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Forum Home  →  Discussion  →  Universal credit migration  →  Thread

Two payments in one assessment period

Pete at CAB
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This news story was on this site and in Touchbase

https://www.rightsnet.org.uk/welfare-rights/news/item/dwp-confirms-that-it-has-automated-process-for-identifying-claimants-who-receive-two-monthly-wage-payments-in-one-universal-credit-assessment-period

I understand that this is not as straightforward as it might appear, it seems that the system will flag up two payments but someone will then have to contact the cl and if it is the case that there were two monthly wages payments in one AP then they will raise an RTI dispute.

If this true then, although it is still a very welcome improvement, it isn’t quite as ‘automatic’ as it seems at first sight.

Daphne
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I’m also concerned that it won’t pick up where no payments in a month happens before the two payments in a month - i’ve sent an email up via stakeholders for further clarification…

Ianb
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Daphne - 31 August 2021 12:28 PM

I’m also concerned that it won’t pick up where no payments in a month happens before the two payments in a month - i’ve sent an email up via stakeholders for further clarification…

Although that is presumably less common because disruption to normal monthly pay patterns due to holidays normally results in employee being paid earlier than usual rather than later than usual.

Daphne
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I guess it would be in cases like when you’re paid the last working day of the month which I think is standard for local authorities - which could be anything from 26-31 depending on weekends/months - and your assessment day is 29/30 - which I think it was in the Johnson case if I remember rightly

HB Anorak
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Ianb - 31 August 2021 12:59 PM
Daphne - 31 August 2021 12:28 PM

I’m also concerned that it won’t pick up where no payments in a month happens before the two payments in a month - i’ve sent an email up via stakeholders for further clarification…

Although that is presumably less common because disruption to normal monthly pay patterns due to holidays normally results in employee being paid earlier than usual rather than later than usual.

A two-payment AP will always be followed or preceded by a no-payment AP if the claimant is paid calendar monthly: they only get paid 12 times a year, so if one payment vacates its regular date in an AP and shifts to an adjacent AP, the vacated AP will have no salary in it.  That is why some claimants affected by this phenomenon can be better off overall, albeit with some confusion and disruption to their budget and exposure to the risk of the benefit cap in some cases too.

Ianb
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HB Anorak - 31 August 2021 01:48 PM

A two-payment AP will always be followed or preceded by a no-payment AP if the claimant is paid calendar monthly: they only get paid 12 times a year, so if one payment vacates its regular date in an AP and shifts to an adjacent AP, the vacated AP will have no salary in it.  That is why some claimants affected by this phenomenon can be better off overall, albeit with some confusion and disruption to their budget and exposure to the risk of the benefit cap in some cases too.

I realise that. My point was that it is more usual for normal pay day to be brought forward in response to bank holidays than it is for normal pay day to be delayed and therefore it is more common for the AP with zero earnings to be after the AP with two payments rather than before it. However there can, of course, be other reasons for disruption of normal pay dates.

Pete at CAB
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With regard to bank holidays etc it seems to be possible to sidestep the whole issue by changing the way earnings are reported by employers- this specifically refers to Christmas but surely it should be possible to extend it to other holidays

https://www.rossmartin.co.uk/sme-tax-news/5069-paye-rti-reporting-christmas-exception-to-the-rules

HB Anorak
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Ianb - 31 August 2021 02:20 PM
HB Anorak - 31 August 2021 01:48 PM

A two-payment AP will always be followed or preceded by a no-payment AP if the claimant is paid calendar monthly: they only get paid 12 times a year, so if one payment vacates its regular date in an AP and shifts to an adjacent AP, the vacated AP will have no salary in it.  That is why some claimants affected by this phenomenon can be better off overall, albeit with some confusion and disruption to their budget and exposure to the risk of the benefit cap in some cases too.

I realise that. My point was that it is more usual for normal pay day to be brought forward in response to bank holidays than it is for normal pay day to be delayed and therefore it is more common for the AP with zero earnings to be after the AP with two payments rather than before it. However there can, of course, be other reasons for disruption of normal pay dates.

Yes indeed, ,I see what you were saying now

UB40
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.....but not where there is a Work Allowance—-’ Whenever they were treated as receiving two months’ wages in one assessment period, only one work allowance was applied to those earnings. They therefore lost out on the benefit of one work allowance against one month’s salary. This cash loss was not compensated for by the fact that the following assessment period they were treated as receiving no wages and so received the maximum UC allowance. ‘

https://cpag.org.uk/welfare-rights/legal-test-cases/universal-credit-assessment-period-inflexibility

 

Ianb
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Pete at CAB - 31 August 2021 02:28 PM

With regard to bank holidays etc it seems to be possible to sidestep the whole issue by changing the way earnings are reported by employers- this specifically refers to Christmas but surely it should be possible to extend it to other holidays

https://www.rossmartin.co.uk/sme-tax-news/5069-paye-rti-reporting-christmas-exception-to-the-rules

Indeed, if employers report earnings in accordance with HMRC advice the problem does not arise.
https://www.gov.uk/running-payroll/reporting-to-hmrc
“You must enter the usual date that you pay your employees, even if you pay them earlier or later. For example, if you pay your employees early because your usual payday falls on a Bank Holiday, you should still enter your regular payday.”

 

Timothy Seaside
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Ianb - 01 September 2021 08:25 AM
Pete at CAB - 31 August 2021 02:28 PM

With regard to bank holidays etc it seems to be possible to sidestep the whole issue by changing the way earnings are reported by employers- this specifically refers to Christmas but surely it should be possible to extend it to other holidays

https://www.rossmartin.co.uk/sme-tax-news/5069-paye-rti-reporting-christmas-exception-to-the-rules

Indeed, if employers report earnings in accordance with HMRC advice the problem does not arise.
https://www.gov.uk/running-payroll/reporting-to-hmrc
“You must enter the usual date that you pay your employees, even if you pay them earlier or later. For example, if you pay your employees early because your usual payday falls on a Bank Holiday, you should still enter your regular payday.”

 

That’s true, but I don’t think it addresses the problem of people who are paid on the last working day, or the last Friday of the month.

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Timothy Seaside - 01 September 2021 09:28 AM

That’s true, but I don’t think it addresses the problem of people who are paid on the last working day, or the last Friday of the month.

Indeed it doesn’t. I’ve written a lot about the problems and possible solutions.  There’s an overview at https://benefitsinthefuture.com/universal-credit-and-patterns-of-earning/ .

Just to raise a linked issue; what’s the panel view about the increasing ‘get your pay early’ schemes that are proliferating.  Is this earnings (they all say it’s not a loan) and what date should count?

Timothy Seaside
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I’ve just helped a client with a reclaim. When you select “monthly” for earnings frequency, it asks “When do you usually get paid?” and gives you the options of the last Friday of the month, the last working day, the 28th, or other. So presumably this is some attempt to pick it up automatically.

There is no option to say you are paid four weekly, but then again they are still trying to justify the benefit cap and four weekly pay issue, so they don’t want to go making it too obvious that it would be quite easy to sort it out.