A report from the Child Poverty Action Group (CPAG) has identifies a range of problems arising from the rigid system of monthly assessment of both income and circumstances in Universal Credit.

For instance being paid early as a result of weekends or bank holidays makes it look like a worker has earned more because they receive two payments in a calendar month.

The figures skew how much they are then assessed as being entitled to in benefits, according to the charity

It said one in 20 cases analysed by its early warning system, which uses evidence from welfare rights advisers to identify issues, were hit by problems with the monthly assessment system.

Alison Garnham, CPAG chief executive, 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.

“In the worst cases, people are losing out on significant amounts of money – hundreds of pounds over the course of a year – simply because of when their paydays and assessment periods fall.”

CPAG called for reforms to the system, including allowing claimants to change the date of their assessments so they do not clash with paydays.

It said earnings should be averaged when assessments are made over whether the benefit cap should be imposed.

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