Martin Lewis' MoneySavingExpert warns about Universal Credit Bank Holiday payment trap

MARTIN Lewis' MoneySavingExpert is warning Brits about a flaw in the Universal Credit system, which could mean no payments at all in May.

The team warned that a trap created by the bank holiday could leave people high and dry, in it's weekly newsletter.

The warning read: "On universal credit? Beware a bank holiday payment trap. It's complicated but the upcoming bank holidays could mean you get NO universal credit in May. "

The problem could affect anyone whose employer pays early when there is a bank holiday – often on the last working day beforehand.

This year's May bank holiday falls on Monday, May 3, which means lots of people will actually get paid on April 30.

People likely to get their salary early are those who would usually be paid on the 1st, 2nd or 3rd of the month.

If that sounds like you, you need to check what date your Universal Credit assessment period starts and finishes on – to see whether your early payment will mean you are paid twice in one period.

The the more you earn in an assessment period, the less benefits you get the following month – you can find out more about work allowances and tapers in our Universal Credit guide.

What to do if you have problems claiming Universal Credit

IF you’re experiencing trouble applying for your Universal Credit, or the payments just don’t cover costs, here are your options:

  • Apply for an advance – Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it's a loan which means the repayments will be automatically deducted from your future Universal Credit payout.
  • Alternative Payment Arrangements – If you're falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you're part of a couple.
  • Budgeting Advance – You may be able to get help from the Government for emergency household costs of up to £348 if you're single, £464 if you're part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You'll have to repay the advance through your regular Universal Credit payments. You'll still have to repay the loan, even if you stop claiming for Universal Credit.
  • Cut your Council Tax – You might be able to get a discount on your Council Tax by applying for a Council Tax Reduction. Alternatively, you might be entitled to Discretionary Housing Payments to help cover your rent.
  • Foodbanks – If you're really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussell Trust website.

If your Universal Credit assessment period runs from April 1, 2 or 3 then it could look like your earnings have doubled for your April assessment period, which means you could get significantly less benefits in May.

For instance, if you're usually paid on the 1st, 2nd or 3rd of the month, you will get a pay packet in early April, but could also get your May wage on April 30th.

Some people will be pushed above the earnings threshold, which means that you won't get any Universal Credit payments at all in May.

If this does happen, the good news is that your June benefits payment should be much higher as you have will have no monthly earnings recorded in the May assessment period.

But that is scant comfort to many people who rely on Universal Credit payments each month, and who would seriously struggle if a month was missed.

Even worse, you have to stretch your May salary longer, from April 30 to whenever you are usually paid in June.

Fortunately, the DWP rules have changed after judges last year ruled it "irrational and unfair".

That means there is a quick trick to make sure you don't miss out – but you may need to get in touch with your Universal Credit Work Coach.

If your monthly payment date changes – you need to sign into your online account to check how much your next Universal Credit monthly payment will be.

If it looks like you’ll get paid too much or too little Universal Credit, ask your work coach to move your wages into another assessment period.

In this case, it will mean that your wage is assigned to May not April, so you'll keep getting your payments as usual.

In theory, if your employer pays you on the same day each month, it is up to them to report what your actual payday should have been, so your Universal Credit claim is unaffected.

But DWP says that some employers do not follow HMRC guidance meaning it's really important that you sign into your workbook to see how your payments will be affected.

If your assessment period runs from the middle of one month to the next, then you are unlikely to be affected by this bank holiday, but could have problems with others.

For instance, someone whose assessment period ran from the 25th to the 24th might get into issues around the Christmas bank holiday.

A DWP spokesperson said: “We have changed the rules so that Universal Credit claimants getting two monthly pay packets in one assessment period can have their second payment moved to another assessment period.

"This gives claimants more stability in the amount of benefits they receive.

“If a claimant gets two monthly pay packets in one assessment period they should report it to their Work Coach.”

The Sun wants to Make Universal Credit Work

UNIVERSAL Credit replaces six benefits with a single monthly payment.

But there are big problems – it takes five weeks to get the first payment and this leaves some families worse off by thousands of pounds a year.

And while working Brits can claim back up to 85% of their childcare costs, they must find the money to pay for childcare upfront.We’ve heard of families waiting up to six months for the money.

Working parents across the country told us they’ve been unable to take on more hours – or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.

The harsh taper rate also makes it hard for Brits to get back to work.

It’s time to Make Universal Credit work. Since December 2018, we've been calling for the government to:

  1. Get paid faster: The government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop millions from being pushed into debt.
  2. Keep more of what you earn: The work allowance should be increased and the taper rate should be slashed from from 63p to 50p, helping at least 4million families.
  3. Don’t get punished for having a family: Parents should get the 85% of the money they can claim for childcare upfront instead of being paid in arrears.

Together, these changes will help Make Universal Credit Work.

Join our Universal Credit Facebook group or email [email protected] to share your story.

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