Critics say the regulations can lead to reduced payments from the Department for Work and Pensions
The Department for Work and Pensions (DWP) has released a statement after being questioned about ‘double pay days’. The issue is a quirk that can affect Universal Credit claimants and affect their payments.
The matter has been thrust back into the spotlight this week following a parliamentary question, prompting the government to clarify the regulations and outline what people need to know following a rule change made in 2020. Labour MP for Bedford, Mohammad Yasin, brought the matter to the fore with a fresh query directed at the Department for Work and Pensions.
The question sought “to ask the Secretary of State for Work and Pensions, with reference to The Universal Credit (Earned Income) Amendment Regulations 2020, what assessment her department has made of the potential impact of moving double-paydays to subsequent assessment periods on (a) working Universal Credit recipients and (b) resourcing within her department; and what steps she is taking to reduce the impact on (i) claimants and (ii) resources.”
DWP guidelines on Universal Credit state that payments are made once a month, typically directly into your bank, building society or credit union account, the gov.uk website says. Your payment may include funds for rent or other housing costs, which you’ll generally need to forward to your landlord.
If you’re unable to open a bank, building society or credit union account, the Universal Credit helpline is on hand to advise you on alternative payment arrangements. In reply to the Bedford MP’s question, Stephen Timms, Minister of State (Department for Work and Pensions), said: “The department recognises that receiving two sets of earnings from the same employer within a single Universal Credit assessment period can create unexpected fluctuations in a claimant’s award.
“This situation typically occurs when a claimant’s monthly payday falls very close to the end of their assessment period, resulting in two wage payments being reported through HMRC’s Real Time Information (RTI) system in the same month.
“To address this, the Universal Credit (Earned Income) Amendment Regulations 2020 were introduced, allowing one set of monthly paid earnings to be reallocated to a different assessment period to ensure awards are calculated fairly. This rule only applies where earnings are paid calendar monthly.
“The department’s assessment found that enabling the reallocation of earnings has a positive impact on working UC recipients. By smoothing income across assessment periods, the change reduces financial volatility for the relatively small number of households affected and helps maintain a regular payment cycle. Importantly, it also prevents claimants from losing their Work Allowance in months when double reporting would otherwise occur.
“Most cases affected by double earnings are now identified and corrected automatically, minimising any burden on customers and administrative pressure on the department.”
The double payday issue can cause problems for people with their Universal Credit payments. For example, the Royal College of Nursing (RCN) website tells its members: “The double payday issue can trigger serious difficulties. For instance, the Royal College of Nursing website advises its members: “Due to the way Universal Credit is calculated, some RCN members who are working whilst claiming Universal Credit may find their benefits incorrectly reduced.
“This means they may lose ‘work allowances’ worth up to £344 per month, and could be incorrectly subject to the benefit cap.” It goes on to say some people “could lose hundreds of pounds each year because their paydays clash with the UC monthly ‘assessment periods.'”
It notes: “Because of the way UC works, working claimants are often unable to tell how much benefit they will receive from one month to the next. UC assessment periods run for a calendar month, starting from the date UC is awarded. At the end of each month, claimants’ circumstances and income are assessed to determine their entitlement to UC, with payment made a week later in arrears.
“There are situations where claimants can be paid a day or two early e.g. if their payday falls on a weekend or bank holiday. When this happens, claimants can be recorded as having had two paydays (or two lots of earnings) in one assessment period, and none in the assessment period after.”
You can apply for Universal Credit online. For more information, visit the gov.uk page on the topic.
