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Claimants left worse off after being told by DWP to claim UC are to take case to Court of Appeal

CPAG are helping two claimants who were left worse off after being advised to claim UC to seek leave to appeal to the Court of Appeal. This follows their case being considered and rejected by the High Court.

Both claimants took advice from the DWP and claimed UC after their existing benefits ended - to find themselves worse off as a result. (Despite government assurances that no-one is worse off on UC, many claimants are - particularly, but not only, claimants with disabilities. This is because some disability-related elements are lower or non-existent in UC.)

But - even though they could have remained on their existing legacy benefits - because of the UC 'lobster-pot' effect, Regulations prevented the claimants from returning to these benefits, even after the decision to end them was found to be incorrect.

One of the claimants, the mother of a severely disabled child, was told her only option was to claim Universal Credit. Her Carers Allowance had stopped because her daughter's DLA renewal application had not yet been processed in time. However, she could have continued on Income Support whilst awaiting the outcome of the DLA renewal. She was left almost £140 per month worse off on UC than her previous benefit entitlement because payments for some disabled children are lower on Universal Credit than on Tax Credits.

Because these claimants had moved onto Universal Credit 'naturally' they were not entitled to the transitional protection to compensate for the loss that will be available to claimants who are 'managed migrated' in future.
CPAG believe that the decision to prevent these claimants from returning to their previous benefits, while at the same time not affording them transitional protection, was not justified when the situation had arisen not from any change in their circumstances but from DWP’s errors. They argued that the claimants, 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.

The Court of Appeal accepted the fact that claimants with disabilities can be worse off on Universal Credit - but that was not in itself unlawful - the role of the courts is to evaluate the legality, not the morality, of such political decisions. They had to consider the issue of whether the claimants had been discriminated against. And it is the discriminatory impact of a policy, rather than the policy itself, that must be shown to be manifestly without reasonable foundation.

They decided that there had not been discrimination in these cases in part because:

1. It had not been shown that claimants with disabilities were more likely to have errors made in their legacy benefit claims, and
2. The managed migration process and Regulations that govern these were still in draft form so it was impossible to make comparisons with a group of claimants that could not easily be identified and was still subject to change.

CPAG's argument is that:

(i) DWP’s policy is irrational - individuals in such a situation have not undergone a change of circumstances nor have they chosen to claim UC and as such there is no rational basis for treating them differently from those who are moved onto UC under the managed migration process who will receive transitional protection against any cash loss under UC.

(ii) the policy is discriminatory, including on the grounds of disability– incorrect decisions that a person no longer qualifies for a sickness or disability related benefits are more common than for other benefits and those with a disabled person in the household are more likely to be cash losers under UC than under legacy benefits.

(iii) breach of public sector equality duty – neither the equality impact assessment which accompanied the UC proposals in the Welfare Reform Act 2012 nor the subsequent impact assessment addressed the situation of those whose legacy benefits are incorrectly terminated, let alone the particular impact on those with a disability.

Commenting on today’s High Court judgement, Child Poverty Action Group’s Head of Strategic Litigation Carla Clarke said:
“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.................
 “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."

Click here for the High Court decision.