Working people claiming universal credit are having their benefits capped when they shouldn’t be, and losing the effects of ‘work allowances’ worth up to £258 per month simply because of the dates on which their paydays and universal credit ‘assessment periods’ happen to fall, according to new evidence from Child Poverty Action Group (CPAG).

The report says that In the worst cases workers are losing hundreds of pounds each year simply because their paydays clash with the monthly ‘assessment periods’ in universal credit (UC). Far from offering much-vaunted simplicity, universal credit rules leave many workers unable to predict what their payments will be from one month to the next. People who happen to move house at the ‘wrong’ point in their assessment period can also lose hundreds of pounds in help with rent. One in 20 cases coming into the charity’s Early Warning System – which gathers case evidence from welfare rights advisers across the UK – indicates a problem with the monthly assessment system in UC.

Universal credit assessment periods run for a calendar month, starting from the date Universal Credit 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. But where a claimant’s monthly payday is on or close to the first day of their assessment period and they are paid a day or two early some months, because their normal payday would fall on a weekend or bank holiday, they are then recorded as having had two paydays in one assessment period and none in the one after.

Two pay cheques in one assessment period can leave claimants facing unexpectedly low universal credit awards as well as losing the effect of one month’s work allowance (see below). Claimants can even lose help with prescription charges or travel costs for NHS treatment because when paid twice they appear to earn more than they do. And if they appear to have no earnings in the following assessment period – because they received two pay cheques in the preceding one – then rather than seeing their universal credit increase to compensate for this they may find that they are in fact subject to the benefit cap (which was designed to limit how much support is paid to people out of work or with very low earnings) so their support for that month is reduced too. Had they simply received one paycheque in each assessment period they would have a consistent UC award and would be recognised as earning enough not to face the benefit cap.

Commenting on the findings from CPAG’s Early Warning System, the charity’s 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.”