Four working single mothers have won a High Court challenge over the government’s universal credit scheme.
The women say they are struggling financially because of variation in their payments.
They argued a “fundamental problem” with the scheme meant their monthly payments varied “enormously”, leaving them up out of pocket.
Lawyers for the women said the problem was likely to affect “tens of thousands of people” claiming the benefit.
It comes as Work and Pensions Secretary Amber Rudd announced a raft of changes to the government’s flagship benefits scheme, including a U-turn on plans to extend a benefits cap on families with more than two children.
Universal credit is a means-tested benefit, rolling six separate benefits into one payment.
It has proved controversial almost from its inception, with reports of IT issues, massive overspends, administrative problems and delays to the scheme’s roll-out.
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On Friday, it was announced that Danielle Johnson, Claire Woods, Erin Barrett and Katie Stewart had succeeded in a judicial review action against the government over the method used to calculate payments.
When calculating universal credit, the Department for Work and Pensions (DWP) sets assessment periods for each person to look at how much they earn – from the 1st of the month to the end of the month, for example.
But lawyers for the mothers said a problem arises when claimants are paid by employers on a date which “clashes” with their assessment period.
For example, they pointed out that 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.
Two judges in London concluded the work and pensions secretary had “wrongly interpreted” the relevant regulations.
It followed a hearing in November when they were told the women were struggling financially, with some falling into debt or relying on food banks.
Tessa Gregory, a solicitor from law firm Leigh Day, who represented part-time dinner lady Danielle Johnson from Keighly, West Yorkshire, said her client was “a hard-working single mum” and “precisely the kind of person universal credit was supposed to help”.
But Ms Gregory said the “rigid income assessment system” had left her £500 out of pocket over the year and spiralling into debt.
She called for Ms Rudd to take “immediate steps to ensure that no other claimants are adversely affected” and “ensure all those who have suffered because of this unlawful conduct are swiftly and fairly compensated”.
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