06:09, January 11 233 0 theguardian.com

2019-01-11 06:09:09
Four single mothers win high court benefits battle against DWP

Four working single mothers have won a high court challenge over the government’s universal credit scheme.

Two judges in London announced on Friday that the women, who said they have been struggling financially because of the way the welfare system operates, had succeeded in a judicial review against the work and pensions secretary, Amber Rudd.

The women argued that a “fundamental problem” with the scheme meant their monthly payments varied “enormously” and they had ended up out of pocket.

They challenged the method used by the Department for Work and Pensions (DWP) when calculating the amount payable under the 2013 universal credit regulations.

Lord Justice Singh and Mr Justice Lewis gave their ruling following a hearing in November, when they were told the women were struggling to manage their household budgets and some had fallen into debt or had to rely on food banks.

Quick guide

What is universal credit and what are the problems?

What is universal credit?

Universal credit (UC) is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment and benefits, and tax credits) into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the system and increase the incentives for people to move off benefits into work.

How long has it been around?

The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults  means it is six years behind schedule and rollout will not be complete until 2023.

What is the biggest problem?

The original design set out  a minimum 42-day wait for a first payment to claimants when they moved to UC (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears and evictions, hunger (food banks in UC areas report notable increases in referrals), use of expensive credit and mental distress. 

Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. Housing benefit will now continue for an extra two weeks after the start of a UC claim. However, critics say the five-week wait is still too long and want it reduced to two or three weeks.

Are there other problems?

Plenty.  Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean UC is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move to UC, reducing work incentives.

Landlords are worried that the level of rent arrears accrued by tenants on UC could lead to a rise in evictions. It's also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access.

And there is concern that UC cannot deliver key promises: a critical study found it does not deliver savings, cannot prove it gets more people into work, and has plunged vulnerable claimants into hardship.

Lawyers for Danielle Johnson, Claire Woods, Erin Barrett and Katie Stewart said the problem was likely to affect tens of thousands of people claiming universal credit, which was introduced to replace means-tested benefits including income support and housing benefit.

The problem would arise, they said, when claimants were paid by employers on a date that “clashes” with their assessment period for universal credit.

The women pointed out that if a claimant were paid early because of a weekend or bank holiday, for example, the system would count them as having been paid twice in one month and they would receive a “vastly reduced” universal credit payment.

The judges said they had concluded that the “secretary of state had wrongly interpreted” the relevant regulations.