by GMLC volunteer Alex McColl
R (Johnson & Ors) v SSWP  EWHC 23 (Admin)
In January this year, four single mothers won a case in the High Court against the DWP in a judicial review of the way in which universal credit is calculated.
Universal credit was introduced in 2013. It merged six other benefits into one single monthly payment.Depending on their circumstances, people are entitled to a certain amount of money as a standard allowance of universal credit. If they are also working and earning money, the standard allowance is reduced by 63p for every £1 earned until it is reduced to zero. So, for example, a single person under 25 is entitled to £251.77 a month as their standard allowance. But if they earn £300 a month from wages, the amount of universal credit they receive will be reduced to £62.77.
Those with children or a disability that restricts their ability to work are entitled to a larger standard allowance (around £598) and are also allowed to keep £198 of their standard allowance before the 63% reduction is applied.
When someone makes a claim for universal credit for the first time, the date that the they first apply becomes the first day of their ‘assessment period’. The assessment period runs until the following month (i.e. if you initially claim on the 5th January, the assessment period will run from the 5th of the month until the 4th of the following month). Any earnings received during that month are taken into account when calculating the following month’s universal credit payment.
The problem highlighted in this case arises when someone’s pay day falls on a weekend or a bank holiday. For example, if someone is paid on the first of the month, and the first day of the next month falls on a Sunday, they may actually be paid on the following day. They can end up getting counted as though they were paid twice during one assessment period and then not at all during the next period. This means that the amount they receive in universal credit changes month on month, making it extremely difficult to manage outgoings such as rent, food and bills. They also lose money because the £198 protected standard allowance is only calculated once for two lots of earnings.
“Th[is] creates cash flow difficulties which, for persons on low income, with little or no savings, can create difficulties in terms of paying for rent, or utilities or other bills.” (case, para 24)
This case was brought by four single mothers who were in this position, represented by Child Poverty Action Group and solicitors Leigh Day.
Unable to obtain any flexibility from either their employers or the DWP, they decided to bring a judicial review claim. Judicial review is the means through which individuals can challenge government decisions in court. It is a powerful tool that stops public bodies from going beyond their remit and holds them accountable for their actions.
The court was asked to decide if the way universal credit was being calculated by the DWP was lawful. The court decided that it was not. It held that the government regulations implementing universal credit intended for universal credit to take into account how much claimants earned every month, not how much they received. The court found that the DWP had misinterpreted the regulations and its approach had been too inflexible. The amount a claimant receives during an assessment period might be enough to work out someone’s entitlement but in some cases – such as the single mothers – further adjustments will need to be made to ensure claimants get the correct amount. The judges were very clear about that the DWP’s approach had:
“result[ed] in a calculation of a claimant’s earned income in a way that does not reflect the actual facts and, indeed, could be said to lead to nonsensical situations, for example that a person does not have any earned income during a period when in fact he or she clearly is working and is being paid.” (para 56)
This is the second successful judicial review of an aspect of universal credit. Last year, two people with severe disabilities used the Human Rights Act to argue that the government was unlawfully discriminating against them by moving them onto universal credit from employment and support allowance (ESA), which meant they lost money, without providing any extra money to support the transition.
“That it should have required them to go to court to challenge the DWP’s position is a testament to their commitment to bring up their children in a working household but it is a situation they should never have been put in. Today’s result should mean that in future no one will lose out on their universal credit awards or face the hardship that my clients have faced simply because of when their payday happens to fall.” – Carla Clarke, CPAG solicitor in Johnson & Ors
Judicial review and the Human Rights Act are a vital way to challenge government welfare policy, but they have limitations. The TP and ARcase successfully challenged the way universal credit has been rolled out. The claimants in Johnson & Orshave successfully shown that the DWP has not been calculating it correctly. The courts can deal with issues on a case by case basis. But there are deeper issues with universal credit and the wider benefit system that cannot be successfully challenged in court since they require a substantial change in the direction of government policy.
Welfare benefits are a basic right. Most people will at some point in their lives make use of some form of state benefit. When access is restricted or denied, the consequences for those who rely on them can be devastating. For many, the cost and the stress involved in challenging the government makes it impossible to do so. The law surrounding benefits has become extremely complicated. Nevertheless, in 2012 the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) significantly reduced the availability of legal aid for welfare benefits issues meaning that people who cannot afford to pay now face an uphill struggle to obtain legal advice and representation.
This is why the work of law centres is so important. But government cuts have also put law centres under a huge strain. A 2018 report by the Equality and Human Rights Commission found that:
“LASPO has significantly diminished the capacity and scope of charities and voluntary advice organisations, who are the principal providers of formal welfare law advice. There is little specialist advice left to support appeals against welfare benefits decisions.” (Equality and Human Rights Commission, Research report 118, p35)
The government has created a hostile environment for those who need to access the benefits system and has targeted advice centres’ funding to restrict people’s ability to challenge them. The Greater Manchester Law Centre and its team of dedicated volunteers work tirelessly to provide advice, support and representation to those who seek to challenge the government. We will continue to campaign for people’s right to access their benefit entitlements, for access to justice and for an end to hostile welfare policies.
Alex Mccoll is a volunteer at GMLC. He is currently in the process of applying for pupillage to begin the final stage of becoming a barrister. He aims to practice within the legal aid sector and would like to specialise in social welfare and human rights law.