Yet another DWP court case is potentially on the cards

The UK Supreme Court and the DWP logo

The Department for Work and Pensions (DWP) is potentially facing another court case. It’s once more over Universal Credit. The claimant in the case is having to appeal to the highest court in England. But will it listen?

Universal Credit and childcare

Nichola Salvato is a lone parent from Brighton. She’s a Universal Credit claimant who works. Under the system, Universal Credit should give Salvato her childcare costs back. But for her and potentially 500,000 other claimants, there’s a major flaw with this.

As lawyers Leigh Day said in a press release:

In September 2018 she began working full time as a welfare rights adviser for a housing association, and needed up to 3.5 hours childcare per day for her then 10-year-old daughter.

Although Nichola was working full time, she could not afford the £377.40 of upfront childcare costs that arose in September-October, so she had to borrow the money.

She had to borrow the money because Universal Credit does not pay childcare costs up-front. Claimants have to pay them first before the DWP gives the cost back to them. So, as Leigh Day wrote:

this situation continued in the months that followed and gave rise to what she described as a “cycle of debt where I was constantly owing childcare as well as loan providers and struggling to find the money to cover payments”.

Read on...

“Overwhelmed”

The situation worsened for Salvato. Leigh Day wrote that:

By January 2019, Nichola was “becoming overwhelmed with the juggle of work, childcare, parenting and ongoing poverty”. She took as much time off as she could to minimise childcare costs and was constantly stressed and worried. Eventually Nichola had to cut her work to 32 hours, then 25.5 hours, which reduced her monthly income and increased her dependence on benefits.

So, she decided enough was enough and started a legal challenge against the DWP. Her case argued that Universal Credit should pay childcare costs upfront. The DWP said that the system was like it is to reduce “error and fraud”. But the judge agreed with Salvato. He ruled in January that the DWP had acted irrationally and discriminated against her based on her sex. Justice Chamberlain said:

It is not obvious why a system of awards based on liability to pay (evidenced by an invoice) would be any more likely to result in error or fraud than a system based on actual payment (evidenced by a receipt).

There is no evidence that the decision to make payment of the [childcare costs element] dependent on proof of payment (rather than proof that the charges have been incurred) was ever directly considered by Ministers.

But this wasn’t the end.

DWP: appealing common sense?

The DWP appealed the ruling in July. The Court of Appeal, according to Leigh Day, found:

that while the “proof of payment” rule does indirectly discriminate, the difference in treatment is justifiable and the rule is not irrational.

In other words, the DWP won. But Salvato is not accepting this. She has applied to appeal the previous Court of Appeal decision in the Supreme Court. Salvato said in a press release:

Although I’m very disappointed that the Court of Appeal did not uphold the High Court ruling, I am hopeful that that the Supreme Court will address the issue. So many of us single parents want to work but find the upfront childcare costs through Universal Credit an impossible barrier, meanwhile the government continues to support better off families with their childcare costs in advance via the tax-free childcare system.

Of course, this is not the first time claimants have taken the DWP to court over Universal Credit. Recently, a claimant won a case over hardship payments and how the DWP made people pay them back. The department has also been back in court for a third time over Universal Credit’s discriminatory treatment of severely disabled people.

“Fight to get our voices heard”

Salvato summed up by saying:

The system is clearly discriminatory, and the Court of Appeal agrees that it is discriminatory, but has said the government is entitled to discriminate unless I can show that there is an easy and better way. I don’t think that is correct and I will continue my fight to get our voices heard. Affordable, accessible childcare support is fundamental to our infrastructure if the government want to achieve higher levels of employment among single mums and reduce child poverty.

Now, if Salvato’s appeal is granted, it will be down to the Supreme Court to decide if what seems to be common sense prevails, or if the DWP gets away with this alleged discrimination.

Featured image via Tom Morris – Wikimedia and UK government – Wikimedia 

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  • Show Comments
    1. Exactly the same is done with Housing Benefit. Allegedly Housing Benefit allows you to ‘choose’ whether to rent from a housing assoc or privately and the ability to have the money paid to your OWN account, rather than directly to the landlord, is to address the stigma of being on benefits. But landlords ask for payment in advance and, by the time Housing Benefit pay up, you’re due your third months payment, you’ll forever be in arrears. Even housing associations no longer tolerate this and ask for the money to be paid, in full, by the tenant (despite the fact that they shouldn’t be paying ANY rent) This is usually paid piecemeal until the full amount of missing payments are made.

      This actively discriminates against Housing Benefit claimants being able to access suitable housing which has a worse effect on the disabled and those with children ie the most vulnerable. The government made a half-hearted attempt to make it look like they were doing something but they knew they weren’t doing anything to address the problem..

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