![[Basket]](images/basket.png){kind=small}
Your order![[cover image]](images/issue/BK201804.jpg)
Creating chaos in family finances — the pay-day effect
[ch 1: pages 22-23]Both Usdaw and UNISON have highlighted problems for workers who are paid on a given day of the month, such as the last Thursday, and those who are paid on a four-weekly basis because of UC’s fixed monthly assessment period.
Usdaw explains that if you are paid four-weekly, one UC payment per year will be reduced or may be nil because you receive 13 pay packets in a year. In one monthly assessment period, two of your pay packets will be included in the assessment rather than just one, meaning your UC payment that month will be considerably reduced.
If including two of your pay packets in the assessment results in your UC calculation being £0.00, you will not receive any payment for this month and you will also need to inform the UC office straight away that you are reclaiming from the following month. If you do not inform them, the computer system will assume you have ceased to be eligible and you will not receive payments in the future until you request them.
UNISON’s Creating chaos in family finances report demonstrates problems that can result from the interface between the assessment period and the pay date for people who are paid on a given day, and for those who are paid every four weeks. The union modelled a number of examples and showed how the “pay-day effect” can mean that claimants do not receive the UC they should be receiving. In one case, a worker being paid on the last Thursday of the month lost £683.76 a year or almost 7% of the UC they would have received without this effect. Employers paying their employees at Christmas will have the same effect.
UNISON reports: “This will have the same effect and will result in people facing financial difficulties just after Christmas as well as possibly being short changed by Universal Credit at the time of the year when family finances are stretched hardest.” The union has called on the DWP to use a standard UC assessment period that begins on the first of each month and ends on the last day of each month, or to give people the right to amend their assessment period so the problem does not arise.
A Child Poverty Action Group case study demonstrates the issue faced by people who are paid on a fixed date each month:
A working single mother is paid several days early if the normal pay date (the 15th of the month) falls on a weekend or a bank holiday. As her assessment period runs from the 14th to the 13th of the month, she is regularly paid twice in one UC assessment period. As a result, she often receives no UC for a particular assessment period and full entitlement in the subsequent month. She finds budgeting difficult and gets less UC than she would if she were paid on the same day each month, as only one work allowance is used in calculating her entitlement in each assessment period.