An important ruling at the Upper Tribunal held that people with severe disabilities should not face losing benefits just because they move from one type of home to another. Shelter legal adviser Elliot Kent explains what this means for our client and other people in her situation.
The ‘cliff-edge’ issue
When Universal Credit (UC) was introduced, the government decided to exclude premiums previously paid to people with disabilities – most significantly the Severe Disability Premium (SDP). Since 2018, people in receipt of benefits under the pre-UC system (known as legacy benefits) have needed to move to UC when their circumstances change. This meant that when life changes, such as moving house, forced people who previously received SDP to move to UC, they often saw a huge drop in their income.
These sudden income drops could be hundreds of pounds per month, and would come at a time the person was already dealing with a costly and stressful change in their circumstances such as a house move.
Following legal challenges, this ‘cliff-edge’ effect was found to be unlawfully discriminatory and the government was required to change the law to provide for a smoother transition from legacy benefits to Universal Credit.
The Department for Work and Pensions (DWP) introduced a ‘transitional payment’, which would be paid to severely disabled people when they moved to UC. This payment topped up their benefits to roughly the same level as they had previously received, but would ‘erode’ over time. This meant that it would be reduced when there was an increase to other elements of UC.
Julie’s case – another ‘cliff-edge’
Shelter’s client Julie has significant disabilities and qualified for the transitional payment. Since the introduction of UC, for the majority of people rent is covered by the housing costs element of UC. However, legacy housing benefit (administered by local authorities) continues to cover some specialist accommodation, including supported housing for people with significant care needs, temporary accommodation for homeless households and refuges for survivors of domestic abuse. This is then paid alongside UC, which covers the person’s living costs.
Julie moved from supported housing paid by housing benefit, to sheltered accommodation and, due to this move, her housing costs would now be covered by UC. Despite the fact that she was moving to a much cheaper rented home, the move from housing benefit to UC meant that the whole of her housing costs were now treated as an increase to her UC – even though her income was not increasing. This resulted in her transitional protection being ‘eroded’ in one go.
Julie’s loss of her transitional protection meant another sudden drop in her income – another ‘cliff-edge’ – in much the same way as the Courts had already held that the DWP needed to avoid. The overall decrease to Julie’s income was £285 a month, causing her financial hardship which she felt was very unfair – and so she came to Shelter for advice.
The appeal
Shelter adviser, Jeni Wainwright, helped Julie appeal the DWP’s decision to stop her transitional protection at the First-tier Tribunal, which covers appeals brought against benefit decisions by the DWP and other government departments. The tribunal allowed the appeal and decided that the DWP needed to recalculate her award.
However, the DWP appealed against this decision to the Upper Tribunal and Julie needed Shelter’s help to resist the appeal. Legal aid is barely existent for welfare benefits following cuts made to legal aid in 2013, but Shelter was successful in applying for what is called Exceptional Case Funding to represent our client and instruct her barrister, Tom Royston of Garden Court North.
Due to the complexity and importance of this legal challenge, the appeal was listed for a full day hearing before the Upper Tribunal in London.
The Upper Tribunal finds in our favour and dismisses the government’s appeal
The Upper Tribunal judge, Judge Church, agreed with Shelter’s arguments and dismissed the government’s appeal.
Judge Church found that people like Julie, who moved from legacy housing benefit to the housing costs element of UC, were not being treated equally to people who moved within the same benefit, who would not suffer the ‘cliff-edge’ effect of losing all their transitional protection payments in one go. As the DWP was unable to justify this unequal treatment it amounted to unlawful discrimination.
It is not right that people who receive transitional protection payments due to their significant disabilities, lose all of that payment simply because of a change in the way that their housing costs are funded, when they see no actual increase in their income.
Julie’s treatment had failed to avoid the ‘cliff-edge’ effect of a sudden loss of income. The Judge said that ‘What cannot occur is the unfair stripping away of all transitional protection in one fell swoop when a claimant’s circumstances change such that they need to move between specified accommodation which is funded via Housing Benefit and non-specified accommodation which attracts the Housing Costs Element of Universal Credit.’
The DWP has not yet confirmed if they intend to apply for permission to appeal further.
The full decision is available on the Upper Tribunal’s website.
What this means for people in the same situation
The Upper Tribunal’s decision confirms that it is not lawful for disabled people to lose their transitional protection simply as a result of moving from specialist housing funded by housing benefit to more mainstream housing covered by UC. Our work in representing Julie in this case means that other people with disabilities should not face the same ‘cliff-edge’ and hardship that she did.
The DWP’s ‘managed migration’ process means it will be transferring hundreds of thousands of people claiming former ‘legacy’ benefits on to UC over the next year. We share concerns raised by Child Poverty Action Group that the speed of the rollout could leave many people falling through the cracks and at risk of having their benefits cut off, putting them at risk of rent arrears and homelessness.
The government must urgently change the law to reflect the Tribunal’s finding. And the DWP must make sure that managed migration won’t result in more people living with disabilities and health problems facing financial hardship.
In the meantime, we encourage anyone who thinks that they may be impacted by this decision to seek specialist advice.
Visit our get help page to find out about the different types of advice Shelter offers.
Finally, our important work in supporting people, like Julie, to win legal challenges and to campaign for improvements to systems that leave people facing homelessness relies on your help. Please donate today.
