Four working single mothers have won a legal victory that could force the government to radically overhaul the way it operates the controversial universal credit scheme.
Two high court judges ruled the Department for Work and Pensions (DWP) was wrongly interpreting universal credit regulations after the women – who had argued they were struggling financially because of how the welfare system worked – were successful in their judicial review.
The women had argued a “fundamental problem” with the scheme meant their monthly payments varied enormously and they had ended up out of pocket, a problem their lawyers said was likely to affect tens of thousands of people.
A DWP spokesman told The Guardian: “We are carefully considering the court’s judgment.”
If the department chooses not to appeal then the women and their supporters expect to see almost immediate changes to the implementation of the scheme, which was introduced to replace means-tested welfare including income support and housing benefit.
Crucially, the changes would involve civil servants stepping in to manually override the automated way in which universal credit awards are calculated, a scenario the DWP had argued would be too costly and go against its design.
The ruling upstaged an announcement by the work and pensions secretary, Amber Rudd, of her plans to scrap a proposal to extend the two-child benefits cap, as part of an attempt to reset public perceptions of universal credit.
News of the ruling came in the middle of Rudd’s speech, in which she had described universal credit as a “fair and compassionate welfare system”.
Lord Justice Singh and Mr Justice Lewis gave their ruling following a hearing in November, when they were told the women were struggling to manage their household budgets and some had fallen into debt or had to rely on food banks.
Lawyers for the women, whose case was brought by Leigh Day and the Child Poverty Action Group (CPAG), said the problem would arise when claimants were paid by employers on a date that clashed with their assessment period for universal credit.
The women pointed out that if a claimant were paid early because of a weekend or bank holiday, for example, the system would count them as having been paid twice in one month and they would receive a “vastly reduced” universal credit payment.
Read the rest of The Guardian story here