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CPAG and Leigh Day challenge UC assessment periods

The High Court in England and Wales has recently heard a challenge relating to Universal Credit assessment periods. Joined claims from CPAG and Leigh Day solicitors were heard by the court on the 27 and 28 November. 

The challenge is 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. This is likely to have a particularly devastating impact at Christmas, when many employers pay wages early in order to help staff manage an expensive period of time. However, for those in receipt of Universal Credit this well-meant gesture may mean that they receive no benefit whatsoever in December, as they are seen by the system to have received twice their usual monthly income. 

 Challenges brought by single parents

The High Court challenges are being brought on behalf of four single working mothers. One of these is paid monthly and on the last day of the month. However, as her UC assessment period runs from the 30th of one month to the 29th of the next, there are months when she receives her monthly wage twice during her assessment period. In 2017, this woman received her monthly salary on the 30th November and on the 29th December, meaning her January 2018 UC payment was hugely reduced, despite having no increase in monthly earnings. 

For the other claimants, their UC assessment period runs from 28th of one month to 27th of the next and they are paid monthly on the 28th.  When the 28th falls on a non-working day they are paid early resulting in two wages falling in one assessment period. 

Universal Credit is intended to "make work pay", and the government has stressed the importance of the work allowance within the benefit. This allowance entitled a claimant in work to keep a certain amount of their income before it impacts or reduces the amount of benefit they receive. However, where a claimant is paid twice in one assessment period they effectively lose one month's worth of the work allowance and this is not compensated in the following month when the claimant is treated as not receiving any salary and receives the full UC allowance. Perversely, in some cases where a person's salary is taken into account twice in one month and they are classed as not receiving any income the following month, that claimant has had their UC reduced due to the benefit cap, further compounding the financial difficulties caused by the rigidity of UC's assessment periods. 

Assessment periods are discriminatory, irrational and undermine the purpose of UC

The DWP has refused to adjust the claimants' assessment periods to avoid this situation, and CPAG has argued that this refusal is discriminatory against working parents with children, as well as being irrational and undermining the legislative purpose of UC.  In fact, claimants who are impacted by this flaw in the system would likely be better off not working, as they could then receive a regular and guaranteed amount of Universal Credit. 

Tagged In

Benefits, Outside NI, Welfare Reform, Legal

Author

Etain Ní Fhearghail