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Universal Credit

Department for Work and Pensions written question – answered on 21st June 2019.

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Photo of Chris Elmore Chris Elmore Opposition Whip (Commons)

To ask the Secretary of State for Work and Pensions, what steps he is taking to ensure that universal credit claimants paying rent weekly do not face a one-week shortfall in their universal credit housing element in 2020.

Photo of Will Quince Will Quince The Parliamentary Under-Secretary of State for Work and Pensions

No-one will face a one-week shortfall in their Universal Credit (UC) housing element in 2020 as no year contains 53 weeks. This perceived issue of there being a one-week shortfall due to there being 53 weeks in a year arises where a landlord charges rent weekly on a Monday and, because of the way the calendar falls every 5 or 6 years, requiring 53 rent payments in a year, with the 53rd payment in part covering the tenancy for the first few days of the following year.

Where a tenant makes a 53rd rent payment in a given year, this payment will cover some days in the subsequent year. This will mean the following month only has four payment dates and, as such, the claimant will be ‘overpaid’ for their housing and their shortfall will be recovered.

Universal Credit payments are designed to mirror the world of work, with monthly payments reflecting the way many working people are paid. This model of monthly payments allows claimants to take responsibility for budgeting their own income and helps prepare them for getting back to work.

We are aware of a separate issue with respect to the way the calculation in the Universal Credit regulations converts a weekly liability into a monthly allowance. The conversion is achieved by multiplying the weekly rent by 52 and then dividing by 12. This effectively means one day’s rent a year (two days in a leap years) are not covered by UC. We are currently considering whether this formulation around weekly rents, and potentially other weekly amounts in the UC calculation, should be amended.

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