Give Universal Credit and Housing Benefit their own benefit cap and LHA shared-accommodation rules

changelog.d/uc-hb-split-shared-cap-lha-rules.added.md

@@ -0,0 +1 @@
+Per-scheme benefit cap variables (`uc_benefit_cap`, `is_uc_benefit_cap_single_claimant_rate`, `is_uc_benefit_cap_exempt`, `is_uc_benefit_cap_exempt_earnings`, `is_uc_benefit_cap_exempt_specified_benefit`, `is_uc_benefit_cap_exempt_qualifying_age`, `uc_benefit_cap_reduction`; `housing_benefit_benefit_cap`, `is_housing_benefit_benefit_cap_single_claimant_rate`, `is_housing_benefit_benefit_cap_exempt`, `is_housing_benefit_benefit_cap_exempt_working_tax_credit`, `is_housing_benefit_benefit_cap_exempt_specified_benefit`, `housing_benefit_benefit_cap_reduction`; `benefit_cap_welfare_benefits`), with the parameter `gov.dwp.housing_benefit.minimum_weekly_amount`.

changelog.d/uc-hb-split-shared-cap-lha-rules.fixed.md

@@ -0,0 +1 @@
+Universal Credit and Housing Benefit each apply their own benefit cap. The UC cap (UC Regs 2013 regs 79-83) treats a member of a couple claiming as a single person (reg 3(3)) as a single claimant, lifts the cap for earnings and the LCWRA and carer elements but not for working tax credit, lifts it on age only where the single claimant or both joint claimants have reached the qualifying age for State Pension Credit (SI 2014/1230 reg 60C), and takes the childcare costs element off the reduction (reg 81). The HB cap (HB Regs 2006 Part 8A) treats that couple as a couple, lifts the cap for working tax credit and the benefits in reg 75F (the partner's included) but not for earnings or UC elements, does not reach pension-age claims (reg 5), and leaves at least 50 pence a week of HB (reg 75D(2)). A family paid both (Housing Benefit for specified or temporary accommodation alongside UC, which the model gives only when both are supplied) is capped once, through UC: UC counts the Housing Benefit as nil (reg 80(2A)) and the HB cap does not apply to a claimant receiving UC (reg 75F(1)(g)). The UC shared accommodation test (`is_lha_shared_accommodation_rate_specified_renter`, UC Sch 4 paras 27-29) applies reg 3(3) whatever legacy benefits the family reports, and armed forces independence payment now excepts a renter under 35 from it (UC reg 2). Armed forces independence payment lifts the UC cap only when a claimant receives it (UC reg 83(1)(c) with reg 2), no longer when a young person does, and lifts the HB cap when the claimant, the partner or a young person they are responsible for receives it (HB reg 75F(1)(ea)). The shared-rules stopgap for reg 3(3) single claims (`stays_on_legacy_benefits` and the two helpers built on it) is gone.

changelog.d/uc-hb-split-shared-cap-lha-rules.removed.md

@@ -0,0 +1 @@
+The shared benefit cap variables `benefit_cap`, `is_benefit_cap_exempt`, `is_benefit_cap_exempt_earnings`, `is_benefit_cap_exempt_health_disability`, `is_benefit_cap_exempt_other` and `is_benefit_cap_single_claimant_rate`, replaced by each scheme's own. `benefit_cap_reduction` remains as the sum of the Universal Credit and Housing Benefit reductions.

docs/book/programs/gov/dwp/housing-benefit.ipynb

@@ -40,11 +40,11 @@
     "\n",
     "The award is computed in four stages:\n",
     "\n",
-    "1. **Eligible rent**: the rent the benunit is liable for (`benunit_rent`). Where the Local Housing Allowance applies (`LHA_eligible`: renting, and no member in social housing), the eligible rent is the maximum rent (LHA), which is the LHA rate or, where the rent is lower, the rent (`LHA_cap`; SI 2006/213 regs [12D(2)(a)](https://www.legislation.gov.uk/uksi/2006/213/regulation/12D) and [13D(5)](https://www.legislation.gov.uk/uksi/2006/213/regulation/13D)).\n",
+    "1. **Eligible rent**: the rent the benunit is liable for (`benunit_rent`). Where the Local Housing Allowance applies (`LHA_eligible`: renting, and no member in social housing), the eligible rent is the maximum rent (LHA), which is the LHA rate for the Housing Benefit category of dwelling (`housing_benefit_LHA_category`: the shared accommodation rate for a young individual with no non-dependant, or a claimant entitled to one bedroom who lacks exclusive use of self-contained accommodation, unless the severe disability premium applies, reg 13D(2)) or, where the rent is lower, the rent (`LHA_cap`; SI 2006/213 regs [12D(2)(a)](https://www.legislation.gov.uk/uksi/2006/213/regulation/12D) and [13D(5)](https://www.legislation.gov.uk/uksi/2006/213/regulation/13D)).\n",
     "2. **Applicable amount** (`housing_benefit_applicable_amount`): a personal allowance derived from the benunit's composition (single, couple, lone parent) and age, plus any disability/carer premiums. This is the \"minimum income\" the household needs before HB tapers begin.\n",
     "3. **Means test** (`housing_benefit_entitlement`): the appropriate maximum Housing Benefit is the eligible rent less `housing_benefit_non_dep_deductions` for any non-dependant adults living in the household ([reg. 70](https://www.legislation.gov.uk/uksi/2006/213/regulation/70)). The published `withdrawal_rate` (currently 0.65) of the benunit's `housing_benefit_applicable_income` in excess of the applicable amount is deducted from that maximum ([SSCBA 1992 s. 130(3)(b)](https://www.legislation.gov.uk/ukpga/1992/4/section/130), [reg. 71](https://www.legislation.gov.uk/uksi/2006/213/regulation/71)). Because the LHA caps the eligible rent, the taper comes off the LHA: a private tenant with rent above the LHA and income above the applicable amount receives the LHA less the taper, not the lower of the LHA and the rent less the taper. The pension-age regulations (SI 2006/214) have the same rules at regs 12D, 13D, 50 and 51, and the Northern Ireland regulations at SR 2006/405 regs 13C, 14D, 68 and 69 and SR 2006/406 regs 13C, 14D, 48 and 49.\n",
     "   If the claimant or partner is on Universal Credit, Income Support, income-based Jobseeker's Allowance or income-related Employment and Support Allowance (`housing_benefit_on_passporting_benefit`), the whole of the family's earnings, other income and capital is disregarded ([SI 2006/213 Sch. 4 para. 12](https://www.legislation.gov.uk/uksi/2006/213/schedule/4/paragraph/12), [Sch. 5 para. 4](https://www.legislation.gov.uk/uksi/2006/213/schedule/5/paragraph/4) and [Sch. 6 para. 5](https://www.legislation.gov.uk/uksi/2006/213/schedule/6/paragraph/5); Northern Ireland: [SR 2006/405 Sch. 5 para. 12](https://www.legislation.gov.uk/nisr/2006/405/schedule/5/paragraph/12), [Sch. 6 para. 4](https://www.legislation.gov.uk/nisr/2006/405/schedule/6/paragraph/4) and [Sch. 7 para. 5](https://www.legislation.gov.uk/nisr/2006/405/schedule/7/paragraph/5)). `housing_benefit_applicable_income` and `housing_benefit_assessable_capital` are then zero, so the award is that maximum. This applies at any age: a mixed-age couple whose younger member is on one of these benefits is assessed under the working-age regulations ([SI 2006/213 reg. 5(1)(b)](https://www.legislation.gov.uk/uksi/2006/213/regulation/5)). Income Support, income-based Jobseeker's Allowance and income-related Employment and Support Allowance count when a positive amount is paid on the claimant's or partner's award (`in_receipt_of_income_support_jsa_ib_or_esa_ir`, which reads `claimant_or_partner_jsa_income` and `claimant_or_partner_esa_income`). Another member's own award, such as a non-dependant's, is payable to them and does not passport the claimant. A person is on Universal Credit on any day they are entitled to it, whether it is in payment or not ([reg. 2(3B)](https://www.legislation.gov.uk/uksi/2006/213/regulation/2)); PolicyEngine reads that as Universal Credit above nil before the benefit cap and deductions (`is_uc_entitled`), for a family that claims it, so the passport adds no circular dependency through the benefit cap. The universal credit limb applies from 28 October 2013 in Great Britain and 8 May 2018 in Northern Ireland (`gov.dwp.housing_benefit.means_test.universal_credit_passport`). It matters only where Housing Benefit is paid alongside Universal Credit, for specified or temporary accommodation, which the eligibility rules above do not yet model.\n",
-    "4. **Benefit cap** (`housing_benefit`): the post-means-test award is finally reduced by `benefit_cap_reduction` if the household's total benefit income exceeds the cap and no cap exemption applies.\n",
+    "4. **Benefit cap** (`housing_benefit`): the post-means-test award is finally reduced by `housing_benefit_benefit_cap_reduction`, the excess of the family's welfare benefits over the Housing Benefit cap (`housing_benefit_benefit_cap`, SI 2006/213 reg 75CA), leaving at least 50 pence a week (reg 75D). The cap does not apply where the claimant or couple is entitled to working tax credit (reg 75E), the claimant or partner receives a benefit listed in reg 75F, or the claim is under the pension-age regulations (reg 5). Universal Credit has its own cap.\n",
     "\n",
     "The take-up gate (`would_claim_housing_benefit`) is applied inside `housing_benefit_pre_benefit_cap`."
    ]

docs/book/usage/scenarios.md

@@ -272,8 +272,8 @@ baseline_sim = Simulation(situation=benefit_cap_family)
 reformed_sim = Simulation(situation=benefit_cap_family, scenario=reindex_benefit_cap)
 
 # Compare the benefit cap levels
-baseline_cap = baseline_sim.calculate("benefit_cap", 2026).mean()
-reformed_cap = reformed_sim.calculate("benefit_cap", 2026).mean()
+baseline_cap = baseline_sim.calculate("uc_benefit_cap", 2026).mean()
+reformed_cap = reformed_sim.calculate("uc_benefit_cap", 2026).mean()
 
 print(
     f"Benefit cap - frozen: £{baseline_cap:.0f}/year, indexed: £{reformed_cap:.0f}/year"

policyengine_uk/parameters/gov/dwp/LHA/shared_accommodation_age_threshold.yaml

@@ -6,7 +6,9 @@ metadata:
   unit: year
   label: Lha shared accommodation age threshold
   reference:
-    - title: The Housing Benefit Regulations 2006 - Schedule 4 - Paragraph 28
+    - title: Universal Credit Regulations 2013 Sch 4 para 28(2)(a)
       href: https://www.legislation.gov.uk/uksi/2013/376/schedule/4/paragraph/28
+    - title: Housing Benefit Regulations 2006 reg 2(1) ("young individual")
+      href: https://www.legislation.gov.uk/uksi/2006/213/regulation/2
     - title: LHA shared accommodation rate guidance
-      href: https://www.gov.uk/government/publications/local-housing-allowance-rates-applicable-from-april-2013
+      href: https://www.gov.uk/government/publications/local-housing-allowance-rates-applicable-from-april-2013

policyengine_uk/parameters/gov/dwp/LHA/shared_accommodation_exception_benefits.yaml

@@ -1,12 +1,15 @@
-description: Disability benefits whose recipients under 35 are excepted from the shared accommodation rate.
+description: Disability benefits whose recipients under 35 are excepted from the Universal Credit shared accommodation rate.
 values:
   2013-04-29:
     - attendance_allowance
     - dla_sc_middle_plus
     - pip_dl
+    - armed_forces_independence_payment
 metadata:
   unit: list
-  label: shared accommodation rate disability exceptions
+  label: Universal Credit shared accommodation rate disability exceptions
   reference:
     - title: Universal Credit Regulations 2013 Sch 4 para 29(5)
       href: https://www.legislation.gov.uk/uksi/2013/376/schedule/4/paragraph/29
+    - title: Universal Credit Regulations 2013 reg 2 ("attendance allowance" includes armed forces independence payment)
+      href: https://www.legislation.gov.uk/uksi/2013/376/regulation/2

policyengine_uk/parameters/gov/dwp/housing_benefit/minimum_weekly_amount.yaml

@@ -0,0 +1,12 @@
+description: Housing Benefit is not payable where the weekly amount would be less than this; where the benefit cap would reduce Housing Benefit below it, the reduction leaves this amount.
+values:
+  2006-03-06: 0.5
+metadata:
+  unit: currency-GBP
+  period: week
+  label: Housing Benefit minimum weekly amount
+  reference:
+    - title: Housing Benefit Regulations 2006 reg. 75 (minimum housing benefit)
+      href: https://www.legislation.gov.uk/uksi/2006/213/regulation/75
+    - title: Housing Benefit Regulations 2006 reg. 75D(2) (reduction of housing benefit)
+      href: https://www.legislation.gov.uk/uksi/2006/213/regulation/75D

policyengine_uk/programs.yaml

@@ -318,9 +318,10 @@ programs:
     agency: DWP
     status: complete
     coverage: UK
-    variable: benefit_cap
+    variable: benefit_cap_reduction
     parameter_prefix: gov.dwp
     verified_start_year: 2022
+    notes: Universal Credit (uc_benefit_cap) and Housing Benefit (housing_benefit_benefit_cap) each apply their own cap; benefit_cap_reduction is the sum of their reductions
 
   - id: tax_credits
     name: Tax credits

policyengine_uk/tests/policy/baseline/finance/benefit/family/LHA_claimant_composition.yaml

@@ -1,7 +1,11 @@
-# UC Regulations 2013, Schedule 4 paragraphs 9 and 27-28:
+# UC Regulations 2013, Schedule 4 paragraphs 9 and 27-29 (LHA_category):
 # https://www.legislation.gov.uk/uksi/2013/376/schedule/4/paragraph/28
+# HB Regulations 2006 reg 13D(2)(a)(i) and reg 2(1) "young individual"
+# (housing_benefit_LHA_category):
+# https://www.legislation.gov.uk/uksi/2006/213/regulation/13D
 # The existing bedroom calculation is unchanged: B = 1 bedroom, C = 2;
 # A is the shared accommodation rate, overriding the bedroom calculation.
+# Where the schemes agree, each case asserts both categories.
 - name: Single 17-year-old renter is not their own dependent child
   period: 2025
   input:
@@ -13,6 +17,7 @@
     is_lha_shared_accommodation_rate_specified_renter: true
     # Single; 17 < 35; no dependant or non-dependant: A (previously B).
     LHA_category: A
+    housing_benefit_LHA_category: A
 
 - name: Single 30-year-old renter remains subject to the shared rate
   period: 2025
@@ -23,6 +28,7 @@
     is_lha_shared_accommodation_rate_specified_renter: true
     # Single; 30 < 35; no other occupants: A.
     LHA_category: A
+    housing_benefit_LHA_category: A
 
 - name: Single renter immediately below the shared rate age threshold
   period: 2025
@@ -32,6 +38,7 @@
     is_lha_shared_accommodation_rate_specified_renter: true
     # 34 < 35: A.
     LHA_category: A
+    housing_benefit_LHA_category: A
 
 - name: Single renter at the shared rate age threshold
   period: 2025
@@ -41,6 +48,7 @@
     is_lha_shared_accommodation_rate_specified_renter: false
     # 35 is not below 35; 1 bedroom: B.
     LHA_category: B
+    housing_benefit_LHA_category: B
 
 - name: A 17-year-old apprentice in the renter's benefit unit is a non-dependant
   period: 2025
@@ -65,6 +73,9 @@
     is_lha_shared_accommodation_rate_specified_renter: false
     # No UC QYP, but a non-dependant blocks A. Existing bedroom formula = 1: B.
     LHA_category: B
+    # HB reg 13D(3)(a)-(b): a bedroom for the renter and one for the
+    # 17-year-old, who is not a child (reg 2(1): under 16): 2 bedrooms, C.
+    housing_benefit_LHA_category: C
 
 - name: Lone parent with an 18-year-old qualifying young person
   period: 2025
@@ -89,8 +100,11 @@
     is_lha_shared_accommodation_rate_specified_renter: false
     # Responsibility for a UC QYP blocks A. Existing bedroom formula = 1: B.
     LHA_category: B
+    # HB reg 13D(3)(a)-(b): a bedroom for the renter and one for the
+    # 18-year-old, who is not a child (reg 2(1): under 16): 2 bedrooms, C.
+    housing_benefit_LHA_category: C
 
-- name: Renter aged 30 whose partner is 17 claims as a single person and is a specified renter
+- name: Renter aged 30 whose partner is 17 claims UC as a single person and is a specified renter; for HB they are a couple
   period: 2025
   input:
     people:
@@ -118,6 +132,11 @@
     uc_member_of_couple_claims_as_single_person: true
     is_lha_shared_accommodation_rate_specified_renter: true
     LHA_category: A
+    # HB has no single claim by a member of a couple: a claimant with a
+    # partner is not a "single claimant", so not a young individual (HB reg
+    # 2(1)); the couple's one bedroom (reg 13D(3)(a)) gives B.
+    is_housing_benefit_young_individual: false
+    housing_benefit_LHA_category: B
 
 - name: Couple aged 30 and 17 where the partner is within reg. 8 is not a specified renter
   period: 2025
@@ -143,6 +162,7 @@
     is_lha_shared_accommodation_rate_specified_renter: false
     # Joint renters have one bedroom (Sch 4 para 10(1)(a)): B.
     LHA_category: B
+    housing_benefit_LHA_category: B
 
 - name: A 17-year-old in another family is a non-dependant of the household head only
   period: 2025
@@ -246,6 +266,7 @@
     # Single, 30 < 35, nobody else in this household: A.
     # Other renter 40 >= 35; 1 bedroom: B.
     LHA_category: [A, B]
+    housing_benefit_LHA_category: [A, B]
 
 - name: Actual shared accommodation gives the shared rate for Housing Benefit only
   period: 2025
@@ -271,6 +292,7 @@
   output:
     is_lha_shared_accommodation_rate_specified_renter: false
     LHA_category: B
+    housing_benefit_LHA_category: B
 
 - name: A disabled 16-year-old renter is excepted from the shared accommodation rate
   # UC Sch 4 para 29(5)(a): the DLA care component at the middle or highest
@@ -282,6 +304,7 @@
   output:
     is_lha_shared_accommodation_rate_specified_renter: false
     LHA_category: B
+    housing_benefit_LHA_category: B
 
 - name: A 16-year-old renter without a disability benefit gets the shared rate
   period: 2025
@@ -290,6 +313,7 @@
   output:
     is_lha_shared_accommodation_rate_specified_renter: true
     LHA_category: A
+    housing_benefit_LHA_category: A
 
 - name: A renter under 35 on attendance allowance is excepted from the shared rate
   period: 2025
@@ -299,3 +323,4 @@
   output:
     is_lha_shared_accommodation_rate_specified_renter: false
     LHA_category: B
+    housing_benefit_LHA_category: B

policyengine_uk/tests/policy/baseline/finance/benefit/family/housing_benefit/housing_benefit.yaml

@@ -3,7 +3,7 @@
   absolute_error_margin: 100
   input:
     housing_benefit_pre_benefit_cap: 1_000
-    benefit_cap_reduction: 400
+    housing_benefit_benefit_cap_reduction: 400
     would_claim_housing_benefit: true
   output:
     housing_benefit: 600
@@ -13,7 +13,7 @@
   absolute_error_margin: 100
   input:
     housing_benefit_pre_benefit_cap: 1_000
-    benefit_cap_reduction: 3_000
+    housing_benefit_benefit_cap_reduction: 3_000
     would_claim_housing_benefit: true
   output:
     housing_benefit: 0