Many Universal Credit claimants are losing hundreds of pounds each year because their payday falls too close to their assessment date, a charity has revealed.

The charity Child Poverty Action Group (CPAG) has found that working people who claim Universal Credit have their benefits capped when their payday clashes with the new welfare scheme’s 'assessment periods’.

The research also discovered people who happen to move house at the ‘wrong’ point in their assessment period can also lose out on rent support.

Universal Credit assessment periods run for a calendar month, starting from the date the benefit 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.

However, where a claimant’s monthly payday is on or close to the first day of their assessment period and they are paid a day or two early some months, because their normal payday would fall on a weekend or bank holiday, they are then recorded as having had two paydays in one assessment period and none in the one after.

This can leave claimants facing unexpectedly low Universal Credit awards as well as losing the effect of one month's work allowance.

One in 20 cases coming in to CPAG’s Early Warning System — which gathers case evidence from welfare rights advisers across the UK — indicates a problem with the monthly assessment system in UC.

Commenting on the findings from CPAG's Early Warning System, the charity's chief executive Alison Garnham said: ‘Universal Credit isn’t working for working people. Our Early Warning System shows claimants are often left flummoxed by how much — or how little — Universal Credit they will receive from one month to the next.

‘But we believe most of the problems created by the monthly assessment system can be fixed relatively easily if the political will is there. The mass migration of families on to universal credit should not begin until these fundamental problems are resolved.’