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Is Universal Credit here to pay? What do the courts say? Asks Ripon Ray

It’s clear from consecutive governments that our welfare system is not here to pay for those who are genuinely in need of help when they suffer actual financial hardship. It will penalise and leave you in destitution. Social landlords have already said that Universal Credit (UC) is pushing people to the verge of homelessness. Peobody Trust, a housing association, confirms that 30% of  their UC claimants have gone without essentials like food; and rent arrears are almost six times  the average, compared to the arrears of  the previous housing benefit claimants. Whether the current government is going to make a U-turn on its flagship policy, regardless of a number of conundrum, is no where to be seen. 

The birth of the financial crisis in 2008 was the welfare reform. As part of a number of changes, post crisis governments introduced cuts on local government funding by 40%, benefit cap, bedroom tax and the introduction of the council tax reduction, replacing full council tax benefit support had claimants been deemed too poor to pay. 

Introduction of UC should be considered in this context. One can realise that the purpose of this policy is to save money in times of austerity. However, UC was sold on the basis that work is going to pay. There is the tapering system that takes only 63 pence from every pound UC claimant  earns as a worker or employee. If addition, UC can extremely harsh to claimants in other categories.

The minimum income floor puts the self-employed at a disadvantage. This was confirmed in the case of Charmaine Parkin, the case brought by Equity the actors union. It does not matter whether Ms Parkin was left in destitution due to her work.  In her case, she was worse off than being unemployed. 

If you are a worker, and your employer makes an administrative error, the claimant has to suffer the financial loss and live in poverty. If an employer pays two pay slips in one assessment period because it's convenient for the employer, the recipient may find that on the following assessment month, they are not in receipt of any payment because DWP’s computer will declare, that they have been paid too much. Therefore the computer will refuse to give more money.  It may then take the claimant out of the threshold of entitlement to any benefits from UC.

It so happens that the current successful challenges in courts against UC are connected with disability rights and migration to it. Natural Migration is triggered when a claimant’s circumstance have changed in such a way that  they are not entitled to legacy benefits. They are then forced to apply for UC. 

Most obvious types of natural migration occur when claimants move to another borough and are then told they were ineligible for previous benefits. Such a scenario is most conflicting when disabled people lost out on severe disability and enhanced premiums when they moved to UC. Under Managed Migration, however, they are provided with Transitional  Protection, a top up of the shortfall of payment until your circumstances change. It was in this context that two cases went to the High Court to argue that, due to claimants moving onto UC, it discriminates against them. They were moved onto UC with Managed Migration. DWP appealed against the decision of the High Court. The Court of Appeal upheld the decision of the lower courts. It means that those who are moved onto UC through Natural Migration must be compensated for the loss of Transitional Protection.

Universal Credit was sold to members of the public on the basis that it was meant to be simple, fair and here to pay to those who need financial support. On the face of it, it's anything but!

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