Project protected pension-age Housing Benefit by component

changelog.d/2154.fixed.md

@@ -0,0 +1 @@
+- Correct the forecast basis for protected pension-age Housing Benefit personal allowances.

policyengine_uk/parameters/gov/dwp/housing_benefit/allowances/create_protected_pension_age_uprating.py

@@ -0,0 +1,118 @@
+"""Project the protected pension-age Housing Benefit allowance.
+
+The protected single and lone-parent allowance consists of the Pension Credit
+standard minimum guarantee plus the retained Savings Credit uplift. The two
+components use different annual review inputs, so neither CPI nor earnings
+alone is a faithful forecast proxy.
+"""
+
+from policyengine_core.parameters import Parameter, ParameterNode
+
+
+BASE_YEAR = 2026
+GUARANTEE_COMPONENT = 238.0
+SAVINGS_CREDIT_COMPONENT = 18.0
+BASE_ALLOWANCE = GUARANTEE_COMPONENT + SAVINGS_CREDIT_COMPONENT
+
+
+def project_components(
+    guarantee: float,
+    savings_credit_uplift: float,
+    earnings_growth: float,
+    cpi_growth: float,
+) -> tuple[float, float]:
+    """Project both components without reducing either cash amount."""
+    return (
+        guarantee * (1 + max(earnings_growth, 0)),
+        savings_credit_uplift * (1 + max(cpi_growth, 0)),
+    )
+
+
+def add_protected_pension_age_uprating(
+    parameters: ParameterNode,
+) -> ParameterNode:
+    """Add the component-weighted forecast index used after April 2026."""
+    inputs = parameters.gov.economic_assumptions.statutory_uprating_inputs
+    allowances = parameters.gov.dwp.housing_benefit.allowances
+    last_input_year = min(
+        max(
+            int(value.instant_str[:4])
+            for value in input_parameter.values_list
+            if value.value is not None
+        )
+        for input_parameter in (
+            inputs.awe_total_pay_may_july,
+            inputs.cpi_september,
+        )
+    )
+
+    guarantee = GUARANTEE_COMPONENT
+    savings_credit_uplift = SAVINGS_CREDIT_COMPONENT
+    values = {f"{BASE_YEAR}-04-01": 1.0}
+    for year in range(BASE_YEAR + 1, last_input_year + 2):
+        observation_year = year - 1
+        guarantee, savings_credit_uplift = project_components(
+            guarantee,
+            savings_credit_uplift,
+            float(inputs.awe_total_pay_may_july(f"{observation_year}-07-01")),
+            float(inputs.cpi_september(f"{observation_year}-09-01")),
+        )
+        values[f"{year}-04-01"] = (guarantee + savings_credit_uplift) / BASE_ALLOWANCE
+
+    allowances.add_child(
+        "protected_pension_age_uprating",
+        Parameter(
+            "gov.dwp.housing_benefit.allowances.protected_pension_age_uprating",
+            data={
+                "description": (
+                    "Forecast index for the protected pension-age Housing "
+                    "Benefit allowance. The 2026-27 rounded base allocates "
+                    "£238 to the Pension Credit guarantee and £18 to the "
+                    "retained Savings Credit uplift. The components follow "
+                    "non-negative May-to-July earnings and September CPI, "
+                    "respectively. Projected values are not enacted rates."
+                ),
+                "values": values,
+                "metadata": {
+                    "unit": "/1",
+                    "label": (
+                        "Protected pension-age Housing Benefit allowance forecast index"
+                    ),
+                    "reference": [
+                        {
+                            "title": (
+                                "A14/2025 Housing Benefit uprating for the "
+                                "financial year ending March 2027, paragraphs "
+                                "5 and 20"
+                            ),
+                            "href": (
+                                "https://www.gov.uk/government/publications/"
+                                "housing-benefit-adjudication-circulars-2025/"
+                                "a142025-housing-benefit-uprating-for-the-"
+                                "financial-year-ending-march-2027"
+                            ),
+                        },
+                        {
+                            "title": (
+                                "ONS KAC3 average weekly earnings, whole "
+                                "economy, total pay"
+                            ),
+                            "href": (
+                                "https://www.ons.gov.uk/"
+                                "employmentandlabourmarket/peopleinwork/"
+                                "earningsandworkinghours/timeseries/kac3/lms"
+                            ),
+                        },
+                        {
+                            "title": "ONS D7G7 Consumer Prices Index annual rate",
+                            "href": (
+                                "https://www.ons.gov.uk/economy/"
+                                "inflationandpriceindices/timeseries/d7g7/mm23"
+                            ),
+                        },
+                    ],
+                },
+            },
+        ),
+    )
+    return parameters

policyengine_uk/parameters/gov/dwp/housing_benefit/allowances/lone_parent/aged.yaml

@@ -1,4 +1,7 @@
-description: Personal allowance for Housing Benefit for a lone parent over State Pension age.
+description: >-
+  Personal allowance for Housing Benefit for a lone parent over State Pension
+  age. Amounts after the last enacted rate use a component-weighted forecast
+  and are not enacted future rates.
 
 values:
   2015-04-01: 181
@@ -13,9 +16,11 @@ metadata:
   period: week
   unit: currency-GBP
   label: Housing benefit lone parent aged personal allowance
-  uprating: gov.benefit_uprating_cpi
+  uprating: gov.dwp.housing_benefit.allowances.protected_pension_age_uprating
   reference: 
     - title: The Housing Benefit Regulations 2006 Schedule 3 sec. 1
       href: https://www.legislation.gov.uk/uksi/2006/213/data.pdf#page=212
     - title: Benefit and pension rates 2024 to 2025 - Policy paper
       href: https://www.gov.uk/government/publications/benefit-and-pension-rates-2024-to-2025/benefit-and-pension-rates-2024-to-2025
+    - title: A14/2025 Housing Benefit uprating for the financial year ending March 2027, paragraphs 5 and 20
+      href: https://www.gov.uk/government/publications/housing-benefit-adjudication-circulars-2025/a142025-housing-benefit-uprating-for-the-financial-year-ending-march-2027

policyengine_uk/parameters/gov/dwp/housing_benefit/allowances/single/aged.yaml

@@ -1,4 +1,7 @@
-description: The following personal allowance amount is provided to single filers over the pension age under the Housing Benefit.
+description: >-
+  The following personal allowance amount is provided to single filers over
+  the pension age under the Housing Benefit. Amounts after the last enacted
+  rate use a component-weighted forecast and are not enacted future rates.
 values:
   2015-04-01: 181
   2021-04-01: 191.15
@@ -12,9 +15,11 @@ metadata:
   period: week
   unit: currency-GBP
   label: Housing benefit single aged personal allowance
-  uprating: gov.benefit_uprating_cpi
+  uprating: gov.dwp.housing_benefit.allowances.protected_pension_age_uprating
   reference: 
     - title: The Housing Benefit Regulations 2006 Schedule 3 sec. 1
       href: https://www.legislation.gov.uk/uksi/2006/213/data.pdf#page=212
     - title: Benefit and pension rates 2024 to 2025 - Policy paper
       href: https://www.gov.uk/government/publications/benefit-and-pension-rates-2024-to-2025/benefit-and-pension-rates-2024-to-2025
+    - title: A14/2025 Housing Benefit uprating for the financial year ending March 2027, paragraphs 5 and 20
+      href: https://www.gov.uk/government/publications/housing-benefit-adjudication-circulars-2025/a142025-housing-benefit-uprating-for-the-financial-year-ending-march-2027

policyengine_uk/tax_benefit_system.py

@@ -21,6 +21,9 @@
 from policyengine_uk.parameters.gov.dwp.state_pension.triple_lock.create_triple_lock import (
     add_triple_lock,
 )
+from policyengine_uk.parameters.gov.dwp.housing_benefit.allowances.create_protected_pension_age_uprating import (
+    add_protected_pension_age_uprating,
+)
 from policyengine_uk.parameters.gov.economic_assumptions.create_economic_assumption_indices import (
     create_economic_assumption_indices,
 )
@@ -101,6 +104,7 @@ def process_parameters(self) -> None:
         self.parameters = add_lagged_earnings(self.parameters)
         self.parameters = add_lagged_cpi(self.parameters)
         self.parameters = add_statutory_uprating_inputs(self.parameters)
+        self.parameters = add_protected_pension_age_uprating(self.parameters)
         self.parameters = add_triple_lock(self.parameters)
         self.parameters = create_economic_assumption_indices(self.parameters)
         self.parameters = add_lsr_deprecation_aliases(self.parameters)

policyengine_uk/tests/test_housing_benefit_protected_allowance_uprating.py

@@ -0,0 +1,54 @@
+import pytest
+
+from policyengine_uk import system
+from policyengine_uk.parameters.gov.dwp.housing_benefit.allowances.create_protected_pension_age_uprating import (
+    BASE_ALLOWANCE,
+    GUARANTEE_COMPONENT,
+    SAVINGS_CREDIT_COMPONENT,
+    project_components,
+)
+
+
+def _parameters():
+    return system.parameters
+
+
+def test_protected_allowance_index_combines_the_two_statutory_inputs():
+    parameters = _parameters()
+    inputs = parameters.gov.economic_assumptions.statutory_uprating_inputs
+    index = parameters.gov.dwp.housing_benefit.allowances.protected_pension_age_uprating
+
+    guarantee, savings_credit_uplift = project_components(
+        GUARANTEE_COMPONENT,
+        SAVINGS_CREDIT_COMPONENT,
+        inputs.awe_total_pay_may_july("2026-07-01"),
+        inputs.cpi_september("2026-09-01"),
+    )
+
+    assert inputs.awe_total_pay_may_july("2026-07-01") == pytest.approx(0.039)
+    assert inputs.cpi_september("2026-09-01") == pytest.approx(0.02116)
+    assert index("2026-04-01") == 1
+    expected_index = (guarantee + savings_credit_uplift) / BASE_ALLOWANCE
+    assert expected_index == pytest.approx(1.037745625)
+    assert index("2027-04-01") == pytest.approx(expected_index)
+
+
+def test_single_and_lone_parent_use_the_composite_projection():
+    allowances = _parameters().gov.dwp.housing_benefit.allowances
+    index = allowances.protected_pension_age_uprating
+    expected_2027 = 256 * index("2027-04-01") / index("2026-04-01")
+
+    assert allowances.single.aged("2026-04-01") == 256
+    assert allowances.lone_parent.aged("2026-04-01") == 256
+    assert expected_2027 == pytest.approx(265.66288)
+    assert allowances.single.aged("2027-04-01") == pytest.approx(expected_2027)
+    assert allowances.lone_parent.aged("2027-04-01") == pytest.approx(expected_2027)
+    assert allowances.single.aged("2027-04-01") != pytest.approx(
+        256
+        * _parameters().gov.benefit_uprating_cpi("2027-04-01")
+        / _parameters().gov.benefit_uprating_cpi("2026-04-01")
+    )
+
+
+def test_component_projection_does_not_reduce_cash_amounts():
+    assert project_components(238, 18, -0.01, -0.02) == (238, 18)