Guidance

LA Welfare Direct 5/2025

Updated 7 May 2025

LAWD5/2025 1 May 2025

Crown Copyright 2025

Recipients may freely reproduce this bulletin.

Contact

If you have queries about the:

• technical content of this bulletin then contact details are given at the end of each article

• general content and distribution of this bulletin, contact lawelfare.correspondence@dwp.gov.uk

Who should read

All Housing Benefit colleagues and wider if appropriate

Action

For information

Editorial

Welcome everyone to May’s 2025 edition of the LA Welfare Direct.  

With the bank holiday around the corner and the weather finally feeling more like summer, it’s the perfect time to catch up on the latest updates.  

This bumper edition is packed with important information and an exciting opportunity for a secondment within the Local Authority Funding Team. It’s a great chance to gain experience and contribute to our funding strategies. If you’re interested, be sure to look at the article and apply by the end of the month.  

You’ll also see there is a really important reminder about the joint consultation on the measures in the Supported Housing (Regulatory Oversight) Act that is closing on the 15 May 2025. Therefore, if you haven’t already done so, we encourage you to submit your responses. 

I hope you find this bulletin helpful and, as always, we welcome your feedback to lawelfare.correspondance@dwp.gov.uk  

Rebecca Bryning 

Head of Grant Delivery, Local Authority Partnership and Engagement division 

Local authority action to take when a claimant is required to Move to Universal Credit  

1. When a Housing Benefit (HB) claimant makes a claim to Universal Credit (UC) by the deadline date on their Migration Notice, the UC Service sends an HBMIG Stop Notice to the local authority (LA) to advise them to terminate HB. 

2. LAs should then follow the action detailed in the LA Move to UC (Managed Migration) Guidance (version 3) to terminate the HB claim and, where necessary, complete and return the MGP1LA form when the HB claim is closed and there is an overlap of benefit from the day after the Transition to UC Housing Payment ends.  

Action when a UC claim is closed and no payment is made  

3. When a new claim to UC is made, evidence may be required to verify the information that claimants provide when making a new UC claim. This could be to establish: 

• their identity 

• relevant circumstances 

• reasons for payment. 

4. Claimants are given a calendar month to provide information or evidence in connection with their new claim. The calendar month begins when the claimant is informed what evidence is needed. This applies to any declaration made within the first Assessment Period. 

5. A small number of LAs have reported to the Local Authority Partnership, Engagement and Delivery (LA-PED) division that they have seen an increase in the number of MGP1LA forms being returned to them stating the UC claim has been closed or is defective and no UC has been paid. As a result, the Department for Work and Pensions (DWP) is unable to record or recover any overpayment of HB.  

6. LA-PED has sought advice from DWP Debt Policy colleagues and when an MGP1LA form is returned, stating the UC claim has been closed or defective and no UC has been paid, the LA should record the HB overpayment as claimant error.

LA action required to terminate an HB claim (when a claim to UC has not been made) 

7. On receipt of an HB TRM Stop Notice, LAs should continue to follow the existing guidance to terminate an HB claim (when a claim to UC has not been made) and classify any overpayment for the period after the Transition to UC Housing Payment as Admin Delay. 

Change of HB entitlement during the Transition to UC Housing Payment period  

8. DWP is receiving MGP1LA requests from LAs to recover an overpayment of HB that has occurred during the Transition to UC Housing Payment period. 

9. The Transition to UC Housing Payment should be paid for two weeks after the effective date and Regulation 8A determines that the payment made is at the existing HB rate. 

10. LAs are reminded that any overpayment of the Transition to UC Housing Payment should be recovered under the business as usual overpayment referral process. 

11. Any MGP1 LA request for the circumstances described in paragraph 8 will be returned to the LA.  

12. If you have any questions regarding the content of this article, contact lawelfare.laliaisonteam@dwp.gov.uk    

Applications for Third Party Deductions from UC  

13. Following a legal challenge, it was determined that some of the existing applications (request forms) for Third Party Deductions from UC were not fully compliant. Therefore, on 3 March 2025, new versions of the Court Fines, Council Tax and Water (Scotland only) forms were made available on www.gov.uk. LAs should now start using the new version 3 forms.  

14. However, DWP is aware that some LAs use IT software supplier automation to complete the forms. For those LAs that use automation, suppliers have confirmed they are making the appropriate changes to their solutions, which will be released over the summer. These LAs should start using the new forms as soon as possible following their supplier’s release and are expected to use the new forms by September 2025.  

15. If you have any questions regarding the content of this article, contact lawelfare.laliaisonteam@dwp.gov.uk

Change of tax year for HB Matching Service self-assessment 

16. LAs will be aware that changes to the tax year for the HB Matching Service (HBMS) are implemented in April of each year in line with HM Revenue and Customs procedures.  

17. The HBMS self-assessment referrals were matched against the tax year 2022 to 2023 until the end of April 2025. From the end of April 2025, HBMS referrals are being matched against the tax year 2023 to 2024. 

18. This means all LAs will receive higher volumes of referrals and (possible) duplications within this first month (May 2025) of this change. However, volumes will start to decrease by month two of implementation.   

19. The following rules, which are detailed in the HBMS Rules guide found on Glasscubes, will be impacted:   

• HBSA002   

• HBSA003  

• HBSA004  

• HBHB405  

20. If you have any questions, contact lawelfare.datamatching@dwp.gov.uk  

LA funding for DWP’s requirements provided by Adult Social Care IT software suppliers  

21. DWP has worked with project leads and LA Adult Social Care (ASC) IT software suppliers to prepare the LA funding to pay for DWP commissioned work on the Care Home Information Service completed by LA ASC IT software suppliers. 

22. The funding was paid to LAs on 1 May 2025.  

23. On 30 April 2025, the Local Authority Data Sharing (LADS) team sent a letter to LAs’ (that administer ASC) single inboxes with a breakdown of the funding, the work this relates to and the specific date the payment will be made. 

24. LAs should ensure this letter has been forwarded to their finance team.    

25. LA ASC IT software suppliers will be invoicing you for the amount received and LA finance teams need to ensure these invoices are paid in a timely manner.   

26. We’d also like to take this opportunity to thank you for your support with this work.  

27. If you need any further information, email lawelfare.ladsdeliveryteam@dwp.gov.uk

LA funding for DWP’s requirements provided by LA IT software suppliers  

28. DWP has worked with project leads and LA HB IT software suppliers to prepare the LA funding to pay for DWP commissioned work completed by LA HB IT software suppliers.   

29. The funding will be made to LAs in two payments on: 

• 1 May 2025  

• 6 May 2025 

30. The LADS team have sent a letter (dated 30 April 2025) to LAs’ single inboxes with a breakdown of the funding, the work this relates to, and the specific dates the payment will be made.  

31. LAs should ensure this letter has been forwarded to their finance team.    

32. Once the payments have been made the LA HB IT software suppliers will be invoicing you for the amount received and LA finance teams need to ensure these invoices are paid in a timely manner.   

33. Once again, we’d like to take this opportunity to thank you for your support with this work.  

34. If you need any further information, email lawelfare.ladsdeliveryteam@dwp.gov.uk    

Ending of the UC Rapid Reclaims process  

35. As referenced in LAWD8/2023, a small number of LAs raised concerns that the Local Council Tax Reduction (LCTR) interests set on Searchlight were not operating in the way they would like. 

36. In response, a temporary tactical solution was agreed whilst we were looking into a potential long-term solution.   

37. However, the reclaim process is no longer available and a full UC claim is now taken for all UC claims which will set the LCTR interest, if applicable. Therefore, the concerns raised should no longer be an issue for LAs due to the new UC claims process.  

38. If there are any continued examples of UC claims that are not having the LCTR interest set (if applicable), LAs should raise an incident in the usual way through the Local Authority Security and Support Team at lawelfare.lasupport@dwp.gov.uk who will investigate with the UC design teams.  

Revision to previous guidance: How the underpayments of State Pension are treated for HB purposes 

39. DWP is continuing to identify individuals who have been underpaid their State Pension entitlement. This includes cases where individuals may be entitled to an increase to their State Pension amount due to increasing or inheriting State Pension from a spouse or civil partner 

40. Where underpayments are identified, DWP contacts the individual to inform them of any increase to their State Pension and of any arrears’ payment due. These arrears are backdated to the date the individual became entitled to an increased amount. 

Revised guidance on the effect on HB and its treatment 

41. The guidance provided in LAWD3/2023 advised that arrears of State Pension should be treated as capital for HB purposes.  

42. However, arrears of State Pension should be treated as income for HB purposes, not capital as previously advised. 

43. Where HB overpayments arise as a result of increased income from the receipt of these arrears, such overpayments should be treated as Departmental Error and classified as non-recoverable in line with existing HB overpayment recovery guidance. 

44. Any queries about this matter should be emailed to housing.policyenquiries@dwp.gov.uk

Update: Pension Age Disability Payment and Scottish Adult Disability Payment managed case transfers 

45. In LA Welfare Direct 3/2025, we informed LAs about the commencement of Pension Age Disability Payment (PADP) and Scottish Adult Disability Payment (SADLA) managed case transfers. This means that individuals of Pension age living in Scotland who receive Attendance Allowance or Disability Living Allowance will progressively transition to the new Scottish benefits. 

46. We also introduced a new method for sharing information to Scottish LAs about cases selected for transfer using Transfer Your File (TYF), ahead of the ATLAS (Automated Transfer to Local Authority Systems) changes being implemented from 19 May 2025. 

Update on data sharing with LAs 

47. We can now confirm the transfer window for DWP to move cases from Attendance Allowance to PADP is 8 to 12 weeks, and for SADLA it is 4 to 8 weeks. Social Security Scotland has also advised that they do not broadcast the PADP or SADLA details to Searchlight until approximately 35 days before the start of the benefit award. 

48. Therefore, DWP will no longer send case transfer cases to Scottish LAs through the single point of contact (SPOC) process, because the transfer window for any cases selected for transfer from now will end after 19 May 2025 and LAs will receive an ATLAS notification. 

49. Until 19 May 2025, we will continue to send Scottish LAs details of new PADP claims through the SPOC process. 

50. Please send any questions to lawelfare.changemanagementoffice@dwp.gov.uk 

Update: UC data sharing 

UC – Local Council Tax Reduction data feed enhancements implementation update 

51. As advised in April’s LAWD4/2025 bulletin, work to release the enhanced version 2 (V2) files to all LAs was finalised at the end of March 2025. We would like to thank our working group members, the LAs who tested the files in advance of wider rollout across the various suppliers and the LA IT software suppliers who have greatly supported us through development, testing and rollout.   

52. Our intention remains to decommission V1 files by the end of September 2025. Beyond that, only V2 files will be available.   

53. We would greatly appreciate hearing from you about your experience during implementation and the impact that it had on the service you deliver. We would also invite LAs to let us know if there is anything preventing their implementation of V2 files before the end of September 2025. To provide feedback and request support, email lawelfare.datasharingtransformation@dwp.gov.uk 

Additional UC information on Searchlight 

54. We advised in LAWD4/2025 that the implementation of the first phase in adding more UC claim information to Searchlight had been postponed until 24 April 2025. Unfortunately, whilst work to build and test Phase 1 has concluded, unforeseen wider Searchlight issues unrelated to our project have indefinitely delayed the Phase 1 release. We are working relentlessly to ensure that we can deliver an updated timeframe for the release of the phases. 

55. Improvements in Phase 1 include:  

• the amount the benefit cap reduces the UC award by, if it has been applied  

• details, at an aggregated level, about deductions that are made from the UC award  

• details, at a household level, about any Limited Capability for Work (LCW), including if it has no monetary value or LCW and Work-Related Activity. 

56. We also recommended in LA Welfare Direct 4/2025 that LA staff read the associated updated Searchlight training material. At the time of drafting that advice, our understanding was that the updated training material would be released widely to all LAs by the time that LAWD was published. However, we took the decision not to do so as it requires more updating than we first considered and apologise if this caused any confusion. We are now looking to coincide the release of the updated training material with the Phase 1 release.  

57. We’re already working on Phase 2 and are aiming to:   

• provide more information about dependant children, indicate which children are and which children are not included in the UC assessment (due to the two-child limit)  

• say what the UC Transitional Protection relates to    

• provide greater clarity on what any deduction from UC is for  

• include the amount, at a household level, of any Disabled Child Element   

• include the amount and type of any Advance Payment  

• include the amount and type of any Alternative Payment Arrangements

58. We anticipate there being a Phase 3 release with further improvements and maybe a Phase 4 release too. We continue to consult with our working group of LAs to co-design how and where the new items will appear in Searchlight and we are very grateful for their support.  

59. The Local Government Data Sharing Transformation team will continue to update on progress through this LAWD bulletin but, in the meantime, if you have any questions email lawelfare.datasharingtransformation@dwp.gov.uk 

Identifying Local Vulnerability data sharing working group 

60. We advised in LA Welfare Direct 4/2025 that the Local Government Data Sharing Transformation (LGDST) team were still engaged in work to conclude the discovery phase and that this was taking longer than expected due to the need to consult more widely.  

61. Since then, we have arranged two LA visits and are planning more. This is to gain a deeper understanding of LA data needs and, in particular, to further explore the value of this data share (financial as well as non-financial). We are also meeting with a number of data and digital architects across DWP in May 2025 to identify solution options. 

62. We are planning to meet again with our working group of LAs to discuss the findings from the series of workshops held in England, Scotland and Wales as highlighted in previous LAWD articles. 

63. Whilst our main source of information is the working group, LGDST welcomes input from all LAs in building and strengthening the financial and non-financial case for investment in this new data share. LAs can help shape this by telling us about the difference it would make to their authority to receive UC information that identifies various cohorts of vulnerability, including those: 

• in severe financial hardship  

• at risk of homelessness 

• 16 to 18 year-olds not in education, employment or training. 

64. LAs can help inform the DWP business case by writing to lawelfare.datasharingtransformation@dwp.gov.uk

Response to LA requests for Veterans Agency data 

65. As part of DWPs’ engagement to seek ideas for new and improved data sharing, a small number of LAs asked whether it was possible for DWP to source and share information from the Veterans Agency, in relation to benefits paid to War Pensioners. 

66. Following discovery work undertaken, a decision has been taken not to prioritise the acquisition and sharing of Veterans Agency data for the following reasons: 

• The sharing of Veterans Agency data for HB awards is not currently covered under Social Security legislation, so there is no current legal gateway to utilise it.  

• DWP would find it difficult to build a value for money business case to support acquisition of the data because: 

  • the overall the volume of awards under the War Pension Scheme (WPS) and Armed Forces Compensation Scheme (AFCS) is small 

  • only a single WPS/AFCS case was attributed to contributing to the Fraud and Error figures within the most recent statistically valid sample. 

• The majority of LAs already utilise flexibilities to disregard up to 100% of WPS/AFCS benefits, utilising Modified Schemes covered under sections 134(8)(b) and 139(6)(b) of the Social Security Administration Act 1992. 

67. Those LAs who have not already considered utilising flexibilities afforded to them under Modified Schemes may wish to do so.  

68. In operating Modified Schemes, LAs must retain evidence for audit purposes, including details of the scheme and that individual HB claims meet the qualifying criteria. Further information on HB Subsidy for Modified Schemes can be found in the Housing Benefit subsidy guidance manual 2023 to 2024 (paragraphs 14.9 to 14.11). 

69. If you have any questions about this article, contact lawelfare.datamatching@dwp.gov.uk

HB Award Accuracy Initiative for the financial year ending March 2026 

70. DWP will continue to work with LAs to tackle fraud and error through the HB Award Accuracy (HBAA) Initiative from 1 April 2025 onwards and has secured funding of approximately £9.7 million for the financial year ending (FYE) March 2026. 

71. Circular HB A7/2025 sets out all the details of the HBAA Initiative for the FYE March 2026. The funding is designed to support LAs undertaking the prescribed activities to proactively identify unreported change of circumstances and make sure the right amount of benefit is paid to the right person at the right time. 

72. If you have any questions about the contents of this article, contact the LA-PED at lawelfare.frauderrordebt@dwp.gov.uk 

The Verify Earnings and Pensions Initiative  

73. As a long-standing fraud and error Initiative, Verify Earnings and Pensions (VEP) was a forerunner in using data from another government department to successfully prevent fraud and error from entering the HB caseload.  

74. However, due to the diminishing HB caseload following migration of the HB Working Age cases to UC, a decision has been made not to relaunch the Initiative for the FYE March 2026. 

What this means for LAs 

75. LAs must continue to action VEP Alerts up to and including 30 June 2025 as part of the VEP Initiative for the FYE March 2025. We will still gather management information (MI) to inform the final performance standards for the Initiative. Once this MI is collected, we will then be able to determine the overall savings and return on investment for the entire Initiative, which we will share with LAs.  

The VEP service  

76. The VEP service will continue to be available to verify a claimant’s employment earnings and non-state pensions. We will still send Alerts to inform you of any qualifying change to a claimant’s earnings and pensions.  

77. However, VEP funding will no longer be paid as a separate grant and became part of the HB Administration Subsidy (HBAS) from 1 April 2025. LAs must use the VEP funding paid as part of HBAS to continue to action all Alerts going forward. 

78. We would also like to take this opportunity to thank LAs for being our delivery partners and successful delivering seven years of the VEP Initiative. 

79. If you have any questions about the contents of this article, contact LA-PED at lawelfare.frauderrordebt@dwp.gov.uk 

Update: Move to UC  

80. In light of the good progress made on Employment and Support Allowance (ESA) cases to date, with over 200,000 already successfully transitioned to UC, a decision has been made to increase the volume of Migration Notices issued each month to 83,000. This will allow a little more time before the end of March 2026 to provide support for our more vulnerable claimants and complete the migration of ESA cases to UC, with the final Migration Notices issued in September 2025. 

New DWP Working Age Services directorate 

81. From April 2025, as a result of closing the UC Programme, DWP has set up a new directorate Working Age Services. This directorate will bring together our services that focus on meeting the needs of claimants and maximising employment, whilst building on the ways of working that allowed us to successfully develop and implement UC. 

Secondment opportunity on the LA Funding Team  

82. Working with LAs as one of our major stakeholders in Welfare Reform continues to feature heavily and, for this reason, we value the expertise and knowledge that those administering HB and other Welfare initiative within LAs can bring. 

83. LA-PED has had a very successful programme of bringing experts from LAs in to work alongside data sharing, subsidy, change and performance teams on secondment. We are now looking for an LA secondee to join our LA Funding Team (LAFT).  

84. LAFT work collaboratively across the department, with LAs, auditors and other stakeholders to administer funding allocations, facilitate the payment of HB subsidy and other payments (grants and New Burdens) and provide support to the audit of HB Subsidy claims. We also work closely with policy teams, in particular, on temporary accommodation and supported accommodation. In the next few months, we are looking to embed changes to the HB Assurance Process (HBAP) in England and introduce a new IT software system to facilitate the claiming and payment of HB Subsidy. 

Desirable skills 

• Knowledge of LAs and DWPs’ relationships with LAs and the HB subsidy process and HB/subsidy legislation 

• Experience of working directly with a wide range of stakeholders  

• Excellent communication and stakeholder management skills 

• Evidence of knowledge and experience of working on projects using project management approaches, tools, and techniques 

• Excellent drafting and communication skills 

• Proven planning and organisational skills, including risk management 

• Ability to manage competing priorities 

• Ability to work as part of a team or on own initiative 

• A working knowledge of HBAP 

Further information 

85. The secondment post would be offered for either 6 or 12 months. The post is full time and can be based across the country, although no moves at public expense would be considered. The role is equivalent to a Civil Service Senior Executive Officer that has a national pay band of £42,614 to £45,081. You will, however, retain your current LA salary. 

86. If you are keen to register your interest:  

• check with your LA that you could be released, then  

• send your CV by email to rob.prentice1@dwp.gov.uk by Friday 30 May 2025.

Reminder: Have your say on the future of supported housing  

87. As advised in LAWD3/2025, we would just like to remind you that the joint consultation on the measures in the Supported Housing (Regulatory Oversight) Act will close on 15 May 2025.  

88. It’s important that we hear your LA’s views on the proposals as these will be invaluable in shaping the policy moving forward. Therefore, if you haven’t already done so, we encourage you to submit your responses. 

89. Do contact supportedhousingconsultations@communities.gov.uk if you have any questions.   

Practitioners’ Operational Group and LA Welfare Steering Group         

90. The last Practitioners’ Operational Group meeting took place on 16 April 2025. Agenda items included bringing the administration together for HB and Pension Credit, LA funding, Move to UC, Cost of Living, HB fraud investigations and Joint Working update and supported housing.  

91. Both groups’ meetings are held bi-monthly (and alternately), so the next LA Welfare Steering Group meeting is scheduled to take place on 15 May 2025.          

92. If you have any questions regarding topics raised at these consultation groups, you can email  lawelfare.correspondence@dwp.gov.uk    

HB Decisions by the Upper Tribunal  

93. Decision Making and Appeals (DMA) Leeds is not aware of any cases that have been decided by the Upper Tribunal (UT): 

94. A selection of decisions of the UT are published on their website. Do be aware that there is an undefined time lapse between decisions being issued and their appearance on the website. 

95.  If you have any queries about cases before the UT Judges or courts, please contact us by email at quarryhouse.dmaleedscustomersupportservices@dwp.gov.uk 

HB cases awaiting decision by the UT 

96. DMA Leeds have not been made aware of any HB case that is awaiting decision by the Upper Tribunal. 

New Legislation 

97. The following Statutory Instruments (SIs) have been laid:  

• 2025 No. 401 – The National Minimum Wage (Amendment) Regulations 2025, made on 26 March 2025 

• 2025 No. 404 – The Infected Blood Compensation Scheme Regulations 2025, made on 27 March 2025 

•  2025 No. 422 – The Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2025, made on 1 April 2025 

• 2025 No. 429 – The Social Security (Contributions) (amendment No. 5) Regulations 2025, made on 2 April 2025 

98. Copies of SIs can now be downloaded from legislation.gov.uk   

What’s new on our HB pages on www.gov.uk

99. The following items can be found on the website link shown:

Document Type	Subject	Link
LAWD bulletin	Editorial – Pension Age Disability Payment and Scottish Adult Disability Living Allowance IT changes – Reminder: Deadline for the submission of HB pre-audit final claims and Discretionary Housing Payment end of year final claims – All LA Housing Benefit Award Accuracy conference calls: To discuss the approach to management information – Update: Universal Credit data sharing–Update: Care Home Information Service national rollout plans – Update: Move to UC–Invitation to the next Data sharing and IT consultation and engagement forum – HB Debt Recovery statistics for April 2024 to September 2024 – Secondment opportunity on the Local Authority Data Sharing team – Practitioners’ Operational Group and LA Welfare Steering Group – HB decisions by the Upper Tribunal – New Legislation – What’s new on our HB pages on www.gov.uk	LAWD4/2025
Adjudication and Operations (A) circular	The Social Security (Scotland) Act 2018 (Disability Assistance) (Consequential Amendments) Order 2025	A5/2025
Adjudication and Operations (A) circular	The Neonatal Care Leave and Pay (Consequential Amendments to Subordinate Legislation) Regulations 2025	A6/2025
Adjudication and Operations (A) circular	Housing Benefit Award Accuracy Initiative for the financial year ending March 2026	A7/2025
Subsidy (S) circular	Housing Benefit Administration Subsidy arrangements for English, Scottish and Welsh local authorities for the financial year ending March 2026	S2/2025
Subsidy (S) circular	Additional New Burdens funding to meet the costs of delivering Welfare Reform changes in the financial year ending March 2026	S3/2025
Subsidy (S) circular	Housing Benefit Award Accuracy Initiative funding for the financial year ending March 2026 for local authorities participating from 1 April 2025	S4/2025