Thousands on benefits urged to check Christmas pay to avoid Universal Credit cut

Thousands on benefits urged to check Christmas pay to avoid Universal Credit cut

THOUSANDS of Brits claiming benefits have been urged to check payments over Christmas so they don't lose out.

Getting paid early because of the festive holidays can affect how much Universal Credit people get.

Previously this was because it can put two salary payments into one assessment period for working out Universal Credit payments.

This can make it look like you've earned more in that time and so reduce your benefit entitlement the following month.

The government has acted to close this loophole recently which means that the Universal Credit system now flags when there are two pay dates in one period.

Work coaches can then move one of them manually into a different period, ensuring Universal Credit payments are not affected.

But in a separate issue, if employers don't report pay dates correctly, those on the benefit could still end up out of pocket.

As many as 100,000 people could be affected, experts estimate, but there are no official figures on those who could be affected.

Robert Salter, a tax service director with Blick Rothenberg said: "In the run-up to Christmas, it is common for employers to pay December salaries earlier than normal.

"But if they get the dates wrong on the electronic submissions they make to HMRC, it could severely impact those on Universal Credit."

Employers this Christmas could pay the salary for the month ending December 31 on December 17 instead to help staff with cash

But if earnings are reported as being for the period up to December 17 instead of 31 this could impact Universal Credit entitlement.

He said: “In broad terms, reporting the wrong pay period – and thereby artificially inflating the perceived wages of an employee, could reduce their Universal Credit support from the government by as much as 55%. 

"Not exactly the type of Christmas Present that anybody would want this time of year.”

Mr Salter said it's worth anyone getting Universal Credit highlighting the issues to their employer's HR or payroll team.

Meanwhile, thousands of employees are still missing out because they’re not on a monthly payroll.

The government closed the loophole affecting pay dates that fall into the same period, but only when it's a one-off for those paid monthly.

Anyone who gets paid every four weeks, fortnightly or weekly is still missing out. 

The problem affects thousands of workers who are paid by their employers more regularly causing their benefits to drop to £0 in some cases.

The DWP has previously argued 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. 

The Sun has called on the government to fix errors in the system, as part of our Make Universal Credit campaign.

Meanwhile in a win for the Sun's campaign, nearly 2million Brits in work and claiming Universal Credit will be over £1,000 a year better off from tomorrow onwards.

Workers will lose less of what they earn as the taper rate falls from 63p for every £1 earned to 55p, and the work allowance rises by £500.

 

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