Work and Health Programme Provider Guidance
Chapter 13 – Funding Model
Contents
Background
The Delivery Fee
The Job Outcome Payment
The Validation of Job Outcomes
Accelerator Payment Mechanism
Qualifying Period
Claiming Payments
Participant moving Contract Package Area
Payments to Suppliers
Payment Control Measures
ESF Documentation and Evidence Retention Requirements
VAT
Provider Referrals and Payments
Background
1. The WHP Funding Model is predominantly based on Payment by Results
(PbR) to drive sustained work outcomes.
2. There are two distinct elements to the WHP Funding Model:
 Delivery Fee
 Outcome Payment
3. There is no price differentiation for outcomes between participant groups
nor the employed or self-employed. The prices paid will be as agreed
during the bid process.
Outcome Payments
4. For the employed, an outcome payment will be triggered when a
participant earns in the (456 + 182) day period from the participant’s Start
Date on WHP, the equivalent of someone working for 16 hours per week
for 182 days, earning the adult rate (aged 25 or over) of the National
Living Wage (NLW). Earnings data will be provided by Her Majesty’s
Revenue and Customs (HMRC). You will not be required to make a claim
for employed outcomes.
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5. Self-Employed outcomes will be measured through duration in selfemployment which you will be expected to keep a suite of evidence and
claim appropriately after the required period has been achieved. For the
self-employed, an entitlement to an outcome would be triggered when a
participant achieves a cumulative period of not less than (26 weeks) 182
days self-employment. 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.
6. A price acceleration cohort model also exists when the number of
outcomes achieved by you exceeds the volume of outcomes specified by
DWP as required to allow an increased outcome payment to be paid in
respect of each outcome achieved above the volume specified by DWP.
Please see the Accelerator Payment Mechanism section further in this
Chapter.
Please note - only one outcome can be achieved per participant and
must be wholly achieved in either employment or self-employment. Selfemployed earnings cannot be combined with direct employment earnings
for the purpose of achieving an outcome. The first job outcome to be
successfully achieved will trigger payment.
The Delivery Fee
7. The Delivery Fee will be:
 30% of the Estimated Possible Total Contract Value (EPTCV), as
estimated by DWP in its absolute discretion, divided by Estimated
Possible Number of Months (EPNM) in which services are to be
provided, as estimated by DWP in its absolute discretion
 Paid (without the need to claim) monthly in arrears, at the same level
each month, at a date to be agreed.
 Paid for each month throughout the period between the Call-Off
Service Start Date and the Referral End Date up to a maximum of 60
months (see paragraph 1.30 of the WHP Call-Off Specification for
Contract Duration and Implementation and see paragraph 4.25 of
the WHP Call-Off Specification for conditions attached to the
payment of the Delivery Fee).
 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 Chapter 16 Performance Management and Compliance Monitoring.
8. The delivery fee supports you in delivering your service to participants
and you are not expected to submit a monthly invoice for this fee.
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9. DWP will agree a common date with you so that the delivery fees will be
paid monthly in arrears. Any part period for the first month at start up will
be paid on a pro-rata basis.
10. Each delivery fee payment would be generated for payment on the same
calendar day each month.
The Job Outcome Payment
Employed Outcomes
11. For the purposes of validating directly employed outcomes, the below
definition should be noted:
“An eligible WHP participant must have been directly employed, with
accumulated gross earnings at least, equivalent to working for 16 hours
per week for 182 days, earning the adult rate (aged 25 or over) of the
NLW during their time on the WHP, or within 182 days after provision
completion.”
12. This threshold currently stands at approximately £2,995, and will be
uprated in line with NLW. An outcome will be achieved when gross
earnings become equal to, or surpass the NLW adjusted threshold
appropriate on the date of the payment which caused cumulative earnings
to trigger the threshold. Cumulative earnings, below the threshold which
are paid prior to threshold uprate will not be prorated towards the
increased threshold – their value will remain and contribute towards the
new threshold which will have to be met in full.
13. Participants moving into employed work will be identified by DWP solely
using HMRC (PAYE) on-line 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
claimed by suppliers holding contracts for the Work Programme. You will
be paid based on the outcomes observed in this data. No separate
evidence will be accepted.
14. DWP will monitor participant earnings via HMRC (PAYE) on-line data
from the first ‘payment date’ for a maximum period of 639 calendar days
from (and including) the Start Date, and will continue to look for earnings
received in the 639 calendar days.
15. The HMRC PAYE information will feed into our Provider Referral and
Payment (PRaP) system and will automatically pay for employment
outcomes.
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16. Prior to starting the participant on the programme, you must ensure the
participant is not in any form of employment or has had a job offer. The
Jobcentre Plus 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. Please note however, between referral and starting the
participant there may be some participants who move into
employment/self-employment, or have had a job offer. If this is the case,
you must enter a Did Not Start (DNS) on PRaP and return the participant
to Jobcentre Plus.
17. Any earnings that the participant has accumulated prior to starting on the
programme will not count towards an employed outcome.
18. DWP will share the following information with you, related to the validation
of earning based outcomes:
 when a participant’s earnings are first declared to HMRC, following a
confirmed start on the programme;
 when a participant has achieved income milestones of £1,000 and
£2,000 during their employment; and
 an automatic outcome payment once the earning threshold is
reached.
Self Employed Outcomes
19. As the data supplied by HMRC does not contain earnings from selfemployment, you will need to keep a suite of evidence of a participants
duration and participation in self-employment.
20. An entitlement to a self-employed outcome would be triggered when a
participant achieves a cumulative period of not less than (26 weeks) 182
days self-employment. 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. Please note that for
validation purposes, a week is defined as a minimum of one day in any
seven day period.
21. You will be responsible for claiming self-employed outcomes correctly and
within a maximum of 700 calendar days from the participants start date.
Claims must be made via PRaP and you must provide DWP with
sufficient and accurate information to allow a manual validation to
independently verify the claim.
22. The expectation is that the majority of self employed outcomes will sustain
well beyond the 182 calendar days period. DWP will be undertaking
analysis of the self-employment outcomes being achieved by you.
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Please note – You will only be eligible to receive one WHP job outcome
payment per participant i.e. either an employed outcome or a selfemployed outcome, not both. Time spent in or earnings from selfemployment will not count towards an employment outcome. For
individuals who are in self-employment but also have earnings from paid
employment at the same time – only the employment earnings will be
used towards the employment outcome. The first job outcome to be
successfully achieved will trigger payment.
The Validation of Job Outcomes
23. The validation of Job Outcomes will be determined by the type of
employment, either the participant is employed by an employer or the
participant is self-employed. Further information can be found in Chapter
14 – Validation.
Accelerator Payment Mechanism
24. The WHP uses a price acceleration model in order to drive performance
and incentivise you to provide the increased investment required for the
harder to help participants, who may have multiple barriers to overcome.
Price Acceleration takes place when the number of outcomes achieved by
you exceeds the volume of outcomes based on the tMPL (Tender
Minimum Performance Level) formula from the contractor as set out in the
contract to allow an increased outcome payment to be paid in respect of
each outcome achieved above the volume specified by DWP.
25. For each calendar month cohort of participants starting on the programme
(all customer groups to be included in the monthly calculation of the
number of starts for accelerator payment purposes), a standard outcome
payment will be paid for the first 75% of the contracted outcome volumes
(75% of the tMPL) at aggregated participant group level, all further
outcomes achieved (above and beyond) will be paid at a higher rate. This
higher rate is set 40% higher than the lower rate.
26. For example - A provider is contracted to achieve outcomes for 60% of
participants who start on the programme. Within the price acceleration
mechanism, this would mean that within any particular cohort, the first
75% of the performance bid will be paid at the standard rate. In this
instance, this would equate to the first 45% of the cohort who achieve an
outcome (75% * 60%).
Any outcomes achieved above the 45% point will be paid at the higher
rate. This is the remaining 25% of the performance bid (i.e. 15% of the
cohort), plus any outcomes over and above the bid. For example, if the
provider achieves 65% of starts resulting in an outcome within a particular
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cohort, the first 45% will be paid at the standard price and the residual 20
percentage points (15% remainder of the cohort plus 5% performance
above the target) will be paid at the higher rate.
Qualifying Period
27. A qualifying period of 182 calendar days exists immediately after the
maximum time on programme. Therefore an eligible employment or self
employment outcome payment may start within the period on programme
or during the following 182 calendar day period. Any outcome must be
achieved within the total 639 calendar days qualifying period to be eligible
for a payment.
Claiming Payments
28. You do not have to claim an employed outcome as DWP will
automatically pay you using data from the HMRC (PAYE) on-line data to
identify participant earnings.
29. As the data supplied by HMRC does not contain earnings from selfemployment, these outcomes are based on duration of self-employment
and you will be required to claim all self-employed outcomes. Within five
working days of the participant informing you that they have commenced
self-employment, you must update PRaP with the date the selfemployment started. Further information can be found in Chapter 14 –
Validation.
30. For self-employment outcomes, you should maintain a robust system of
internal controls which must include appropriate checks, monitoring
arrangements and adequate records to demonstrate that you are entitled
to make the self-employed claim. The records maintained need to be
sufficient not only to support any self-employment claim payments but
also to support your internal management checks and independent
validation e.g. by DWP and other external bodies. The records maintained
should document how and when the information was obtained.
31. You should claim self-employed outcome payments when you are
satisfied that the participant has been in valid self-employment for a
cumulative period of 182 calendar days and you have sufficient evidence
to support the claim. The final date that any claim for payment can be
accepted will be 700 calendar days from an individual’s start on provision.
This is made up of the maximum 456 calendar days on Programme, 182
calendar days qualifying period which self-employed job outcomes are
claimable and a 61 day period to claim the outcome payment.
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32. All payments made in respect of WHP Provision will be made via PRaP
directly into your agreed bank account. Further information regarding
PRaP can be found in the DWP Generic Provider Guidance:
https://www.gov.uk/government/publications/provider-referrals-andpayments-prap-system-for-dwp
Participant moving Contract Package Area
33. Where a participant moves outside a provider contract delivery area prior
to any outcome payments being achieved, you are still entitled to claim
any outcome payment relating to that participant. Further information
relating to participants who move to/between Scotland, London and
Manchester can be found in Chapter 10 - Change of Circumstances and
Notifications.
Payments to Suppliers
34. All payments will be made through the appropriate IT system/PRaP in line
with the amounts set out in the contract. Please note that DWP can only
make direct payments to United Kingdom (UK) bank accounts.
Payment Control Measures
35. To protect public funds and DWP’s reputation the Department has
introduced additional controls to the Work and Health Programme
Funding Model:
Employing participants within a providers business or supply chain
36. You must notify DWP when you or a supply chain partner employs a WHP
participant within a part of your business directly relating to departmental
employment contracts. You cannot claim or receive an outcome payment
for anyone who you or your supply chain partners have employed directly
or indirectly, or on a self-employed basis. Any such periods of
employment or self-employment (and wages earned from being
employed) with you or a supply chain partner cannot count towards an
outcome. An example of self-employed work would be: A Provider or a
supply chain partner employs a participant on the WHP as a private IT
contractor to work on provider systems.
37. When you employ a WHP Participant in your employment business, DWP
expect you to complete a ‘WHP Employment Business Customer Form
(Fields; ‘customer name,’ ‘NINO’ and ‘date employment commenced’).
You must send this by unencrypted email, within 10 working days of the
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WHP participant beginning employment to the department’s Payment
Team Central Inbox;
[email protected]. [Subject to PIA Sign off].
38. You must notify DWP if and when the participant leaves their employment
within the 639 calendar day period from the date the participant started on
the programme. You must notify the department by completing the
second part of the ‘WHP Employment Business Customer Form
(specifically the ‘date employment ceased’ field) and send this by
unencrypted email to the department’s Payment Team Central Inbox;
[email protected]. [Subject to PIA Sign off].
39. In the circumstances above DWP will review HMRC PAYE data at the end
of the cohort. If the participant has any additional earnings from other
employers which meet the requirements for an outcome, we will pay. The
self-employment line will remain available for self employment claims and
again if the participant subsequently meets the requirements for a self
employed outcome DWP will pay.
40. If you fail to notify DWP when you employ a participant in the
circumstances described above, DWP will treat this as a non service
failure.
41. If an outcome payment has been made and DWP later identify a service
failure related to a participant you claimed for, DWP will seek to recover
these funds.
Financial incentives
42. You must not provide any financial incentive (for example funding and / or
payment) to support the employment of participants. You may provide
appropriate services and support to employers to help with the
engagement and employment of participants.
43. For participants in self-employment, where the participant has a clear
business plan which would benefit from financial support through either
working capital and or equipment, you may provide up to a maximum of
£1,000 for working capital and or equipment per participant for the
purpose of the self-employed business. You must retain evidence of the
Business Plan and any payments related to the working capital and or
equipment. A failure to do so could result in the outcome payment being
disallowed for payment and performance purposes.
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44. For the purpose of Work and Health Programme, if you decide to provide
working capital and or equipment for the participant to support their selfemployed business, you should not consider this to be in any format a
loan to the participant.
45. If DWP discover that you have failed to retain evidence of equipment or
training purchases, or that you have offered a financial incentive to secure
an employment outcome, we will treat this seriously.
46. If an outcome payment has been made in the above circumstances and
we later discover this, we will seek to recover these funds.
ESF Compliance and Evidence Retention Requirements
47. As part of this Provision may be funded by ESF it may be subject to
stringent audit by DWP and EC Auditors who may require evidence that
the Provision is being delivered in accordance with the contract and all
payments are clearly and appropriately evidenced. Failure to meet these
audit requirements can result in financial penalties or withdrawal of
funding.
48. You must keep sufficient, relevant evidence and key documentation in
support of provision delivery and payments. It is your responsibility to
ensure that documents and data can be relied on for possible ESF audit
purposes. You must have robust systems in place to ensure that
documentation (paper or electronic) is securely held and is easily
retrievable and accessible throughout the retention period.
Further information regarding ESF requirements can be found in the
Generic Provider Guidance Chapter 11b – ESF requirements 2014 –
2020 (England Only) and also further information can be found in Chapter
18 - European Social Fund.
VAT
49. Your VAT obligations are covered in the Terms and Conditions of the
contract.
Additional VAT requirements for self-billing contracts
50. The following guidance should be read in conjunction with the HMRC
guidance VAT Notice 700/62: Self-Billing.
https://www.gov.uk/government/publications/vat-notice-70062-self-billing
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51. 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 (Delivery Fee or relevant Job
Outcome Payment).
IMPORTANT
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.
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 contract 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
52. DWP is responsible for ensuring that:
 VAT rates are sent to the supplier;
 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.
53. 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
54. 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.
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Provider Referrals and Payments
55. PRaP system enables secure, automated exchanges of information about
Participants referred to Provision and payments from DWP to Providers.
Please note - Specific PRaP guidance with actions to take with WHP
participants will be made available to the winning bidder when known.
56. Providers access PRaP via Government Gateway; providers can
download information to manage on their individual systems and update
information about Participants progress into PRaP; payment claims and
calculations are generated automatically.
Provider security requirements can be found on the contract Terms and
Conditions page at http://www.dwp.gov.uk/supplying-dwp/doing-businesswith-dwp/terms-and-conditions
57. The PRaP system also provides DWP and Providers with transparent
data about the cost and performance of Contracted Employment
Programmes (CEP), supporting contract and performance management.
58. You should also refer to UPK/Tutor PRaP on-line Guidance, and DWP
Generic Provider Guidance Chapter 5.
https://www.gov.uk/government/uploads/system/uploads/attachment_data
/file/446787/pg-chapter-5-v3.3.pdf
59. For further information about PRaP, please see our Questions and
Answers at: http://www.dwp.gov.uk/docs/prap-qanda.pdf
60. More information on the PRaP system can be found at:
https://www.gov.uk/government/publications/Provider-referrals-andpayments-prap-system-for-dwp
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