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Government will fix Universal Credit payment date issue following court ruling, minister confirms
The government will find a fix for the Universal Credit payment date issue that sees some claimants wrongly lose out on hundreds of pounds a year, welfare delivery minister Will Quince has confirmed.
Court of Appeal judges ruled this week that Universal Credit regulations are “irrational” and “unlawful” for failing to account for the fact that paydays for people on monthly salaries can vary because of weekends and bank holidays.
Mr Quince told the House of Commons yesterday that the government will not appeal the decision and is now “assessing the remedial options”.
This ends a two-year court battle between the Department of Work and Pensions (DWP) and four single working mothers who brought the case forward.
The latest ruling came after the government attempted to overturn a previous decision against it by the High Court.
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One of the women in the case, Danielle Johnson, is paid for her job serving school dinners on the last working day of each month while her Universal Credit assessment period runs from the last day of the month to the penultimate day of the following month.
That means when her wages enter her bank account a day earlier because the last day of the month falls on a weekend, she is assessed as having earned double in one month and none in the next when her Universal Credit entitlement is calculated.
Ms Johnson lost the work allowance in several months because of that loophole, leaving her around £500 a year worse off and causing her to fall into rent arrears.
The court heard that around 85,000 Universal Credit claimants could be similarly affected, but Mr Quince said yesterday that he did not recognise that figure and suggested it had been put forward by Labour.
Instead, he said the government believes the number is “in the region of 1,500”.
Around 5.2 million people are on Universal Credit, including more than three million new claimants since the coronavirus outbreak in March.
Mr Quince told MPs: “We are looking at how we can further identify people in this group. I stress that many people affected by two salary payments will not suffer a financial loss, as their Universal Credit award will increase in the following month to balance the reduction.
“However, we do recognise the budgeting issues that may have been caused, and we are now assessing the remedial options.
“That is not straightforward – it is not the simple click of a switch – particularly at a time when the department is focused on meeting the challenges of unprecedented demand for its services.”
He added: “My first instinct is to look at whether we can find an automated fix, but we will of course look at manual fixes if that is necessary.”
