CPAG test case update April 2020

Introduction

CPAG is currently involved with a number of legal challenges, dealing with a range of issues, from the practicalities of assessing universal credit (UC) awards to the legality of legislation that results in discrimination against certain groups. Some challenges came about following the roll-out of UC, as issues with the inflexibility of the automated system became apparent. Other cases challenge legislation that has a discriminatory effect and seek to have the legislation quashed or to have a declaration of incompatibility issued. Below are some of the cases that CPAG is currently working on. For full details, visit the Test case updates page on the CPAG website.

UC assessment periods and wage payments

R (Johnson, Woods, Barrett and Stewart) v SSWP [2019] EWHC 23 (Admin)

On 27 and 28 November 2018, CPAG represented three single mothers whose UC awards were reduced in months where their wages were paid early due to their normal pay-day falling on a non-banking day. A fourth claimant in the same position was represented by Leigh Day. Receiving their pay early resulted in their being treated as having received two wages in one assessment period, even though the payments were clearly earned in separate assessment periods.

On 11 January 2019, the High Court found in favour of the claimants, stating that the correct application of regulation 54 of the Universal Credit Regulations 2013 (the ‘UC Regs’) was that the assessment of earned income should be based on the actual income received in that period, an adjustment may be necessary where it is clear that the amounts received do not accurately reflect the amount actually earned in that period. The Secretary of State for Work and Pensions (SSWP) has appealed against this decision and the case will be heard by the Court of Appeal on 19 May 2020.

In the meantime, claimants affected by this issue can request a mandatory reconsideration and then go on to appeal. Some awards are being corrected using this method, but the results are inconsistent and having to appeal leaves the claimant short of income in the meantime.

SP and others v SSWP CO/3572/2019

This is another case involving issues that arise due to the strict interpretation of wages received in an assessment period. The claimant is a single mother who works 16 hours per week at national minimum wage. Under regulation 82 of the UC Regs, working these hours at this wage should result in a claimant meeting the earnings threshold to avoid the benefit cap. However, the earnings threshold is calculated as a monthly figure, and the claimant is paid four-weekly. So, while someone in her position who is paid monthly would escape the benefit cap, the claimant’s income falls slightly short of the threshold for 11 of 12 assessment periods, and so she is subject to the benefit cap. In the 12th assessment period, she receives two payments, meaning that her UC is significantly reduced, as both payments are treated as having been earned in the same assessment period.

The correct application of regulation 54, as decided by the High Court in Johnson, means that there is discretion to adjust the calculation of a person’s UC award where the income received does not accurately reflect the income earned in an assessment period – ie, in this case, where the claimant works a completely regular pattern of work, she should be treated as earning one-twelfth of her annual income each month, instead of having 13 payment periods over the year, which is how she is actually paid. This judicial review case will be heard in the High Court on 13 May 2020.

Bereavement benefits

R (Jackson and others) v SSWP [2020] EWHC 183 (Admin)

CPAG represented two fathers in this case, each of whom had children with a cohabiting partner who died. They were refused bereavement support payment on the basis that they were not the spouse or civil partner of the deceased. CPAG argued that, in the context of the higher rate of bereavement support payment (for bereaved parents), this discriminated against unmarried partners and their children. The High Court found in favour of the claimants, dismissing the SSWP’s argument that bereavement support payment was not intended to benefit the children and making a declaration of incompatibility with the European Convention on Human Rights. Judge Holman subsequently refused the SSWP’s application to appeal to the Court of Appeal and stated that pursuing this further was a ‘waste of time and money’. At time of writing, it was not known if the application was to be renewed directly to the Court of Appeal. The Prime Minister has responded to a PMQ on this issue by stating that the refusal of support to these families was an injustice that must be rectified and the SSWP has also stated that it is one of the issues on her agenda. However, as things stand, the legislation still states that a claimant must have been the spouse or civil partner of the deceased.

Right to reside and pre-settled status

Fratila and Tanase v SSWP CO/3632/2019

The claimants in this case were European Union (EU) nationals who had been granted pre-settled status under the EU Settlement Scheme. They had been refused UC on the basis that the Social Security (Income-related Benefits) (Updating and Amendment) (EU Exit) Regulations 2019 (the ‘2019 regulations’) amended the UC Regs so that pre-settled status is not a right to reside for UC purposes (and indeed for other benefit purposes).

CPAG is challenging this on the basis that the claimants have a right to reside that does not include any limitation on their access to public funds and that the effect of the 2019 regulations is discriminatory. The case was heard in the High Court on 18 and 19 February 2020 and we are awaiting the judgment. The remedy sought by the claimants is a quashing order in respect of the 2019 regulations. With 80,000 EU nationals a month being granted pre-settled status, such an order could result in UC entitlement for a vast number of people.

Maternity allowance under UC

TM v SSWP CO/4081/2019

Under UC, maternity allowance (MA) is treated as unearned income, meaning that it reduces a claimant’s UC pound for pound, not attracting the work allowance or taper that the claimant would benefit from if she was receiving statutory maternity pay (SMP), which is treated as earnings. The claimant is a single mother who changed jobs when she found out that she was pregnant, as she wanted more security and better career prospects. The result was that she was not employed by her new employer for a long enough period to claim SMP.

The women affected are in employment and in the same position as women claiming SMP. CPAG is arguing that both benefits are paid to allow a woman to take time off work during her maternity period and so treating them so differently under UC cannot be justified. The case will be heard by the High Court on 24 and 25 June.

Two-child rule

SC and others v SSWP UKSC/2019/0135

This is a challenge to the ‘two-child rule’ introduced by the Welfare Reform and Work Act 2016. This rule states that a household will receive benefit support for a maximum of two children, with some limited exceptions, and applies to all children born after April 2017. CPAG issued judicial review proceedings on this matter in August 2017 on behalf of two single mothers and their eight children. The claimants’ position is that the rule discriminates against children, people in households with more than two children, claimants with a philosophical or religious objection to abortion, and women, because any measures reducing benefits to children will necessarily affect more women than men, since the majority of lone parents are women.

The case was heard in the High Court on 6 and 7 February 2018, where the judge found that the treatment of children in kinship care under the two-child rule was irrational due to different rules applying depending on when the child moved into the household, but otherwise found in favour of the defendant. CPAG appealed to the Court of Appeal but the appeal was dismissed (in SC and others v Secretary of State for Work and Pensions and others [2019] EWCA Civ 615 (16 April 2019)). CPAG has been granted permission to appeal to the Supreme Court and the case will be heard on 20–22 October 2020.

Benefit cap

R (DS and others) v Secretary of State for Work and Pensions [2019] UKSC 21

CPAG’s challenge to the benefit cap, on human rights grounds, was heard by the Supreme Court on 17–19 July 2018. In R (DA and others) and R (DS and others) v Secretary of State for Work and Pensions [2019] UKSC 21 (15 May 2019), the court rejected the appeal. CPAG is looking for new clients so that another challenge can be taken to the European Court of Human Rights in Strasbourg.