Commentary on Sections Schedule 5: Universal credit and other working-age benefits
168.Paragraph 2 of Schedule 5 enables the Secretary of State to make provision in regulations for circumstances where a claimant is entitled to universal credit and either ESA or JSA. After the introduction of universal credit, ESA and JSA will continue to be available as contributory benefits.
169.Sub-paragraph (1) allows for regulations to determine the amount of ESA or JSA payable where a claimant is entitled to universal credit as well as one of the contributory benefits. Under sub-paragraph (2) this may include paying no amount of ESA or JSA.
170.Regulations may also make provision for how work-related requirements and sanctions will apply where a person is entitled to either JSA or ESA and universal credit. This may include treating compliance with a requirement for the purposes of one benefit as compliance for the other, or not applying work-related requirements in certain circumstances.
171.Sub-paragraph (5) enables regulations to provide for the order in which sanctions are applied when a person is entitled to more than one benefit and provide that, if both benefits are payable, a reduction in one as a result of a sanction does not lead to an increase in the other.
172.Paragraph 3 allows regulations to provide that sanctions imposed on a universal credit claimant may be applied to an award of ESA or JSA if the award of universal credit ceases and the claimant moves onto one of these benefits.
173.Similarly, regulations may provide that sanctions imposed on JSA or ESA claimants may be applied to an award of universal credit. In certain circumstances, these rules may not apply (which may include, for example, certain changes in a claimant’s circumstances such as severe ill health).
174.Paragraph 4 allows for regulations under section 28 to provide for hardship payments to be made to a person who is subject to a sanction and is entitled to JSA or ESA and universal credit, or where a sanction imposed on a JSA or ESA claimant has been applied to a subsequent award of universal credit.
175.Paragraph 5 amends JA 1995 and WRA 2007 to allow for the introduction of an earnings taper, so that ESA and JSA will be reduced at a constant rate as earnings increase in the same way as universal credit. This rate will be prescribed in regulations.