Benefits warning as Universal Credit could be cut to zero by Christmas pay error

Around 85,000 workers who get Universal Credit are at risk of getting nothing over the festive period if their employer makes a mistake with when they pay salaries

Around 85,000 workers on Universal Credit could fall into it
Around 85,000 workers on Universal Credit could fall into it

A warning has been issued to Universal Credit claimants over an error by their employers that could lead to benefits being slashed.

Workers who claim the support to top up their income could fall victim to the blunder if they receive wages early on during the festive season .

The Department for Work and Pensions (DWP) bases Universal Credit payouts on what HMRC holds on a person’s earnings.

But a tax service director with financial firm Blick Rothenberg explained firms paying people’s wages early must make sure they get the dates right.

Otherwise the DWP could wrongly believe a worker has had a double payday within four weeks and then cut their next Universal Credit allowance.

Blick Rothenberg’s Robert Salter 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 submission they make to HMRC, it could severely impact those on Universal Credit.

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Around 85,000 workers on the benefit could be affected


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“Employers may pay the salary for the month ended December 31 on, say, December 17 rather than the (traditional) last working day of the month, because of office closures and / or to assist employees from a cashflow perspective – which is a nice gesture, but it could go wrong.”

It’s estimated 85,000 people are at risk of these double payday problems, with some claimants having their Universal Credit cut to zero because employers wrongly reported the period covered by their wages.

Although DWP systems now automatically identify cases where a claimant has received a second salary in one assessment period, because of weekends or bank holidays, this relies on employers supplying the correct information.

And Salter warns this is an easy mistake for employers to get wrong.

He added: “It’s an easy mistake for employers – and their payroll teams – to make but it could have a really painful impact on those employees and their families who are in receipt of Universal Credit, to top up their pay.”

Advice site Revenue Benefits said the issue of two sets of earnings in one month can occur in several different situations.

These include “where an employer pays someone on a different day (usually early) because their normal contractual pay date falls on a weekend or bank holiday and doesn’t follow HMRCs guidance relating to this. A similar situation can occur at Christmas, where employers shut down and pay staff several days earlier than usual and HMRC guidance is not followed.”

Universal Credit helpline numbers

  • Telephone: 0800 328 5644
  • Textphone: 0800 328 1344
  • Relay UK (if you cannot hear or speak on the phone): 18001 then 0800 328 5644
  • Video relay service for British Sign Language (BSL) users – check you can use this service
  • Welsh language: 0800 328 1744
  • Helplines are open Monday to Friday, 8am to 6pm. Calls to 0800 numbers are free

In an earlier bulletin to businesses, the government said: “We know some employers pay their employees earlier than usual over the Christmas period. This can be for a number of reasons, for example during the Christmas period the business may close, meaning workers need to be paid earlier than normal.

“If you do pay early over the Christmas period, please report your normal (or contractual) payday as the payment date on your Full Payment Submission (FPS) and ensure that the FPS is submitted on or before this date.

“Doing this will help to protect your employees’ eligibility for Universal Credit, as reporting the payday as the payment date may affect current and future entitlements.”

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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