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DWP refusal to alter Universal Credit rule – despite it creating two month payment rise delay

today29 June 2022

Background
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Calls have been made to change the way Universal Credit payments are awarded . The Department for Work and Pensions (DWP) has responded.

There is much talk at the moment about how much all Government payments, including Universal Credit, other benefits and the State Pension, might go up for the 2023-2024 financial year. For instance, Downing Street confirmed that the state pension will be rising by double figures to protect pensioners from inflation. Ministers pledged that the triple lock on pensions would return in April 2023.

However, concerns have been raised about a rule that delays a payment rise for Universal Credit recipients. It follows confusion when the new Universal Credit payment rates came into effect in April 2022 after a 3.1 per cent increase was confirmed for all benefits. According to Birmingham Live, some claimants didn’t get the increase straight away and were left wondering when they’d see the extra money added to their claim.

READ MORE: State pension set to rise by double figures to protect elderly from inflation

Universal Credit – how is it paid?

The date of a person’s Universal Credit payment is based on when they apply for the benefit. The date of the first payment – typically received five weeks later – becomes the regular monthly date when amounts are deposited in your account, unless there is a weekend or bank holiday that forces this to be moved. So if you first get Universal Credit on the 25th of a month, the 25th of every subsequent month becomes your regular payment date from then on.

Universal Credit is therefore paid every four weeks and is always in arrears rather than in advance, meaning the money you get is for the previous month rather than the coming month. This preceding month is known as the assessment period, when the DWP looks at all your financial circumstances, including any income such as wages, to decide how much you are eligible to get in benefits.

What happens when there is an annual rise – why the delay?

The April pension and benefits upratings typically come into effect on April 11, as was seen in 2022.

What that means is that anyone whose one-month assessment period starts before April 11 receives their next benefit amount in May, but it is all calculated on the old rates that were in effect when the assessment period started. The new payment rates would not be applied until the following month’s amount arrives in June, a delay of two months from the April starting point.

If your assessment period starts on or after April 11, then your payment a month later in May will be based on the new rates of pay.

Anyone putting in a new claim for Universal Credit has to wait a longer period of five weeks – and sometimes more – for the first payment to arrive, so if applying on or after April 11, it would be deposited on or after May 17 and be worked out at the new rates.

New applications for Universal Credit made before April 11 mean your payment five weeks later is based on the old rates and you would not see the increase applied until the next monthly payment in June.

The response: What the DWP said about the issue

Martyn Day, Shadow SNP spokesperson for Health and Social Care, brought up the issue in a parliamentary question, saying he wanted to “ask the Secretary of State for Work and Pensions if she will change Universal Credit policy so that claimants whose assessment period misses the uprating date of the first Monday of the tax year do not have to wait two months before receiving an uplift.”

DWP minister David Rutley responded by saying: “Increases in Universal Credit come into force from the start of the first assessment period beginning on or after the first Monday of the tax year (or from the start of the first assessment period beginning on or after any earlier date in April). As Universal Credit is a calendar monthly assessed benefit that is paid in arrears, a claimant will receive their newly-uprated benefit award at their first full Assessment Period that follows the change. There are no current plans to alter how the uprating of benefits interacts with claimants’ assessment periods.”

So it looks like the payment delay will remain in place for now. It’s worth bearing this in mind when it comes to the April 2023 increases, as you may not see them in your benefits until June that year.

In England, Scotland and Wales, there are 5.6 million people on Universal Credit. Of those, 40 per cent are working and claiming the benefit to top up low wages.

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Written by: thehitnetwork

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