Universal credit assessment period inflexibility

Last updated: June 5, 2019

R (Woods, Barrett and Stewart) v SSWP CO/1552/2018

On 29 March 2018, CPAG filed a claim for permission to apply for judicial review to challenge the rigidity of the assessment period regime in universal credit which results in some people being treated as receiving two monthly wages in one assessment period, in turn affecting the amount of their UC award.

Update June 2019: The Secretary of State is currently seeking permission to appeal to the Court of Appeal against the High Court decision in this case. No stay of the High Court judgment has been sought and so the Johnson ruling should be applied in cases involving similar facts: where two separate monthly wages have been treated as earnings in the same assessment period, due to a regular payment date falling on a non-banking day and so being paid early. Despite this, we have received reports from several welfare rights advisers that the DWP is not applying the judgment in Johnson and continuing to treat wages from separate months as being earnings for the same assessment period. In these cases, we would encourage advisers to request a mandatory reconsideration, to protect claimants from losing out on work allowances. A template letter to request a MR is available here. Until such time as DWP update their guidance please also use the judicial review pre-action letter, available here

 

Where a client’s pay situation is similar to but not on all fours with that of the claimants in Johnson eg paid fortnightly or paid four weekly rather than monthly, a mandatory reconsideration should still be sought on the basis that the reasoning in Johnson equally applies to such situations to the extent that: ‘There may however need to be an adjustment where it is clear that the amounts received in an assessment period do not, in fact, reflect, the amounts of earned income in respect of the period of time included within that assessment period (Johnson §52).

Permission to apply for judicial review was granted on 5 July 2018 and the claim joined with a similar case being brought by Leigh Day solicitors. The hearing of both claims took place on 27 to 28 November 2018 in the High Court. Judgment was given on 11 January 2019 finding in favour of the claimants: the SSWP had been incorrectly interpreting her own regulations and "wrongly assumed that where salaries for two different months were received during the same assessment period, the combined salaries from the two months were to be treated as earned income in respect of that assessment period."

You can read the High Court judgment here

The claim is being brought on behalf of three single working mothers. For one, her UC assessment period runs from the 30th of one month to the 29th of the next and she is paid by her employer on the last working day of each month. As a consequence, there are some assessment periods when she is treated as receiving two monthly wages (eg Nov/Dec 2017 she was paid on Thursday 30th November and Friday 29th December). This results in a dramatically reduced UC award, as she is treated as receiving twice the amount from income as is usually the case, causing obvious cash flow problems for somebody managing on a very tightly balanced budget. Further, as the claimant is entitled to a working allowance, she effectively loses out on the benefit of one working allowance against one month’s salary which is not compensated by the fact that the following assessment period she is treated as receiving no wages and so gets the maximum UC allowance. For the two 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 AP.

CPAG is arguing that DWP’s refusal to adjust the claimants' assessment periods to avoid this situation is discriminatory against working parents with children (one of the two groups who are entitled to a work allowance), as well as being irrational and undermining the legislative purpose of UC. Far from incentivising work, mirroring the world of work or ensuring consistency and predictability, the claimants' fluctuating UC aware while their monthly salary remains unchanged, means that things would be much easier for them if they were not working and instead receiving, on a regular and entirely predictable basis, the maximum UC award.