Timing a UC claim to fall between calendar monthly payment of wages

Assuming a level of earnings that would not normally give somebody an entitlement to UC, what would stop somebody who is paid calendar monthly from tactically claiming UC on a date where no wages would be due in the first AP?

e.g. if you are paid on the last working day of the month - your wages will next be paid on 29 July. If you then claim UC on 30th July, your first AP would not include any earned income.

Obviously reg 61 now includes provisions to allow DWP to reallocate payments but do any of these bite in these circumstances?

Did you mean paid on 29th July and then claim UC on 30th July (rather than August)?
AP would then run 30th July to 29th August.
If then paid on 30th or 31st August there would be no earnings in the AP* and full UC payable. can’t see anything to prevent that (but it’s only going to work for that one initial AP.
(*If the payment date reported to HMRC is 29th July, possibly the payment date would still be reported as 30th July even though paid on 29th due to the weekend.)

Yes thanks for that I have edited my original post.

That’s a good point Ian. I guess this would vary across employers and would be interested to know what HMRC instructs employers to do in these circumstances (?)

I am paid calendar monthly in this way and have just checked my Personal Tax Account. My earnings are reported on the day I am actually paid (last working day of each month)

I should add here that even if this were to work I am not planning to take advantage of this myself (!) but many other people paid calendar monthly who on the face of it would not qualify for UC must be in a similar position where there are these odd months where wages could fall outside of a monthly assessment period.

I seem to remember people who know about reporting to HMRC (probably Gareth Morgan or Charles) saying that the employer’s info to HMRC is supposed to include the date that the pay is due as well as the date it is actually put in the bank; which would overcome the issue of being paid early for weekends, Christmas, etc. This was in the context of the two pay days in one AP issue (the Johnson case) that the amended regs are designed to address. So I think it was also clear that a lot of employers obviously don’t know how to complete their digital returns to HMRC properly (or don’t bother).

It strikes me that the DWP would think this (edit: I mean your cunning plan) is very wrong (even if it’s within the regs) whereas they clearly felt very strongly (i.e. worth going to the Court of Appeal for) that it was perfectly okay when the exact same issue was depriving people of UC with missing work allowances, etc.

Haven’t looked at it too closely but, by being paid on the last Thursday of every month, I think someone in my circumstances could take advantage of this more frequently (though might also be caught by the surplus earnings rules for 2 wages in some other APs).

Aside from that, could people not also do this again after the 6 month rapid reclaim gap when they can change their AP dates?

Might be meaningful for managing the longer-term finances for some people on low incomes, though not sure I feel comfortable giving the advice. Using gaming terminology, it sounds like cheesing (rather than cheating) the system by taking advantage of loopholes, bad practices etc.

(And no, not planning on taking advantage of it either.)

Timothy Seaside - 25 July 2022 01:03 PM

It strikes me that the DWP would think this (edit: I mean your cunning plan) is very wrong (even if it’s within the regs) whereas they clearly felt very strongly (i.e. worth going to the Court of Appeal for) that it was perfectly okay when the exact same issue was depriving people of UC with missing work allowances, etc.

Indeed. I did wonder if there were any wider benefit to JRing a decision to award in these circumstances but other than highlighting the unfairness you suggest, I imagine any loophole would be shut down very quickly and it would probably be of no benefit to anyone!

tbidmead - 26 July 2022 04:11 PM

I imagine any loophole would be shut down very quickly and it would probably be of no benefit to anyone!

I don’t think so, it’s a consequence of the fundamental design of Universal Credit.  It wouldn’t be easy to close; and it probably save s them more money than it would cost.  In order to taje advantage of it, people would have to have a very good idea of when it would be advantageous to them to claim and that isn’t easy… unless, cough, they were using something like our Assessment Period Reckoner.

My understanding is that it is the date the information is passed from HMRC to DWP that is relevant for UC purposes. That is why it is possible for an employer to report earnings on a particular day but for it to be counted by UC the following day (which is a problem if that happens at the end of an assessment period/start of another). This is because there are 4 checks a day between the two systems and the last one is at 9 or 10pm. If the employer sends their FPS submission to HMRC after that time, it goes across to DWP the following day.

Is that still your understanding Gareth?

I was assured that they should be using the correct RTI field and passing it across for that date to be used.  My suspicion is that may be a change waiting to happen.