Workers are losing hundreds of pounds every month because of when their payday falls in relation to their Universal Credit assessment date, claims a new report.
The Child Poverty Action Group’s (CPAG) Early Warning System – which analyses cases when social security reform isn’t working – found that one in 20 cases had suffered problems with the assessment system leading to benefits incorrectly capped and loss of up to £258 per month in work allowances.
The controversial benefits system sees users assessed monthly but some are being mistakenly viewed as being paid twice in a month if their payday is near to the assessment date.
In #universalcredit it's only circumstances on the last day of your assessment period which count, even if they changed earlier in the month. This can leave families who move house with an arbitrary shortfall. See our new report https://t.co/gSf6hsFAIE #UCroughjustice
— Child Poverty Action (@CPAGUK) August 6, 2018
This is also the case if pay dates are moved forward to negotiate weekends or bank holidays, leading to unexpectedly low awards for the following month as well as the loss of one month’s work allowance. Help with prescription charges or travel costs for NHS treatment can also be lost.
The knock-on effects continue the following month with the next assessment finding no pay cheque, making the user subject to the benefit cap so their support for that month is reduced too.
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The inconsistency and uncertainty from this issue makes it impossible to budget, increasing the chances of running into financial difficulties going forward.
CPAG is calling for Universal Credit rules to be changed to allow earnings to be averaged as well as allowing claimants to tweak their own assessment period dates to suit their payday.
For passported benefits, they are asking for averaging of earnings over three months to determine entitlement while housing costs should be paid based on the number of days spent at an address or the actual rents occurred, they claim.
Speech by Esther McVey MP on Universal Credit https://t.co/btEgWbA6OM
— Reform (@reformthinktank) July 19, 2018
CPAG chief executive Alison Garnham said: “Universal Credit isn’t working for working people. Our Early Warning System shows claimants are often left flummoxed by how much – or how little – universal credit they will receive from one month to the next.
“But we believe most of the problems created by the monthly assessment system can be fixed relatively easily if the political will is there. The mass migration of families on to universal credit should not begin until these fundamental problems are resolved.”
Last month the Work and Pensions Secretary Esther McVey acknowledged the need to look at “payment cycles for those in work” during a speech at think tank Reform.
A DWP spokesman said: “We are listening to stakeholders’ concerns and working on issues regarding payment cycles and we will consider this report carefully.”