In a judgement published 11th January 2019, the High Court found that, correctly interpreted, the Regulations mean the DWP can - and should - adjust its calculation of Universal Credit awards when “it is clear that the actual amounts received in an assessment period do not, in fact, reflect the earned income payable in respect of that period”.
High Court ruled that, in the cases brought by four appellants, the DWP had wrongly interpreted regulation 54 of the UC Regulations 2013. The DWP had failed to take advantage of an interpretation of the regulations which allows adjustments to the UC calculation of earned income. This adjustment could have treated two sets of earnings paid in one monthly assessment period as "in respect of" two different assessment periods.
The judges concentrated on two features of regulation 54, as we show in italics:
The calculation of a person's earned income in respect of the assessment period is, unless otherwise provided in this Chapter, to be based on the actual amounts received in that period".
They argue that the wording "based on" shows that there may be further adjustments to be made, and that the phrase "in respect of" the assessment period means the calculation should reflect the fact that the monthly earnings are intended for separate monthly assessment periods. Furthermore to take two sets of earnings into account for one monthly assessment period runs contrary to the primary legislation on which the UC Regulations are based (section 8(3) of the Welfare Reform Act 2012).
They also stated that, correctly interpreted, the regulations mean the DWP can and should adjust its calculation of universal credit awards when “it is clear that the actual amounts received in an assessment period do not, in fact, reflect the earned income payable in respect of that period”.
A further submission by the appellants is required to identify the appropriate remedy.
We hope that this will eventually mean that wages will be allocated to the Monthly Assessment Period in which they would have normally been paid, rather than to the Monthly Assessment Period in which they were received.
The DWP now either have to issue guidance to staff on the manual interventions that will be necessary to implement this decision - which affects not just single parents but all working claimants - or appeal it! Their decision is expected in the next few weeks.
Please see our standard letter UC HM5
which argues that the wages should be taken as received on the claimant's normal pay day!
(Note - the claimant should make this request through their on line UC account)