Page 64 - Reforming Benefits Decision-Making -(updated - August 2021)

it. DWP told us that they are about to release functionality which should
172
automatically detect such cases. This begs the question of why the DWP
maintained that it was not technically possible to deal with this issue and did
not fix it sooner.

2.82 Being paid on a weekly cycle may also mean that claimants are subject to the
benefit cap even though they are working and earning enough to meet the
exemption. For example, a year has 13 four-week periods in it, but 12
173
monthly assessment periods. Therefore, claimants paid on a 4-weekly cycle
will, each year, have eleven UC assessment periods in which they receive one
thirteenth of their annual salary, and one assessment period in which they
receive two thirteenths of their salary. For the assessment periods when they
are receiving one thirteenth of their annual salary they may be treated as if
they have earned or worked less than the earnings exemption amount.

2.83 In Pantellerisco v Secretary of State for Work and Pensions, a mother
174
challenged the application of the benefit cap to her UC award. The benefit cap
was applied despite the fact that she met the exemption by working the 16
hours per week at national minimum wage. The issue was, as described in
paragraph 2.80 above, she was paid four-weekly rather than monthly. The
Court found that although introducing a solution for this problem might be
technically complicated, it would be manageable – some, at least, of the
necessary computer software is in place and can readily be utilised and the

172 The Universal Credit (Earned Income) Amendment Regulations 2020 (2020/1138) came into force
on 16 November 2020. The amending regulations make changes to regulation 61 of the Universal
Credit Regulations 2013, which govern how the Secretary of State calculates earned income. The
Johnson issue is addressed by creating a power for the Secretary of State to treat one of two wage
payments received/reported in the same assessment period as earnings in respect of a different
assessment period (regulation 61(6)). This only applies to claimants who are paid on a regular monthly
basis.

173 The benefits cap limits the total amount of income a household can receive. There is an exemption
for claimants who are in work and, between them and their partner are earning the equivalent of 16
hours per week on national minimum wage if receiving Universal Credit.
174 [2020] EWHC 1944 (Admin).

55