Woman left worse off by coronavirus cash boost challenges benefits rules

  • 5/18/2020
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A single mother has launched a legal challenge to overturn “perverse” benefit rules that have cancelled out the chancellor’s £90-a-month coronavirus living costs boost for thousands of low-income families on universal credit and left her £123 a month worse off than she was before the crisis. The full-time carer for her four young children, who does not wish to be named, was told that the chancellor’s pandemic funds would increase her income by £20 a week to help pay for the higher costs of food and energy during lockdown. However, the money pushed her over government benefit cap limits, wiping out the increase. Her plight was compounded when benefits officials insisted the chancellor’s March handout meant she could now afford higher repayments on her universal credit advance loan, and so increased monthly deductions from her benefits by almost 30% – even though the benefit cap meant she was no better off. As a result, the woman, who lives in the north-west of England, is now £123 a month worse off. She said that after rent and bills were paid she now had just £100 a month to live on and she had been forced to borrow from her mum and sister to make ends meet. “I have only one meal a day, and it’s been like this for ages. I live off toast. I’d rather they [my kids] eat than me. I can’t even remember when I last bought clothes for myself. I’ve been stressed. It’s been horrendous,” she told the Guardian. “The changes to benefits in the pandemic have left me worse off when in fact they were supposed to help me during this difficult time. How can that be right?” The woman was not previously benefit-capped, but her income had already been diminished when her youngest child was born after the introduction of the two-child benefit limit in 2017, meaning her universal credit claim restricted financial support to only three of her four children. The woman’s solicitors, Leigh Day, who have filed pre-action papers with the Department for Work and Pensions (DWP), argue that the retention of both the benefit cap and benefit deductions in the current environment is perverse, irrational, discriminatory and unlawfully breaches the woman’s human rights. The case will increase pressure on ministers to review the benefit cap, a notorious seven year-old policy intended to “incentivise” unemployed claimants to get a job by severely limiting their benefit payments. In effect it has mainly hit single parents not expected to work because they are full-time carers for young children. House of Commons library estimates conservatively suggest around 108,000 families – including 90,000 families already capped – will be denied the chancellor’s universal credit cash boost because the benefit cap enables the DWP to claw the money back. Labour called for the benefit cap to be scrapped. “Why raise universal credit with one hand only to take it away with the other? Unless the cap is ended, we risk seeing many more people losing critical funds at a time when they need them most,” said the shadow work and pensions secretary, Jonathan Reynolds. Carolin Ott, a Leigh Day solicitor, said: “The benefit cap is a measure intended to encourage benefit claimants into work but it is absurd for it to deprive individuals of much-needed support during a time when it is entirely unrealistic for them to enter into employment.” Moving into work is the main way to escape the benefit cap, a task made harder during lockdown when job vacancies are scarce. Even before the crisis this was a challenge for many capped claimants: a 2016 DWP-backed study found limiting an unemployed person’s benefits made it less likely they would get a job. The benefit cap limits total household benefits to £23,000 a year (£442 a week) in London and £20,000 a year (£385 a week) outside the capital. A DWP spokesperson said: “Universal credit adapts to your personal circumstances and the vast majority of claimants are better off on it. We estimate that 2.5 million households receiving universal credit will benefit straight away from the increase in the standard allowance.” In March the work and pensions secretary, Thérèse Coffey, welcomed the £20-a-week boost to universal credit, saying the DWP was “standing by those who rely on the welfare safety net“ and would do “whatever it takes to protect the most vulnerable and get them through these unprecedented times”.

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