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Legacy benefit claimants lose fight for £1,500 Covid backpay

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21/02/2022
More than two million people on legacy benefits have missed out on an extra £1,500 in support after the High Court rejected their ‘discrimination’ claim.

Four people on legacy benefits brought a discrimination claim to the High Court, arguing they should be granted the same £20 a week ‘uplift’ as millions of people in receipt of Universal Credit.

When the coronavirus pandemic first hit in March 2020, the government increased the standard allowance element of Universal Credit payments by £20 each week.

This ‘uplift’ was due to end after a year, but it was extended to October 2021. In total, these claimants were given an additional £1,500 in support.

But the personal allowance element for those on legacy benefits such as Employment and Support Allowance (ESA), Jobseekers’ Allowance (JSA) and Income Support (IS) – mainly paid to those who are sick or disabled – wasn’t increased.

As such, four legacy benefit claimants took a test case to the High Court where they challenged the government over its “failure” to apply a similar increase, citing the “two-tier” difference in treatment as “unlawful discrimination contrary to Human Rights laws” and “indirect discrimination on grounds of disability”.

They set out their weekly benefit entitlement, compared to Universal Credit (UC) recipients’ extra Covid payments to highlight the “unfair” treatment:

  • ESA at the rate of £198.60 a week (£860.60 a month) vs UC payments of £201.96 a week (£875.14 a month). Difference of £3.36 a week or £14.54 a month.
  • ESA at the rate of £131.29 a week (£568.96 a month) vs UC payments of £174.26 a week (£755.14 a month). Difference of £42.97 a week or £186.18 a month.
  • IS at the rate of £112.40 a week (£487.07 a month) vs UC payments of £132.75 a week (£575.24 a month). Difference of £20.35 a week or £88.17 a month.
  • JSA of £74.70 a week (£323.70 a month) vs UC of £94.96 a week (£411.51 a month). Difference of £20.26 a week or £87.81a month.

‘Difference in treatment justified’

The judge Mr Justice Swift said the £20 difference won’t necessarily translate into an across-the-board distinction as much will depend on the personal circumstances of each claimant.

He cited the Secretary of State’s response that as this is a comparison between two different benefits or more specifically one element of each benefit (the standard allowance and the personal allowance), “no fair or relevant comparison can be drawn”.

Instead, recipients could have made a claim for UC instead of continuing to claim the relevant legacy benefits which will in time be replaced by UC.

Mr Justice Swift said: “My conclusion is that the difference in treatment of Universal Credit claimants over those claiming legacy benefits resulting from the 2020 Regulations was justified.

“By the end of March 2020, the government’s objective was to take steps to preserve stability in the labour market in the short term, to provide a basis for rapid economic recovery once the pandemic had passed. The best-known measure in support of this objective was the Job Retention Scheme (usually referred to as the furlough scheme) which made it possible for many who would otherwise have been dismissed in consequence of the March 2020 lockdown, to remain in employment.

“The increase to the standard allowance was a way of providing additional support to those who did lose jobs or income because of the pandemic and became reliant on Universal Credit for the first time. The increase was intended to cushion the sudden impact of loss of employment or reduced employment. I accept this was a legitimate objective made in anticipation of a dramatic rise in the numbers of new benefits claimants.”

In the year to November 2020 the number of ESA claimants fell by approximately 99,000 to 1.37m claimants. The numbers of claimants in receipt of either JSA or IS was less than 450,000 in February 2020.

By contrast, the number of people claiming UC rose significantly. By March 2020, approximately three million people were in receipt of UC. In May, new UC claims were running at between 20,000 and 25,000 per day, double the rate prior to the pandemic, with 5.3 million claiming the benefit. By 2021, six million people were claiming UC.

“New benefits claimants would need to adjust to a loss in income. They would be affected differently to persons already claiming benefits”, the judge added.

‘Devastating blow’ and ‘deeply unfair’

William Ford, partner at Osbornes Law, who represented the four claimants, said: “We are extremely disappointed by today’s judgment and will study it carefully to assess whether there are any grounds to appeal.

“The court’s decision is a devastating blow to more than two million people who we consider were unjustly deprived of the £20 uplift given to those who receive Universal Credit during the pandemic.

“It is deeply unfair that those on so called legacy benefits should be discriminated against in this way and we will look to see if we can continue to fight the government on this issue to get our clients and everybody else on legacy benefits justice.”

 

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