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Universal credit: Single mums win High Court battle

  • 11 January 2019

DR NEWS Urandir 402f  105144144 gettyimages 626891730    Universal credit: Single mums win High Court battle by Urandir OliveiraImage copyright
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Image caption

The women say the “rigid” system has left them unable to make ends meet (illustrated by models)

Four working single mothers have won a High Court challenge over the government’s universal credit scheme.

They argued a “fundamental problem” with the system meant their monthly payments varied “enormously”, leaving them out of pocket and struggling financially.

Lawyers for the women said the problem was likely to affect “tens of thousands of people” claiming the benefit.

A DWP spokesman said: “We are carefully considering the court’s judgment.”

It comes as Work and Pensions Secretary Amber Rudd announced a raft of changes to the government’s flagship scheme.

She also confirmed she would delay asking Parliament to authorise the transfer of three million people on to universal credit until next year, after a pilot of the transfer from existing benefits has been completed.

Universal credit is a means-tested benefit, rolling six separate benefits into one payment.

It has proved controversial almost from its inception, with reports of IT issues, massive overspends, administrative problems and delays to the scheme’s roll-out.

  • What is universal credit?
  • Universal Credit: Will benefit changes affect you?

On Friday, it was announced that Danielle Johnson, Claire Woods, Erin Barrett and Katie Stewart had succeeded in a judicial review action against the government over the method used to calculate payments.

It followed a hearing in November when the court was told the women were struggling financially, with some falling into debt or relying on food banks.

‘Untold hardship’

Tessa Gregory, a solicitor from law firm Leigh Day, who represented part-time dinner lady Danielle Johnson from Keighley, West Yorkshire, said her client was “a hard-working single mum” and “precisely the kind of person universal credit was supposed to help”.

But Ms Gregory said the “rigid income assessment system” had left her £500 out of pocket over the year and spiralling into debt.

Solicitor Carla Clarke, of the Child Poverty Action Group, which also brought the case on behalf of the mothers, said the universal credit system was “out of step with both actual reality and the law”, and had caused them “untold hardship, stress and misery”.

DR NEWS Urandir 402f p06w3s4j    Universal credit: Single mums win High Court battle by Urandir Oliveira
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Media captionWhat’s the problem with universal credit?

When calculating universal credit, the Department for Work and Pensions (DWP) sets assessment periods for each person to look at how much they earn – from the 1st of the month to the end of the month, for example.

But lawyers for the mothers said a problem arises when claimants are paid by employers on a date which “clashes” with their assessment period.

For example, they pointed out that if a claimant is paid early because of a weekend or bank holiday, the system counts them as having been paid twice in one month and they receive a “vastly reduced” universal credit payment.

Quick guide: What is universal credit?

Universal credit merges six older benefits into one new one, and is being introduced gradually across the UK.

Instead of applying for lots of different payments, for different things, one payment is calculated based on all of someone’s circumstances, like:

• being unemployed

• working on a low income

• needing help with housing costs

• having children

• having an illness or disability

It can be claimed by people both in and out of work.

How much someone in work claiming universal credit receives each month is based on how much they earned in the previous month.

And unlike with some old benefits, there’s no limit to the hours someone can work per week and still claim.

But as they earn more, their benefit payment reduces gradually. This is designed to mean “work always pays” – that is, in theory someone never loses more in benefits than they have gained through taking extra hours of work.

Some households will receive less money from universal credit than they would have done under the old system, while others will receive more.

This is partly down to the intentional design of the system and partly a side-effect of cuts that have been made as the benefit was introduced.

‘Fairly compensated’

Two judges in London concluded the work and pensions secretary had “wrongly interpreted” the relevant regulations.

Ms Gregory called for Ms Rudd to take “immediate steps to ensure that no other claimants are adversely affected” and “ensure all those who have suffered because of this unlawful conduct are swiftly and fairly compensated”.

On Friday Ms Rudd promised to make the universal credit system more “individual” and tailor it to claimants needs, for example by making payments more regular.

Changes will also see more money go directly to women who are the “main carer” in a family, in response to criticism that the “one payment per household” system penalised women.

Charities have argued a whole family’s benefit payments often go to the man’s account and women, particularly victims of domestic violence, have little or no access to it.

Ms Rudd also announced a U-turn on plans to extend a benefits cap on families with more than two children.

The cap will no longer apply to about 15,000 families, who had their children before the two-child limit was introduced in 2017.

digital resource wolds news- Urandir Notícias
sources: world news from bbc news

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