Reallocating earnings to a different assessment period under Universal Credit

New legislation has been enacted to resolve the irrationality identified by the Court of Appeal in Secretary of State for Work And Pensions v Johnson & Ors [2020] EWCA Civ 778. The plaintiffs in this case were penalised because they received two payments of wages in one Universal Credit (UC) assessment period. Decision makers deemed that the plaintiffs "earned" twice as much income in that assessment period, reducing their UC entitlement considerably. The second payment of wages occured because the claimants were paid early to account for bank holidays or weekends. The Court of Appeal decided that the government had failed to take account of the impact that standard banking patterns can have on a claimant's payment date. 

New regulations allow officials to attribute income to different assessment period than that in which it was received

The Universal Credit (Earned Income) (Amendment) Regulations (Northern Ireland) 2020 come into operation on the 16 November 2020. The intention of these regulations is to ensure that no more than one monthly payment of salary from a single employer will be treated as being received in any one assessment period. The instrument gives decision makers the authority to allocate a received payment to a different assessment period, either because the income was reported by the employer in the wrong assessment period or in order to maintain a regular payment cycle. 

Issue may still remain for UC claimants paid at other intervals

The regulations specifically refer to monthly payments of salary. These regulations do not appear to offer a solution to claimants who are paid at different frequencies, such as claimants who are paid four-weekly and who will experience assessment periods in which 2 payments of wages are received. 

Claimants whose UC housing costs payment has been reduced as a result of an irregular salary payment pattern should contact Housing Rights, who may be able to assist in challenging the decision.