The Landmark Legal Challenge to Universal Credit System Explained

By Ewan Somerville, 8 Feb 2018
Economic, Workplace

A controversial new social security benefit, currently being rolled out across the UK, is facing a major legal challenge. But what’s the challenge all about and what impact might it have? 

Universal Credit (UC) replaces six different benefits (housing and unemployment benefit, child and working tax credit, income support and job-seekers allowance) with a single monthly payment. Passed into law in 2011, the idea behind it was to simplify the process for benefit-claimants and incentivise work.

At the time, many across the political spectrum agreed on the need to streamline the benefits system, but today its full rollout is behind schedule and the system is facing growing criticism.

Who’s Bringing This Challenge and Why?

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A 52-year old terminally ill man (known only as TP) who is suffering from non-Hodgkin Lymphoma and Castleman’s disease, has been granted the right to a full judicial review at the High Court after his lawyers say that the move to UC has left him significantly worse off financially.

During the judicial review (a type of legal claim where a judge reviews the lawfulness of a decision or action made by a public body), the Court will assess whether the financial hardship he has experienced is unlawful.  It’s the first High Court challenge of its kind on Universal Credit.

Financial Hardship

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TP says he has been left £178 a month worse off after his doctors urged him to move to London, a full-service UC area, for enhanced treatment. He had been receiving both the severe disability premium (SDP) and the enhanced disability premium (EDP) for living alone without a carer, but these have both been withdrawn since he was placed on UC.

His lawyers say that there have been repeated commitments from former work and pensions secretary David Gauke that :“No one will experience a reduction in the benefit they are receiving at the point of migration to universal credit where circumstances remain the same.”

But no top-up payments are currently planned until July 2019, leading Tessa Gregory from the law firm representing TP to argue: “We believe that by taking away these essential benefits for some of the most vulnerable people in society, the government has acted unlawfully.”

Speaking to the Observer, TP explained:

I am proceeding with the judicial review for my own personal financial situation during this very difficult time of illness, but also because it is quite wrong of the government to remove by stealth and without prior warning on a transition into universal credit a much-needed benefit for people trying to cope alone at home with a substantial disability.

Why Does It Matter?

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UC has been heavily criticised by disability campaigners, charities and the parliamentary work and pensions select committee. A particular focus of this has been the long wait that claimants face for their first payment, which can lead to rent arrears and other hardships. While the government has shortened this waiting period to 35 days from an initial 42, and made hardship loans available, critics say these changes don’t go far enough.

The Resolution Foundation think tank damns the “rigid philosophy” of UC: “Life, which is complex, doesn’t fit with an inflexible administration system”. According to Disability Rights UK, disabled adults without a carer or only a young carer will lose £3,247.40 each year because of the abolition of SDP. They also found that the axing of EDP will cost them £826.80 a year.

What’s Ahead?

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If TP’s legal challenge is successful then this could impact the benefits of thousands of other disabled people who also claim they are financially worse off after being moved onto UC. There is also a possibility that others, such as the self-employed and ordinary working families, could then call for separate judicial reviews for their own financial hardship resulting from UC.

Commenting on the legal action, a DWP spokeswoman said that, while they could not discuss the specifics of the case whilst the review continues, they were “committed to supporting people into work while making sure the right care is in place for those that cannot.”

They added: “Unlike the previous system, universal credit is more targeted and support is focused on those who need it most. Transitional protection is also available for those people who move on to UC from other benefits, provided their circumstances stay the same.”

Image Credit: Dom J / Pexels

About The Author

Ewan Somerville

Ewan studies Politics and International Relations at The University of Sheffield.

Ewan studies Politics and International Relations at The University of Sheffield.