Defective claims revisited | CPAG

Defective claims revisited

03 December 2018
Issue 267 (December 2018)

Martin Williams provides an update to the article in Bulletin 262, ‘Universal credit: defective claims and withdrawals’.


The previous article presented potential legal arguments for claimants who had unwisely initiated a claim for universal credit (UC), causing or risking the cessation of legacy benefits and who then either withdrew their claim or could argue that their claim was defective. This was aimed at assisting claimants to avoid what would otherwise be, for them, negative consequences of claiming UC. This article explains developments which necessitate revisiting those arguments. Additionally, there may be arguments that can assist claimants who take some days to complete the UC online claim form to argue their date of claim is when they first click ‘Make a claim’.


In HMRC v LH (TC) [2018] UKUT 306 (AAC), the claimant and her partner had a joint claim for child tax credit (CTC). The claimant mistakenly submitted a claim for UC and then withdrew it. Before the withdrawal request was made, HM Revenue and Customs (HMRC) had ended the award of tax credits because, following the UC claim, the DWP had sent a ‘stop notice’ to HMRC. The First-tier Tribunal allowed the appeal, holding that there was no evidence the Secretary of State for Work and Pensions (SSWP) had been satisfied that the claimant met the basic conditions of entitlement to UC. Therefore, the First-tier Tribunal reasoned, regulation 8(1)(b) of the Universal Credit (Transitional Provisions) Regulations 2014 (SI No.1230) was not made, and termination of CTC could not take place under regulation 8(2) of those regulations. In the Upper Tribunal, Judge Jacobs finds that it was not sufficient for HMRC in such a case simply to have received a ‘stop notice’ in order to terminate a tax credit award. What is needed, he holds, is the simultaneous existence of a claim and the SSWP being satisfied the basic conditions are met. If the HMRC decision was appealed, it would need to show evidence that this was the case. However, Judge Jacobs goes on to decide that the explanation provided to it, of how stop notices came to be issued, was sufficient in that case to show that the SSWP had been satisfied about the basic conditions. Frustratingly, the Upper Tribunal does not detail what that explanation was. However, government lawyers have informed CPAG that all they told the Upper Tribunal was that the stop notice was only issued by the SSWP when she was satisfied the basic conditions were satisfied. Given the DWP correspondence about this with CPAG (see below) and that the Upper Tribunal was not informed of that, one could doubt that the mere existence of the stop notice shows the SSWP has properly undertaken the process in all cases.

Judge Jacobs also finds that a withdrawal of a claim, where made after the stop notice is issued will not assist a claimant (on the grounds a withdrawal does not operate retrospectively). He does not decide what would have happened had the withdrawal been made prior to the notice being issued.

DWP correspondence with CPAG

Regulation 8 process

Government Legal Department lawyers have revealed further details about the way in which stop notices are issued in pre-action correspondence with CPAG. They have stated:

the determination for the purposes of regulation 8 is done by the computer system at the very moment that a claim is submitted. If the claimant says in the claim that they are at least 18, have not reached the qualifying age for state pension credit, are in Great Britain and are not in education, as **** did, then the Secretary of State can be satisfied that the conditions as specified by regulation 8 are met immediately the claim is submitted. It is only if it is indicated in the claim that the claimant may not meet the basic eligibility conditions, e.g. if the claimant says that they are in full-time education, would the Secretary of State need to make further enquiries to be satisfied that an exception applies and the claimant meets the basic conditions of entitlement.

If that is how the system operates, arguably this would only count as a sufficient process in some cases. Certainly, if the claimant indicates that s/he is not a British or Irish citizen or has been outside the UK for periods in the last two years, it is difficult to see how the SSWP could be satisfied the claimant was ‘in Great Britain’ (given the requirement of that of a right to reside, as per regulation 9 of the Universal Credit Regulations 2013).

Other issues

In Bulletin 262, it was suggested that housing benefit (HB), income support (IS) or tax credits could not end under regulation 8 if the claim was defective (and similarly that employment and support allowance (ESA) and jobseeker's allowance (JSA) do not cease to exist where a defective claim for UC is made). This was argued on the basis that both regulation 8 and also the Orders providing for abolition of ESA and JSA require determination of the first day of entitlement to UC in order to establish the date from which termination of the legacy benefit takes place. That first day can only be established in the case of a valid claim for UC. This issue is not considered in HMRC v LH (presumably the claim was not defective). However, government lawyers maintain that the point is wrong in any event. They argue that regulation 8 (and also the Orders providing for abolition of JSA and ESA where a UC claim is made) refer simply to a claim being ‘made and do not have any of the intricacies of whether it is a valid claim or whether it can be treated as such. They say that to interpret the rules otherwise would render the system unworkable.


Regardless of whether the SSWP’s position is correct, this certainly suggests that the DWP will not be willing to back down in such cases. Advisers will need to bear this in mind, and it is suggested that at present it would be unwise to advise a claimant who had submitted a claim for UC to withdraw that claim in the hope s/he could easily obtain restoration of legacy benefits.

What is a defective claim in universal credit anyway?

In Bulletin 262, it was suggested that a valid claim was made once a claimant had answered questions on the online claim system. It is at that point that the claimant can click a button saying ‘Submit claim’. Since then, the SSWP has confirmed, in response to the Social Security Advisory Committee (SSAC) report on the managed migration regulations, that:

In Universal Credit, a claim is effective from the point at which the Universal Credit claim is submitted. Because of its digital nature, it is almost impossible to make a defective claim on Universal Credit because the system does notallowthe claim tobe submitted until relevant fields have been populated.

It could be argued, however, that this is wrong. The online system for claiming UC allows for the creation of an online account. The claimant is then given the option to click a button to ‘Make a claim’. The system then presents a series of questions which, as the SSWP told the SSAC, must all be completed in full before the ‘Submit claim’ button appears. If a claimant does not answer all the questions and logs out of her/his account, the responses s/he has given thus far are saved on the DWP computer system.

Where the claimant has not filled in all the questions, s/he will be emailed a reminder to do so – which accords with the requirement where a defective claim is made for the SSWP to notify the claimant of the defect.

It may well be arguable that, at that stage, a defective claim has already been made. Such a position means that if the claimant then completes the questions properly and submits the claim within a month of that notification, her/his date of claim should be the date on which s/he first made the claim – ie, clicked ‘Make a claim’.

It could be argued that:

  • provision exists in regulations for defective claims, so it would be odd if it was impossible for a claim to be defective;
  • the purpose of providing for defective claims is to give some assistance, by relaxing the date of claim conditions, for those who, for one reason or another, are unable to complete the form in accordance with the instructions. One should therefore assume that the system has not been designed to make it impossible for such claimants to complete the form: that would be the case if a defective claim is made when a person clicks ‘Make a claim’;
  • following Novitskaya v LB Brent [2009] EWCA Civ 1260, a defective claim counts as having been made if the context of the document suggests the claimant intends that document to constitute a request for benefit. Clicking ‘Make a claim’ would seem to do that;
  • once ‘Make a claim’ is clicked, then the details of that are ‘delivered to an official computer system’ and appear to be ‘accepted by the system’ as they are saved on it (Schedule 2, paragraph 4 of the Universal Credit, Personal Independence Payment, Jobseeker's Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013, SI No.380).

In short, what is the difference between a half-completed electronic claim form saved on the DWP computer system and a half-completed paper form delivered to a DWP office?

Clearly, however, this is only an arguable position and, importantly, it is not the position of the SSWP. Claimants would be well advised to fill in all the answers and click ‘Submit claim’ on the same day they start the process. Where they have not managed to do that, they can appeal against the decision awarding them UC and argue that the start date has been wrongly determined.



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