THE full rollout of universal credit (UC) should not begin until “fundamental problems” that leave claimants hundreds of pounds out of pocket every year are fixed, according to a new report.

The Child Poverty Action Group (CPAG) said workers can lose out if they are paid early because of weekends or bank holidays, which makes it appear as though they have earned more than they really have. Two payments in a calendar month, CPAG said, skews their assessments.

One in 20 cases it analysed under its “early warning system” were hit by problems with the monthly assessment system.

CPAG 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.”

She added that the “mass migration of families on to universal credit should not begin until these fundamental problems are resolved.”

CPAG warned that there can be significant impact on how much claimants receive if their payday is on or close to the first day of their assessment period. Its report stated: “In the worst cases, people are losing out on significant amounts of money … simply because of when their paydays and assessment periods fall.”

The report added that this unfairness was “most starkly shown” by employees “at the same company, with identical hours and pay, some of whom are subject to the benefit cap most months of the year simply because they are on a four-weekly contract.”

CPAG said the problems found “undermine some of the key selling points of UC, namely that it was supposed to be simple, adjust to people’s earnings in real time and reward work or increased earnings in ways which are easy to understand.

“In reality the current monthly assessment system is a huge oversimplification which does not reflect the reality of people’s lives and work.”

Shadow work & pensions secretary Margaret Greenwood said: “It is clear that that there are still major problems with the design and the delivery of universal credit, as the National Audit Office also highlighted recently.

“The government must pause the rollout of universal credit and fix the problems so that no more people are pushed into poverty by the major flaws in its design and delivery.”

A Department for Work and Pensions spokesman said: “We are listening to stakeholders’ concerns and working on issues regarding payment cycles and we will consider this report carefully.”