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Universal Credit

Department for Work and Pensions written question – answered on 17th March 2020.

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Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

To ask the Secretary of State for Work and Pensions, for what reasons maternity allowance is treated as unearned income and deducted from an award of universal credit award whereas statutory maternity pay is often disregarded in the calculation for that benefit as a result of the work allowance and 63 percent earnings taper rate; what assessment her Department has made of the financial effect of that policy on women on maternity allowance who apply for universal credit; and if she will make a statement.

Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

To ask the Secretary of State for Work and Pensions, with reference to Maternity Action's briefing, Different treatment of Maternity Allowance and Statutory Maternity Pay in the calculation of Universal Credit awards, published February 2020, what steps her Department is taking to ensure equitable treatment of pregnant women and new mothers in receipt of (a) maternity allowance and (b) statutory maternity pay who apply for universal credit.

Photo of Mims Davies Mims Davies The Parliamentary Under-Secretary of State for Work and Pensions

Statutory Maternity Pay is paid by an employer through their payroll system and is therefore a form of earnings subject to the work allowance (where a claimant is eligible) and tapering, in the same way as other earned income. Universal Credit seeks to take earnings into account in a way that is fair and transparent. The amount of Universal Credit paid reflects, as closely as possible, the actual circumstances of a household during each monthly assessment period, including any earnings reported by their employer or employers during the assessment period, regardless of when they were paid, or which month they relate to.

Assessment periods allow for Universal Credit awards to be adjusted on a monthly basis, ensuring that if a claimant’s income changes, they do not have to wait several months for a corresponding change in their Universal Credit award. Claimants can discuss the implications of any changes in earnings with their Case Manager or Work Coach and can be referred to personal budgeting support to help them manage their budgeting.

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