DWP loses Court of Appeal case relating to Universal Credit

29 June 2020

The Department for Work and Pensions (DWP) has lost a Court of Appeal Case, relating to four single mothers who experienced severe financial hardship due to extreme variations in the Universal Credit payments that they received as a result of a technical issue.

The court ruled that issues around Universal Credit, which arise when workers get paid by their employer on a different day to their standard pay day, as the normal date falls on a weekend day or a bank holiday, were “irrational”. This is because the system incorrectly interprets that workers have been paid twice in one Universal Credit assessment period and has frequently resulted in individuals receiving significantly lower benefits payments on which to live.

The DWP lost the case at High Court in January 2019 and appealed, but the Court of Appeal has now rejected, and ruled in favour of the workers, and not DWP.

The four mothers were forced to borrow money, access food banks and fell into rent arrears. One of the claimants confirmed that the issue with the system meant that she could lose anything up to £500 per year.

It is estimated that approximately 85,000 Universal Credit claimants could be affected by the ruling, and the three judges at the Court of Appeal ruled that:

“The failure of the Secretary of State to ensure that the regulations cater for the phenomenon of ‘non-banking day salary shift’ is unlawful”.

Lady Justice Rose said:

“The threshold for establishing irrationality is very high, but it is not insuperable. This case is, in my judgment, one of the rare instances where the Secretary of State for Work and Pensions' (SSWP) refusal to put in place a solution to this very specific problem is so irrational that I have concluded that the threshold is met because no reasonable SSWP would have struck the balance in that way.”

CIPP comment

 

The CIPP welcomes this decision that finally sees a resolution to this long-standing problem, and we look forward to seeing the government address this. The CIPP annual payslip survey results fed in to some of the research and evidence presented at this case and we thank everyone who continues to feed in to this valuable annual survey. See the latest edition here.

 


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