High Court rules UC assessment period approach unlawful

The High Court ruled today that the DWP's treatment of UC claimants who are paid twice in one assessment period is unlawful, with the judgment descriping DWP's approach as "odd in the extreme". This case was brought jointly by the Child Poverty Action Group and Leigh Day who represented four women who had been assessed as receiving twice as much income in an assessment period and who had, consequently, lost entitlement to Universal Credit because the system lacks the flexibility to deal appropriately with employees who are paid other than once a calendar month.

Departmental interpretation of regulations found to be "incorrect"

The challenge was to the rigidity of Universal Credit's assessment period regime, which has led to claimants being unfairly penalised due to their own payment frequency. Universal Credit was designed as a monthly benefit, in an attempt to better reflect the world of work, despite the fact that a majority of low-income workers are paid weekly or fortnightly. A claimant's income is assessed each month, but there is no failsafe to protect those employees who may end up being paid twice during their assessment period.

The court has found that this approach is derived from an incorrect interpretation of the regulations, stating "We do not belittle the administrative inconvenience or the cost involved but the language of the regulations cannot be distorted to give effect to a design which may have proceeded on a basis which is wrong in law."

In its conclusion, the court held

On a proper interpretation of regulation 54 of the 2013 Regulations, read in context, the amount of the earned income of a claimant in respect of an assessment period is to be based on, but will not necessarily be the same as, the amount of earned income actually received in that assessment period. There will need to be an adjustment where, as in the present case, the claimants actually received two months’ salary in one assessment period but the combined salaries do not, in fact, constitute earned income in respect of the period of time included in that assessment period. 

DWP action required to give effect to true intention of regulations

A DWP spokesperson has stated that the Department is considering the judgment, but if the Department does not intend to appeal this judgment urgent changes will be required to the way in which Universal Credit awards are assessed. It is likely that work-coaches will have to review the automated process which determines earned income and will need the authority to override the automated system each time that an anomaly, such as a claimant having two paydays in one assessment period, occurs. Tessa Gregory, solicitor with Leigh Day has called on Secretary of State for Work & Pensions Amber Rudd to take "immediate steps to ensure that no other claimants are adversely affected and... ensure all those who have suffered because of this unlawful conduct are swiftly and fairly compensated". 

As the judgment hinges on the interpretation of the regulations, no legislative amendments are required in order to give effect to the ruling. Rather, operational changes at DWP and the Department for Communities will be necessary in order to ensure claimants' income and entitlement is assessed accurately and fairly. 

The full judgment is available from the Courts and Tribunals Judiciary website.