The DWP is taking Greggs’ staff bonuses

Greggs and the DWP logo
Steve Topple

THE INFORMATION IN THIS ARTICLE DOES NOT CONSTITUTE LEGAL ADVICE. YOU SHOULD ALWAYS SEEK SUPPORT FROM A WELFARE RIGHTS PROFESSIONAL WHEN NEEDED, BASED ON YOUR OWN PERSONAL CIRCUMSTANCE.

The Department for Work and Pensions (DWP) is taking the bonuses of some Greggs’ staff. This is because many workers receive Universal Credit. But a court case from 2019 could provide a route of appeal for some of the high streets firm’s employees.

The DWP: taking away bonuses?

As much of the media reported, Greggs is going to be paying most of its staff bonuses. This is due to financial success in 2019. The bonuses will be anything up to £300. Good news on the face of it. But as one journalist pointed out on Twitter, it’s not as easy as that.

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Ally Fogg tweeted:

You could call the government’s subsidies for the service sector ‘corporate welfare‘:

The Canary has confirmed that Fogg’s source is authentic. So, is this story from a Greggs’ employee correct? In some cases, probably yes.

Work Allowances

The DWP clearly states that:

In most cases bonuses will be assessed along with the salary and, depending upon the individual’s circumstances, could reduce their benefit for that assessment period.

Usually, the claimants will continue on Universal Credit automatically for their next payment.

However, if the bonus reduces the Universal Credit award to zero, DWP can help claimants quickly return to claiming Universal Credit.

In other words, the DWP treats bonuses as it treats wages. As a rule, the DWP get an employed Universal Credit claimant’s earnings from HMRC. This worked out by “assessment periods“. These are for a calendar month, which starts on the date they made their original claim.

It may not affect some staff. This is due to Universal Credit’s “work allowance“. It is an amount some people can earn without the DWP reducing their payments.

But this work allowance is for relatively small amounts (£287 with housing support/£503 without). A minimum-wage employee would have to work around 35 to 61 hours in a calendar month for the DWP not to deduct anything. That’s around 8 to 15 hours a week; not a lot of work. So, it could hit some staff who work more hours. It’s worth noting that for every £1 you earn over your work allowance, the DWP deducts 63p of Universal Credit.

Complexities

Also, some Greggs’ employees on Universal Credit will also fall foul of its assessment periods. Although this does depend on whether Greggs’ follows HMRC guidance on payroll submissions.

The company pays some staff on the 25 of each month. But if that date falls on a weekend, this changes to the Friday before.

If a staff member was on Universal Credit, and their assessment period ran from 25 of one month to the 24 of the next, they could get paid twice in one period. It may mean they could lose all their Universal Credit. This is because the system would assume they earned more than they actually have. It would then deduct both sets of wages off their payments. If this person is also getting a bonus, that would be taken off too. But the flip side of this is it may mean in the next assessment period the DWP classes the employee as nil income.

As the DWP itself points out, this could mean it would end some people’s claims.

A court ruling

The High Court ruled on this issue last January, saying the situation was “odd in the extreme” and “could be said to lead to nonsensical situations”. It said the DWP’s interpretation of its own rules was unlawful.

Astonishingly, the DWP has still not acted on this ruling, as its guidelines show. The Canary understands it is currently appealing the verdict. But this court case could also be the key to Greggs’ employees’ bonus predicament.

A potential lifeline?

Buried within the judgement are two relevant sections. The judges ruled that:

That other factor is the period in respect of which the earned income is earned. It is the earned income in respect of the period of time included within the assessment period that is to be calculated. That is to be based on the actual amounts received in the assessment period. There may, however, need to be an adjustment where it is clear that the amounts received in an assessment period do not, in fact, reflect the amounts of earned income received in respect of the period of time included within that assessment period.

That interpretation of regulation 54 of the 2013 Regulations is also consistent with the wording of the 2013 Regulations read as a whole, and regulation 22 in particular…

That language, too, focusses [sic] on the earned income in respect of the assessment period. It is not expressed in terms of earned income actually received in the assessment period even if the earned income is properly referable to another period of time not included within the assessment period.

The devil is in the detail

In short, the judgement questions whether the DWP should count money that a claimant did not actually earn during an assessment period, in that same assessment period.

Greggs’ staff bonuses are for 2019. So, staff technically did not earn them in the assessment period from which the DWP will deduct them. Therefore, Greggs’ staff could argue that the DWP should not count them as earned income. In other words, it should not deduct the bonuses because the employee did not earn them in the assessment period in question.

These circumstances are all very specific. It’s important to note many people may not be affected at all. Also, some people may be better off if the DWP deducts the bonus in one assessment period. Greggs’ employees would need to check their own claimant commitments and work allowance. They should also seek professional opinion from a welfare rights adviser.

The DWP and Greggs say…

The Canary asked the DWP for comment. It chose not to provide a statement. But it did point us to the rules on Universal Credit and the work allowance, which this article has detailed.

We also asked Greggs for comment, but it declined to give us a statement.

Head of the Low Incomes Tax Reform Group team Victoria Todd told The Canary:

The Johnson case opens up some interesting issues around when earned income should be taken into account for Universal Credit purposes. Currently, claimants who receive an additional payment and who think it should be treated as income in a different assessment period will need to ask for a Mandatory Reconsideration and, if unsuccessful, ultimately appeal to a Tribunal. Whether it is beneficial to have any bonus treated in a different assessment period very much depends on the circumstances of each case and we recommend that people seek advice from a welfare rights specialist.

The subject of Greggs’ bonuses exposes much wider failings at the DWP. It also shines a light into the still flawed Universal Credit system. But there are also much larger issues at play in this story.

Corporate welfare

As Fogg tweeted:

Welcome to 21st-century employment, corporate welfare, and Universal Credit. Or, as UN special rapporteur Philip Alston called it:

a digital and sanitized version of the 19th-century workhouse

Welcome to the workhouse

All this makes the national picture dire. Around 8 million people in relative poverty live in working households. 70% of children in poverty live in a household where at least one person works. The Child Poverty Action Group (CPAG) estimates Universal Credit will plunge another 100,000 children into poverty by 2023/24.

Meanwhile, the Joseph Rowntree Foundation (JRF) estimates that under Universal Credit, while:

5.6 million people in working families are likely to see an increase in their incomes. … 5.1 million people in working families are expected to see a reduction in income

Moreover, it says that:

1.7 million people living in poverty in working families… face a substantial reduction in income, on average £2,500 a year.

The government’s aim with Universal Credit is to “support people” to be “better off in work”.

But judging by Fogg’s Greggs’ worker’s comments, it may make people less likely to work more. They’d be forgiven for thinking ‘What’s the point in working hard? What’s the point in a bonus? The DWP and government just take the money, anyway’.

We live in an age of low-wage gig work. Employers and the system treat people as numbers and not individuals. Moreover, Universal Credit operates with that same mantra. This is despite DWP claims to the contrary. So, those affected fighting back is crucial. The information contained in this article may not be relevant to many Greggs’ employees. But when the system herds most of us like cattle, if one person can claim a small victory against the DWP, then it’s a win for all of us.

Featured image via Creative Commons – mrrobertwade (wadey) and Wikimedia – UK government

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  • Show Comments
        1. frank_freeman you are correct sir but they do get tax brakes
          and help with thier homes plus death taxes help payments form rich Tory M.P. they vote for (so they do benift of the backs of the poor)
          As the more money the Tory Govt claw back from U-CREDIT payment the less chance of the old rich Tory member (voters) being tax any more on their assests or incomes or off shore account doggy money.

      1. very good point
        This racking back of our cash will not stop
        at Greggs firm it will spread to over firm (buseness) that pay under the living wage to it’s enployees(if we speak up were sacked so we could see a mass UNenployent mess come to this counrty over this Tory Crap of taking money back of low paid worker that cannot live on what they get now.
        //
        Also where is the money used they claw back is it given to local council
        to help off set this damige done by Tory D.W.P. Minister pay for the loss income
        to residents (will it also start to increase homeless and food bank needs again)
        //
        Remember this TRUE ”fact Tory M.P. have a food bank scam APP going on now where them in needs have to pay to be told if they can have FOOD BANK HELP
        OR NOT –So all Tory M.P. will keep and open up new fodd banks to feed their account with dirty cash made off the poor low paid in work people that use food banks now to suvive day to day

    1. The DWP is taking Greggs’ staff bonuses
      ////
      WELL Tory SCAM U-CREDIT screwing the benefits uses again I see.
      Think about this all residents plus rich people using the Gregg shops of U.K./Wales/N/Ireland /Scotland what if Gregg’s shop working gives up working? In the shops after they get none of the bonuses given by Gregg shop owner to help, subsidize they low income out.
      ///
      How many of you rich Tory party funders backing this Govt move will go be hide the shop counter?
      And run the Gregg shops if no low-income staff turn up for work after D.W.P. rip the cash back of the low paid workers trying to make a living. remember this true fact here in work poverty will increases as a result of Govt Scam U-CREDIT taking this money way remember D.W.P. minister plus P.M. Boris they are in work not on the streets living yet this form of punishing the in working family is NOT ON Boris.
      //
      The clawing back of cash Will or could put people out of work in town center shop of Gregg’s when they cannot survive after you take this money of the working person in the Gregg’s shops and could end up on the our streets as well in local area.
      //
      True ‘FACT here all Govt M.P./Ministers/Boris as well all
      Claim expenses back of us taxpayer so do not loss out on the laws they make on benefits or any over claw back of cash by Govt Minister like D.W.P. here in this article.
      //
      Therefore, Boris keep an eye on your un-employment figures going through the roof’ they are about to go up over this claw back of money by your Tory D.W.P. Minister as it will not just be used in Gregg shop.
      //
      But over low paid jobs as well residents + voter of Tory party to claw back cash needed by Tory Govt to keep their promises to voter in Dec G.E. look like the poor in working family will pay for our needs not the rich or well off again to keep Tory Govt promises that Boris himself + his Tory party local M.P./Minister alike to improve the poverty within low paid working family, look like they all have forgotten their promises already voters the pledge or promises us all in Dec G.E. 2019.
      //
      Now Tory party are in full power will the poor only continue to keep this country running (But at what cost I ask as a free voter Boris???)
      Will you Boris + Tory party wish to loss power in next G.E. in 2024 and join Labour on the scrap heap of power no more to run our country.
      //
      Boris are you prepared to pay this price SIR yes or no?
      If not, Boris STOP this claw back of cash now you have the power to do so use it SIR before job are lost and more people on our streets living.
      And tax the rich more to cover the coast of your Tory Govt members promises to us free voter in the U.K. Wales/N/Ireland/Scotland
      In Dec G.E. 2019 we free voters will be watching how this this mess unfolds in this article Boris + Tory Members we will also hold all Tory Govt member to account fully for failing to deliver their spoken promises live on T.V. to all us free voter that put Tory party in full power in Dec G.E. 2019 we can or could remove our votes for Tory party members next G.E. in 2024 Boris and place it with other party’s

    2. If someone is receiving a benefit because they aren’t receiving enough in wages (and that could be because they work part time, not necessarily because the hourly rate is low) and in a particular month or week they do get enough wages why should they still receive the benefit?

      1. Reply to– GrahamHindson
        ///
        Good point BUT OUT OF ORDER SIR —GrahamHindson
        ///
        Can you tell me plus all low paid workers why the?
        employers in firms are still not paying the Tory Govt first living wage, to their employees? yes or no?
        //
        Remembering a new living wage as gone into law to be enforced in April 2020 (will they pay this full amount??)
        Never mind this new living wage coming in law
        Will the firm PAY UP this new wage amount, so benefit is not need by low paid work people yes or no?? GrahamHindson.
        //
        It’s the crook running firm that are keeping the money from its work force already on low wages.
        So, they need Tory SCAM U-CREDIT to survive plus food banks as well to feed their families NOW GrahamHindson.

        FINALY!
        Could I politely ask you SIR??
        Are you one of the crocked employers that are Not paying the right living wages to your employees yes or no?
        Or are you a M.P. for Tory Govt yes or no?
        That voted YES for what’s in this article here to unfold
        On the low paid working people of ALL of U.K. areas.
        Doing any low paid jobs in over serves not just Greggs.

        1. Leaving aside the emotive language I’m making the very simple point that benefits are supposed to prop up those who have no money. If someone has the money one week why should they receive the benefit that week?

    3. One could conceive that the bonus was earned over 12 months. This is different than an increase in pay.
      The details are mind boggling and living with so little an income to begin with, and if your not well versed on the computer start praying.
      How to instill a feeling of utterly helplessness in people.
      I hope the blackmarket is thriving. The less Government knows the easier life becomes in many respects. Why its the same attitude as the rich then with their legal offshore accounts paying no tax keeping it offside as an issue.
      Picking on the poor by using devilish details to confuse, stymie, , and simply oppress the spirit to do anything.
      A social problem creation agency is the DWP.
      These low wage people ought to qualify for carbon tax credits as their impact is so miniscule on the planet.
      People have to get organized here, and put the new rules of the world into perspective!

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