The Government has been ordered to come up with a new way of paying up to 85,000 Universal Credit claimants, which should benefit both tenants and landlords.
Court of Appeal judges have ruled the DWP’s failure to cater for ‘non-banking day salary shift’ is unlawful.
They agreed that the benefit system currently fails to factor in the fact that paydays for people on monthly salaries can vary because of weekends and bank holidays – and can mean many are paid erratically and fall into rent arrears.
In January 2019, the High Court decided in favour of four working mothers who argued that these rules meant their incomes fluctuated significantly, causing major cash flow struggles and rent arrears.
The Court of Appeal has now dismissed the Government’s appeal and ruled that it acted irrationally and unlawfully; Lady Justice Rose said one of the women worried that cash flow problems meant she was unable to pay her rent, jeopardising her tenancy.
Universal Credit expert Bill Irvine tells LandlordZONE that the DWP will now have to deal with cases more sympathetically – but that a major fix could take a while.
He says: “These women had to feed their kids first and pay the rent later and some had been chased by their landlord, but it’s the inflexible system that’s at fault.
“Changing it should help both tenants and landlords, although the last time the DWP had a major issue, it took three years to sort out.”
If two monthly salary payments fall within one of the monthly assessment periods, their Universal Credit award drops dramatically because of their apparently high level of income and means that in the next assessment period they’ll typically receive no monthly salary payment and as a result will get a much higher Universal Credit award.