Universal Credit for Those with On-Call or Zero-Hours Roles

The modern workforce is evolving rapidly, with traditional 9-to-5 jobs no longer dominating the employment landscape. Instead, on-call and zero-hours roles have become increasingly common, offering flexibility but often at the cost of financial security. For workers in these precarious positions, Universal Credit (UC) can be a lifeline—but accessing and managing it effectively is far from straightforward.

The Rise of On-Call and Zero-Hours Work

What Are On-Call and Zero-Hours Contracts?

On-call roles require employees to be available for work at short notice, while zero-hours contracts guarantee no set minimum hours. These arrangements are prevalent in industries like healthcare, hospitality, and retail, where demand fluctuates unpredictably.

The Pros and Cons

Flexibility is the biggest draw—workers can often choose when they’re available. However, the lack of stable income makes budgeting nearly impossible. A sudden drop in shifts can leave individuals struggling to pay rent or buy groceries.

Universal Credit: A Safety Net with Gaps

How UC Supports Flexible Workers

Universal Credit is designed to top up low or irregular earnings. Unlike legacy benefits, it adjusts monthly based on reported income, making it theoretically ideal for zero-hours workers. Key features include:
- Monthly assessments that account for fluctuating pay.
- Work allowances letting claimants earn a certain amount before deductions kick in.
- Digital reporting via an online journal to update earnings and circumstances.

The Challenges of Claiming UC

Despite its adaptability, UC poses hurdles:
1. Reporting complexities: Missing a deadline or underreporting earnings by even £1 can trigger sanctions.
2. Five-week wait: The initial assessment period leaves many relying on food banks.
3. Surprise deductions: Earnings from extra shifts can reduce UC payments abruptly, disincentivizing work.

Real-Life Struggles: Case Studies

Maria’s Story: The Hospitality Rollercoaster

Maria, a hotel cleaner on a zero-hours contract, saw her shifts drop from 30 to 10 hours a month during the off-season. UC helped cover her rent, but the system’s lag meant she faced eviction threats while waiting for adjustments.

James’ Dilemma: The On-Call Care Worker

James, a care assistant, often works 50-hour weeks but sometimes gets just 15. UC’s "surplus earnings" rule once clawed back his entire payment after a busy month, leaving him worse off than if he’d worked less.

Policy Flaws and Advocacy

The "Cliff Edge" Problem

UC’s taper rate (55%) means every £1 earned over the work allowance reduces UC by 55p. For low-wage workers, this creates a poverty trap where taking extra shifts barely improves take-home pay.

Calls for Reform

Organizations like the Joseph Rowntree Foundation urge:
- Reducing the taper rate to 50% or lower.
- Scrapping the five-week wait with advance grants becoming non-repayable.
- Auto-adjusting payments using real-time payroll data to prevent errors.

Practical Tips for Claimants

Maximizing Your UC Entitlement

• Report earnings promptly: Use HMRC’s Real Time Information (RTI) system to sync payroll data.
• Challenge unfair sanctions: Seek help from Citizens Advice if penalized for minor errors.
• Budget for fluctuations: Apps like MoneyHelper can forecast UC payments based on expected hours.

Side Hustles and UC

Earnings from freelance gigs (e.g., Uber, Fiverr) must be declared. Keep meticulous records—UC counts net profit after expenses.

The Bigger Picture: A System Out of Sync?

While UC is more responsive than older benefits, it still assumes a level of stability that zero-hours workers lack. As the gig economy grows, policymakers must choose: band-aid fixes or a radical redesign? Until then, millions remain trapped in a cycle of uncertainty, where "flexibility" too often means financial fragility.

For now, education and advocacy are key. Knowing your rights—and pushing for systemic change—can turn UC from a flawed stopgap into a genuine tool for empowerment.