11 January 2019
Lord Justice Singh and Mr Justice Lewis today ruled that the DWP has been wrongly interpreting the universal credit regulations. They said in their judgment that treating claimants as having earned twice as much as they do if they happen to receive two pay cheques in one monthly assessment period, and as having no earnings in the next assessment period is “odd in the extreme” and “…. could be said to lead to nonsensical situations”.
They added that the DWP’s incorrect interpretation of the regulations had caused “…severe cash flow problems for the claimants living as they do on low incomes with little or no savings”.
The judicial review case, brought by solicitors Leigh Day and Child Poverty Action Group on behalf of four lone mothers, challenged the rigid, automated assessment system in universal credit which meant the mothers lost several hundreds of pounds each year and were subject to large variations in their universal credit awards because of the dates on which their paydays and universal credit ‘assessment periods’ happened to fall.
The mothers all had monthly paydays that ‘clashed’ with the dates of their monthly universal credit assessment periods, with the result that if they were paid early some months, because their payday fell on a weekend or bank holiday for example, they were treated as receiving two monthly wages in one assessment period – which in turn dramatically reduced their UC award – and as receiving no wages at all the next month. This is a problem which has affected many working claimants and has been widely reported in the media.
In addition to creating wildly fluctuating universal credit awards, when the mothers received two pay cheques in one assessment period, they lost the benefit of one month’s work allowance. The work allowance is the amount of earnings claimants with children or with limited capability for work can keep in full before universal credit is tapered away at a rate of 63p per pound, worth hundreds of pounds each year.
This flaw in the system has denied working parents the additional financial support that they are entitled to so as to help them in work and ensure that work always pays. The severe fluctuations in their universal credit awards and therefore their total monthly income has also caused major cash flow difficulties for parents on very low incomes, leading to them falling into debt and, for some, having to choose between paying their rent or paying their childcare costs.
Source: High Court finds DWP unlawful on universal credit assessments|LeighDay.co.uk | sdbast