The Queen (on the application of TD, AD and Patricia Reynolds) v Secretary of State for Work and Pensions

Hearing date: 23 April 2020

Approved Judgment

Introduction

The Appellants (TD, her child AD, and Patricia Reynolds) appeal against the order of May J dated 1 March 2019, dismissing their challenge, by way of judicial review, to the implementation of aspects of the Universal Credit (“UC”) scheme, which was created by Parliament in the Welfare Reform Act 2012 (“the 2012 Act”).

On 13 September 2019 the Appellants were granted permission to appeal to this Court by me.

Factual Background

In March 2017, the Appellants were subject to adverse decisions made by the Respondent ceasing their entitlement to certain benefits which UC is intended to replace (referred to as “legacy benefits”). The trigger for these decisions was that the Appellants were considered by the Respondent to have undergone a change of circumstances altering their benefit entitlements. Following the Respondent's decisions, the Appellants applied for UC.

The Appellants' entitlements under UC were less than their legacy benefit entitlements and as a result each household received lower monthly payments.

The adverse decisions concerning the Appellants' entitlement to legacy benefits were later overturned as a result of reviews carried out by the Respondent (in the language of the relevant legislation, they were “revised”), but the effect of the legislation implementing UC was that the Appellants were obliged to remain on UC. In the relevant terminology, they had “migrated” and there could be “no turning back”. At one time the phrase used was “the lobster pot” principle, a phrase that was used before the Judge and by her in her judgment, but I will use the currently preferred phrase “no turning back”.

Although the 2012 Act provides a power to afford transitional protection to those who move from legacy benefits to UC, no such legislation had been enacted when the Appellants moved to UC in 2017. The Appellants therefore received no transitional protection against the drop in income. There is still no legislation in place that would provide transitional protection to people in the Appellants' situation, although there is now such legislation for certain other groups.

I gratefully adopt the Judge's summary of the particular facts in the case of TD/AD, which she set out at paras. 31–34 of her judgment:

“31. TD is a single parent. She used to work as a laboratory research chemist until she gave up work in 2015 to look after her daughter, AD. AD has sickle cell anaemia and epilepsy. She requires monthly blood transfusions and needs to attend other regular medical appointments. At the beginning of 2017, TD was entitled to income support, carer's allowance and child tax credit, with a disability element. Her total entitlement (excluding housing benefit) was £1005.45 per month. She also received disability living allowance, on behalf of AD, of £333.23 per month.

32. From 25 March 2017 the SSWP stopped TD's award of income support. Her Job Centre advised her that she should claim UC, which was awarded to her from 27 April 2017. TD later successfully challenged the decision to stop her income support but the application of Regulations 8 and 13 described above, precluded her from receiving or claiming any legacy benefit after 27 April 2017.

33. TD was awarded UC of £872.90 per month, which was £136.99 per month less than the amount to which she had been entitled under the legacy system. The loss of entitlement on transfer to UC was because of the less generous treatment of some children with disabilities under UC compared with legacy benefits.

34. Subsequently, on 18 August 2018 the SSWP revised the level of AD's disability living allowance (DLA) upwards. This revision had consequences for TD's UC entitlement, entitling her to the highest rate of the disabled child element of child tax credit up to 27 April 2017 and thereafter at the highest rate of the disabled child element of UC. The effect of this has been that the household's combined entitlement is now at the same level under UC as it would have been had TD continued to receive her legacy benefits. Notwithstanding this increase in her UC payments, TD contends that her claim is not academic as she and AD continue to seek a declaration and damages for the distress caused to them resulting from the drop in income at the time of transfer; the declaration sought would also benefit others in the same position as TD/AD but who remain on a lower entitlement under UC.”

More detail is contained in the second witness statement of Dr Beatrice Fannon, filed on behalf of the Respondent, at paras. 80–93; and in the statement of Mr Martin Williams, filed on behalf of the Appellants, at paras. 31–43.

The Judge summarised the particular facts of Ms Reynolds' case as follows at paras. 35–38 of her judgment:

“35. PR lives on her own. She is severely affected with rheumatoid arthritis, spondylitis, depression and panic attacks, the effect of which caused her to give up work in 2015.

36. In March 2017 PR was receiving ESA [Employment and Support Allowance], with SDP [Severe Disability Premium] and support component, and was also entitled to a personal independence payment.

37. On 17 March 2017, the SSWP stopped PR's ESA. PR challenged that decision; in the meantime she claimed UC on 17 April 2017 as that was the only income replacement benefit available to her pending determination of her challenge to the ESA decision. The ESA decision was reversed on 7 August 2017 but the operation of Regulations 8 and 13 described above precluded PR from receiving or claiming any legacy benefits after 16 April 2017.

38. At the time of her transfer to UC, PR's legacy benefits entitled her to receive £814.67 per month. She was awarded UC of £636.58 per month, which is £178.09 less than she had formerly been receiving. The lower UC entitlement is attributable to the less generous treatment of some adults with disabilities in UC than under the legacy system.”

More detail is contained in the second witness statement of Dr Fannon, at paras. 63–79; and the statement of Mr Williams, at paras. 44–48. It is right to note that a medical assessment was scheduled for 24 February 2017 but that Ms Reynolds failed to attend that assessment. As a consequence the Respondent terminated her ESA, but the official who took that decision on 17 March 2017 had not seen a letter sent by Ms Reynolds' GP on 9 March 2017 explaining the reasons why Ms Reynolds had not attended the appointment. It is also right to note that, as Dr Fannon points out at para. 75, the Respondent revised the decision in relation to ESA on 24 July 2017.

Material Legislation

The Welfare Reform Act 2012

The legislative provisions providing for the creation of UC are contained in the 2012 Act. Section 1 provides as follows:

“1 – Universal credit

(1) A benefit known as universal credit is payable in accordance with this Part.

(2) Universal credit may, subject as follows, be awarded to—

(a) an individual who is not a member of a couple (a ‘single person’), or

(b) members of a couple jointly.

(3) An award of universal credit is, subject as follows, calculated by reference to—

(a) a standard allowance,

(b) an amount for responsibility for children or young persons,

(c) an amount for housing, and

(d) amounts for other particular needs or circumstances.”

Section 33 provides for the abolition of legacy benefits and section 36 provides for migration to UC through the provisions of Sch. 6 to the 2012 Act.

Para. 1 of Sch. 6 provides a power to make provision “for the purposes of, or in connection with, replacing existing benefits with universal credit.” Para. 4(1)(b) provides that the power in para. 1 includes “provision for making an award of universal credit, with or without application, to a person whose award of existing benefit is terminated.” Para. 4(3)(a) confers the power to provide transitional protection. It provides that:

“Provision … may secure that where an award of universal credit is made … —

(a) the amount of the award is not less than the amount to which the person would have been entitled under the terminated award, or is not less than that amount by more than a prescribed amount.”

The Universal Credit (Transitional Provisions) Regulations 2014

The provisions which resulted in these Appellants' entitlement to legacy benefits ceasing are, in respect of Income Support, Housing Benefit and Tax Credits, regulations 8 and 13 of the Universal Credit (Transitional Provisions) Regulations 2014 (SI 2014 No. 1230) (“the 2014 Regulations”). In respect of ESA, and materially to the same effect, the relevant provision was Article 4 of the Welfare Reform Act 2012 (Commencement No. 22 and Transitional and Transitory Provisions) Order 2015 (SI 2015 No. 101). I will set out here only the relevant provisions of the 2014 Regulations.

Regulation 8 (at the relevant time) provided as follows:

“8. – Termination of awards of certain existing benefits: other claimants

(1)...