The Department of Work and Pensions has abandoned a lengthy legal battle over a defect in the universal credit system.
The Minister of Work and Pensions, Will Quince stated yesterday that his department would not appeal a decision reached by the Court of Appeal that the Universal Credit rules that restricted payments for working applicants who were paid in twice a month were “irrational” and “unlawful.”
DWP has said that it must address a problem in its digital system that treats claimants as if they have a 100 percent pay increase when their salary is paid slightly earlier or later than usual on a day at a weekend or a bank holiday and is forced into the same month as another wage or salary.
Universal Credit Judgement In Claimant’s Favor
The judgement in the appeal represents a victory for four single mothers who brought a legal challenge to the Department after being forcibly liable for rent arrears and debt.
The High Court stated that “it was odd at the extreme” that DWP refused to correct the problem.
In appeal, DWP said it would cost £ 7.5 m to upgrade its online system and undermine the universal credit principle.
“In my opinion, this case is so irrational that I concluded that the threshold is met because no reasonable [minister] would have made the system so,” she said. This was one of the rare instances when the Secretary for Work and Pensions refused to implement a solution in this very specific problem.
The Department is now trying to identify all the claimants concerned and evaluates “remedial options,” Quince said.
“As we told the court, it is difficult to identify claimants; this is a difficult issue. To date, approximately 1,000 claimants have disputed their earnings and fall within the corresponding cohort.
How Many Universal Credit Claims Have Been Affected?
Studies suggest that actual figures stand at around 85,000 and could be more.
We’re looking how we can further identify people in this group, “Quince said yesterday in the House of Commons.
DWP estimates that about 1,500 individuals, including 1,000 claimants who have disputed payments, were affected by the problem, Quince said.
The Minister said that those affected would not suffer a financial loss as any benefits that they lose within a month will be added to their Universal Credit payment in the coming month as a result of the system flaw.
However, he admitted that the system may have caused “budgeting problems” for people receiving UC.
He said it would take time to fix the problem, particularly in the midst of a coronavirus crisis.
“It’s not easy – it’s not simply a switch click – especially at a time when the service is focused on responding to challenges posed by an unprecedented demand for its services,” he said.
He said it “would not give further consideration before we press on, especially if the court has not requested immediate action.”
“We will now begin the process of examining possible solutions carefully,” he said.
A Complicated Fix That Could Take Weeks
Mark Harper, a former departmental minister responsible for the 2014 and 2015 Universal Credit Programme, said he “does not understate just how complicated a fix is.”
Quince said in short, that the DWP had begun to work with HM Revenue and Customs on ways employers can correctly report their employees’ salary’s.
Quince said that HMRC had published guidelines for employers to reduce the number of affected people.
If you believe you may have been affected by this universal credit flaw you can speak to one of our team members who would be more than happy to assist you with how you can claim back the revenue you’ve missed out on.