Benefit cap and those paid 4 weekly | CPAG

Benefit cap and those paid 4 weekly

08 January 2020

SP and others v SSWP CO/3572/2019

On 12 September 2019, CPAG issued judicial review proceedings on behalf of a single parent and her children challenging the application of the benefit cap to the mother’s universal credit award despite the fact that she works 16 hours per week at national minimum wage simply because she is paid 4 weekly rather than monthly. Permission to apply for judicial review was granted on 5th December 2019.

SP has always worked since she left school when she was 16. Initially she worked full-time but then moved to part-time work following the birth of her first child. As of November 2018, she has been working as a home-carer for 16 hours per week at national minimum wage. Her employer pays her 4 weekly. In February 2019, her then relationship broke down and she contacted HMRC as she and her partner had been claiming tax credits on a joint claimant basis. She was told that she would have to claim UC which she did and found herself subject to the benefit cap because the wages she receives in each assessment period are for 4 weeks work (other than for one assessment period per year in which she receives two lots of 4 weeks wages). This amounts to £525.44 whereas the earnings exemption for the benefit cap, while based in 16 hours work per week at national minimum wage is set at £569.23 because it is calculated on a monthly basis.

SP has tried to get her employer to pay her monthly but this has not been possible. Nor can she increase her hours of work given her childcare responsibilities and her own health (she suffers from fibromyalgia). Being subject to the cap means that she has been forced to rely on a local foodbank and her children’s school for assistance with food, school uniforms and payment of gas and electricity bills.

The legal challenge is brought on the basis that the SSWP has adopted an unlawful approach to the calculation of earned income of people paid on a four-weekly basis rather than a calendar-monthly basis. As a result, for eleven twelfths of the year the First Claimant is treated as if she worked less than the required amount, and therefore subjected to the benefit cap. It is being argued that the SSWP’s approach to earned income misapply Reg 54 and Reg 61 of the 2013 Regulations as per Johnson and others v SSWP [2019] EWHC 23. Alternatively, if the SSWP’s approach to income calculation is in fact in line with the legislation it is irrational, at least for the purposes of establishing benefit cap exemption, and creates perverse outcomes. Further, it is argued that the SSWP’s approach is discriminatory contrary to Art 14 ECHR.