Universal Credit is changing this week - here’s how it could affect you

A new Universal Credit rule change comes into place from Monday 16 November, which will benefit over 85,000 claimants.

Sign up to our daily newsletter

The i newsletter cut through the noise

This is due to a change in the rules, which has come into place after the Department for Work and Pensions addressed a loophole which was costing people thousands of pounds.

Changes to Universal Credit payments

Claimants who get paid twice in a month by their employer will now not be penalised in their next payment.

Prior to this, workers who got paid twice in a month were flagged as “over-earning” on the DWP's systems, which subsequently meant that their following payment was reduced in order to reflect their higher income.

The flaw left some families without benefits, as it didn’t make allowances for those who are paid multiple times in a month, for example if their employer paid them on the first or last working day, or if they received a late or early payment because of a bank holiday.

A portion of the "double payment" was docked from a person’s next Universal Credit payment because of the taper rate, which meant 63p for every £1 earned over the work allowance was deducted from Universal Credit.

However, in the majority of cases, claimants were not over-earning at all, so a change in rules has now been made after the DWP was ordered to fix the flaw.

In June of this year, four single mums took their case to the Court of Appeal over the issue. The flaw resulted in them falling into rent arrears, defaulting on council tax, incurring bank overdraft charges, and needing to turn to food banks.

The judge said that the system was "irrational and unfair,” and the DWP was ordered to change it.

The DWP has said that the benefits system will now only register one payment for every assessment period.

The responsibility for manually moving the payday will still rely on Universal Credit, but it is recommended that, if possible, the claimant informs their work coach in advance via their online journal.

Do I need to do anything?

If you are a claimant of Universal Credit who was previously affected by this flaw, you will not need to do anything extra, as payments will still be based on Real Time Information (RTI) from your employer, as usual.

The rule change will not affect the day on which employees are paid, but it will instead record it in the following Universal Credit assessment period.