Child Poverty Action Group (CPAG) is seeking leave to appeal direct to the Court of Appeal on behalf of 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. The move follows a High Court decision today which rejected a claim of unlawful discrimination brought by the two households and refused permission to appeal.
The Government has consistently given assurances that no claimant will be worse off when they move to UC where there has been no change of circumstances.
Both households were forced to claim UC because their existing benefits were removed incorrectly by the DWP and were entitled to significantly less on UC than on their previous benefits, because some disability-related payments are lower or non-existent in UC.
Yet DWP policy also prevented the claimants from returning to their previous benefits (under the so-called ‘lobster-pot principle’- once in, there’s no way out) even after the DWP decision to end their entitlement to their existing benefits was found to be incorrect.
Neither household had any change in circumstances which would oblige them to claim UC – other than the DWP’s erroneous termination of their existing benefits. Nor were they entitled to the cash top-ups ( ‘transitional protection’ against income losses) which will be available to claimants of existing benefits whose circumstance do not change and who from 2020 will be moved to UC under a mass, managed-migration process.
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 claimant is more than £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.
Commenting on today’s High Court judgement, Child Poverty Action Group’s Head of Strategic Litigation Carla Clarke said:
“The High Court has found that the Secretary of State considered the impact of universal credit policy on claimants in the circumstances of our clients. But to be lawful and not to amount to discrimination, the difference in treatment of some groups of people, such as our clients, must not simply be considered but must also be justified. In our view, such justification has not been made out. As the judge herself said: “The SSWP’s [Secretary of State for Work and Pensions] case is that she and Ministers have specifically considered the apparently arbitrary disadvantage visited on people like these claimants – caring alone for a child with severe disabilities in the case of TD and living alone with severe disabilities in the case of PR – resulting from an error in their benefits made by her department.” It is difficult to see how a disadvantage which is arbitrary can be justified.
“Incorrect decisions by the DWP forced our clients to claim universal credit. If it weren’t for those incorrect decisions, they would have remained on their original benefits. They lost income as a result because their awards under UC were less and they were caught in a lobster-pot effect - once on universal credit, there was no way back to their previous benefits. Nor did they have access to top-up payments to buffer their cash-losses, despite the fact that these will be available to people moving to universal credit in future as part of the mass, managed migration of claimants.
“At the centre of this case there is a single mother of a disabled child and a woman who has mobility difficulties. We will ask the Court of Appeal to consider how the decision to prevent them returning to their previous benefits while at the same time not affording them transitional protection can be justified when the situation has arisen not from any change of their circumstances but from the DWP’s errors. They, and many others like them, have seen large drops in their income and are no less worthy of protection than other groups who will move to universal credit in the future with transitional protection as a buffer against such drops in income.
“This ‘arbitrary disadvantage’ is an injustice affecting potentially tens of thousands of benefit claimants who have only claimed universal credit because of incorrect decisions by the DWP, principally among them adults and children who stand to lose out on financial help with the extra costs of disability.”
Notes to editors:
Today’s judgment and more information on the case which was heard in the High Court on 23rd and 24th January is here
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 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 all claimants of existing benefits. Under the managed migration of claimants of existing benefits to UC, from 2020, transitional protection will be available to protect people whose circumstances have not changed against income losses at the point of transition to UC.
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 less severe 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, 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. Anonymity orders are in place for TD and AD.
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.
The other claimant, Ms Reynolds, has mobility difficulties. 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.
Media contact: Jane Ahrends 0207 812 5216 or 07816 909302