Universal Credit loophole hits thousands of hard-working Brits – and it can cut benefits to £0

HARD working Brits on Universal Credit are still missing out on crucial welfare payments due to a loophole in the system. 

The problem affects thousands of workers who are paid by their employers twice in the same month, causing their benefits to drop to £0. 

Last year, the Department for Work and Pensions (DWP) fixed this loophole for around 85,000 employees on a monthly payroll after a court ruled it “irrational and unfair”. 

Since November 2020, the DWP has been able to manually move one of the pay cheques into a different assessment period so Universal Credit can calculate payments normally. 

But thousands of employees are still missing out because they’re not on a monthly payroll, such as workers who are paid by employers every four weeks, fortnightly or weekly. 

Adam, 33, from Sheffield, was forced to borrow hundreds of pounds from family after his Universal Credit payment dropped to zero earlier this year. 

What to do if you have problems claiming Universal Credit

IF you’re experiencing trouble applying for your Universal Credit, or the payments just don’t cover costs, here are your options:

  • Apply for an advance – Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it's a loan which means the repayments will be automatically deducted from your future Universal Credit payout.
  • Alternative Payment Arrangements – If you're falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you're part of a couple.
  • Budgeting Advance – You may be able to get help from the Government for emergency household costs of up to £348 if you're single, £464 if you're part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You'll have to repay the advance through your regular Universal Credit payments. You'll still have to repay the loan, even if you stop claiming for Universal Credit.
  • Cut your Council Tax – You might be able to get a discount on your Council Tax by applying for a Council Tax Reduction. Alternatively, you might be entitled to Discretionary Housing Payments to help cover your rent.
  • Foodbanks – If you're really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussell Trust website.

Usually Adam, who claims jointly with his wife Tracey, earns between £500 and £700 a month depending on how much overtime he is able to pick up. 

The household income is typically topped up by between £350 and £700 a month Universal Credit to help cover the rent and care for his step-son Jack, 18. 

The part-time Tesco worker, who is paid every four weeks, had to borrow money from family to pay his £550 rent in February. 

“It’s awful,” Adam told The Sun. “I’m fortunate enough that I can go to my family for help, but I shouldn’t have to do that. 

“It makes me feel terrible that I have to lean on my family. 

“We couldn’t afford to do a grocery shop so my sister brought a food parcel but they shouldn’t have to do that.”

Second time in a year

It’s the second time Adam has been affected by the issue. The first time it happened in March 2020 he used a food bank to put meals on the table for his family. 

He is one of thousands of workers hit by this glitch. The Sun has called on the government to fix errors in the system, as part of our Make Universal Credit campaign. 

Adam spotted the error would affect him again earlier this year and flagged it to his Universal Credit work coach. 

But he was told by his work coach that they were unable to fix the issue. 

Another worker hit by the same problem is Georgina Davey, 49, who also works for Tesco part time, and is on a four weekly payroll. 

The retail worker was hit with a £0 Universal Credit payment in April after an early Easter bank holiday pay cheque meant it fell into the same assessment period as her previous wage pay. 

Despite being a keyworker throughout the pandemic, Georgina was unable to take out an advance or budgeting loan to get her through the hard-up month. 

The Sun wants to Make Universal Credit Work

UNIVERSAL Credit replaces six benefits with a single monthly payment.

But there are big problems – it takes five weeks to get the first payment and this leaves some families worse off by thousands of pounds a year.

And while working Brits can claim back up to 85% of their childcare costs, they must find the money to pay for childcare upfront.We’ve heard of families waiting up to six months for the money.

Working parents across the country told us they’ve been unable to take on more hours – or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.

The harsh taper rate also makes it hard for Brits to get back to work.

It’s time to Make Universal Credit work. Since December 2018, we've been calling for the government to:

  1. Get paid faster: The government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop millions from being pushed into debt.
  2. Keep more of what you earn: The work allowance should be increased and the taper rate should be slashed from from 63p to 50p, helping at least 4million families.
  3. Don’t get punished for having a family: Parents should get the 85% of the money they can claim for childcare upfront instead of being paid in arrears.

Together, these changes will help Make Universal Credit Work.

Join our Universal Credit Facebook group or email [email protected] to share your story.

Instead, she had to borrow cash from her daughter and friends to help cover the rent and bills. 

She’s now been signed off work due to stress and anxiety. 

“I was broken,” Georgina told The Sun. “I love work. I’ve worked at Tesco for 15 years now and it does my mental health so much good. 

“It’s amazing for my self-esteem, especially throughout the coronavirus crisis. 

“I’ve received £0 payments before but that was because I’d worked over time so the taper rate kicked in. I get that, I’ve earned more so I don’t need as much Universal Credit. 

“But I wasn’t offered as many hours in March so my pay was less than normal too and then to get nothing from Universal Credit. I was devastated. 

“I feel physically sick at the thought of what Universal Credit payment I’ll get next month.

“And the bit that got me the most was having to ask friends and family to borrow money. That was just the worst.”

Universal Credit is an automatic system and is supposed to adjust payments monthly based on changes to a claimants income, but in reality it only takes into account wages received in the same calendar month.

While the manual fix has helped those who are paid multiple times in a month for example, because payday would normally fall on a weekend or bank holiday, those who are paid every four weeks are still missing out. 

The DWP argues that those paid by their employer every four weeks will be paid more frequently than those who are paid monthly and Universal Credit is designed to reflect this. 

A DWP spokesperson said: “Universal Credit is designed to reflect the world of work as closely as possible, and most workers continue to be paid monthly, meaning that Universal Credit replicates this.

“Monthly assessment periods also allow Universal Credit to be adjusted each month. This means that if a claimant’s income falls, which leads to a rise in their Universal Credit payment, they will not have to wait several months to receive it.”

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