Context
The question arises from the observation that universal credit claimants who receive one-off bonuses, such as those awarded to key workers during the pandemic, often see their monthly payments reduced after receiving these bonuses.
Question
What assessment has been made of the effect of bonuses on the level of payments made to universal credit claimants? My constituent received a £120 bonus but had £172.69 deducted from her next month's payment under universal credit, eroding the reward for hard work.
Answer from Will Quince
Bonuses are treated as earnings under universal credit, reflecting HMRC guidance. Universal credit ensures people are better off in work compared to legacy benefits. Under the previous system, claimants could lose up to 91% of their additional earnings, whereas under universal credit, it is a maximum of 75%. The government has already made significant investment to increase the generosity of universal credit.
Not addressed: The Minister did not directly address whether temporary changes will be considered to enable key workers to receive their bonuses in full.
How: Thanking Key Workers
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