The Department for Work and Pensions’ (DWP) latest Universal Credit calamity takes the biscuit. Because it shows the lack of thought that has actually gone into designing the contentious benefit.
The DWP: shambolic
Universal Credit, the DWP’s flagship benefit which combines six means-tested payments, has been dogged by controversy. From a damning National Audit Office report to increased foodbank use and rent arrears, the benefit has been in chaos. But now, a parliamentary question has revealed that the DWP has made a serious oversight.
On 27 November, Labour MP for Oxford East Anneliese Dodds asked work and pensions secretary Amber Rudd:
what plans her Department has to take account of 53-week years in the provision of universal credit.
The DWP couldn’t answer. Its minister of state Alok Sharma said it:
has indicated that it will not be possible to answer this question within the usual time period. An answer is being prepared and will be provided as soon as it is available.
It gave this response because it currently has no provision for what to do in these instances. But it should have done, because it’s a common occurrence.
Take a 53 week year in the context of housing costs. Because there are never exactly 52 weeks in a year, landlords who calculate rent on a weekly basis often charge tenants for 53 weeks’ rent every six or seven years. The DWP is aware of this, as minister Justin Tomlinson said in response to a similar question:
Universal Credit is calculated and paid on monthly cycles to reflect the fact that the vast majority of people receive their wages monthly. Many social landlords still expect their tenants to pay rent on a weekly basis, a practice based upon a time when both wages and benefits were paid weekly. The effect of this is that, roughly every six years, there will be 53 payment days in a twelve-month period with the result that, over the cycle, the average social sector tenant will receive approximately 35p a week less towards their rent. A key principle of Universal Credit is that it simplifies the benefit system for working age claimants and re-assessing housing costs to reflect the number of rent payments in any particular year would be complicated and lead to confusion. As such, the Department has no plans to amend these regulations.
So when it comes to rent, the DWP is seemingly happy to leave claimants short. But you also have 53-week years in the context of wages.
As the government’s website itself states:
If you pay your employees weekly, fortnightly or every 4 weeks, you might need to make a ‘week 53’ payment in your final… [payment] of the year.
This could mean that some Universal Credit claimants’ money would change at the end of each tax year. And we’ve already seen the implications of what happens when claimants’ wages go up and down.
As The Canary previously reported, four claimants took the DWP to court in November. They accused it of “irrational” and “discriminatory” treatment under Universal Credit. This is because the DWP fixes its assessment periods for Universal Credit, where it checks working claimants’ earnings. They run from the last day of each month. But the four claimants’ employers don’t always pay their wages on the last day; meaning in the eyes of the DWP, some months the claimants get double the wages, other months nothing at all.
This means that sometimes the DWP does not pay the claimants any benefit, even though they have not actually earned any more from their jobs. A similar situation could well arise with ‘week 53′ payments. Because while claimants’ wages may be stable for the whole of the tax year, at the end they might fluctuate. And the DWP has no provision to deal with this.
The Canary asked the DWP for comment. It referred us to Sharma’s response to Dodds.
This is another blunder in the ongoing shambles that is Universal Credit. But it shows that the DWP designed the benefit without any thought to its practical, real-world implications.
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