Most people that claim Universal Credit find themselves in debt through no fault of their own. The five week wait for a new claim to be processed ensures that they’re going to accrue debts.
At the time of writing the DWP can automatically take high level deductions from a persons universal credit payments personal allowance for court fine payments, council tax debts and suchlike.
The DWP has a blanket policy of always cutting benefit by the maximum amount possible which is given regardless of personal circumstances. This leaves already financially vulnerable people struggling to buy food and to pay bills.
Yesterday the High Court has today ruled that this policy and practice of taking high amounts of payments from a persons Universal Credit is unlawful.
In February 2020, Shelter launched a legal challenge on behalf of four people, all of whom had a history of rough sleeping and therefore are hugely impacted affected by deductions being taken out of their Universal Credit payments.
Shelter challenged the DWPs deductions policy and all decisions to apply the ‘maximum deduction rate’ to universal credit. They also challenged this for all court fine payments regardless of the claimant’s personal circumstances.
The DWPs policy of deducting the maximum amount of 30% from the Universal Credit standard allowance leaves claimants with as little as £51 per week to live on., that is unless they have more deductions taken from their payments for other debts such as DWP loans etc.
These payments ensure that claimants cant afford to heat and or eat, pay for transport to get themselves to appointments and to buy essential phone credit to fulfil their required Universal Credit job searches.
Shelter argued in court that the DWP’s deductions policy and approach to deductions unlawfully removes an important discretion prescribed by law. Regulation 4 of The Fines (Deductions from Income Support) Regulations 1992) provides the DWP discretion to deduct a minimum of 5% from peoples’ UC to pay back court fines (and a maximum of £108.35).
The DWP’s blanket policy removes this discretion by setting a fixed maximum deduction of 30% and doesn’t allow claimants to request a lower deduction even in exceptional circumstances where they’re facing hardship.
The DWP’s defence of this policy is that in theory Universal Credit claimants can return to the magistrates’ court to request a direct repayment plan.
In reality this is impracticable. Most claimants aren’t aware that they can do this and the DWP aren’t exactly helpful if a person wants to do this.
The deductions regime is an effective means of repayment of debts, however as it stands the high level of repayments pushes a claimant even further into debt and poverty because repayments aren’t set at a reasonable level, taking into account a claimants financial circumstances.
Shelters case was heard at the High Court before Mr Justice Kerr via a remote hearing on 12 and 13 January 2021. Shelter’s claim was also heard together with a second claim brought by Hackney Community Law Centre acting on behalf of a disabled UC claimant.
The court found that DWP’s deductions policy is unlawful because it ‘fetters discretion’: i.e. it prevents decision makers from taking a UC claimant’s personal circumstances into account when setting the deduction rate.
The court ruled that by setting a fixed rate for deductions from UC for fines, and the DWP’s inflexible approach in making decisions on these cases, removes the discretion provided for in the relevant legislation. This is unlawful.
Responding to the DWP’s defence of an ‘alternative route’ through the magistrates’ court, Mr Justice Kerr states:
‘The deductions regime is paternalistic: the debtor cannot be left to pay off court fines voluntarily; they must be made to do so, for their sake and society’s. The Secretary of State’s passivity leaves unperformed the duty upon her to make that happen in appropriate cases.’
The High Court ruled that the DWP’s policy and practice in its present form was not lawful. The judge ordered that the relevant section in the deductions policy relating to fines be amended to reflect the judgment.
This judgment means that the DWP will have to change the deductions policy and their guidance must include discretion for DWP decision makers.
This will mean that Universal Credit claimants will be able ask the DWP to lower the amount deducted for court fine payments if they are struggling financially to pay them.
In reality nothing is changing regarding this legal decision yet because the DWP are as usual appealing the courts decision, but I will keep you posted about this.
This ruling has the opportunity to change Universal Credit claimants financial situations for the better, but you can bet that the DWP will drag this out for as long as possible.
My apologies for the lateness of this weeks blog. Yesterday was so busy for myself and my daughter and I’m once again unwell again.
I will endeavour to do my best to not let this happen again.
I’m so fed up with being unwell, not only does it impact me health wise it impacts my relationship with my children and it hits me hard financially.
I am doing my best to get well again because I hate feeling like this.
Please take care, keep safe and be kind to yourselves.
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7 thoughts on “High Court rules that taking high amounts of payments from Universal Credit payments unlawful.”
The truth is starting to come out…
DWP staff admit inflicting ‘psychological harm’ on claimants during coalition years
Department for Work and Pensions (DWP) staff and managers deliberately inflicted psychological harm on benefit claimants, engaged in unofficial sanctioning targets, and pushed disabled people into work despite the risk to their health, shocking new testimony has revealed.
It certainly is
DWP deliberately conspired with Tory media to build a “hostile environment” against benefit claimants
DWP staff encouraged to discourage sick and disabled people from claiming welfare benefits.
Responding to the allegations set out in the report, a Department for Work and Pensions spokesperson said: “This journal article does not reflect the compassionate support offered by our jobcentres day in, day out.
Thanks for posting this. I can use this decision to help one of my clients who the DWP overpaid through their own breathtaking negligence. People who are getting deductions taken from their universal credit should make the most of it before the DWP gets to the Court of Appeal and possibly get it reversed.
Brilliant advice. I’m keeping everything crossed that it doesn’t get reversed at their appeal. They’ve not been having much luck with their appeals lately 🙄
btw, did you know that the utterly disgraceful 30% debt clawback is reducing to “only” 25% soon?
it’s still utterly disgraceful, but it is at least a start!