Four women have launched a high court legal challenge to universal credit, arguing that an arbitrary design flaw in the payment system for the new benefit is “irrational and discriminatory” and leaves some families hundreds of pounds a year worse off.
They say the flaw, which relates to the way universal credit monthly payments are calculated, disproportionately affects working parents with children, though it is likely to affect tens of thousands of people claiming the benefit.
The women say the flaw leaves claimants with a “dramatically fluctuating income” and unable to budget from month to month. They can also suffer financial shortfalls because of what lawyers call a “rigid, inflexible assessment system”.
...
The problem arises when claimants’ wages are paid on or close to the first day of their universal credit monthly assessment period, which is used to calculate how much a claimant is entitled to be paid each month.
If a claimant is paid wages a day or two earlier – because their normal payday would fall on a weekend or bank holiday, for example – the system records them as having had two pay cheques in one assessment period and none in the following one.
As a result, universal credit considers them to be earning more than they actually do in the first period. In the second period it wrongly considers them to be earning nothing, meaning they lose out of work allowance of up to £258 each month.
One of the women, Claire Woods, 30, said the cashflow problems caused by the fluctuating payments forced her to rely on a food bank and run up debts. She was subsequently forced to turn down a promotion and put her career on hold.
…
In some
cases uncovered by the
Child Poverty Action Group (CPAG) , household income fluctuated wildly as a result of the design flaw. In one case, a family’s monthly payment swung from £1,185 to zero, making budgeting impossible.
…
The challenge against the Department for Work and Pensions opened on Tuesday at the high court in London. It is expected to last two days with a ruling expected next year.