Guidance

Chapter 8: Payment model and outcomes

Updated 25 February 2022

Applies to Scotland

This is Job Entry: Targeted Support (JETS) in Scotland provider guidance.

Background

8.01 There are two elements to the JETS in Scotland Payment Model:

• The Delivery Fee; and
• The Outcome Payment (Payment by Results)

The Delivery Fee

8.02 The Delivery Fee will be an amount payable by DWP to you (without you needing to claim) on a monthly basis (in arrears, date to be agreed) in respect of each month of service delivery (up to 18 months).

8.03 Where the Delivery fee is due, it will be paid for the period between the Call-Off Service Start Date up to a maximum of 18 months. The Delivery Fee will be calculated as 85% of the Estimated Possible Total Contract Value (EPTCV), as estimated by DWP in its absolute discretion.

8.04 Delivery Fee payments will be apportioned by DWP at its absolute discretion as follows:

• months 1-3 equates in total to 25% of the Delivery Fee
• months 4-12 equates in total to 52.50% of the Delivery Fee
• months 13-18 equate in total to 22.50% of the Delivery Fee

Please note: calculation of amounts will be made as part of the bids and financial evaluation.

8.05 DWP may defer Delivery Fee payments if formal performance improvement action is taken as a result of failing to meet service standards. Further information can be found in JETS in Scotland Provider Guidance Chapter 11 Performance Management, MI Requirements, Compliance and Assurance.

The Outcome Payments

8.06 There is only one Outcome Payment per Participant for either employed or self-employed work which meets the job outcome definition. There is no price differentiation for outcomes between those Participants who gain employment or self-employment.

8.07 An Outcome cannot be a mix of self-employment and paid employment.

8.08 The funding available for Outcome Payments equates to 15% of Total Contract Value (TCV).

Employed Outcome Payments

8.09 Earnings data will be provided to DWP by His Majesty’s Revenue and Customs (HMRC). You will not be required to make a claim for employed outcomes (with the exception of Special Customer Records (SCR) – further details can be found on Page 12 and 13 within this guidance).

8.10 Participants moving into employed work will be identified by DWP solely using HMRC (PAYE) online data submitted each time an employee is paid by an employer, on or before their pay date. DWP already use this information to pay Universal Credit (UC) and to validate outcomes. You will be paid based on the outcomes observed in this data. No separate evidence will be accepted.

8.11 DWP will monitor Participant earnings via HMRC (PAYE) online data from the first ‘payment date’ for the qualifying period of 238 calendar days from (and including) the Start Date. We will continue to look for earnings received within the 299 calendar days (which includes a late notification period).

8.12 The HMRC PAYE information will feed into our Provider Referral and Payment (PRaP) system and will automatically pay for employment outcomes. Please note, to ensure system effectiveness, DWP may undertake tests as necessary of the automated payment system to confirm it is delivering the requirements. Should underpayments or overpayments be identified through these checks, remedial action may be undertaken where appropriate.

8.13 DWP will share the following information with you, relating to the validation of earning based outcomes:

• when a Participant’s earnings are first declared to HMRC, following a confirmed start on provision; and
• when the earnings threshold is reached

8.14 The Jobcentre Work Coach will determine if a Participant is in any form of employment or has a job offer, prior to the referral and will not make the referral if it is identified the Participant is in any form of employment at that point in time.

8.15 Prior to starting the Participant on the programme, you must ensure the Participant is not in any form of employment or has received a job offer. If this is the case, you must enter either Did Not Attend (DNA) or Did Not Start (DNS) on Provider Referral and Payment System (PRaP) and return the Participant to Jobcentre Plus. Please refer to Chapter 3 of this JETS in Scotland Guidance for the exact action to take.

8.16 Any earnings from furloughed employment (for employment which started whilst on provision) will count towards outcomes as participants are in contracted employment. Participants furloughed will still be in contracted employment and will receive income whilst on the Coronavirus Job Retention Scheme via their employer. These earnings will count towards RTE/RTI (Real Time Earnings/Real Time Information) job outcome performance.

Employed Outcome definition

8.17 An Employed Outcome Payment will be triggered when a Participant on JETS in Scotland commences employment in the 182-day period from the Participant’s Start Date on JETS in Scotland and when Cumulative Earnings in RTE reach the £1,000 Earnings Threshold.

8.18 For automated Employed Outcomes Payment, any Outcome(s) must be achieved within 238 days from the Participant’s Start Date to be eligible.

8.19 You must inform DWP if you become aware of outcome payments triggered from non-qualifying earnings. An outcome payment may be triggered through non-qualifying earnings contributing to automatic employed outcomes being generated and payment may need recovering or performance may need adjusting through end of provision reconciliation. The non- qualifying earnings that can trigger payments are:

• Tax refunds
• payments in lieu of notice
• holiday pay
• payments made as a part of being Armed Forces Reservists
• other retainer payments; and
• payments that are not related to qualifying employment generated whilst on JETS in Scotland

8.20 You must notify DWP PRaP team of any of these payments using the Non-JETS in Scotland Earnings Notification Form (Non-JETS.S EENF) and send to the Department’s PRaP Operational Support Team Central Inbox: [email protected]

8.21 The Non-JETS in Scotland Earnings Notification Form (Non-JETS.S EENF) can be found in Annex E on Jaggaer.

8.22 For information on actions to undertake with the Participant in this circumstance, please see Chapter 3 ‘Referrals, Initial Participant Engagement and Starts on Programme’, ‘Awareness of an ineligible payment’.

Self Employed Outcome Payments

8.23 The data supplied by HMRC does not contain earnings from self-employment. Therefore, self-employed outcomes will be based on duration and evidence of trading during the period of self-employment, as set out below. You will track and claim self-employed outcomes yourself and submit the resultant claims through PRaP. You will retain evidence to support your claims and provide this to DWP on request – see Chapter 9 – Validation. There is no cap on the proportion of self-employed outcomes you can claim.

8.24 If a participant is in receipt of the ‘Self-Employment Income Support Scheme’ grant which they received to enable them to continue the self-employment that the Participant started whilst on provision, the duration may count as evidence towards the self-employed outcome, provided the participant is unable to trade (temporarily due to coronavirus) or trading for a minimum of one day a week and all other Self-employed job outcome criteria are met.

8.25 You will be responsible for claiming self-employed outcomes correctly and within a maximum of 299 calendar days, when achieved, from the Participant’s start date.

Self- Employment Outcome Definition

8.26 For self-employed Participants, your entitlement to claim a Self-Employed Outcome will be triggered when a Participant achieves and you can robustly evidence a cumulative period of not less than 56 days’/8 weeks’ self-employment. i.e. self-employment lasting for 8 weeks, achieved within 238 days from the Participant’s Start Date.

8.27 To obtain a Self-Employed Outcome payment (for outcomes achieved in the 238-day qualifying period from the start date), you must submit a claim for a Self-Employed Outcome through PRaP within the 299-day period from the Participant’s Start Date and within 90 days of the date when the conditions for that outcome have been met. This date is confirmed in the Date 2 box of your PRaP claim.

8.28 If 90 days has been exceeded between Date 2 and the date the claim has been submitted, the claim will automatically go on hold, manual checks will be undertaken by DWP and the claim may be classified as a Fail if the conditions for claiming have not been met.

8.29 The date of achievement is the date the Participant has been in self-employment and off benefit, or meeting UC requirements (as outlined in the evidence section below) and the outcome definition is met.

Please note: for validation purposes, a week of self-employment is defined as a minimum of one day’s self-employment within any seven-day period (which does not overlap with any other week of self-employment) where the Participant was for that week also either off benefit (i.e. not claiming or receiving any unemployment related state benefit) or for Participants continuing to claim Universal Credit (UC), complying with relevant UC requirements for the self-employed.

8.30 Any period of self-employment can only be counted once regardless of whether the Participant has one or multiple self-employed occupations during that period.

Evidence to support a self-employed claim

8.31 Before submitting a claim on PRaP, you must ensure that you have robust evidence which satisfies you that there is a genuine claim. You must hold and can supply upon request, evidence that the self-employment was the participant’s main employment; was organised, developed, regular; and carried out in reasonable expectation of profit (although the participant does not need to have made a specific level of profit the activity across the claim period should be in expectation of profit), and Provider audit-evidence may include, but is not limited to:

• a business plan or other convincing evidence demonstrating the activity was marketed/advertised in order to generate and or increase income
• evidence of work generated including ‘jobs’ quoted for and work or delivery of services undertaken or in the pipeline; and
• a record of hours spent each week working on the activity and the regularity of the work demonstrating the activity was the participant’s main employment and was self-employment. Is independently considered by DWP to be self-employed for the required duration

8.32 Where Universal Credit (UC)-defined periods of gainful self-employment and self-declared self-employed earnings recorded on the UC system are not definitive, at DWP’s reasonable discretion, other sources of evidence to confirm the nature and duration of self-employment will be considered, and sources considered by DWP could include, but are not limited to:

• UC Gainfully Self-Employed marker
• HMRC registration
• Participant contact/confirmation
• Bank statements showing details of recent transactions/earnings
• Invoices, purchase orders received/sent in relation to the running of a business
• Websites/Social Media
• Where appropriate, evidence that goods sold were obtained for that express intention
• Additional UC system checks for supporting evidence as required

8.33 Participants claiming UC will be required to notify Jobcentre Plus and meet UC requirements. For your 8-week cumulative claiming period, you should work with the Participant to understand if they have (where possible):

• reported a Change of Circumstance / Change of Work & Earnings on UC; and
• declared within each 30-day UC Assessment Period all relevant Self-Employed Earnings

Please note: Within five working days of a Participant informing you that they have commenced self-employment, you must update PRaP with the date the self-employment started. Claims submitted which are incomplete or do not supply enough information to allow the validator to attempt to verify the outcome will fail the check and will count as attempt 1 of 3 attempts allowable – see Validation Chapter 9.

Self Employed Gateway Interview

8.34 We have included at Annex A information on the Self Employed Gateway Interview. This section confirms what a Participant will need to do to meet the conditionality requirements of being self-employed whilst claiming UC.

8.35 Though it is the Participant’s responsibility to meet these requirements, it would be advantageous to you as the Provider to ensure the Participant is complying with the requirements for declaring, as a UC self-employed Participant, as DWP will access relevant data from within a Participant’s UC records to determine if the Participant is in self-employment for the duration claimed. This is just one source of assurance that the DWP validators can examine to verify self-employed outcomes.

The Validation of Job Outcomes

8.36 The validation of Job Outcomes will be determined by the type of employment. For further information, please refer to Chapter 9 Validation of this JETS Scotland Guidance.

Qualifying Period

8.37 Any Outcome must be achieved within the period that a Participant is on the JETS in Scotland programme. The qualifying period will be up to 238 days after the Participant started on the programme, depending on when a Participant becomes a Completer or an Early Completer. Only Outcomes achieved in this qualifying period are eligible for Outcome Payments.

Payment arrangements

8.38 All payments made in respect of JETS in Scotland provision will be triggered by PRaP and paid through a Single Operating Platform (SOP) in line with the amounts agreed in the contract payment schedules, which will form part of the terms and conditions. DWP can only make direct payments to United Kingdom (UK) bank accounts.

8.39 To allow for data consolidation and ensure optimum accuracy there will be a 61-day delay between receipt of the data and payment to the supplier for each Employed Job Outcome.

8.40 Further information regarding current PRaP payment action can be found in the DWP Generic Provider Guidance: DWP Generic Provider Guidance – PRaP

Participant moving out of Scotland

8.41 Should a Participant move outside of Scotland, you are still entitled to any eligible outcome payment relating to that Participant within the eligible earnings window, provided earnings derive from within the UK.

Non-qualifying Earnings

Employing Participants within a provider’s business or supply chain

8.42 Where you or supply chain partners employ JETS in Scotland Participants, you will not be eligible to receive an Outcome Payment for anyone you or your supply chain partner(s) have employed directly or indirectly, or use/contract with on a self-employed basis. The earnings from any such periods of employment or self-employment with you or your supply chain partner(s) cannot count towards the achievement of an outcome for either payment or performance purposes.

8.43 An example of self-employed work would be a Provider or a supply chain partner uses/contracts with a Participant on JETS in Scotland as a private Information Technology (IT) contractor to work on their systems.

ILMs and other non-qualifying earnings

8.44 Providers will not be eligible to receive an Outcome Payment for Intermediate Labour Market opportunities [ILMs], such as employment that is an additional economic activity intended to be a “bridge” into sustainable, genuine employment; undertaken on a temporary contract and where there is any contract or agreement or proposed contract or agreement between the Contractor their supply chain and/or any third party; or where JETS in Scotland participants are ‘recycled’ through placements.

8.45 For clarity, such earnings are considered as “Non- Qualifying Earnings” as defined in the JETS in Scotland Terms and Conditions.

Notifying DWP of Non-Qualifying Earnings

8.46 You must notify DWP at least 5 working days before first salary payment that you, a supply chain partner, or any third party with an ILM agreement, have employed a JETS in Scotland Participant within a part of your business by completing a JETS Scotland Employment Business Customer Form (PBECF JETS.S). This is a vital requirement. You should complete all details on the form including date started and date of first earnings.

8.47 The JETS in Scotland Provider Business Employment Customer Form (PBECFJETS.S) can be found in Annex F on Jaggaer.

8.48 The completed PBECFJETS.S must be sent via unencrypted email, at least 5 working days before the first salary payment is made to the Department’s PRaP Operational Support Team Central Inbox: [email protected]. You will receive a receipt notification.

8.49 You must complete the JETS in Scotland Provider Business Employment Customer Form (PBECFJETS.S) and send via unencrypted email to the PRaP Operational Support Team Central Inbox when the Participant leaves employment with you (or a member of your supply chain). This should be sent as soon as the information is available. This should include the date the employment ceased and date of last earnings. [email protected].

Please note: Any forms received after the 299 calendar day period from the date the Participant started on the programme will not be accepted.

8.50 On receipt of the PBECFJETS.S, the payment line will be suspended. DWP will review HMRC PAYE data (and any other information it deems appropriate), at the end of the validation period to establish if the outcome criteria have been achieved from employment or self-employment excluding the period of earnings from the non-qualifying period. If the outcome criteria are satisfied, the appropriate payment will be made.

Financial Incentives

8.51 You must not provide any financial incentive, however funded, to employers (for example funding and/or payment) to support the employment of Participants.

8.52 You may provide appropriate services and support to employers to help with the engagement and employment of Participants. You must not make a payment, from whatever source, to an employer or offer employers either a full or part contribution towards a Participant’s wage.

8.53 Should you provide funding for equipment or training, this must not be paid directly to the employer in any circumstances.

8.54 If DWP discovers that a Provider has failed to retain evidence of equipment or training purchases, or that the Provider has offered a financial incentive to secure an employment outcome, DWP will treat this seriously. Depending on the circumstances, DWP may seek to terminate the contract.

8.55 If an outcome payment has been made in the above circumstances and DWP later discovers this, DWP will seek to recover these funds.

VAT

8.56 Your VAT obligations are covered in the Terms and Conditions of the contract.

Additional VAT requirements for self-billing contracts

8.57 The following guidance should be read in conjunction with the HMRC guidance VAT Notice 700/62: Self-Billing. GOV.UK - VAT and Self Billing.

8.58 HMRC guidance states that under a self-billing contract both parties are responsible for ensuring that the VAT is charged correctly on invoices. As part of your bid, you were asked to provide the VAT rate(s) that should be charged for each part of the funding model (Service Fee or relevant Job Outcome Payment).

IMPORTANT

8.59 You will be asked to confirm that the VAT rate(s) quoted as part of your bid are still correct prior to commencement date of the contract.

8.60 Please note that the onus is with you to provide the VAT rate for this contract as per HMRC guidelines. DWP will however, assist in this matter by providing an annual self-billing agreement and requesting confirmation of the VAT rate(s). If the self-billing agreement process is delayed for any reason, you are still responsible for notifying the VAT rate(s) to the Authority on an annual basis.

DWP’s responsibilities

8.61 DWP is responsible for ensuring that:

• VAT rates are sent to the provider
• an annual self-billing agreement is in place; and
• VAT rate(s) are changed on the PRaP system if you notify a change in VAT status

8.62 DWP will seek agreement from you to the self-billing arrangement on an annual basis and request that you confirm the VAT rate(s) to be applied to all aspects of the funding model.

Provider’s responsibilities

8.63 You are responsible for:

• providing a signed agreement promptly on an annual basis when requested by DWP
• ensuring that DWP is immediately notified of a change in the VAT rate(s) should they change during an agreement term
• ensuring that duplicate invoices are not sent to DWP for a supply which is self-billed; and
• ensuring that you fully understand and comply with VAT Notice 700/62

Provider Referral and Payment System (PRaP)

8.64 The DWP IT system enables secure, automated exchanges of information about Participants referred to provision, and payments from DWP to providers.

8.65 Providers access PRaP though the DWP authentication service TPAS and can download information to manage on their potential participant systems and update information about Participants progress into PRaP. Payment claims and calculations are generated automatically.

8.66 Provider security requirements can be found on the contract Terms and Conditions page at Terms and Conditions.

8.67 The PRaP system also provides DWP and Providers with transparent data about the cost and performance of Contract Management and Partner Delivery (CPMD) supporting contract and performance management.

8.68 You should also refer to PRaP on-line Guidance, and DWP Generic Provider Guidance Chapter 5.

Please Note: Full details on the action required to update PRaP can be found in the JETS in Scotland-specific PRaP Guidance, available through PRaP (UPK).

Special Customer Records (Clerical claim process)

8.69 The majority of claims for payment must be submitted via PRaP however, where you have a Participant who is granted Special Customer Records (SCR) status (as determined by HMRC) due to the very sensitive nature of data to be held on the potential participant e.g. witness protection, you are required to submit a claim in accordance with the SCR clerical claim process. Where DWP identifies that SCR status is not granted the claim will be rejected.

8.70 Where you have a SCR claim, you are required to print off the PRaP11 form and complete manually. This form can be found on Annex H on Jaggaer.

Please note: You must only submit claims on these forms on the rare occasions that SCR status is granted.

8.71 This clerical process mirrors the PRaP automated process however as the Department will be unable to monitor earnings on an on-going basis you will be required to track the potential participant’s earnings and then invoke the clerical claim process at the point the employed earnings threshold has been met. The Provider Payment Validation Team will check the claim has been submitted within the timeline and validate employment with employers and/or Participants. Incomplete forms will not be acted upon and will be returned.

8.72 Where you have a SCR claim, you will need to follow a clerical process. If you receive an SCR2 clerical referral you must only submit claims on the PRaP11 forms after tracking a Participant’s employment and confirming an outcome has been achieved.

8.73 Guidance to assist you in the completion of the form can be found by opening the excel form and placing the cursor over the small red corners of the relevant cells.

8.74 For SCR employed outcomes where you submit a clerical claim, we will attempt manual validation of the claim. If the claim cannot be validated it will become classed as Unable to Validate and therefore subjected to apportionment at the end of the 299 calendar days.

8.75 You should send your fully completed claim form to:

Provider Payment Validation Team (PPVT)
Department for Work and Pensions
Finance Group - Contracted Employment Provision Directorate
Floor 1
1 Hartshead Square
Sheffield
S1 2FD

8.76 All clerical documents carrying personal information should be retained securely in line with the Data Protection Act 2018 (DPA 2018), and the General Dara Protection Regulation (GDPR), which can be found: Guide to data protection and Guide to GDPR.