universalcreditinfo

factchecking myths and misconceptions about universal credit

“If my regular earnings stay the same my monthly universal credit payment will also stay the same”

The short answer:

You would think so … but that’s not how it works in every case

Even when you receive the same amount of pay from employment each pay period - whether you are paid weekly, fortnightly or monthly - your monthly universal credit award can change from one assessment period to the next depending on which day you are actually paid.

For example -

  • if you are paid weekly, some assessment periods will have four pay days while others will have five, leading to a reduction in, or loss of, your universal credit award in those periods;
  • if you are paid fortnightly, some monthly assessment periods will have two pay days while others will have three, again leading to a reduction in or loss of your award; and
  • if you are paid monthly you may be affected if payments are made near or on the first day of your assessment period and are paid early sometimes (such as to take account of non-banking days) - in these cases two months’ payments can fall in the same assessment period while one or no monthly payments would fall in others.

When this happens it can reduce or cancel out your universal credit entitlement and can impact on other aspects of your benefit entitlement - such as leading to the benefit cap being applied, loss of work allowance, and loss of passported benefits such as help with health costs of free school meals.

The DWP has interpreted rules for calculating earnings in any given assessment period without any flexibility if they operate harshly in any case (although DWP Minister Justin Tomlinson admitted that there is a problem for claimants in evidence to the Work and Pensions Committee on 21 November 2018 (at Question 195) and that the Department is 'urgently' looking at the issue.

However, a challenge by monthly paid claimants affected by these rules when they received two monthly salary payments in a single assessment period - brought by the Child Poverty Action Group and Leigh Day Solicitors - has been successful. The resulting High Court judgment on 11 January 2019 - [2019] EWHC 23 - rules that the DWP is wrong to treat the combined salaries for two different months as the amount of earned income received in respect of a single monthly assessment period and that 'adjustments' should be made in these circumstances to account for the payments in separate assessment periods.

Tip: If you are losing out because of how your pay periods fall in your assessment period, you should ask for your claim to be reviewed and refer to the High Court's judgment in [2019] EWHC 23.


Law and case law:

http://data.parliament.uk/DepositedPapers/Files/DEP2019-0465/Treatment_of_earnings_-_v5.0.pdfRegulations 54 of the Universal Credit Regulations 2013 provides for the general principle that the calculation of a person's earned income in respect of an assessment period is to be based on the actual amounts received in that period.


Official guidance:

Universal Credit: different earning patterns and your payments (payment cycles) from gov.uk

Treatment of earnings (last updated March 2019) DWP guidance from the House of Commons library.

Response to parliamentary question on income volatility by Employment Minister Alok Sharma (11 September 2018) suggests that personal budgeting support is the solution to the issue.

Need more help?

If you need help in finding out more about your rights and the options available to you, do consider contacting a local independent advice organisation. 

Enter a postcode on our advicelocal site to find details of advice organisations in your area. They will usually be able to offer free advice and support, and help to answer any questions you have.

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