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Families wrongly ‘benefit-capped’

  • 07/08/2018
  • Author:Liam.Evans@turn2us.org.uk

Low income households affected, says Child Poverty Action Group (CPAG)

Empty street

People claiming Universal Credit are losing hundreds of pounds each year because the system fails to spot they are working enough.

How is this happening?

The issue mainly affects claimants whose wages are paid near to the first day of their Universal Credit monthly assessment period, which is used to calculate how much you are entitled to each month.

If a claimant is paid their wages a day or two earlier than normal (because their usual payday would fall on a weekend, for example) the system records them as having had two pay cheques in one assessment period and none in the following one.

As a result of this, the Department for Work and Pensions (DWP) will consider them to be earning more than they actually do in the first period and considers them to be earning nothing in the second period, which then makes them subject to the benefit cap.

What to do if this happens?

If you are affected by the cap, read our information on the benefit cap which tells you of your options.

You should be exempt from the benefit cap if:

  • You and your partner earn enough or work enough hours to qualify for Working Tax Credit
  • You or your partner receives a disability benefit
  • You or your partner qualifies for a carer benefit
  • You or your partner claims Guardian’s Allowance
  • You or your partner is over Pension Credit age
  • You are in a grace period.

If you are not sure whether you can afford to make ends meet and you need advice about what to do next, you can use our Find an Adviser tool to find a benefits or debt advisor near you.

Pritie Billimoria, Head of Communications at Turn2us, said:

“Universal Credit was supposed to bring the welfare benefits system into the digital age. But once again we are hearing that this one-size-fits-all approach is simply not working.

“The current monthly assessment system is not fit for purpose, and if it isn’t fixed before it is rolled out to the rest of the country, we are going to see even more people going hungry and unable to afford to keep a roof over their head.”

Read our guides to Universal Credit.

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