THOUSANDS of people receiving controversial new ‘universal credit’ state benefits could face a frosty Yuletide, warn money experts.
The BBC’s Money Box has revealed the glitch will hit some of the 67,000 people who claim while working and who are paid weekly – the problem is there are five paydays in December and monthly income may rise above levels to receive the credit; other people may have to reapply.
Universal credit merges six benefits into a single payment and allows people to work – the benefit taking into account earnings – the aim being to get people back into employment rather than relying on the state.
The government denies it has become Scrooge; defending the system and saying the majority of claimants were unaffected.
However, the Department for Work and Pensions has warned on its website that people paid five times in a month may earn too much to receive a benefit – it said people will be notified should this happen and also be told to reapply for the following month.
Kayley Hignell, of help group Citizens Advice, said the way universal credit was calculated brought some benefits but also “significant budget challenges” and believes “the key” was communication.
She said: “People need to know that if they’re getting extra income in one month… it may stop their universal credit payment, and that they then subsequently need to put in a new claim to make sure that they continue to get those payments.
“If you’ve got extra money in the month, don’t necessarily bank on the fact that your universal credit is going to stay the same, because it could change it either in this month or the next.”
The Department for Work and Pensions said not all those paid weekly would get a reduced payment in December because it would depend on the date on which a claimant’s universal credit was paid.
It also said the payments balanced out, because claimants entitled to more would receive it in the following month, and said those who reapplied for the benefits would not have to start an application from scratch.
The DWP said: “For the vast majority of people in work, they will continue to get paid universal credit in a five-week month. Universal credit adjusts automatically to people’s wages.
“When someone’s wages take them over the UC threshold, they can get universal credit the next month, and this process is working.”