Universal Credits and 4 week pay

mellofax

According to many helpful guides, answers to questions on various sites (including this one!) and the governments own pages, being paid every 4 weeks instead of monthly looks like it is going to cause hell when I switch to universal credits. Right now, with my circumstances as a single father I am actually looking to increase my hours worked to 40 and universal credits makes that a lot more viable than the existing system - but I will definately loose a month of Universal credits when the "pay overlap" occurs of more than one payment in a month. Ive seen all the arguments about its not fair, etc etc but im a pragmatic guy im looking for the solution not the problem.

If I were to reduce my hours by HALF for 2 months (Times to coincide with the 2 payments in one month) this would equal exactly what it would have been in the case of a normal month to Universal Credits.

For clarity : Working 40 hours a week, each 4 weeks I would be working 160 hours. On the month that clashes, this would show (however dumbly) as 320 hours because of the overlap - SO for the overlap (which means for the 2 coinciding pay periods) I will instead reduce my hours to 20 a week making 80 hours. Clashing that makes 160 hours which is what it always is as far as their strange system sees it.

My question is : will that work? Will it screw up anything else? As far as I can see it simply makes the circumstances fit their bizzare way of doing things!

Ineededaname

The answer to this situation is just to manage your money. People being paid their income at different frequencies to their bills is in no way different to many people who are working. It's really not bizarre at all.

You can work out when this will happen and plan for it. People who are paid four weekly normally have a pay packet where they are not paying their major monthly bills. If possible you could amend your bill dates to coincide, or failing this you simply put the money aside (hopefully the 'free' month comes before the nilled UC payment). Or you simply save a portion of each of your UC payments and then use this money in the month in question.

The income you lose from halving your hours for two whole months should be a larger amount than the UC you gain. You are essentoally choosing to reduce your annual income :eek:

The other problem is that a voluntary loss of pay in order to increase benefit received is sanctionable. If they were ever to realise what you are doing it could result in a sanction on your benefit.

Finally have you considered your employer in all of this? They may not be too happy.

calcotti

That ought to work. However I would suggest you calculate how much UC you would be getting and combine it with your earnings to see what your total income will be if you do as you suggest as against just working continuously. There doesn’t seem much point in reducing your overall income just to avoid a nil UC period.

There may also a possibility of being sanctioned for giving up work if it drops you below your threshold (not sure whether this could apply for a short term reduction).

Ineededaname

Here's an example.
Let's assume your UC rate is £1000 a month. Two pay packets of £1000 each would indeed leave you with no UC. You have still had wages of £2000.

If you halve your income and only earn £1000 your UC payable would be £494.74. Your total income is now £1494.74.

£2000 > £1494.74
This is why your plan is bad.
Plan and budget properly instead of throwing money away.

calcotti

Another factor to consider is whether the double payment results in surplus earnings which may reduce UC entitlement in the following month (there is a disregard of £2,500 at the moment but this reduced to £300 next April).

https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/surplus-earnings-and-losses/

Icequeen99

calcotti wrote: »

Another factor to consider is whether the double payment results in surplus earnings which may reduce UC entitlement in the following month (there is a disregard of £2,500 at the moment but this reduced to £300 next April).

https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/surplus-earnings-and-losses/

Just announced as delayed to April 2020 (for the £300 disregard)

IQ

calcotti

Icequeen99 wrote: »

Just announced as delayed to April 2020 (for the £300 disregard)
IQ

Excellent news (was that tucked away in the budget?).

Icequeen99

calcotti wrote: »

Excellent news (was that tucked away in the budget?).

it was indeed. From the red book:

5.38 The government will deliver these changes slowly and carefully. In response to feedback
on Universal Credit, the implementation schedule has been updated: it will begin in July 2019,
as planned, but will end in December 2023. The scope of the surplus earnings policy in Universal
Credit will also be temporarily reduced: it will continue to affect large earnings spikes (above
£2,500) until April 2020, when it will revert to affecting earnings spikes of £300. (15)

IQ

calcotti

Icequeen99 wrote: »

it was indeed. From the red book:
5.38 The government will deliver these changes slowly and carefully. In response to feedback
on Universal Credit, the implementation schedule has been updated: it will begin in July 2019,
as planned, but will end in December 2023. The scope of the surplus earnings policy in Universal
Credit will also be temporarily reduced: it will continue to affect large earnings spikes (above
£2,500) until April 2020, when it will revert to affecting earnings spikes of £300. (15)
IQ

Thank you for highlighting this - it is at least a problem postponed.