Pay rise / back pay / Universal Credit 30 November 2022 at 7:56PM in Benefits & tax credits 7 replies 209 views

coconutcurls

There are rumours at my work place that next year in April we will get a pay rise backdated from October this year.
How will this affect my Universal Credit and do I need to do anything?

poppy12345

UC is based on earnings received during your assessment period. This means that if you receive money owed from your employer it will reduce your UC entitlement for that month, in the same way as your usual earnings. Your employer should report the earnings to HMRC so you don't need to do anything.

xxxxxxxx

It is for you to decide.... will you be better off receiving what is likely to be £0.00 (including rent) for that assessment period of UC that you receive the large payout from your employer   or  will you be better off  asking UC for the earnings to be spread out across the whole period from October to April ?   To ask for this you would need a letter from your employer saying the amount of earnings "were due" in October, November, December, etc   

I'm not 100% sure if this can be asked for, I'm sure calcotti will help answer this.

Alice_Holt

xxxxxxxx said:

It is for you to decide.... will you be better off receiving what is likely to be £0.00 (including rent) for that assessment period of UC that you receive the large payout from your employer   or  will you be better off  asking UC for the earnings to be spread out across the whole period from October to April ?   To ask for this you would need a letter from your employer saying the amount of earnings "were due" in October, November, December, etc   

I'm not 100% sure if this can be asked for, I'm sure calcotti will help answer this.

      AFAIK it can't.
  As poppy says UC is based on actual earnings paid in the assessment period as notified from HMRC.

  Other than a monthly pay RTI dispute I can't see UC retrospectively making adjustments to actual earnings dependent on when "it was due".

   However, the employer may be able to spread the back-pay payments over a number of months rather than it all being paid all in one month. If this is possible, then it could be beneficial to those employees receiving the UC work allowance.
However it would need a careful calculation to determine if this might leave the OP better off.

https://www.seemp.co.uk/2022/11/15/backpay-and-universal-credit/

https://www.barnetunison.me.uk/wp/2022/11/08/advice-on-backpay-and-universal-credit/

poppy12345

xxxxxxxx said:

It is for you to decide.... will you be better off receiving what is likely to be £0.00 (including rent) for that assessment period of UC that you receive the large payout from your employer   or  will you be better off  asking UC for the earnings to be spread out across the whole period from October to April ?   To ask for this you would need a letter from your employer saying the amount of earnings "were due" in October, November, December, etc   

I'm not 100% sure if this can be asked for, I'm sure calcotti will help answer this.

It's not possible to do this. There's been a couple of other threads here recently with the same question. UC is based on earnings received each month.

calcotti

xxxxxxxx said:

It is for you to decide.... will you be better off receiving what is likely to be £0.00 (including rent) for that assessment period of UC that you receive the large payout from your employer   or  will you be better off  asking UC for the earnings to be spread out across the whole period from October to April ?   To ask for this you would need a letter from your employer saying the amount of earnings "were due" in October, November, December, etc   

I'm not 100% sure if this can be asked for, I'm sure calcotti will help answer this.

No it can’t. Earnings are taken into account when received, not when they are earned (with the exception of monthly payments paid on the ‘wrong’ AP due to changes in payday due to weekends or Nablus holidays).

Alice_Holt said:.

However, the employer may be able to spread the back-pay payments over a number of months rather than it all being paid all in one month. If this is possible, then it could be beneficial to those employees receiving the UC work allowance.
However it would need a careful calculation to determine if this might leave the OP better off.

As you say, careful calculation would be required but my instinct is that of having it all in one go results in nil payment for that AP that is likely to be more beneficial overall than spreading the payment out would be. This because the ‘surplus earnings’ in the nil period would effectively be ignored whereas if spread out would be subject to an earnings deduction.

HillStreetBlues

There is a danger (no one knows yet)  of missing out on a CoL 2023 payment if you have a Nil award around that time.

calcotti

HillStreetBlues said:

There is a danger (no one knows yet)  of missing out on a CoL 2023 payment if you have a Nil award around that time.

That’s a good point - I hadn’t considered that.