Working and on universal credit? You may have been underpaid by £100s – check NOW

Working and on universal credit? You may have been underpaid by £100s  check NOW

If you work and claim universal credit, you could be one of thousands who may be getting paid the wrong amount each month due to flaws with the automated universal credit system. It's more likely to affect you if you're paid weekly or irregularly, but this guide explains what the issue is, how to check if you're affected – and how to get back what you're owed if you've been underpaid.

Please help us by letting us know your experience. This is a new area for us, so please let us know your experiences in our paid the wrong amount of universal credit forum thread, and feed back on how we can improve this guide so others can claim more easily.

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Why your universal credit may be wrong

If you work and claim universal credit (UC), you're one of thousands at risk of getting paid the wrong amount each month, due to flaws with the Government's automated system. 

If you've worked during the latest universal credit assessment period, HM Revenue & Customs (the department that deals with earnings and taxes) will pass over details of how much you've earned to the Department for Work & Pensions (DWP), which looks after universal credit.

The easiest way for HMRC to match up your earnings information with your benefit claim is to use your national insurance (NI) number.

If your NI number is included when your employer sends your earnings information to HMRC, it can send these details to the DWP straight away, which will then calculate the impact this will have on how much universal credit you get that same day.

But if your employer submits your earnings info WITHOUT your national insurance number, it can cause a delay of a few days while HMRC verifies your earnings. Crucially, this delay can mean your earnings information ends up the wrong assessment period – skewing your benefit calculation. This is because, in the first instance, DWP uses the date it receives the earnings info to decide which assessment period it applies to – NOT the date you actually got paid.

In fact, roughly 1% of worker's earnings information is submitted without a NINO each month – which means around 20,000 of the 2.2 million working universal credit claimants could be affected each month. And this figure is likely to be much higher, as people who claim UC and have casual low-paid jobs are disproportionately likely to be affected.

  • The technical details of how the DWP works out your claim

    Employers submit information about worker's earnings to HMRC using what's called the RTI – or 'real time information' – system. If you're claiming universal credit, this information is then used to automatically work out how much UC you'll get that month.

    But the system doesn't always work in real time. If your employer sends information about your earnings to HMRC without your national insurance number, it can be difficult to match up that information with your benefits claim. 

    This causes a delay, and, if your pay date falls close to the end of your assessment period, can mean your UC gets worked out based on the wrong amount of earnings.

    Unfortunately, employers are allowed to submit information without a national insurance number – even though HMRC and DWP acknowledge the problems this causes.

These mistakes often aren't automatically corrected 

It might not sound like a big deal, but mistakes like this can make a big difference to the amount of universal credit you get. In the worst cases, it can even stop you getting any universal credit at all in some months. 

A reporting delay can affect your UC in one of two ways: 

  • It can make it look like you earned LESS than you did. If this happens you may be given too much UC, which might sound good, but this money can then be taken from any future month's payment – resulting in a surprise deduction.

    This is similar to what happened to Dora and her husband, who weren't aware they'd been overpaid, and now have a surprise bill of £2,000...

A couple of months ago we received a message to our UC account saying that they have overpaid us by £2,000 and they will start to deduct it from our monthly payout. They said it happened because my husband's employer didn't report his earnings on time.

  • It can make it look like you earned MORE than you did. If this happens, you'll get less UC than you should that month. And if you've got a work allowance, your UC payment could be reduced by more than if your earnings had been taken into account on the correct dates, because of the taper rate.  

    MSE forum user Platypuskn discovered the impact of earnings being placed in the wrong assessment period when their employer reported their earnings late to HMRC. They ended up getting nothing in universal credit that month – a loss of around £600...

According to UC they reported my earnings to HMRC eight days after I was paid. But I wasn't paid twice in the month. I was in tears on the phone as, after all the delays, I am really struggling and stressed. UC say they know the date that the wages were paid, and the date it was reported. But the system automatically uses the date it's reported.

Important: Don't assume that if you're underpaid one month, it'll be automatically corrected the next. You need to report the mistake to get the amount you're owed back (we explain how to do this later on). The example below shows how processing delays can lead to you getting the wrong amount of UC – and why you might not make that money back in their next UC payment: 

You're most likely to be affected if you're paid more than once a month

While everyone who works and claims universal credit is at risk, you're most likely to be impacted by this issue if: 

  • You get paid weekly, fortnightly, four-weekly, or irregularly.
  • You didn’t have to provide a national insurance number when you gave your employer your payment information.
  • You have pay days that fall very close to the end of your universal credit assessment period.
  • You've just started a new job. HMRC told us that earnings information for 1 in 15 new employees is submitted without a national insurance number. 

An example may help to show how these mistakes can happen...

Penny Paidweekly is 26, has two children, and lives in a privately rented flat. She's paid £225 a week. Most months she's paid four times, which means she gets a universal credit payment of £1,069. In longer months, her assessment period can cover five paydays, meaning she gets a reduced payment of £970. 

One month, though, her fourth payday fell the day before her assessment period ended. Her employer didn't include her NI number when reporting her earnings, so HMRC had to reprocess it. DWP didn't get it until two days later – after the end of her assessment period. So her final week's earnings were added to her next assessment period. 

DWP therefore assumed she only got paid three times that month, while in the next month it looks like she was paid six times. Because of this, Penny got a boosted universal credit payment of £1,187 in the first month, and a reduced payment of £888 in the second. Over both months, this totals £2,075.

Had there not been a reprocessing delay, Penny would have received her standard payment of £1,069, in the first month, and £970, in the second month – totalling £2,039. The reprocessing delay left Penny out of pocket by £36. 

[Data correct as of April 2022, using EntitledTo's benefit calculator]

  • What the Government says about this

    The Government told MSE that it's aware of the problem but has no current plans to make improvements. It also stated that it was the responsibility of employers and claimants to check for mistakes, because its system will not correct them automatically.

    It said: "DWP and HMRC work closely to support and inform employers who report earnings, to emphasise the importance of timely reporting via the RTI system, to reduce any issues. HMRC has updated its guidance to reiterate to employers the importance of reporting accurate dates and the impact on payment cycles."

How to check your universal credit statement

If you're working and on universal credit, it's important to get into the habit of checking your universal credit statement each month. This will help you budget for the month ahead, and see if there are any errors that need fixing – especially if you're paid different amounts each month. 

These steps are important to see if you're likely affected by the under- or overpayment issue. Here's how to do it:

Step 1: Log on to your online universal credit account

To find your statement, you'll need to log into your online universal credit account. Once you're in, click on the 'Monthly Statement' section. 

Your statement will appear here a few days before you’re due to get your next universal credit payment.

Step 2: Know what your statement should show

On your statement page you should see a breakdown of your universal credit payment for this month, including:

  • The total amount you'll get in universal credit this month.
  • The dates of your assessment period.
  • Your standard allowance. This is the basic amount of universal credit you're eligible for. 
  • Any extra amounts you qualify for, such as allowances for housing or childcare.
  • Any 'work allowance' you get. This is how much you can earn before your UC payment starts to reduce. You'll get this if you've children, or have 'limited capability to work'.
  • Any deductions or sanctions that have been made, and why.

Step 3: Compare your UC statement with your bank statement

To check the amount you're getting is correct, you need to know exactly how much money you earnt during this assessment period.

This means looking at the dates on your payslips and bank statements to see which salary payments fell into your latest assessment period (which should be displayed at the top of your latest UC statement). To do this:

  1. Scroll down to the section titled: 'Take home pay'. It'll look like this screenshot.

  2. Then compare the amount shown here with the take-home pay amount on your payslips, or  how much was paid in to your bank account. Remember to only include amounts paid during the assessment period dates at the top of your universal credit statement.

For example: if your assessment period runs from 15 March to 14 April, and you're paid £150 every Friday, you'll need to count all the Fridays that fall on or between these dates, and then multiply that number by £150. This is the amount DWP should use to work out how much UC you'll get this month. 

When you're comparing the number of times you got paid with the amount your online journal says was used to work out your UC, you're looking for EITHER too few salary payments OR too many in that given period.

Both are signs that salary payments have been put in the wrong assessment period, and you've been paid the wrong amount of universal credit as a result.

Important: If you do spot something that looks wrong (or you're unsure), download or print out a copy of the statement. You can use this to discuss the mistake with an independent advisor or DWP later. 

How to get universal credit errors fixed

Don't assume mistakes with your universal credit payment will correct themselves. If something looks wrong on your statement, follow these three steps  to try and get it sorted.

Step 1: See if DWP can sort it over the phone

If something doesn't look right with your universal credit, the first thing to do is...

Call the universal credit helpline on 0800 328 5644 

It's free and lines are open between 8am and 5pm, Monday to Friday (other contact info, is on the Government's universal credit pages). If you're in Northern Ireland, you can call: 0800 012 1331, between 10am and 4pm, Monday to Friday.

You'll often have to upload evidence of the mistake to your journal. This could include uploading bank statements or payslips showing they should have been included in a particular assessment period.

Step 2: Ask for a mandatory reconsideration

If DWP isn't able to fix the issue over the phone, ask for a 'mandatory reconsideration'. This is a formal way of asking the DWP to double check they've got things right. You usually need to do this within one month of finding the issue on your statement.

There are four ways you can do this: 

  • Call DWP using the universal credit helpline: 0800 328 5644.
  • Fill in a mandatory reconsideration request form. This is called a CRMR1 form. 
  • Write a message in your universal credit online journal.
  • Write a letter directly to DWP. 

Calling is often the quickest and easiest way to get the process started, but we'd also recommend following up with a note on your online journal, so there's a written record of your request that you can refer back to later in case nothing happens. 

Once DWP has reviewed your request, you'll get a 'mandatory reconsideration notice'. This will tell you its decision and the reasons for it.

Step 3: If the issue still hasn't been fixed, submit an appeal

If you're not happy with DWP's reply, you have one month to appeal. Your case will then be looked at by an independent review panel. You can only do this AFTER you've done steps one and two above.

The quickest way to submit an appeal is to fill in the Government's Appeal a benefit decision form. Or you can fill in and post an SSCS1 form.

It can often take up to six months for an appeal hearing to happen. If you attend in person, you'll be given the chance to state your case and you'll hear the outcome of your appeal the same day. You don't have to go to the hearing. If you choose not to you'll get the decision in the post.

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