Child Poverty Action Group Report highlights how Universal Credit Claimants are Losing Hundreds Due to Assessment

Research conducted by the Child Poverty Action Group (CPAG) has found that Universal Credit claimants set to lose hundreds of pounds a year, simply as a result of when their paydays and assessment dates fall.

The report is called ‘Rough Justice: Problems with monthly assessment of pay and circumstances in Universal Credit’. In the report CPAG reference cases from their early warning system (which gathers information and case studies about the impact of welfare reform). This shows claimants have lost hundreds of pounds annually because two paydays happened to fall within the one assessment period. CPAG advise that this situation is most likely to occur where paydays fall close to the assessment date at the end of each month.

It has been found that this can result in lower Universal Credit awards, benefit cap deductions (despite the fact claimants are working), loss of work allowances, in addition to loss of entitlement to discretionary housing payments and ‘passported’ benefits (further information available here).

With regard to assessing income, CPAG have called on the Department of Work and Pensions (DWP) to make the following improvements:

• Use of average earnings to facilitate more accurate assessment of fluctuating earners and accurate benefit cap decisions;

• Use of regular pay amounts (as opposed to real-time information on pay) to prevent the potential for monthly-paid claimants being assessed as having two pay packets in one assessment period;

• Permitting monthly-paid claimants to move the date of assessment to minimise the risk of a second pay packet being taken into consideration in any given assessment period;

• Disregarding income from pay or tax rebates relating to a period prior to claim; and

• Allowing earnings to be averaged over three months to determine entitlement to ‘passported’ benefits.

Additionally, CPAG have identified issues with use of the ‘whole month’ approach, whereby a claimant’s circumstances on the last day of each assessment period determines their entitlement for the entire preceding month. CPAG have called for the following improvements with regard to assessing changes of circumstance:

• Housing costs to be paid on the basis of actual rent liability (to protect claimants who move mid-assessment period); and

• Pro rata payments of Universal Credit elements to allow for changes of circumstance e.g. someone moving out of the household mid-assessment period.

CPAG Chief Executive Alison Garnham, has called for these issues to be resolved in advance of mass migration of households over to Universal Credit.  CPAG has also been granted permission to apply for judicial review of the rigidity of Universal Credit assessment periods. They are bringing the claim on behalf of two single, working mothers.

CPAG is arguing that DWP’s refusal to adjust the two claimants' assessment periods to prevent an additional payday falling within the same assessment period is discriminatory against working parents with children (one of the two groups who are entitled to a work allowance). Moreover, CPAG has found that, far from incentivising claimants to work, the rigidity of the assessment periods means claimants would be better off not working. CPAG’s claim has also been joined by Leigh Day Solicitors, who are bringing a similar case. The hearing is due to take place towards the end of November.