Apply the benefit cap to mixed-age couples on Universal Credit, and keep them off pensioner Council Tax Reduction

[MaxGhenis]

Summary

Two rules treated a mixed-age couple on Universal Credit as pensioners. A mixed-age couple is one member over State Pension age and one under it. The law treats such a couple as working-age for both rules.

1. Benefit cap. is_benefit_cap_exempt_other exempted any benefit unit with a member over State Pension age. The UC cap turns on earnings and benefit receipt, not age, so a mixed-age couple's UC award is capped like any other.
   • is_benefit_cap_exempt_earnings and is_benefit_cap_exempt_health_disability compute the same has_pensioner but never return it. That dead code is Fix benefit cap exemption defects (#1818) #1820's to remove.
2. Council Tax Reduction. council_tax_reduction_household_has_pensioner ignored UC. In England a mixed-age couple on UC went to the national pensioner scheme; the law puts it in the council's working-age scheme.

Law (legislation.gov.uk CLML, read 2026-09-30)

UC cap.

• UC Regs 2013 reg 79(1): "Unless regulation 82 or 83 applies, the benefit cap applies where the welfare benefits to which a single person or couple is entitled during the reference period exceed the relevant amount".
• Reg 82 has two exceptions: earnings at 16 hours a week at the NLW ("the couple's combined earned income" for a couple), and the 9-month grace period.
• Reg 83(1)(a)-(k) are benefit-receipt and award-element exceptions (LCWRA or the ESA support component, IIDB, AA, PADP, war pension, AFCS, DLA, Scottish adult DLA, PIP, CDP, ADP, carer's allowance, carer support payment, the carer element, guardian's allowance).
• No version of regs 78-83 from 2013 on, and nothing in WRA 2012 s.96, turns on age.
• The one age-based exception is SI 2014/1230 reg 60C (from 8.6.2024; NI: SR 2016/226 reg 61C): "Where a qualifying claim is made by a single claimant who has, or joint claimants both of whom have, reached the qualifying age for state pension credit, regulation 79 … is not to apply". It covers tax credit migrants over that age (reg 60A) and never a mixed-age couple.
• UC Regs reg 3(2)(a) lets a mixed-age couple claim jointly: "one member does not meet the basic condition in section 4(1)(b) (under the qualifying age for state pension credit) if the other member does meet that condition".
• GOV.UK: "If you're part of a couple and one of you is under State Pension age, the cap may apply." NI UC Regs 2016 regs 79, 82 and 83 have the same structure.

HB cap.

• HB Regs 2006 Part 8A caps HB under those regulations only.
• Reg 5 applies them to someone over the qualifying age "if he, or if he has a partner, his partner, is a person on universal credit, on income support, on an income-based jobseeker's allowance or on an income-related employment and support allowance". Otherwise reg 5(3) takes anyone whose partner has reached that age out of them.
• HB (SPC) Regs 2006 reg 5(2) is the mirror image. Those regulations have no benefit cap. NI HB Regs 2006 reg 5 has the same words.

CTR "pensioner".

• England. SI 2012/2885 reg 3(1)(a): a pensioner "(i) has attained the qualifying age for state pension credit; and (ii) he is not and, if he has a partner, his partner is not— (aa) a person on income support, on an income-based jobseeker's allowance or on an income-related employment and support allowance; or (bb) a person with an award of universal credit".
  • The UC limb is in the 2013 text.
  • Reg 3(2) disregards a UC award held once both members have reached the qualifying age, or under UC (TP) Regs reg 60A.
• Wales. WSI 2013/3029 reg 3 has the same words (from 28.11.2013). Reg 3(2) adds the same disregard for 2026-27 onward.
• Scotland.
  • Pension-age regulations: SSI 2012/319 reg 12(2) excludes anyone on UC, IS, income-based JSA or income-related ESA. The UC words were inserted from 25.11.2013 by SSI 2013/287 reg 15.
  • Working-age regulations: SSI 2012/303 reg 12(1)(b) (UC from 25.11.2013), and from 1 April 2022 SSI 2021/249 reg 3(1)(b), apply to such a person.

Change

• New housing_benefit_pension_age_regulations_apply (BenUnit), for HB Regs 2006 reg 5 and HB (SPC) Regs 2006 reg 5. It holds when all of these hold:

  • a claimant or partner (is_uc_claimant) is over State Pension age;
  • the family has no UC award with a working-age claimant or partner;
  • there is no IS, income-based JSA or income-related ESA.

• is_benefit_cap_exempt_other exempts on that variable in place of "any member over State Pension age". It keeps the AFCS and contributory-ESA terms and drops the dead code. So:

  • a mixed-age couple's UC is capped, unless an earnings, health or disability exception applies;
  • pension-age HB stays uncapped.

  The reduction comes off UC and HB alike, and the model never pays one family both, so one flag serves both caps.

• New council_tax_reduction_pensioner (BenUnit) applies reg 3(1)(a): a claimant or partner over State Pension age, no IS, income-based JSA or income-related ESA, and no UC award with a working-age claimant or partner.

• council_tax_reduction_household_has_pensioner is now the claimant benefit unit's council_tax_reduction_pensioner. It feeds council_tax_reduction_scheme_supported, the English pensioner scheme, and the five simulated local working-age schemes and their non-dependant deductions.

• Which UC award counts.

  • The award is read before the cap (is_uc_entitled, UC before the cap > 0, which also needs would_claim_uc). Reg 81 reduces an award rather than removing it, and HB Regs reg 2(3B) counts a person as "on universal credit" whether or not it is in payment.
  • The award counts only when a claimant or partner is under State Pension age. is_uc_eligible counts any working-age adult, so the model pays UC to a pensioner whose only younger adult is a qualifying young person. Without this guard, that family would have been newly capped and moved off pensioner CTR; the law gives it no UC at all. is_uc_claimant recognises the young person as a dependant only when is_parent is set, as the FRS datasets do; a YAML case pins the result without it.
  • The same guard gives the legal outcome for all-pensioner claims under reg 60A/60C (cap disapplied) and England's reg 3(2)(b) (award disregarded). Replace generic child and adult flags with each programme's legal definitions #1896 changes is_uc_eligible itself to need an is_uc_claimant member under State Pension age.

• As elsewhere in the model, is_SP_age stands in for the qualifying age for State Pension Credit; Use the State Pension Credit qualifying age, and start-of-year status for Class 4 NI #1907 swaps that in.

What changes where

• England. Mixed-age couples on UC now take the council's working-age scheme:
  • the five simulated councils (Newham, Merton, Kingston, Westminster, Oxford) use their scheme, including its non-dependant deductions;
  • elsewhere the model keeps reported CTR, as for every other working-age household. So a household calculation that supplies no reported CTR now shows £0 where main simulated a pensioner award.
• Wales and Scotland. The model's formula for each is national and does not route on pensioner status; its only age split is the pension-age personal allowance in council_tax_reduction_applicable_amount. This PR leaves that file alone. The two nations' working-age rules for UC applicants differ, and the model implements neither:

  • Wales (WSI 2013/3029 Sch 6 paras 3 and 9): applicable amount = UC maximum amount × 12/52; income = UC-assessed income plus the UC award.

  • Scotland (SSI 2021/249 reg 35 and Sch 1): the ordinary working-age allowances (couple £150.15), with income counting retirement pension income and only the child and childcare elements of UC (reg 57(1)(a), (p) and (2)(d)). The model counts the whole UC award as income.

  • A review script tested keeping the pension-age amount against switching to the model's legacy working-age amount, compared with a hand computation of each nation's UC-applicant rules. The grid: couples aged 70 and 58, 0-2 children, rent 0 or £7,800, State Pension £0-12,000, earnings £0-24,000.

    Run	On-UC cells	Keep closer / switch closer / tie	Mean abs. error, keep vs switch
    Wales	112	40 / 13 / 59	£464 vs £718
    Scotland	112	40 / 13 / 59	£531 vs £778
    Wales, State Pension in UC (as Count State Pension as Universal Credit unearned income #1943)	89	41 / 24 / 24	£399 vs £670
    Scotland, State Pension in UC	89	48 / 17 / 24	£532 vs £903

    So this PR keeps it. The PE-UK CTR shortfall work, a separate session, is building both UC-applicant routes keyed on council_tax_reduction_pensioner.

  • Welsh and Scottish CTR still moves through Universal Credit. It counts UC as income, so where the newly applied cap lowers a mixed-age couple's UC, their CTR rises. Invariant P5 pins this, as does a Cardiff YAML case: UC 19,020 after a 10,980 reduction, CTR 1,582.84; main pays UC 30,000 and CTR 0. Both CTR figures come from the model's pension-age formula; the Welsh UC-applicant route (Sch 6 paras 3 and 9) would give this family the full reduction.

Household results (2026, main 44240bd → this branch)

Real model runs; the cases are in ~/reviews/uk-mixed-age-uc-cap-ctr-2026-09-30/cases.py. The benefit cap and UC columns are real outputs on main's UC, which leaves State Pension out of unearned income until #1943.

Case	Cap exempt	Cap reduction	UC	CTR	Net income
Couple 70 + 50, 3 children, London private rent £30,000, State Pension £9,000	yes → no	0 → 11,091.36	33,146.16 → 22,054.80	0 → 0	43,434.31 → 32,342.96
Same, younger partner earns £12,000	yes → yes (now through the reg 82 earnings exception)	0	29,364.36	0	unchanged
Working-age couple 45 + 40, same family	no	11,091.36	22,054.80	0	unchanged
Couple 70 + 50, Maidstone, rent £8,000, reported CTR £700	yes → no	0 (under the cap)	16,003.64	986.11 → 700.00 (reported)	24,009.71 → 23,723.60
Same in Newham	yes → no	0	16,003.64	986.11 → 1,400.00 (Newham scheme)	24,009.71 → 24,423.60
Same in Cardiff / Glasgow	yes → no	0	16,003.64	986.11, unchanged	unchanged
Couple 70 + 50, not claiming UC, reported HB	yes	0	0	unchanged	unchanged
Couple 72 + 68	yes	0	0	unchanged	unchanged

Enhanced FRS impact (real runs)

Both code versions ran on enhanced_frs_2024_25.h5, a read-only copy of uk-weight-8566-2026-09-29/data, sha256 e433e532…. Scripts are impact/dataset_impact.py and impact/compare.py; the branch run is at 48a11ed, the code this PR ships.

	2025	2026	2029
Mixed-age benefit units / of which UC-entitled	1,276k / 35.3k	1,281k / 35.4k	1,296k / 35.8k
Benefit units losing the cap's age exemption	7.8k (26 records)	7.9k (26)	7.3k (25)
… of which now above the cap	0	0	0
UC, HB, benefit cap reduction totals	unchanged	unchanged	unchanged
Households no longer CTR pensioners (England / Scotland / Wales / NI)	36.0k (28.4 / 3.0 / 2.9 / 1.8)	36.2k (28.5 / 3.0 / 2.9 / 1.8)	36.6k (28.8 / 3.0 / 2.9 / 1.8)
CTR, England (16 records change)	+£2.11m	+£2.11m	+£1.19m
CTR gainers / losers (households)	3.6k (+£4.6m) / 3.2k (−£2.5m)	3.6k (+£4.6m) / 3.3k (−£2.5m)	3.7k (+£4.7m) / 3.3k (−£3.5m)
CTR, Scotland, Wales	unchanged	unchanged	unchanged
Household net income	+£2.4m	+£2.1m	+£1.1m
Poverty (BHC, AHC, children, pensioners)	unchanged	unchanged	unchanged

• Cap. In 2026 all 26 records that lose the exemption are couples with two UC claimant/partner members, one over State Pension age. None is above the cap in this dataset (£22,020 for a couple outside London, £25,323 in London), so no UC or HB moves. That is a property of this dataset, not of the rule: the household table and the Cardiff YAML case show capped mixed-age couples.
• CTR. The English movement is 16 records whose reported CTR, now used for the working-age scheme, differs from the simulated pensioner award.
• NI. Northern Ireland has no CTR (the NI rows only move the flag). Its benefit cap is mitigated for families with children by welfare supplementary payments until 31 March 2028 (SR 2025/60), which the model does not have; that is a separate follow-up.

Coordination with open PRs

• Date the mixed-age couple Pension Credit exclusion and model the SI 2019/37 saving #1940 (mixed-age couples' Pension Credit route): composes.
  • I merged both locally: all 29 YAML cases from both PRs pass, as do both property suites and test_housing_benefit_pension_age_properties.py.
  • A couple with the SI 2019/37 saving is on Pension Credit with no UC, so it is cap-exempt and a CTR pensioner. For the 75 + 60 case: Pension Credit £9,889, HB £6,240, CTR £1,500. Without the saving the couple is on UC and capped.
• Count State Pension as Universal Credit unearned income #1943 (State Pension in UC income): once both merge, its case "Mixed-age couple renting from the council, State Pension reduces UC pound for pound" must expect the working-age (reported) CTR, not £1,500. Whichever lands second updates it (comment on Count State Pension as Universal Credit unearned income #1943).
• Use the State Pension Credit qualifying age, and start-of-year status for Class 4 NI #1907 (SPC qualifying age): after both merge, the qualifying-age switch belongs in the two new variables, and Use the State Pension Credit qualifying age, and start-of-year status for Class 4 NI #1907's "not modelled" comment goes (comment on Use the State Pension Credit qualifying age, and start-of-year status for Class 4 NI #1907).
• Fix benefit cap exemption defects (#1818) #1820 (cap exemption defects) and Use the State Pension Credit qualifying age, and start-of-year status for Class 4 NI #1907 both edit is_benefit_cap_exempt_other.py, and Use the State Pension Credit qualifying age, and start-of-year status for Class 4 NI #1907 also edits council_tax_reduction_household_has_pensioner.py; keep this PR's formulas.
• Give Scotland and Wales working-age council tax reduction their own rules (UC routes, passport, child amounts) #1966 (Scotland/Wales working-age CTR) carries a copy of council_tax_reduction_pensioner.py and routes on it; whichever lands second drops its copy.
• Fix benefit cap exemption defects (#1818) #1820's new "already exempt through the state pension age exception" comment no longer holds for mixed-age UC couples (comment on Fix benefit cap exemption defects (#1818) #1820).
• council_tax_reduction_applicable_amount.py (edited by Replace generic child and adult flags with each programme's legal definitions #1896, Use the State Pension Credit qualifying age, and start-of-year status for Class 4 NI #1907 and Split pension-age Housing Benefit allowances by when State Pension age was attained #1913) is not touched.

Invariants (stated and tested)

policyengine_uk/tests/test_benefit_cap_and_ctr_pension_age_properties.py is a Hypothesis test, derandomized, 15 examples of 10-30 families.

• Families drawn: single and couple pension-age, mixed-age, single and couple working-age, and a pensioner with an 18-year-old qualifying young person. The draw is weighted towards mixed-age and qualifying-young-person families, with UC claimed two times in three, across England (two simulated councils, two not), Wales and Scotland.
• One run: 268 families. Of these, 40 are pension-age families on UC, 41 are qualifying-young-person families with a UC award, 18 have UC changed (6 in Wales or Scotland) and 30 have CTR changed.

Invariants:

• P1. Both new variables hold exactly when a claimant or partner is over State Pension age and the family is on neither UC (with a working-age claimant) nor a legacy income-related benefit.
• P2. Every such UC award without a non-age exception has a finite cap.
• P3. Differential against the formulas before this change, kept verbatim in the test as a reform. Families with no pension-age claimant, or one on neither UC nor a legacy benefit, get an identical cap, UC, HB, CTR and household net income. That includes pensioners with a qualifying young person.
• P4. The change only removes exemptions: exempt now ⇒ exempt before; the cap never rises; UC and HB never rise; CTR pensioner now ⇒ before.
• P5. Welsh and Scottish CTR changes only through UC: it is unchanged where UC is unchanged, and never lower where the cap has lowered UC.
• P6. Metamorphic: holding a couple's UC award and child benefit fixed, making one member over State Pension age never changes its exemption or reduction.

Mutation check (scratch worktree, both test layers):

Mutation	Property tests	YAML (of 17, before the 18th case)
Drop the working-age-claimant guard	invariants test fails	2 fail
Restore the any-member cap exemption	invariants and P6 tests fail	4 fail
CTR ignores UC	invariants test fails	5 fail
HB test ignores legacy benefits	invariants test fails	1 fails

Log: out/mutations.log.

Review

• Four adversarial reviewers checked the law (UC cap; CTR in all three nations), the code, and completeness. That produced the qualifying-young-person guard, the P5 restatement, the Scottish law correction and the reg 60C citation.
• An independent Opus review of efd9dd7 found no logic, law or cycle defect. Every household-table number and YAML expectation reproduced, and mutations were caught. It asked for wording changes only: the is_parent qualification, the grid figures, the Cardiff comment, row 2 of the household table, and reg 83(1)(fa). d420697 makes them. A confirmation pass approved them (no formula logic changed; the ASTs match apart from documentation), and a later commit fixes two comment nits it raised.

Tests

• policyengine_uk/tests/policy/baseline/gov/dwp/benefit_cap/benefit_cap_pension_age.yaml (8 cases). UC and HB before the cap are inputs, so rate changes elsewhere cannot break these.
  • Mixed-age couple on UC, capped (reduction £7,677); the same couple excepted by reg 82 earnings.
  • Mixed-age HB couple with no working-age benefit, uncapped; with income-based JSA in 2025-26, capped (reg 5(1)(b)).
  • Pensioner couple.
  • Pensioner with a qualifying young person on UC: uncapped with is_parent, capped without it.
  • Working-age control.
• policyengine_uk/tests/policy/baseline/gov/local_authorities/council_tax_reduction/council_tax_reduction_pensioner.yaml (10 cases).
  • England: UC; no UC; income-based JSA; pensioner couple; pensioner with a qualifying young person.
  • Newham, with amounts: 900.91 on the working-age UC route, where the pensioner scheme would pay 2,000. A Newham household with a working son: non-dependant deduction 392.08, CTR 508.83.
  • Wales and Scotland flags, and the Cardiff cap-through-UC case.
• Full suites on the branch before the review fixes: policyengine-core test policyengine_uk/tests/policy 1,300 passed; pytest policyengine_uk/tests -m "not microsimulation" --ignore=policyengine_uk/tests/policy 322 passed, 15 skipped. CI covers the final head.

Follow-ups (filed as separate tasks)

• The capped-benefit list misses maternity allowance and the widow's benefits. The ESA exemptions are not limited to the support component; war pension and guardian's allowance exceptions are missing.
• The 2024-25 Winter Fuel Payment test omits UC and tax credits of at least £26.
• The HB regime should switch on housing_benefit_pension_age_regulations_apply, together with the HB Sch 5 para 4 / Sch 6 para 5 passport.
• CTR is paid twice when two benefit units tie for the oldest member.
• NI benefit cap welfare supplementary payments.
• Not filed: if a family ever had both UC and HB, the model would cap HB and count it in the UC total, contrary to HB reg 75F(1)(g) and UC reg 80(2A). The model never pays both, so this is unreachable today.

axiom: TheAxiomFoundation/rulespec-uk#389 queued. rulespec-uk takes these as inputs: the cap exemption (uc_pilot_exempt_from_benefit_cap), the HB age switch (hb_pilot_any_member_pension_age) and CTR person_is_pensioner. UC Regs regs 79/83, HB Regs reg 5 and the four CTR "pensioner" provisions need a corpus ingest first.

🤖 Generated with Claude Code

[vahid-ahmadi]

Reviewed: approve with nits, once the pending Test job passes.

The law is right. UC Regs regs 79–83 have no age exception; reg 80A sets only the cap amounts, and SI 2014/1230 reg 60C covers only claims where everyone is over the qualifying age. SI 2012/2885 reg 3, WSI 2013/3029 reg 3 and SSI 2021/249 reg 3 all make a mixed-age couple on UC working-age for CTR.

1. Should fix: this PR and Date the mixed-age couple Pension Credit exclusion and model the SI 2019/37 saving #1940 treat an 18 or 19 year old dependant differently. Take a pensioner aged 70 with an 18-year-old in education and no is_parent. Date the mixed-age couple Pension Credit exclusion and model the SI 2019/37 saving #1940's is_mixed_age_couple leaves the young person out through is_child_or_qualifying_young_person_for_pension_credit. Here is_uc_claimant counts them as a working-age claimant, so the family is capped and loses pensioner CTR (the YAML pins this). Dataset runs agree because the FRS sets is_parent; calculator and API runs don't. Fix: use Date the mixed-age couple Pension Credit exclusion and model the SI 2019/37 saving #1940's claimant-and-partner set, or Replace generic child and adult flags with each programme's legal definitions #1896's is_claimant_or_partner, at housing_benefit_pension_age_regulations_apply.py:36 and council_tax_reduction_pensioner.py:29.
2. Nit: housing_benefit_pension_age_regulations_apply.py:54 repeats council_tax_reduction_relevant_income_based_benefit; reuse that variable.
3. Nit: in England outside the five simulated councils, calculator users with a mixed-age couple on UC now see CTR of £0, because reported CTR is used and they enter none. Worth a line in the changelog.
4. Nit: in the body, England's reg 3 UC limb was substituted from 13 January 2014 by SI 2013/3181; it wasn't in the 2013 text.

Verified: I read UC Regs regs 79, 82 and 83, TP reg 60C, HB Regs 2006 reg 5 and Part 8A (75A, 75C, 75E), SI 2012/2885 reg 3, and SSI 2021/249 reg 3, including para (3) on mixed-age couples on PC. The YAML passes (18/18) and the property suite passes (2/2). Lint and smoke checks pass; Test was still pending.

[MaxGhenis]

Composition note: #2015 (stacked on #2009 → #2006) adds council_tax_reduction_pensioner (BenUnit) with the same name, entity and meaning as this PR, but only the age test, and deletes council_tax_reduction_household_has_pensioner. Every CTR scheme now reads the per-family flag: national, the four _legacy councils, Oxford and council_tax_reduction_scheme_supported. Whichever lands second: keep this PR's formula for council_tax_reduction_pensioner.py (add/add), delete council_tax_reduction_household_has_pensioner.py (modify/delete), and change any remaining benunit.household("council_tax_reduction_household_has_pensioner", period) to benunit("council_tax_reduction_pensioner", period).