Fresh blow for Universal Credit as single mums win High Court battle with DWP
The Government's flagship Universal Credit welfare shake-up has suffered another setback as the High Court ruled in favour of a challenge to the scheme lodged by four single working mothers.
The High Court today found in favour of the women, who argued that the way the Department for Work and Pensions calculated their pay packets had left them in financial difficulty.
The embarrassing ruling came on the day Work and Pensions Secretary Amber Rudd gave a major speech promising a string of changes to the controversial plan to roll six benefits into one, which has been hit by IT delays and claims it is causing severe hardship.
Handing down their judgment today, Lord Justice Singh and Mr Justice Lewis found that the Secretary of State had "wrongly interpreted" Universal Credit rules by effectively treating two months' of the women's salaries as if they had been earned in a single month - thereby slashing the amount of help the mums were entitled to.
The women were paid their salaries on the last working day of each month - meaning sometimes two months’ payment would fall within a single assessment period used by the DWP to calculate Universal Credit payments.
But the top court ruled that the department was "wrong to treat the combined salaries for two different months" in this way. A DWP spokesperson said the department was “carefully considering the court’s judgment”.
Frank Field, chair of the cross-party Work and Pensions Committee said the ruling would be a “test” of Ms Rudd’s vow to overhaul the scheme.
The former Labour MP told PoliticsHome: “The Court has laid bare yet another example of appalling incompetence that was built into the design and delivery of Universal Credit, where common sense seems to be in short supply.
“Sadly, as always, it has been families on low incomes who have been grossly let down by the these failings.
“The decision over how to respond to this significant legal victory for hard-pressed families represents the latest test of the new Secretary of State’s admirable determination to tackle the huge number of flaws in Universal Credit.
“Justice demands swift action to address this latest flaw that has been exposed by the Court.”
Labour meanwhile said it was a "disgrace" that the women had had to take ministers to court in the first place.
Shadow Work and Pensions Secretary Margaret Greenwood said: "The rigid assessment system cannot cope with something as basic as incomes that fluctuate from month to month.
"The High Court’s ruling confirms once again that Universal Credit is failing people on low pay and pushing many into hardship simply because of when their payday falls.
"The Tories must stop the roll out of Universal Credit to ensure no more people are plunged into poverty and deprivation."
The blow for the DWP came as Ms Rudd - who took on the Work and Pensions Secretary job before Christmas after the resignation of Esther McVey - admitted Universal Credit was not "effective" or "compassionate" enough.
Ministers have long argued that the overhaul is needed to simplify the benefits system and make it easier for people claiming benefits to return to work.
But the Cabinet minister confirmed plans - first trailed in the Sunday papers - to scale back the wider roll-out of the scheme to three million more people, and said proposals to retrospectively apply a two-child cap on benefits to people claiming Universal Credit would also be axed.
The Work and Pensions Secretary said: "As it stands, from February 2019 the two child limit will be applied to families applying for Universal Credit who had their children before the cap was even announced. That is not right.
"These parents made decisions about the size of the family when the previous system was the only system in place. So I can today announce that I am going to scrap the extension of the two-child limit o Universal Credit for children born before April 2017.
"All children born before that date will continue to be supported by Universal Credit. This will help approximately 15,000 families a year."
PoliticsHome understands the move follows a major battle with Chancellor Philip Hammond.
But Shadow Work and Pensions Secretary Margaret Greenwood said: "This partial U-turn does not go far enough. Labour has long called for the Government to abandon the two child limit in its entirety.
"Universal Credit simply is not working: it is pushing many families into poverty, rent arrears and towards foodbanks.
"The Government must stop the roll out immediately before more people are pushed into financial hardship."