, claimants over State Pension Credit qualifying age, the responsible carer of a child under 3, or the prescribed descriptions of regs. 89 and 91 (Welfare Reform Act 2012 ss. 19 to 21). Set the floor from the expected hours of reg. 88 (30 a week for the responsible carer of a child under 13, as DWP does, in place of 35), and build the couple threshold from each partner's own threshold (reg. 90(2) and (3)): 16 hours for a partner in the work-focused interview or work preparation group, nothing for a partner with no work-related requirements, and 35 hours at the national living wage for a partner who cannot be a joint claimant.

docs/book/programs/gov/dwp/universal-credit.ipynb

@@ -44,7 +44,7 @@
   {
    "cell_type": "markdown",
    "metadata": {},
-   "source": "## How PolicyEngine computes Universal Credit\n\nPolicyEngine computes Universal Credit at the benefit-unit level in three stages:\n\n1. **Maximum entitlement** (`uc_maximum_amount`): sum the elements the benunit qualifies for — `uc_standard_allowance`, `uc_child_element`, `uc_disability_elements`, `uc_carer_element`, `uc_housing_costs_element`, and `uc_childcare_element`.\n2. **Means test**: only the claimants' income counts: the single claimant, or the two joint claimants (`is_uc_assessed_claimant`; UC Regulations 2013 reg 22(1)). The earnings and unearned income of a child, a qualifying young person or anyone else in the benefit unit are theirs, not the claimant's, so the Universal Credit means test does not count them. Who the claimants are comes from `is_uc_claimant` (the claimant and partner); a member flagged there is taken as a claimant whatever their age. Each person's earnings (`uc_individual_earned_income`) are net of their own relievable pension contributions and the income tax and National Insurance they pay on that employment or self-employment (UC Regulations 2013 regs 55(5) and 57(2)): `uc_income_tax_on_earnings` treats earnings as the lowest slice of the person's non-savings income, so tax on pensions, property, savings and dividends is never deducted, and one partner's tax never reduces the other's earnings. A claimant with a self-employment profit or loss outside a start-up period is subject to the minimum income floor (reg 62): when their earnings after those deductions are below `uc_minimum_income_floor`, they are treated as having that amount instead. The floor is the minimum wage for their age for 35 hours a week (reg 90(2)), less the income tax and the Class 2 and Class 4 National Insurance a self-employed person would pay on it (reg 62(4)(b) leaves this amount to the Secretary of State; this is the basis of DWP's guidance and figures, and setting the `gov.dwp.universal_credit.means_test.minimum_income_floor.self_employed_national_insurance` parameter to false deducts primary Class 1 instead). A member of a couple is lifted only while the couple's combined earnings are below the couple threshold, the sum of both partners' floors, and never above it (reg 62(3)). The maximum entitlement is then reduced by 55% (the `gov.dwp.universal_credit.means_test.reduction_rate` parameter) of the claimants' combined earnings above the work allowance (`uc_work_allowance`), and by all of the claimants' unearned income (`uc_unearned_income`), pound for pound. Unearned income is the list in `gov.dwp.universal_credit.means_test.income_definitions.unearned`: retirement pension income (State Pension and private pensions, UC Regulations 2013 regs 66(1)(a) and 67), Carer's Allowance, carer support payment (up to the Carer's Allowance rate, from November 2023), contribution-based JSA and ESA, maternity allowance, industrial injuries benefit, and the tariff income deemed from capital (reg 72). Actual savings interest, dividends and ordinary rental income are excluded from UC unearned income at every capital level; capital counts through its tariff income instead. Asset rules apply on top of this — capital above the lower threshold deems a tariff income, and capital above the upper threshold disqualifies the benunit entirely.\n3. **Benefit cap**: the post-means-test award (`universal_credit_pre_benefit_cap`) is finally reduced by `benefit_cap_reduction` to produce `universal_credit`. The benefit cap only applies to benunits without a benefit-cap exemption (the claimants earning enough, having a qualifying disability benefit, etc.). The earnings exception reads the claimants' earnings only (reg 82(1)(a)), the capped total counts only the claimants' own contributory benefits (WRA 2012 s.96(1)), and the childcare work condition tests only the claimants (reg 32(1)).\n\nThe take-up step is handled by the input variable `would_claim_uc`, which is populated stochastically when the dataset is built so that PolicyEngine's caseload aggregates match published DWP claimant numbers rather than the full eligible population.\n\nParameters live in `policyengine_uk/parameters/gov/dwp/universal_credit/` and the per-element formulas in `policyengine_uk/variables/gov/dwp/universal_credit/`."
+   "source": "## How PolicyEngine computes Universal Credit\n\nPolicyEngine computes Universal Credit at the benefit-unit level in three stages:\n\n1. **Maximum entitlement** (`uc_maximum_amount`): sum the elements the benunit qualifies for — `uc_standard_allowance`, `uc_child_element`, `uc_disability_elements`, `uc_carer_element`, `uc_housing_costs_element`, and `uc_childcare_element`.\n2. **Means test**: only the claimants' income counts: the single claimant, or the two joint claimants (`is_uc_assessed_claimant`; UC Regulations 2013 reg 22(1)). The earnings and unearned income of a child, a qualifying young person or anyone else in the benefit unit are theirs, not the claimant's, so the Universal Credit means test does not count them. Who the claimants are comes from `is_uc_claimant` (the claimant and partner); a member flagged there is taken as a claimant whatever their age. Each person's earnings (`uc_individual_earned_income`) are net of their own relievable pension contributions and the income tax and National Insurance they pay on that employment or self-employment (UC Regulations 2013 regs 55(5) and 57(2)): `uc_income_tax_on_earnings` treats earnings as the lowest slice of the person's non-savings income, so tax on pensions, property, savings and dividends is never deducted, and one partner's tax never reduces the other's earnings. A claimant in gainful self-employment outside a start-up period who would otherwise be subject to all work-related requirements is subject to the minimum income floor (reg 62): when their earnings after those deductions are below `uc_minimum_income_floor`, they are treated as having that amount instead. The floor does not apply to a claimant in the no work-related requirements, work-focused interview or work preparation group (`uc_work_related_group_apart_from_earnings`; Welfare Reform Act 2012 ss 19 to 21): for example one with limited capability for work-related activity, a carer, a claimant over State Pension Credit qualifying age, or the responsible carer of a child under 3. Only one member of a couple is the responsible carer (`uc_is_responsible_carer`); where the nomination is not supplied the model takes the claimant who works fewer hours (`hours_worked`), then the elder. `hours_worked` defaults to 0, so for a couple entered without hours the default falls to the elder; supply `uc_is_responsible_carer` where the nomination is known. The floor is the minimum wage for their age for their expected hours (`uc_expected_hours`: 35 a week, or for the responsible carer of a child under 13 the hours DWP uses: 30 from February 2025, from April 2017 until then 16 for a child under compulsory school age and 25 for an older child, and 25 for any child under 13 before April 2017; regs 88 and 90(2)), less the income tax and the Class 2 and Class 4 National Insurance a self-employed person would pay on it (reg 62(4)(b) leaves this amount to the Secretary of State; this is the basis of DWP's guidance and figures, and setting the `gov.dwp.universal_credit.means_test.minimum_income_floor.self_employed_national_insurance` parameter to false deducts primary Class 1 instead). A member of a couple is lifted only while the couple's combined earnings are below the couple threshold, and never above it (reg 62(3)). The couple threshold is the sum of both partners' thresholds (reg 90(3)): 16 hours for a partner in the work-focused interview or work preparation group, nothing for a partner with no work-related requirements for a reason other than earnings, and 35 hours at the national living wage (the adult rate before April 2016) for a partner who cannot be a joint claimant (reg 90(3)(b)). The maximum entitlement is then reduced by 55% (the `gov.dwp.universal_credit.means_test.reduction_rate` parameter) of the claimants' combined earnings above the work allowance (`uc_work_allowance`), and by all of the claimants' unearned income (`uc_unearned_income`), pound for pound. Unearned income is the list in `gov.dwp.universal_credit.means_test.income_definitions.unearned`: retirement pension income (State Pension and private pensions, UC Regulations 2013 regs 66(1)(a) and 67), Carer's Allowance, carer support payment (up to the Carer's Allowance rate, from November 2023), contribution-based JSA and ESA, maternity allowance, industrial injuries benefit, and the tariff income deemed from capital (reg 72). Actual savings interest, dividends and ordinary rental income are excluded from UC unearned income at every capital level; capital counts through its tariff income instead. Asset rules apply on top of this — capital above the lower threshold deems a tariff income, and capital above the upper threshold disqualifies the benunit entirely.\n3. **Benefit cap**: the post-means-test award (`universal_credit_pre_benefit_cap`) is finally reduced by `benefit_cap_reduction` to produce `universal_credit`. The benefit cap only applies to benunits without a benefit-cap exemption (the claimants earning enough, having a qualifying disability benefit, etc.). The earnings exception reads the claimants' earnings only (reg 82(1)(a)), the capped total counts only the claimants' own contributory benefits (WRA 2012 s.96(1)), and the childcare work condition tests only the claimants (reg 32(1)).\n\nThe take-up step is handled by the input variable `would_claim_uc`, which is populated stochastically when the dataset is built so that PolicyEngine's caseload aggregates match published DWP claimant numbers rather than the full eligible population.\n\nParameters live in `policyengine_uk/parameters/gov/dwp/universal_credit/` and the per-element formulas in `policyengine_uk/variables/gov/dwp/universal_credit/`."
   },
   {
    "cell_type": "code",

policyengine_uk/parameters/gov/dwp/universal_credit/means_test/minimum_income_floor/ineligible_partner_hours.yaml

@@ -0,0 +1,20 @@
+description: >-
+  Weekly hours behind the amount that a partner who cannot be a joint claimant
+  adds to the couple threshold for the Universal Credit minimum income floor,
+  where a member of a couple claims as a single person (regulation 3(3)).
+  Regulation 90(3)(b)(ii) adds "the amount a person would be paid for 35 hours
+  per week" at the national minimum wage rate of regulation 4 of the National
+  Minimum Wage Regulations (regulation 11 of the 1999 Regulations as made).
+  The 35 is set by regulation 90 itself, separately from the expected hours of
+  regulation 88.
+values:
+  2013-04-29: 35
+metadata:
+  unit: hour
+  period: week
+  label: Universal Credit minimum income floor hours for a partner who cannot be a joint claimant
+  reference:
+    - title: The Universal Credit Regulations 2013 reg. 90(3)(b)(ii)
+      href: https://www.legislation.gov.uk/uksi/2013/376/regulation/90
+    - title: The Universal Credit Regulations 2013 reg. 90(3)(b)(ii), as made
+      href: https://www.legislation.gov.uk/uksi/2013/376/regulation/90/2013-04-29

policyengine_uk/parameters/gov/dwp/universal_credit/means_test/minimum_income_floor/no_requirements_partner_hours.yaml

@@ -0,0 +1,24 @@
+description: >-
+  Weekly hours behind the amount that a joint claimant subject to no
+  work-related requirements, for a reason other than their earnings, adds to
+  the couple threshold for the Universal Credit minimum income floor.
+  Regulation 90(3)(a) makes the couple threshold "the sum of their individual
+  thresholds", and regulation 90(2) sets an individual threshold only for a
+  claimant who would otherwise be in the work-focused interview or work
+  preparation group (16 hours) or the all work-related requirements group (the
+  expected hours). It sets none for a claimant with limited capability for
+  work-related activity, a carer, the responsible carer of a child under 1 or
+  a claimant over State Pension Credit qualifying age, and neither the Advice
+  for Decision Making nor DWP's guidance on the floor gives one. The model
+  follows the text: such a partner adds nothing.
+values:
+  2013-04-29: 0
+metadata:
+  unit: hour
+  period: week
+  label: Universal Credit minimum income floor hours for a partner with no work-related requirements
+  reference:
+    - title: The Universal Credit Regulations 2013 reg. 90(2) and (3)(a)
+      href: https://www.legislation.gov.uk/uksi/2013/376/regulation/90
+    - title: DWP, Advice for Decision Making, chapter H4, H4073-H4077
+      href: https://www.gov.uk/government/publications/advice-for-decision-making-staff-guide

policyengine_uk/parameters/gov/dwp/universal_credit/work_requirements/interview_or_preparation_threshold_hours.yaml

@@ -0,0 +1,13 @@
+description: >-
+  Weekly hours that set the individual earnings threshold of a Universal Credit
+  claimant who would otherwise be subject to the work-focused interview
+  requirement only, or to the work preparation requirement.
+values:
+  2013-04-29: 16
+metadata:
+  unit: hour
+  period: week
+  label: Universal Credit individual threshold hours for the interview-only and work preparation groups
+  reference:
+    - title: The Universal Credit Regulations 2013 reg. 90(2)(a)
+      href: https://www.legislation.gov.uk/uksi/2013/376/regulation/90

policyengine_uk/parameters/gov/dwp/universal_credit/work_requirements/responsible_carer/child_age/interview_only.yaml

@@ -0,0 +1,22 @@
+description: >-
+  Age below which a child aged at least 1 puts their responsible carer in the
+  Universal Credit group subject to the work-focused interview requirement
+  only. The Act as passed covered a child "aged at least 1 and ... under a
+  prescribed age", prescribed as 5 and then, from 28 April 2014, as 3. Since 3
+  April 2017 the Act covers a child "who is aged 1".
+values:
+  2013-04-29: 5
+  2014-04-28: 3
+  2017-04-03: 2
+metadata:
+  unit: year
+  label: Universal Credit responsible carer work-focused interview only child age limit
+  reference:
+    - title: Welfare Reform Act 2012 s. 20(1)(a)
+      href: https://www.legislation.gov.uk/ukpga/2012/5/section/20
+    - title: The Universal Credit Regulations 2013 reg. 91(1), as made (prescribed age 5)
+      href: https://www.legislation.gov.uk/uksi/2013/376/regulation/91/made
+    - title: The Income Support (Work-Related Activity) and Miscellaneous Amendments Regulations 2014 reg. 16 (prescribed age 3)
+      href: https://www.legislation.gov.uk/uksi/2014/1097/regulation/16/made
+    - title: Welfare Reform and Work Act 2016 s. 17(1)(a) (a child aged 1, from 3 April 2017)
+      href: https://www.legislation.gov.uk/ukpga/2016/7/section/17

policyengine_uk/parameters/gov/dwp/universal_credit/work_requirements/responsible_carer/child_age/no_requirements.yaml

@@ -0,0 +1,11 @@
+description: >-
+  Age below which a child puts their responsible carer in the Universal Credit
+  group subject to no work-related requirements.
+values:
+  2013-04-29: 1
+metadata:
+  unit: year
+  label: Universal Credit responsible carer no work-related requirements child age limit
+  reference:
+    - title: Welfare Reform Act 2012 s. 19(2)(c)
+      href: https://www.legislation.gov.uk/ukpga/2012/5/section/19

policyengine_uk/parameters/gov/dwp/universal_credit/work_requirements/responsible_carer/child_age/work_preparation.yaml

@@ -0,0 +1,21 @@
+description: >-
+  Age below which a child too old for the work-focused interview only group
+  puts their responsible carer in the Universal Credit group subject to the
+  work preparation requirement. From 28 April 2014 the group took the
+  responsible carer of a child aged 3 or 4, and since 3 April 2017 it takes
+  the responsible carer of a child aged 2. Before 28 April 2014 a child's age
+  did not put anyone in this group.
+values:
+  2013-04-29: 5
+  2014-04-28: 5
+  2017-04-03: 3
+metadata:
+  unit: year
+  label: Universal Credit responsible carer work preparation child age limit
+  reference:
+    - title: Welfare Reform Act 2012 s. 21(1)(aa)
+      href: https://www.legislation.gov.uk/ukpga/2012/5/section/21
+    - title: The Universal Credit Regulations 2013 reg. 91A, as inserted from 28 April 2014 (a child aged 3 or 4)
+      href: https://www.legislation.gov.uk/uksi/2013/376/regulation/91A/2014-04-28
+    - title: Welfare Reform and Work Act 2016 s. 17(1)(b) and (2)(b) (a child aged 2, from 3 April 2017)
+      href: https://www.legislation.gov.uk/ukpga/2016/7/section/17

policyengine_uk/parameters/gov/dwp/universal_credit/work_requirements/responsible_carer/expected_hours/below_compulsory_school_age.yaml

@@ -0,0 +1,31 @@
+description: >-
+  Expected weekly hours DWP uses for the responsible carer of a child who has
+  not yet reached compulsory school age. The regulation leaves the number to
+  the Secretary of State ("compatible with those caring responsibilities").
+  Until 3 April 2017 one rule covered every child under 13 (25 hours), though
+  the responsible carer of a child under 5 was not then in the all
+  work-related requirements group. DWP's stated expectation from 3 April 2017
+  was 16 hours for a child aged 3 or 4. For the minimum income floor it became
+  a maximum of 30 hours for lead carers found gainfully self-employed from 31
+  January 2024, and DWP began raising existing floors to it from February
+  2025, the date used here. Work coaches can set fewer hours for a claimant's
+  circumstances; the model uses the maximum.
+values:
+  2013-04-29: 25
+  2017-04-03: 16
+  2025-02-01: 30
+metadata:
+  unit: hour
+  period: week
+  label: Universal Credit expected hours for the responsible carer of a child below compulsory school age
+  reference:
+    - title: The Universal Credit Regulations 2013 reg. 88(2)(aa)
+      href: https://www.legislation.gov.uk/uksi/2013/376/regulation/88
+    - title: The Employment and Support Allowance and Universal Credit (Miscellaneous Amendments and Transitional and Savings Provisions) Regulations 2017 reg. 6
+      href: https://www.legislation.gov.uk/uksi/2017/204/regulation/6/made
+    - title: DWP, Advice for Decision Making, chapter J2, J2086
+      href: https://www.gov.uk/government/publications/advice-for-decision-making-staff-guide
+    - title: "DWP, Gainfully self-employed lead carers with youngest child aged 3-12 (increase in expected hours), deposited paper DEP2024-0673"
+      href: https://data.parliament.uk/DepositedPapers/Files/DEP2024-0673/073_Gainfully_SE_lead_carer_youngest_child_age_3_12_expctd_hrs_V1.0.pdf
+    - title: Written answer 129349, 28 April 2026
+      href: https://questions-statements.parliament.uk/written-questions/detail/2026-04-22/129349

policyengine_uk/parameters/gov/dwp/universal_credit/work_requirements/responsible_carer/expected_hours/child_age_limit.yaml

@@ -0,0 +1,11 @@
+description: >-
+  Age below which a child lowers the expected hours of their responsible carer
+  for Universal Credit.
+values:
+  2013-04-29: 13
+metadata:
+  unit: year
+  label: Universal Credit responsible carer reduced expected hours child age limit
+  reference:
+    - title: The Universal Credit Regulations 2013 reg. 88(2)(b)
+      href: https://www.legislation.gov.uk/uksi/2013/376/regulation/88