Source · Select Committees · Work and Pensions Committee
Recommendation 52
52
Paragraph: 231
The monthly assessment is a core part of design of Universal Credit for the Department...
Conclusion
The monthly assessment is a core part of design of Universal Credit for the Department and is the guiding reason behind the five-week wait and payment in arrears. Although the Department says that most people in the wider economy are paid monthly, there is evidence that a significant proportion of people moving onto Universal Credit were paid weekly or fortnightly in their previous job. Even for people who are paid monthly, the recent High Court and Court of Appeal cases which found against DWP show that a rigid assessment still causes fluctuations for claimants, financially disadvantages people and, in some cases, puts people off applying for more stable work. But changing the monthly assessment period would entail a fundamental rebuilding of the entire Universal Credit system. That is not likely to be feasible in the short or even medium term. In the longer term, we would encourage the Department to consider in detail the proposals that have been made for systems that could more flexibly meet claimants’ needs—especially for people who are not paid monthly.
Paragraph Reference:
231
Government Response
Not Addressed
HM Government
Not Addressed
The proposed system described by the Committee cannot easily be operationalised because, whilst you can conceptualise it for an individual case with regular earnings, you cannot reliably run it where earnings fluctuate (such as in zero hour contracts) or where there is more than one set of earnings data (such as in couple households where both maybe working, or individuals with more than one job). In these instances, the reconciliation would be challenging and likely to result in over and underpayments each month as earnings data is verified. This would lead to financial uncertainty and a poor customer service. HM Revenue and Customs sends information to the Department relating to UC claimants who are employed, this includes: gross taxable earnings less tax, National Insurance and pension contributions, pay dates and frequency of payments. This information is combined with any self-reported earnings and income to calculate awards of UC at the end of claimants’ assessment period.