Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, if she will take steps to ensure that universal credit claimants in Wales are able to receive their bonuses from both rounds of the Welsh Government's NHS and social care financial recognition scheme without deductions.

Frontline health and social care workers make a valuable contribution to our society and we are so grateful for their continued work through this pandemic.

The Department does not deduct from a Universal Credit claimant’s salary or bonus payment, however it may reduce the amount of Government support a claimant receives through Universal Credit if their earnings increase and they therefore have more money available to support themselves. It is a long-standing principle of means-tested benefits that as a person’s earnings increase their government support decreases – Universal Credit is no different.

Bonus payments, including those paid to health and social care workers, are earnings and therefore are treated in the same way as any other earnings. Universal Credit rules align closely to tax legislation (Income Tax (Earnings and Pensions) Act 2003 (ITEPA)). Amounts that are taken into account for a Universal Credit award include those that are general earnings, as defined in section 7(3) of ITEPA. Amounts paid as expenses that are exempt from Income tax under Part 4 of ITEPA are not taken into account for a Universal Credit award.

To ensure consistency with the approach taken across different forms of earnings and Covid-19 financial support, the UK Government does not believe there is a case for disregarding these payments from benefit calculations. They are therefore subject to the Universal Credit taper rate of 63%, unless the earnings form part of the work allowance, which is the amount someone can earn before the taper is applied to their earnings.