Danielle Johnson v Secretary of State for Work and Pensions
| Jurisdiction | England & Wales |
| Judge | Lord Justice Singh,Mr Justice Lewis |
| Judgment Date | 11 January 2019 |
| Neutral Citation | [2019] EWHC 23 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 11 January 2019 |
| Docket Number | Case Nos: CO/1643/2018 CO/1552/2018 |
[2019] EWHC 23 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
DIVISIONAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
THE RIGHT HONOURABLE Lord Justice Singh
and
THE HONOURABLE Mr Justice Lewis
Case Nos: CO/1643/2018 CO/1552/2018
R (on the application of)
Jenni Richards QC and Tom Royston (instructed by Leigh Day) for the First Claimant
Jenni Richards QC and Stephen Broach (instructed by the Child Poverty Action Group) for the Second-Fourth Claimants
Edward Brown (instructed by Government Legal Department) for the Defendant
Hearing dates: 27 and 28 November 2018
Approved Judgment
Lord Justice Singh AND
INTRODUCTION
This is the judgment of the Court.
These claims for judicial review concern the proper method of calculating the amount of universal credit payable to each claimant under the Universal Credit Regulations 2013 (“the 2013 Regulations”).
Universal credit is a single welfare payment comprising a basic personal amount and also amounts to reflect the cost of caring for children, housing and other prescribed needs. The amount of universal credit that is payable to a claimant is assessed by reference to a fixed monthly period, known as an assessment period, which runs from the date of the first claim for universal credit. In determining the amount of universal credit payable, the 2013 Regulations require the calculation of the maximum allowance payable to a claimant. The 2013 Regulations then require that some of a claimant's earned income be deducted from the maximum allowance so that the amount of universal credit payable is accordingly reduced. Certain claimants (being those with childcare responsibilities or limited capacity for work) are allowed to retain a certain amount of their earned income (a figure known as the work allowance which, at the relevant time, was £192 for each assessment period) without that affecting the amount of universal credit the claimant receives. Thereafter the amount of universal credit payable is reduced by 63% of earnings above £192.
The four claimants are employees who are paid monthly. As they receive their salary on or around either the last working day or last banking day of the month, there are times when salaries payable in respect of two months are paid during one assessment period. In applying the 2013 Regulations, the defendant has attached critical significance to the fact that the two months of salary are paid in that single assessment period (irrespective of the fact that the salaries are referable to two months). The defendant has, then, allowed the relevant claimant to retain a single amount of £192 by way of the work allowance from the combined two months' salary before calculating the amount by which universal credit is to be reduced by a proportion (63%) of their earned income. Had the defendant attributed each of the two months' salary to different assessment periods, the claimants would have been able to retain £192 of each month's salary before their universal credit was reduced. The claimants also contend that the method of calculation leads on occasions to fluctuations in the amount of universal credit payable which creates severe cash flow problems for them.
The claimants seek judicial review of decisions relating to an assessment period when they were treated as receiving two months' salary in that assessment period and were allowed to retain only one work allowance, that is one sum of £192 from the combined salary for the two months. The claimants initially challenged the method of calculation on the basis that it led to effects that were irrational, or failed to promote the policy and objectives of the underlying statute, the Welfare Reform Act 2012 (“the 2012 Act”), and so was ultra vires the parent statute or that it led to unlawful discrimination contrary to Article 14 of the European Convention on Human Rights (“the ECHR”) read with Article 1 of the First Protocol to the ECHR, those being Convention rights within the meaning of the Human Rights Act 1998 (“the 1998 Act”). One claimant, Ms Johnson, also contended that the defendant failed to comply with its duty to have due regard to certain matters as required by section 149 of the Equality Act 2010 (“the 2010 Act”).
On analysis, it emerged that the first, and critical, issue concerned the proper interpretation of the relevant Regulations and whether the defendant had, in fact, properly interpreted the relevant Regulations when calculating the amount of universal credit payable. In particular, the first question is whether the 2013 Regulations, properly interpreted, do require the defendant to treat two months' salary received during one assessment period to be attributed solely to that assessment period, irrespective of the fact that the salaries are attributable to periods falling within two separate assessment periods. This judgment, therefore, considers first the factual situation of each claimant, then the legal framework governing the calculation of the amount of universal credit before analysing the proper interpretation of the regulations governing that calculation in these cases. Finally, the judgment considers the question of whether the defendant complied with the public sector equality duty imposed by section 149 of the 2010 Act.
THE FACTS
Danielle Johnson
Ms Danielle Johnson is a single mother with one child, a six year old daughter. Ms Johnson receives universal credit. Her assessment period runs from the last day of a month to the penultimate day of the next month (e.g. from 30 November to 29 December 2017).
Ms Johnson obtained work as a general kitchen assistant at a school. She is employed by a large local authority and, under her terms of employment, is paid monthly by bank transfer. Ms Johnson is paid on the last banking day of each month.
Ms Johnson was paid her November 2017 salary on 30 November 2017 and her December 2017 salary on 29 December 2017. On 6 January 2018, she received notification of her universal credit for the 30 th November to 29 th December 2017 assessment period (universal credit being paid monthly in arrears). As two months' salary had been received in the assessment period running from 30 November to 29 December 2017, her universal credit had been calculated as if she had received both the November and December months' salary in that single assessment period. In calculating the amount payable for that assessment period, the defendant took the maximum allowance available to Ms Johnson, allowed Ms Johnson to retain one amount of work allowance, that is £192 of her combined earnings for November and December 2017, and then reduced the amount of the allowance by 63% of the combined earnings for those two months.
In the next assessment period, running from 31 December 2017 to 30 January 2018, Ms Johnson was treated as having no earnings (as her December 2017 salary had been taken into account in the previous assessment period and her January 2018 salary did not fall to be paid until after the end of that assessment period). As a result, she was not, in fact, able to retain any of her earnings in that assessment period in respect of work done during that assessment period. Had she been treated as having received the November salary in one assessment period and the December salary in another assessment period, she would have been entitled to retain £192 from each month's earnings. Ms Johnson therefore lost the benefit of being able to keep £192 from her earnings in December 2017 before reduction of the amount of her universal credit.
On 22 January 2018, Ms Johnson asked the defendant to undertake a reconsideration of her claim and to re-assess the January 2018 payment. By letter dated 7 February 2018, a civil servant at the Department for Work and Pensions informed Ms Johnson that she was unable to revise the decision dated 6 January 2018. The letter stated that regulation 61(a) of the 2013 Regulations provided that the amount of a person's employed earning was to be based on the information provided by the employer to the tax authorities under the PAYE system. The letter said:
“I cannot make a change to the original decision. It is correct that you were paid twice within this Assessment Period (AP) therefore Universal Credit Regulations, regulation 61(2)(a) applies. The information from the employer was accurate and timely; and as such cannot be disregarded.
As such this is stated in Law and cannot be changed therefore the decision remains upheld”.
Ms Johnson also asked her employers to change the dates on which she is paid to avoid the problem with universal credit arising in future months when she receives two monthly salaries in one assessment period. Her employers indicated it was not possible to make special arrangements for her as the payroll was operated on the same day for all employees.
Ms Johnson sought to challenge the decision of 6 January 2018. Claire Woods
Claire Woods is a single mother with two children aged nine and six. Following graduation in June 2017, Ms Woods began to receive universal credit. In Ms Woods' case her assessment period runs from the 30 th of each month to the 29 th of the following month.
Ms Woods began work in the childcare legal department of the local county council. While there she was paid monthly on the last working day of each month. At the end of 2017, Ms Woods was paid her November salary on 30 November 2017 and her December salary on 29 December 2017.
On 3 January 2018, she received notification of her universal credit award. As the salary for November and December 2017 had been received in the assessment period running from the 30 November to 29 December...
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