The surplus earnings policy was introduced to prevent people who are paid large amounts of earnings on an irregular basis from receiving a greater amount of benefit and earnings than claimants who for example earn the same annual salary but are paid over 12 regular salary payments.
This means that where a claimant receives a large payment of earnings within an assessment period which is sufficient to end their Universal Credit award, and then reclaims Universal Credit within 6 months of that award ending, earnings above the de minimis level will be taken into account as earnings for the new award.
I will sign a Determination to extend the current £2,500 Universal Credit surplus earnings de minimis level from 1 April 2020 to 31 March 2021 and will place a copy in the library. This will safeguard the efficient administration of Universal Credit by not reducing the de minimis to £300 as provided by the Universal Credit Regulations 2013.
This measure will cost £70m in 2020/21 and will mean around 500,000 fewer people will see their Universal Credit award reduced by surplus earnings.
This statement has also been made in the House of Lords: