Three cheers for people power
Some good news this week for anyone who cares about building a safety net that actually looks after people rather than dragging them further into poverty. The High Court ruled in favour of the group of working single parents, judging that DWP had been unlawful in how it assessed income through Universal Credit.
It’s amazing to see the result, and a huge testament to the power of a group of people getting organising and not being afraid the challenge the status quo. Congratulations to the Child Poverty Action Group, thank you to all the Leigh Day solicitors who led the work, and most of all, kudos to mums Danielle Johnson, Claire Woods, Erin Barrett and Katie Stewart for leading the way.
“Our clients have been doing everything they can to support themselves and their young children through work but the rigid assessment system in universal credit has caused them untold hardship, stress and misery with them being forced repeatedly to manage on half of their usual total monthly income despite their fixed outgoings remaining the same. They have each ultimately questioned why they are even working. That it should have required them to go to court to challenge the DWP’s position is a testament to their commitment to bring up their children in a working household but it is a situation they should never have been put in. Today’s result should mean that in future no one will lose out on their universal credit awards or face the hardship that my clients have faced simply because of when their payday happens to fall.”
As this comment shows, the case is centred on a chasm between the design of the Universal Credit system, and the actual experience of living on a very low income in the 21st century.
Univeral Credit is paid monthly. If a person gets paid twice in a month (say, if their pay schedule is every 4 weeks, or if they get paid early one month due to a bank holiday or weekend), they then lose support as they’re judged to have earned twice as much in that month.
Ultimately, the women in the case had each lost hundreds of pounds over a year — and they reported high levels of stress, an increase in debt, and all had relied at some point on food banks due to difficulties in juggling such wildly fluctuating incomes.
And here’s the rub: the women who challenged DWP are not outliers. There is clear evidence that 80 percent of households living on a low income experience monthly fluctuations in their pay, and a substantial minority (40 per cent) of Universal Credit claimants get paid more than once a month. A system unable to respond to these fluctuations will effectively guarantee a spiral into crisis: this is a group of households who struggle to save £10 a month. There is no cushion to fall back on.
Which begs the question — how did the DWP manage to design something so out-of-kilter with the reality of people’s lives in the first place? From the built-in five week wait after making an initial claim, to overly rigid payment schedules, to difficulties in being able to claim the childcare element in advance, it is almost as if the government never actually tested out the policy with real people before launching it.
So it was very good to hear Amber Rudd announcing on Friday that she wanted to bring back ‘compassion’ to the benefits system. She announced a slow down of the transition to Universal Credit (something that pretty much everyone bar the government itself has called for), and she also scrapped plans to apply the two-child benefit cap retrospectively to families whose third children were born before 2017 (thank goodness, given the correlation between multiple children and severe poverty).
I really hope that she follows through on this commitment. The changes she’s made this week are all in the right direction, but there’s further to go, and a lot more learning and listening to do if we are to end up with a social support infrastructure that holds people safely and helps them find a path to a better life.