Thousands on benefits urged to check Christmas pay to avoid Universal Credit cut

THOUSANDS should urgently check their Christmas pay to avoid a cut to Universal Credit payments.

Many employers choose to process wages early in December.

This is due to the number of bank holidays over the festive period and to ensure that staff are paid before the big day.

But this means that some people will appear to have their salaries temporarily inflated because they're paid over a shorter period.

And as a result, this would reduce your benefit entitlement for the following month.

The government has already closed a loophole which meant that the Universal Credit system now flags when employees receive two pay dates in one period, ensuring Universal Credit payments are not affected.

But in a separate issue, if employers don't report pay dates correctly, those on the benefit could still end up out of pocket.

As many as 100,000 people could be affected, experts estimate, but there are no official figures on those who could be affected.

Robert Salter, a tax service director with Blick Rothenberg, told The Sun: "It's common for employers to pay salaries earlier than normal over the festive period - but it could severely impact those on Universal Credit."

"For example, employers this Christmas could pay the salary for the month ending December 31 on December 16 instead to help staff with cash."

But if earnings are reported as being for the period up to December 16 instead of 31 this could impact Universal Credit entitlement, according to Mr Salter.

Employers that report the wrong pay period end up inflating the perceived wages of an employee.

As a result of this, employees could see their Universal Credit support from the government reduced by as much as 55%.

If you're on Universal Credit and you know your company is going to pay early, it's worth flagging the issue to payroll now to avoid any confusion.

HMRC says that any bosses paying staff early need to report the normal pay date on the Full Payment Submission (FPS) - so this is what you need to ask payroll to do.

A spokesperson for Revenue Benefits said: "Where an employer pays someone on a different day and doesn’t follow HMRC's guidance, they should contact the Department for Work and Pensions as soon as possible and ask them to re-allocate one of the salary payments to a different assessment period."

The government closed the loophole affecting pay dates that fall into the same period, but only when it's a one-off for those paid monthly.

Anyone who gets paid every four weeks, fortnightly or weekly is still missing out. 

The problem affects thousands of workers who are paid by their employers more regularly causing their benefits to drop to £0 in some cases.

The DWP has previously argued that those paid by their employer every four weeks will be paid more frequently than those who are paid monthly, and Universal Credit is designed to reflect this. 

The Sun has called on the government to fix errors in the system, as part of our Make Universal Credit Work campaign.

Universal Credit changes this December

Millions of households on Universal Credit will soon qualify for a tax-free Christmas bonus.

Eligible households do not need to apply for the bonus as it will be paid automatically - but they will need to meet the eligibility criteria.

The tax-free £10 payment is usually made after the qualifying week and before Christmas.

But to qualify for the payment you must be present or "ordinarily resident" in the UK, Channel Islands, Isle of Man, or Gibraltar during the first full week between December 5 and 11.

You'll then get the bonus paid into the same account where you normally receive your state pension payments.

You should see it as a payment from "DWP XB" on your bank statement.

Thousands on Universal Credit will also face payment date changes over the course of Christmas.

If you usually get paid on the 26th or 27th of each month you should be paid on December 23 this year.

That's because Boxing Day counts as a bank holiday, and the 27th is a "substituted" bank holiday day for Christmas Day and payments aren't made on these days.

The same goes for if you usually receive your Universal Credit payment on the 2nd of each month as January 2, 2023 is a bank holiday.

If you usually get paid Universal Credit on this day, you'll get it on December 30, 2022.

Plus, if you usually get paid on the 24th or 25th of each month you should receive your payment on December 23 as the 24th and 25th fall on the weekend this year.

If a payment date lands on the weekend it's usually made the first working day before then.

You don't need to do anything if your usual date for getting Universal Credit falls on a bank holiday.

But you should factor any early payments into your budget and make sure it lasts you long enough to take you through to the next month.