This CLP notes:

Low paid public sector workers claiming Universal Credit lose hundreds of pounds as a consequence of receiving a lump sum in the month that backdated settlements are paid.

Universal credit is assessed on a monthly basis and receipt of cumulative backpay immediately pushes claimants over the Universal Credit threshold and also a higher NI threshold.  Claimants are then required to start a fresh Universal Credit claim.  In some instances, receiving back pay can result in the uplift leaving them net worse off or at best losing out on the full backpay they would otherwise be entitled to.

Backdated pay for HMRC purposes must be recognised at the earlier of when payment is made or when entitlement occurs, and in this case, this is the same.

This CLP believes:

Thousands of low paid workers are losing out.  The system penalises low paid workers by taking their backdated pay and applying a higher NI rate than they would have been subjected to, had their pay been settled at the start of the financial year.  This is further compounded by the subsequent loss of Universal Credit in the following months.

This CLP:

 Proposes that HMRC should consider changing the rules to allow entitlement of backdated pay to be recognised at the start of the period, and HMRC should invest in arrangements to be put in place to allow employers to flag that the month’s pay includes an element of backpay to be taken into consideration by the DWP, so that low paid workers are not worse off as a result of losing Universal Credit.

This motion to be sent for consideration to local MPs: Abena Oppong Asare MP, Daniel Francis MP, Jim Dickson MP, Clive Efford MP.

Chancellor Rachel Reeves MP and the Secretary of State for Work and Pensions Liz Kendall MP and circulate to our local Union contacts at GMB, Unison and Unite.

 Ends

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