High Court says “No”

Whereas most people, across the political spectrum, have little problem with the principles behind, and the overall objectives for, Universal Credit, there is also almost universal contempt for the way in which the successive Conservative governments have sought to implement it.

There are two basic problems.

The first is that, for a range of historical policy reasons, people – individuals and families – start from very different positions in their transition to universal credit and there are few discretions available to ease the way.

Imagine twenty roads – a mixture of motorways, A and B roads, country lanes and bridle paths with different speed limits and other regulations – being forced to merge into a single highway at one junction. Despite being persistently warned about the inevitable car-crashes, government ministers have ploughed on regardless, claiming that slightly longer slip-roads and new warning signs will solve the problem. They won’t.

The second problem explains why ministers won’t or can’t make the changes necessary to deliver a successful universal credit system. This is that their over-riding obligation of the implementation is not to secure the long-term objectives of universal credit but to secure significant reductions in the welfare bill as quickly as possible.

The government’s flawed implementation strategy – not just about specific proposals but also about a process where ministers have simply closed their ears to those who suggest they’ve got it wrong – has meant that there have been numerous legal challenges, nearly all of which the government has lost.

So, it was almost inevitable that, earlier this year, the High Court said “No” for the umpteenth time. And it wasn’t because it was parodying oldLittle Britain scripts with David Walliams and Matt Lucas playing the judges. It was a classic example of the new system being unable to take account of people’s particular circumstances.

Remember that a huge proportion of people entitled to Universal Credit are low-paid workers, or those whose families include members with significant disabilities. In the real working world, people get paid on the day of the week or day of the month chosen by their employers.

But Universal Credit is assessed and paid monthly.  For claimants who are in work, the amount they receive is based on their earnings with reference to a fixed monthly period – the “assessment period.”

But what happens if you are not paid wages monthly or your wages are paid on the last working day of the month? Universal Credit awards can then fluctuate unpredictably. Further, the system means that some people, just because of their pay-day, will receive far less than someone with exactly the same annual income and circumstances.

Ministers suggested that claimants in those circumstances “…could approach their employers and ask them to change the date on which they are paid”! What fantasy world do they live in?

The High Court judges ruled that the Department of Work and Pensions (DWP) had wrongly interpreted the regulations on how earned income should be calculated.  They said that the amount of earned income in respect of an assessment period is based on, but not necessarily the same as, income actually received in that period.  The judges told the DWP that it would have to make adjustments where the actual amounts received didn’t reflect the actual earnings payable in respect of that period.

The judges were so unimpressed with the DWP case that they rejected its application for permission to appeal. Now, more than 6 months after it lost, the DWP is seeking permission to go directly to the Court of Appeal. 

In the meantime, the DWP has said that it is relying on powers in social security law which allow it to continue to apply the law as it stood before the High Court gave its ruling, until the case is finally concluded. 

Why can’t ministers just accept that their position is fundamentally unfair?

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