PARLIAMENTARY WRITTEN QUESTION
Universal Credit (20 November 2017)

No one on Universal Credit, who are weekly paid, will see a drop in their total income from earnings and benefits in any assessment period with 5 paydays in it. In contrast because of the way UC works in 5 payday assessment periods, the total income a claimant will receive in that month will always be higher, whether their UC is reduced or extinguished

For example if someone is weekly paid at a rate of £200, and has a gross UC entitlement of £1400 a month their total UC entitlement (assuming no work allowance) is £896 a month and £800 from earnings. Total income in the month, benefits and earnings of £1696.

In a five payday month their earnings rise to £1000, UC falls to £770. Total income from benefits and earnings £1770.

For someone on higher earnings of £450 a week, with the same UC gross entitlement of £1400 will receive in a four payday month earnings of £1800 and UC of £266 a month with a total monthly income of £2066. In a five week month their total earnings rise to £2250, UC entitlement zero but total income in that month is higher than in the four payday month.

Everyone who is weekly paid will have a higher income in the 5 payday month, either through a combination of UC and earnings or on straight earnings. The UC taper ensure that people keep every pound of their earnings, with only a 63% reduction in UC entitlement. This is how the system works and how we make work pay. Media reports to the contrary were wrong, misleading and alarmist for UC claimants and I welcome the opportunity to put the record straight.