Single mothers bring High Court challenge to Universal Credit payment system

Four women bringing a High Court challenge over the Government’s Universal Credit scheme say they are struggling financially because of the way the system operates.

The women, who are all working single mothers, argue a “fundamental problem” with the controversial welfare scheme means their monthly payments vary “enormously” and they end up out of pocket.

The court heard on Tuesday they are struggling to manage their household budgets as a result and some have fallen into debt or had to rely on food banks.

Lawyers for the four said the problem is likely to affect “tens of thousands of people” claiming Universal Credit, which was introduced to replace means-tested benefits including income support and housing benefit.

They say the system disproportionately affects single parents, who are mainly female.

Jenni Richards QC, representing the women, told the court: “The claimants in this case all have a number of things in common.

“They are all lone parents, they have all been doing their utmost to work and not depend solely on benefits.”

“There is no reason to suspect they are anomalous or isolated cases,” she added.

Lawyers said the problem arises when claimants are paid by employers on a date which “clashes” with their assessment period for Universal Credit.

For example, if a claimant is paid early because of a weekend or bank holiday, the system counts them as having been paid twice in one month and they receive a “vastly reduced” Universal Credit payment, the court heard.

They also lose out on a working allowance when this happens.

The challenge against the Department for Work and Pensions (DWP) is being brought by Danielle Johnson, Claire Woods, Erin Barrett and Katie Stewart.

Ms Johnson’s lawyers said she is about £500-a-year worse off and struggles to budget in months where she receives no benefit because of the way the system operates.

Government lawyers said the Universal Credit programme is considered to be the “largest and most ambitious state reform of welfare provision for generations” and will be the main source of welfare payments for 6.5 million households.

Edward Brown, for the DWP, said the department is aware of the issue with payment dates and the matter “remains under review” as part of the scheme’s rollout.

He said: “The Secretary of State (for Work and Pensions) recognises and understands the two payments issue, but a complaint of unfairness, however compelling that complaint might be on the facts of an individual case, does not mean the system and underlying legislation is unlawful.”

Mr Brown also said “rational and sensible policy decisions” were taken regarding the best way to design the Universal Credit system.

He added: “Alternative approaches, including those preferred by the claimants, are reasonably considered to be inferior when judged from the perspective of the Secretary of State.

“The IT infrastructure which underpins the reform has been designed accordingly.”

This is the second legal action on Universal Credit to reach the High Court, following a ruling in June that the system unlawfully discriminated against severely disabled people.

The case is being heard over two days – by Lord Justice Singh and Mr Justice Lewis – and the judges are expected to rule at a later date.

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