Two disabled households who were left worse off after they were forced to move to universal credit (UC) because their existing benefits were wrongly stopped by the DWP have won a breakthrough case in the Court of Appeal.
The result means that depending on what remedy the DWP chooses, the two households – and potentially thousands like them subject to wrongful decisions by the DWP – will be able to return to their previous benefits or have their UC awards topped up to the level of their previous benefits.
The test case was brought by Child Poverty Action Group on behalf of a single mother and her disabled daughter and a woman with mobility difficulties who lives alone.
It challenged the lack of protection against cash losses for claimants who are on UC only because of an incorrect decision by the DWP ending their earlier benefits when combined with the fact that such claimants are unable to return to their previous (‘legacy’) benefits after successfully challenging the incorrect decision, even if they are financially worse off on UC.
Both households were significantly worse off on UC, yet they were unable to return to their original benefits because of the so-called ‘lobster pot principle’ (once on UC there’s no way back).
And unlike people who will in future be transferred to UC from their existing benefits as part of a mass, managed-migration process, they were not entitled to have their UC payments topped up to the level of their original benefits (‘transitional protection’ against cash losses at the point of transfer).
Other than the DWP error ending their previous benefits, neither household had any change in circumstances which would have obliged them to claim UC.
‘TD’, the mother of the disabled child, was for a period almost £140 per month worse off on UC than her entitlement on her previous benefits because payments for some disabled children are lower in UC than in tax credits.
For Ms Reynolds, the other claimant, the difference between her previous employment and support allowance (ESA) award and her UC award is around £180 per month.
The court decided there was no justification for treating the two households differently from other claimants who remain on ‘legacy’ benefits and who will in the future move to UC through managed migration and will have transitional protection against income drops.
Lord Justice Singh ruled that this difference in treatment of the two households, unfairly discriminated against them, breaching their rights under the European Convention on Human Rights:
“What is crucial …is that these Appellants were treated as they were despite their successful reviews [of the DWP decision to end their previous benefits] for reasons to do with administrative cost and complexity, which have nothing to do with the merits of their cases; and that the only reason in reality why they moved from legacy benefits to UC was as a result of errors of law by the state itself.”
Lord Justice Singh also drew attention to the practical reality the claimants faced when their previous benefits were stopped by DWP error: “Although it is true that the Appellants were not compelled by law to apply for UC, as a matter of practical reality they had no choice but to apply for UC.
“It is important that the legislation in this country governing social security should be interpreted in a way which conforms to practical reality, given the potential impact on some of the poorest people in society.”
In March 2019, the High Court rejected CPAG’s claim that the two households had suffered unlawful discrimination, considering that it was sufficient that the Secretary of State had considered whether it was justifiable to treat the two households differently to claimants remaining on legacy benefits and claimants who in future will be migrated to UC with transitional protection.
But the Court of Appeal overturned that decision on Tueday, emphasising that the court itself needed to decide whether the difference in treatment of the two households was justified, rather than only whether it had been adequately considered by the Secretary of State.
Commenting after the judgment on Tuesday, Child Poverty Action Group’s solicitor Carla Clarke said: “Today’s judgment corrects a glaring injustice for the two households in this case, and many others in a similar situation, who end up worse off through no fault of their own.
“The court was clear that the way in which UC is implemented must comply with human rights.
“Claimants pushed onto UC when the DWP wrongly stops their old benefits should not have to tolerate an income drop that causes them real hardship simply because the DWP considers it is too costly or too complex to rectify its own mistake.
“Not least among those who will benefit from the judgment are children and adults who otherwise stood to lose out on crucial help with the extra costs of disability.
“The Secretary of State must act swiftly to implement the judgment so that any claimant who claims UC following an incorrect decision to end their previous benefits is protected against financial losses.”