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Due to the way Universal Credit is calculated, some RCN members who are working whilst claiming Universal Credit may find their benefits incorrectly reduced.

This means they may lose 'work allowances' worth up to £344 per month, and could be incorrectly subject to the benefit cap.

On this page you can find more information about this as well as guidance on how to challenge decisions where this happened.

Paydays and monthly assessment periods

Some people claiming Universal Credit (known as “claimants”) could lose hundreds of pounds each year because their paydays clash with the Universal Credit (UC) monthly 'assessment periods.'

Because of the way UC works, working claimants are often unable to tell how much benefit they will receive from one month to the next.

UC assessment periods run for a calendar month, starting from the date UC is awarded. At the end of each month, claimants’ circumstances and income are assessed to determine their entitlement to UC, with payment made a week later in arrears.

There are situations where claimants can be paid a day or two early e.g. if their payday falls on a weekend or bank holiday. When this happens, claimants can be recorded as having had two paydays (or two lots of earnings) in one assessment period, and none in the assessment period after.

Two lots of earnings record in one assessment period

When claimants appear to have no earnings in the following assessment period (due to receiving two payments in the assessment period before), rather than see their UC increase to compensate for this, it can actually lead to:

• A reduction in the amount of UC awarded
• Losing the effect of one month's “work allowance.”
• Being subject to the “benefits cap.”

If you’re paid at the end of the month

Claimants paid monthly near the end of the month can still see UC fluctuate if pay dates and assessment periods do not align, especially where pay is brought forward because of weekends or bank holidays. However, for monthly-paid workers, DWP should usually adjust the UC calculation automatically where a changed payday causes two monthly wages to fall in one assessment period. Claimants should still check their UC statement and query it via their journal if earnings look wrong.

For example, a worker paid on the last working day of each month in 2026, with assessment periods dated 30th - 29th of the month would have:

• 6 assessment periods with one payday
• assessment periods with two paydays
• 3 assessment periods with no paydays.

Other claimants who may also have different numbers of paydays in different assessment periods over the course of a year include claimants who:

• Get paid weekly
• Get paid fortnightly
• Get paid four-weekly
• Do agency shifts that are paid intermittently

Losing work allowances

If two monthly wages are counted in one assessment period and none in the next, a claimant may only receive one work allowance across two pay cycles instead of one in each assessment period. In 2026/27 the work allowance is £427 where UC includes housing costs, or £710 where it does not. In cash terms, losing the effect of one work allowance can reduce UC by up to £234.85 or £390.50 respectively, because earnings above the work allowance reduce UC by 55p per £1.

You may be eligible for a work allowance if either you (and/or your partner):

• have responsibility for a child
• have limited capability for work (e.g. are disabled or ill)

Backdated pay and tax rebates

If you are claiming UC and receive a:

• lump sum of backpay
• payment of accrued holiday pay
• tax rebate for a previous year’s work,

then this is treated as income for the assessment period in which it falls, even if it relates to a period before you claimed UC. This means that UC is withdrawn at the rate of 55p in the pound against this income.

If you have previously overpaid tax, or are owed pay from a time when you were not claiming UC, you would have kept the money in full if you had been taxed correctly or paid on time by your employer. However, because the money is only received after you have claimed UC, you can lose almost two-thirds of it under the UC system.

Benefit cap

The benefit cap does not apply to UC claimants whose household earnings are at or above the monthly earnings threshold. From 1 April 2026 this is £881 a month, broadly equivalent to 16 hours a week at the National Living wage for workers aged 21 and over. If earnings are treated as nil in an assessment period because no payday falls in that period, a claimant may appear to be below the threshold and could be benefit capped unless the monthly earnings are correctly reallocated or another exemption applies.

New regulations 

New regulations have been issued to amend the effect on Universal Credit of double wage payments in one calendar month.

The changes implement the Court of Appeal judgement on and mean that only one set of earnings will be taken into account for each assessment period for people who are paid calendar monthly. 

What you can do

If you have a reduction in your UC, or lost the work allowance included in your UC because of the reasons detailed above, you should immediately request a mandatory reconsideration and cite the Regulations that are now in force - The Universal Credit (Earned Income) Amendment Regulations 2020.

You could also apply for a mandatory reconsideration if you’ve received (or are due to receive) some form of backdated pay which causes financial detriment due to being treated as earned income in one UC assessment period. Please see the template letters below.

How we can assist

The RCN Welfare Service can assist you in deciding if you are at a financial detriment, and if you are, give you advice on requesting a Mandatory Reconsideration by the DWP.

See booking an appointment for more information about requesting a referral to the Welfare Service

Mandatory Reconsideration template letters

If your Universal Credit (UC) has been reduced due to receiving backdated pay, use this Mandatory Reconsideration Template letter for backdated pay to request a mandatory reconsideration.

If you have had two lots of earnings counted in one UC assessment period (e.g. due to your normal pay day falling on a bank holiday/weekend, or your employer reporting your pay earlier than the actual pay date) you can use this Mandatory Reconsideration Template letter for two lots of earnings.

Carmen is a single parent with two dependent children aged 6 and 11. She works part-time as a staff nurse. Carmen Claims Universal Credit (UC) which includes an amount toward housing costs and a work allowance.

Carmen’s salary is paid calendar monthly and her normal payday is the 25th of each month. In months where her normal payday falls either on a bank holiday or a weekend, she is paid on the closest working day.

Carmen’s UC assessment period runs from 26th - 25th of each month. This means that on the times she receives her salary earlier than the 25th of each month, she is treated as having received two month’s pay in one UC assessment period. 

Carmen has also had problems with her Trust payroll department putting the wrong date on pay slips which has resulted in the same issue arising as she has been treated as having received the money in one UC assessment period. This has caused significant problems for Carmen and her family.

Carmen has found it very difficult to budget due to the variable income and managing cash-flow with two young children. She has lost her work allowance in these periods due to the ‘doubling up’ of earnings by the Department for Work and Pensions (DWP) and, she has also repeatedly lost her entitlement to Council Tax Reduction due to the way in which her income has been reported by the DWP.

Carmen has found this situation extremely challenging to deal with both in terms of the financial detriment and her efforts to dispute this matter with the DWP. She has also struggled to get her employer on board in reporting pay dates correctly.

Carmen has disputed the DWP’s decision to assess her income in this way through the mandatory reconsideration process and is now appealing to a First Tier Tribunal and awaits a hearing date.