The government’s controversial welfare reform, Universal Credit, suffered another defeat today (January 11) after four single mums took on the Department of Work and Pensions (DWP) in court and won.
In a decision which is expected to have wide-ranging implications for Universal Credit (UC), the High Court ruled that the way in which the DWP has assessed income from employment to calculate UC payments for these women was unlawful.
The women had lost hundreds of pounds a year and endured extreme hardship in months when they were paid by their employers on dates that ‘clashed’ with their UC payments. For example, when they were paid early because of a weekend or a bank holiday, the system counted them as being paid twice in one month and so their benefits would be vastly reduced.
The judges concluded that the “secretary of state had wrongly interpreted” regulations over UC payment assessments and that in so doing had caused “severe cash flow problems for the claimants living as they do on low incomes with little or no savings”.
The high court ruling comes as DWP secretary Amber Rudd announced yet another major U-turn on Universal Credit in a speech today (January 11) in which she said the government would scrap the extension of the so-called two-child policy.
The policy caps benefits for families who have more than two children which has slashed benefits for many families by nearly £2,800 per child each year.
Currently, the policy only kicks in for children born after April 2017 when it was first announced, but the government pledged to extend it to all families from February of this year.
But now, just three weeks before the extension was to be implemented, Rudd said the policy would remain as it is and only apply to families with children born after April 2017.
Rudd also confirmed that the DWP would pause the ‘mass migration’ of 3m people onto Universal Credit, which roles six benefits into one, from the legacy benefits system and instead undertake a pilot with 10,000 people.
Other changes to UC announced today include a new system for private landlords to request direct rental payments from tenants and provisions to pay childcare costs for claimants in advance if needed.
Rudd moreover said that the benefits freeze implemented by chancellor George Osborne in 2015 would end next year.
The latest changes come at a time of a growing public backlash against Universal Credit, which has caused untold suffering – claimants have faced spiralling debt and evictions, with many forced to resort to foodbanks.
Child poverty has also risen in lockstep with the roll-out of Universal Credit, prompting calls from trade unions, schools, charities and the public to scrap the reform altogether.
Most recently, a head teacher of a school in Moracambe, Lancashire, told BBC Breakfast that one in 10 pupils at her school came from families using foodbanks – a problem that she believes has been exacerbated by Universal Credit.
Siobhan Collingwood told of the heart-breaking encounters she’s had with pupils who are suffering from hunger.
“When children are food deprived it alters their behaviour and they do become quite food obsessed, so we have some children who will be stealing fruit cores from the bins,” she said.
“We have children who have nothing in their lunch boxes and children who are just fixated upon food,” she added, recalling parents “arriving at school literally bursting into tears telling me they have no means of feeding their children”.
Scrap Universal Credit call
Unite Community national co-ordinator Liane Groves said that it was stories like these that demonstrated the need to scrap the failed Universal Credit system.
“It’s all well and good that the government has scrapped an extension of the two-child policy but this does not go far enough – the policy must be scrapped altogether because it is based on an inherently flawed premise,” she told UniteLive. “The two-child policy essentially amounts to punishing children for having siblings.”
“There’s absolutely no evidence either that families will have fewer children based on this two-child policy – all it does is plunge innocent kids into poverty.”
Groves added that it was apparent why the government is now suddenly performing U-turn after U-turn on Universal Credit.
“This is a government running scared of another general election,” she said. “They know that if they rushed through the mass migration to UC for three million people – that’s three million people losing their current benefits and moved to an inherently cruel and chaotic system – they would lose any election by a landslide.”
Commenting on the recent high court case, Groves said that the flawed way in which the DWP has calculated UC payments demonstrates how “out of touch this disaster of a government is with the world of work”.
“That the DWP doesn’t understand something as basic as how salary payments work – that in some cases people can be paid twice in one month — shows that it is simply out of its depth. It also shows that Universal Credit is not fit for purpose – it’s a rigid system totally lacking in the flexibility needed for it to work.
“Unite has raised these issues time and again and it’s disappointing that it takes a full-blown court case for this government to listen,” Groves added as she reiterated Unite’s call to scrap UC altogether.
“The failure upon failure of Universal Credit which has caused unspeakable suffering for countless people from its very inception shows that it simply cannot be made to work.”