Millions of benefit claimants are set to miss out on a major pay-out after a landmark court case was dismissed. Several benefit claimants brought the Department for Work and Pensions (DWP) to court last year over additional money given to universal credit claimants during the pandemic.
The UK Government uplifted the universal credit standard allowance basic element by £20 each week back in March 2020 to help those hardest hit by the pandemic. The increase was worth up to £1,040 a year but was discontinued in October 2021.
While the £20 uplift was given to those on UC - around 5.7 million people in the UK - it was not added to legacy benefits such as income support, housing benefit and child tax credit. It meant around 2.6 million people were estimated to have lost out on the pandemic top-up.
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Last February a group of claimants launched a legal bid describing the system as "unlawful discrimination" against those on legacy benefits, a claim which was rejected by a High Court judge despite the admission it was “obvious” some would face “severe hardship." But in December the case returned to the Court of Appeal where it was narrowed down to a slimmer range of dates. Originally, the claimants argued the whole 18-month policy was discrimination, which could have led to £1,500 of back payments.
But the claimants instead asked judges to rule the policy was unlawful in its final nine months from January 8, 2021, after the DWP argued it was impossible to raise legacy benefits as fast as universal credit due to old computer systems. If the campaigners had secured victory, the department would not necessarily have had to give everyone back payments, but at least some partial back payments would have happened. An extra £20 per week for the duration of the nine month period in question would have added up to £720.
But earlier this week the Court of Appeal upheld the High Court decision with judges accepting the DWP’s claim that the £20 was not intended to alleviate hardship but help reduce the shock to newly unemployed people, preventing them from becoming dependent on long-term benefits.
"The uplift was not targeted at alleviating hardship as a result of increased costs during the pandemic," the court ruling said. "It was targeted at alleviating a particular type of financial disruption, namely that experienced by those who had lost or were at risk of losing employment or significant income, and who as a result were making new claims for social security benefits for the first time having previously been financially self-sufficient.”
It added that legacy benefits claimants were “either not in the labour market at all by virtue of their disabilities, or only to a limited extent. That does not mean they were not a deserving group, and they were undoubtedly vulnerable. Nonetheless, a hard choice was made to prioritise those in the labour market but who it was anticipated would quickly become unemployed as a direct consequence of the pandemic and the lockdown measures that followed, and do so in large numbers.”
A DWP spokesman said: “We welcome the Court of Appeal’s findings in our favour. It has always been the case that claimants on legacy benefits can make a claim for universal credit if they believe they will be better off.” To get all the latest money-saving news straight to your inbox twice a week sign up here.
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