Thousands of people who were knocked off-benefit in error by the Department for Work and Pensions and then put on the lower-paying Universal Credit could claim compensation after a court ruling.
Three judges at the Court of Appeal ruled that claimants should not lose out financially if they were forced to switch onto Universal Credit due to an “error of law”.
The case concerned three women who said their benefits were stopped unfairly.
They were subsequently put back on the benefit system, but on Universal Credit, which paid much less than they had previously received, with no transition payments.
They had to apply for UC after the DWP wrongly stopped their benefits in March 2017. Reviewing their cases, the DWP acknowledged the errors made and the decision to stop their benefits was overturned – but they were unable to return to their previous, higher level of welfare support.
They were also not eligible to receive “transitional protection” payments – cash top-ups designed to cover shortfalls for people moving on to UC.
Disabled Patricia Reynolds told the court she lost £180 per month, and a woman known only as TD, together with her severely disabled daughter, lost £140 per month for 18 months.
The three claimants lost their case at the High Court in March last year, but three leading judges overturned that decision at the Court of Appeal.
Lord Justice Singh said: “I have come to the conclusion, that in the present context, the difference in treatment was manifestly disproportionate in its impact on these appellants having regard to the legitimate aim which the DWP sought to achieve.
“It was therefore manifestly without reasonable foundation.”
He added the three women were treated as they were due to “administrative cost and complexity, which have nothing to do with the merits of their cases”.
He went on: “The only reason, in reality, why they moved from legacy benefits to UC was as a result of errors of law by the state itself.”
The judge said it is now for the Work and Pensions Secretary, Therese Coffey, to decide how to respond to the declaration granted by the court.
The Child Poverty Action Group, which represented the claimants, said the ruling could affect thousands of people whose claims for legacy benefits were terminated wrongly.
It claimed that the DWP must act swiftly to implement the judgement, so anyone who claims UC after an incorrect decision to end their previous benefits is protected against financial losses.
The DWP, of course, sees it differently – and is saying far fewer people are likely to deserve compensation.
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