The Work and Pensions Secretary, Thérèse Coffey MP, has been asked an urgent question on the Court of Appeal’s ruling that the DWP’s failure to fix an issue with Universal Credit was “unlawful”.
In January 2019, the High Court ruled in favour of four women who argued that the Universal Credit regulations did not take into account the fact that pay dates for monthly salaries can fluctuate (due to weekends or bank holidays).
The Universal Credit assessment period runs from the last day of each month to the penultimate day of the following month. Therefore, if an employee is paid a day earlier, they are judged to have earned double in one month and nothing in the next month, meaning their benefits can fluctuate severely.
The women involved in the case reported being in rent arrears, being unable to pay council tax, and having to use foodbanks.
The Court of Appeal dismissed the Department of Work and Pensions’ (DWP) attempt to overturn the High Court’s ruling, with Lord Justice Underhill saying that the issue has had a “severely harmful impact”.
Today, Stephen Timms MP asked the Work and Pensions Secretary for a statement on the Department’s response to this verdict.
Parliamentary Under-Secretary of State for Work and Pensions Will Quince told the House that the DWP would not be appealing the Court of Appeal’s decision.
The Minister said that they were aware of around a thousand claimants who had disputed their earnings and are “looking at how we can identify this group further”, as well as “assessing remedial options”.
He said that most people affected “will not suffer a financial loss” as their universal credit payment will increase the following month, but acknowledged that it had caused “budgeting issues”.
Mr Quince said the solution to the issue needed “more consideration”, but stated the DWP was working with HMRC and employers “on how to report their employees’ earnings correctly “.
The Minister said: “We will now begin the process of carefully considering possible solutions.”
Responding on behalf of the Opposition, Stephen Timms said the situation had left claimants’ income “severely disrupted”. He detailed cases where people had to turn down jobs because they were more “financially stable” out of work.
Mr Timms said that although he was “grateful” that the DWP was not planning to appeal the ruling and had “accepted the inevitable”, they should’ve “given up the fight” last year.
He also asked for an estimate of the number of people affected, with the Court of Appeal estimating around 80,000 claimants having had to deal with the issue, and called it a “very significant problem”. He also questioned the Minister on when the universal credit computer system would be fixed.
The concluded: “Surely, nobody will dispute the view of the Appeal Court that the policy is ‘irrational’.”
Leigh Day lawyer, Tessa Gregory represented one of the mothers, Danielle Johnson, who was badly affected by the regulations.
Tessa Gregory said: “We are delighted to learn from the discussions in Parliament this morning that the Government will not be appealing the Court’s unanimous judgment.
“Urgent steps must now be taken to remedy this absurd situation to ensure that no other hard-working individuals are treated irrationally and to also ensure that those who have lost out financially are recompensed.”