You are here

New court ruling offers better protection to those moving to Universal Credit

A new court ruling is set to offer people greater protection when moving to Universal Credit from legacy benefits, particularly people fleeing domestic abuse. 

Currently people receiving Universal Credit (UC) after migrating from a legacy benefit (i.e. Tax Credits), receive a top up Transitional Element if the UC is less than they received in legacy benefit. The value of the top up is gradually reduced as people's circumstances change. 

The impact on people trying to escape domestic abuse can be stark. They lose any TE entitlement when they become a single person rather than part of a couple, or when they move between temporary and permanent accommodation. This is because the help given to those in temporary accommodation to pay the rent is Housing Benefit, which is separate from UC. In contrast, the help provided to low-income people in mainstream tenancies to pay the rent is Housing Element (HE), which is a component of UC. When HE is paid, it is treated an increase in UC entitlement even though it is paid to the person’s landlord and not the person. HE is subtracted from the TE payable, with the result that no TE is payable since HE is usually always the higher figure.   

The Upper Tribunal has found that the law that governs this process deprives people in this situation of their possessions (in this case the amount of benefit to which they were entitled under the legacy benefit regime) without justification.The ruling may be subject to further legal challenge by the UK Government. If such a challenge is unsuccessful the law will have to be changed to avoid cliff-edge income losses. This might mean specifying in law that TE should only reduce where people are receiving an “in pocket” increase in benefit income.  

The case 

The claimant in the case was migrated to UC from Employment and Support Allowance when she moved from one local authority to another. She was awarded a top up of transitional severe disability premium (SDP). 

When she later moved into supported accommodation, the transitional SDP was converted to Transitional Element. That top up was subsequently reduced to nil when she accepted a permanent tenancy. The “additional amount” awarded for her mainstream housing costs (£369.37) exceeded the amount of the Transitional Element (£285). The claimant lost £285/month without gaining any additional UC income, given that the £369 was doing the job done by housing benefit when she was in supported accommodation, namely paying her rent.   

The findings 

The Tribunal notes that unlike a move from one mainstream rented property to another, a move between supported, refuge and temporary accommodation and mainstream accommodation is “unlikely to be simply a matter of choice”. 

The claimant’s move was closely related to her personal circumstances and her status as a severely disabled person. It was recognised that severely disabled people are less likely to move house than other people because they are less able to cope with the disruption that causes and the potential loss of vital familiar networks and amenities. They are therefore particularly disadvantaged if it becomes necessary for them to move to a new area, a disadvantage made worse if the move is accompanied by a substantial drop in income. 

A similar grave disadvantage is experienced by other people in unstable housing situations, such as those fleeing domestic abuse, for whom financial stability is critical to support a settled way of life. 

Read the full judgement here IN THE UPPER TRIBUNAL (