Warning for thousands over error that could mean you’re underpaid Universal Credit

THOUSANDS on Universal Credit  could be affected by an error that means they are being underpaid benefits

Some claimants have found that the money they pay into their pension through work is being counted as income – even though rules state that they shouldn’t.

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As a result, many claimants were found to be due payment boosts worth hundreds of pounds[/caption]

If pension contributions are counted as income for calculating Universal Credit, it means they may get less than they are entitled to.

It’s thought that thousands of people could be affected by the error, according to Steve Webb, partner at LCP and former pensions minister, who first uncovered the issue.

The issue first came to his attention when a This is Money reader questioned whether their pension contributions were being accounted for in their Universal Credit payments.

Following the initial query, more claimants reported receiving incorrect information from DWP staff.

Steve said: “When the government looks at your income to work out your Universal Credit it should deduct any money you pay into a pension.

“Paying into a pension lowers your income and should mean you get extra benefit. 

“But some people have been wrongly told that their pension contributions cannot be deducted.”

As a result, many claimants were found to be due payment boosts worth hundreds of pounds after being underpaid.

Others were paid arrears to cover what they should have been owed in the past.

Webb helped one This is Money reader claim arrears worth £1,500.

Another was rewarded with £100 in backpay and a £23 a month hike in their monthly Universal Credit award.

Around 40% of Universal Claimants are in work, and many are automatically enrolled into a workplace pension scheme.

Employers are legally required to enrol you into a scheme if you’re over 22 and earn at least £10,000 a year.

Steve added: “The DWP needs to make sure its staff are properly trained and give the correct information.

“It also needs to check to make sure they are not underpaying many thousands of people.”

In response to these claims, a DWP spokesperson said: “We have apologised to these claimants and are working with them to ensure their future Universal Credit entitlement is correct.”

It added that work coaches at Jobcentres receive ongoing training and access to guidance.

CHECK IF YOU’RE AFFECTED

If you believe you’ve been underpaid your Univeral Credit allowance because of this error, you’ll need to reach out to the DWP.

Steve said: “I would encourage people who are on Universal Credit and pay into a pension to make sure that the wages figure showing on their UC calculation is after any pension contributions have been paid.”

If the payment amount doesn’t take account of their pension contributions, customers should need to contact the DWP directly with details of their pension payments.   

You can contact Universal Credit through your online account by visiting www.gov.uk/sign-in-universal-credit.

You can also call the Universal Credit helpline on 0800 328 5644 and query your allowance.

If you disagree with a decision after you’ve complained to the DWP you can ask for the decision to be looked at again – this is called “mandatory reconsideration”.

It’s free to ask for mandatory reconsideration.

You can ask for mandatory reconsideration if any of the following apply:

• You think the office dealing with your claim has made an error or missed important evidence
• You disagree with the reasons for the decision
• You want to have the decision looked at again

Some decisions cannot be reconsidered. Others can go straight to an appeal.

Your original decision letter will say if this applies to you.

You usually need to ask for mandatory reconsideration within one month of the date of the decision.

You can ask for it after one month if you have a good reason, for example, if you’ve been in hospital or had a bereavement.

To ask for a mandatory reconsideration you’ll need to contact the benefits office that gave you the decision.

You can contact them:

• Using your online journal
• By phone
• By letter
• By filling in and returning a form asking for mandatory reconsideration

Find out more by visiting www.gov.uk/mandatory-reconsideration.

NOT THE FIRST UNIVERSAL CREDIT BLUNDER

Last summer, millions of people on Universal Credit were found to be at risk of missing out on extra state pension cash due to a separate error.

The DWP identified that the National Insurance (NI) records of 10million people on the benefit had not been updated.

A further 137,000 who’ve reached the state pension age may also be getting less than they are entitled to because NI credits were never passed on to HMRC.

You can get the full amount of state pension if you have made 35 years’ worth of NI contributions or credits.

But Brits have to have made at least 10 years to get at least something.

Millions of households on Universal Credit automatically qualify for Class 3 NI credit – irrespective of whether they work or not.

However, the error meant that those previously on Universal Credit and now claiming the state pension could be getting less than they’re entitled to.

Since the error was uncovered, the DWP has been manually updating the records of affected customers as they approach the state pension age.

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