Means-testing monthly payments can be problematic for those with unstable incomes, creating work disincentives and leaving vulnerable populations without assistance.

"Means-testing causes further problems when benefits are distributed throughout the yearin regular payments rather than in annual lump sum (a common feature in guaranteed income proposals). If monthly benefits are means-tested according to previous monthlyearnings (e.g. a rolling average) and income is unstable, as it is for many working andmiddle class households, recipients may find their monthly benefit too low to help in any given month because previous income was “too high”; alternatively they may face unexpected clawbacks at tax time because their benefit was, due to earnings fluctuations, “too high” during part of the year. The United Kingdom’s Universal Credit program should serve as a warning for those who favor upfront means testing of cash benefits as this program left some people penniless due to the interaction of the means-testing formula with monthly fluctuations in their earnings."

empirical