Two households affected by disability who were left worse off after they were forced to move to universal credit (UC) from existing benefits following incorrect decisions by DWP will challenge DWP policy in the High Court this week (Wednesday 23rd and Thursday 24th January).
The judicial review, brought by Child Poverty Action Group (CPAG) on behalf of the three individuals in two households, challenges:
- the policy which prevents claimants who have claimed UC only because of an incorrect DWP decision ending their existing ("legacy") benefits being able to return to legacy benefits after successfully challenging the incorrect decision even if they are financially worse off on UC, and, alternatively,
- the lack of protection against cash losses for claimants pushed on to UC in this way.
Both households in the case had no option but to claim UC after their existing benefits were stopped incorrectly and were entitled to significantly less on UC than on their previous benefits. Yet UC rules also blocked their return to legacy benefits, even after the decision to end their entitlement to their existing benefits was found to be incorrect.
People currently on existing (legacy) benefits will in future receive a cash top-up, or transitional protection payment, when they are moved over to UC as part of a mass 'managed migration'. This is intended to protect people whose circumstances have not changed against income losses at the point of transition onto UC. However, the claimants in this case were not part of the managed migration process (which has not yet started ) and so were not entitled to such protection despite suffering significant income drops and only having claimed UC as a result of DWP’s incorrect decisions. One of the claimants, the mother of a severely disabled child, was for a period left almost £140 per month worse off on UC than her entitlement on her previous benefits because payments for some disabled children are lower on UC than on tax credits. The other remains over £180 worse off per month on UC than she would have been on employment support allowance (“ESA”) because she lost the Severe Disability Premium which is not available in UC.
The policy is irrational, the claimants say, since they have neither had a change of circumstances nor chosen to claim UC so there is no basis for treating them differently from people who will be moved to UC under the managed migration process, who will qualify for transitional protection against cash losses.
The policy also has a disproportionately adverse effect on disabled claimants because incorrect decisions that a claimant no longer qualifies for sickness or disability-related benefits are more common than for other benefits, and those with a disabled person in the household are more likely to be cash losers under UC than under so-called legacy benefits.
TD, a 38-year-old single mother, gave up her full-time job to care for her 12-year-old daughter, AD, who has severe sickle cell anaemia and epilepsy. AD must have blood transfusions every 4 weeks in addition to other regular hospital appointments. Until early 2017 TD received carer's allowance, income support and child tax credits. AD received disability living allowance (“DLA”) for a time-limited period, subject to renewal. In February 2017, TD was told that because AD's DLA award had expired, TD's carer's allowance and consequently her income support would also end. In fact, TD had put in a renewal DLA claim for AD (which was subsequently granted). But the jobcentre advised TD to claim UC once her income support ended. She did so. With help from Child Poverty Action Group, TD then got the decision to end her income support overturned on the grounds that she was the carer of a person who had claimed DLA and a decision was still pending on that claim. DWP accepted that there had been an error and paid some arrears. Despite the successful revision, TD received almost £140 per month less under UC than she was entitled to under her previous benefits for over 18 months because the additional amount received under UC for a disabled child is less than the equivalent amount under child tax credit other than for the most severely disabled children.
The other claimant, Ms Reynolds, has disabilities which mean she can only move around with the aid of crutches. She received employment support allowance (“ESA”) and personal independence payment (“PIP”). Despite a deterioration in her health, DWP decided in May 2016 that she no longer qualified for PIP. Then, in March 2017, her ESA was terminated because she failed to attend a work capability assessment. Although Ms Reynolds went on to successfully challenge both the termination of her PIP and her ESA, because she had no other source of income except for her housing benefit, she felt she had no option but to apply for UC.
She is currently worse off on UC than she would have been if she had remained on ESA by £2202 a year or £183.48 a month.
Commenting ahead of the hearing, Child Poverty Action Group’s solicitor Carla Clarke said:
“The Government has consistently said no-one will be worse off if they move to universal credit without a change of circumstances. But our clients suffered significant income drops. Neither chose to claim universal credit – they were forced to, following incorrect decisions by DWP. Neither had any change of circumstances other than DWP making decisions in relation to their previous benefits which it ultimately recognised were incorrect and overturned. Yet DWP’s policy has left them stranded on universal credit, unable to return to their legacy benefits and yet without the protection against cash losses that people will have when they are moved from legacy benefits to universal credit under the managed migration process. We say what happened to them is both irrational and unlawful discrimination, treating them less favourably purely on account of DWP’s own incorrect decisions. To their credit, they are bringing the case to stop any more claimants from having to take the fallout of DWP’s poor decision-making.”
"The DWP made the wrong decisions but it is our clients who have had to pay the price for such poor decision making. For one, the mother of a severely disabled child, life was made very much harder on a daily basis because she had less to live on after the official error that pushed her on to universal credit. No longer able to afford to run a car, getting her daughter to her numerous hospital appointments became an uphill struggle, as did managing to buy the fresh food her daughter needed to keep up her body’s resistance. For our other client, she has been affected twice by incorrect decisions by DWP, firstly terminating her personal independence payment and then her employment support allowance. This left her with no option but to claim UC. She is ultimately worse off on UC but DWP has refused to make good on its own incorrect decisions.”
Notes to Editors:
Universal credit is currently open to people making a new claim for benefit, people on legacy (existing) benefits whose circumstances change and who must therefore make a new claim and people on legacy benefits who for some reason choose themselves to claim UC – known as ‘natural migration’ to UC. The Government will pilot the managed migration to UC of 10,000 current legacy benefit claimants, from July 2019, before bringing forward legislation to extend managed migration to more claimants of existing benefits.
There are two additional amounts available in both child tax credits and universal credit for children with disabilities: one for those with moderate disabilities and one for those with severe disabilities. The amount for those with severe disabilities is the same in both. However, for those with moderate disabilities, the lower rate of the ‘disabled child addition’ in UC (currently £126.11 per month) is worth less than half the disabled child element in child tax credit (£273 per month).
The Severe Disability Premium (“SDP”) is currently £64.30 per week for a single person, £128.60 for a couple. The Government has recently provided some additional protection for those disabled adults who receive SDP by agreeing that they can only move to universal credit through managed migration (qualifying them for transitional protection against losses) and is proposing to pay some compensation for those who have already moved over and therefore lost entitlement to the Premium. However, these measures do not fully compensate for the losses of those disabled people who were entitled to SDP and who were accepted as neither being able to work or to undertake activities to prepare themselves for work before they claimed UC.
TD's UC entitlement is now equivalent to the amount she would receive if she had been able to remain on legacy benefits because the care component of her daughter's DLA was moved to the higher rate (from middle rate) and so she now qualifies for the higher rate disabled child addition.
More background information on the case is here
Anonymity orders are in place for TD and AD.