The Department for Work and Pensions has provided details about double pay days & their effects on Universal Credit claimants and payment amounts.
Mohammad Yasin raised a parliamentary question about this issue this week. The Labour MP for Bedford asked what the DWP had done to evaluate how shifting double paydays to different assessment periods would affect working Universal Credit recipients and department resources. Universal Credit payments are made monthly and transferred directly into your bank account or building society account based on DWP guidance on the gov.uk website. Your payment may include money for rent or housing costs that you must pay to your landlord. If you cannot open a bank account the Universal Credit helpline can assist you in finding alternative payment methods.
Stephen Timms from the Department for Work & Pensions answered the question by stating that the department recognizes that receiving two wage payments in one Universal Credit assessment period can cause unexpected changes in payment amounts. This typically occurs when someone’s monthly payday falls very close to the end of their assessment period. This results in two wage payments being reported through the HMRC Real Time Information system in the same month. The Universal Credit Amendment Regulations from 2020 were introduced to address this problem.
They permit one monthly payment to be transferred to a different assessment period so awards are calculated correctly. This rule applies only to people who receive monthly pay. The DWP determined that moving earnings between periods benefits working Universal Credit recipients. It reduces financial uncertainty for the small number of affected households and maintains regular payments.
It also prevents claimants from losing their Work Allowance in months when double reporting would occur. Most cases are now resolved automatically without requiring action from claimants or creating additional work for the department. The double payday problem can create significant difficulties. The Royal College of Nursing website advises its members that some people working while claiming Universal Credit might experience incorrect benefit reductions.
They could lose work allowances worth up to £344 per month and might incorrectly face the benefit cap. Some people could lose hundreds of pounds annually because their paydays clash with UC monthly assessment periods. Working claimants often cannot predict their monthly benefit amount because of how Universal Credit functions. Assessment periods last one calendar month from the date UC is awarded.
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At the end of each month the system reviews circumstances and income to calculate entitlement and payment is made a week later. Sometimes claimants receive payment a day or two early if their payday falls on a weekend or bank holiday. When this happens the system can record two paydays in one assessment period and none in the next period.
