“the UC Regulations”) prescribe the needs and circumstances. One of these is “childcare costs”
“The childcare costs condition is met in respect of an assessment period if— (a) the claimant pays charges in that period for relevant childcare.”
“The childcare costs condition is met in respect of an assessment period if (za) the claimant has paid charges for relevant childcare that are attributable to that assessment period (see regulation 34A)…”
“Charges paid for relevant childcare are attributable to an assessment period where— (a) those charges are paid in that assessment period for relevant childcare in respect of that assessment period; or (b) those charges are paid in that assessment period for relevant childcare in respect of a previous assessment period; or (c) those charges were paid in either of the two previous assessment periods for relevant childcare in respect of that assessment period.” (a) those charges are paid in that assessment period for relevant childcare in respect of that assessment period; or (b) those charges are paid in that assessment period for relevant childcare in respect of a previous assessment period; or (c) those charges were paid in either of the two previous assessment periods for relevant childcare in respect of that assessment period.”
“the Claims and Payments Regulations”), reg. 47(1) of which provides as follows: “Universal credit is payable monthly in arrears in respect of each assessment period unless in any case or class of case the Secretary of State arranges otherwise.”
“At present, existing income-related benefits are assessed weekly and paid weekly, fortnightly or four weekly. A key difference with Universal Credit is that it will be assessed and paid monthly. This approach is intended to reflect the world of work where around 75% of people receive their wages monthly. Paying in this manner will encourage and support claimants to budget on a monthly basis, which will help smooth the transition into monthly paid work. The monthly approach, together with the collection of earnings details via the new Real Time Information system being implemented by Her Majesty’s Revenue and Customs, will help ensure that benefit assessments are accurate and reflect the current needs of the household.”
“Housing is treated differently insofar as there is no requirement to demonstrate that the liability has been discharged before receiving the UC payment (for all of the reasons referred to about the distinct nature of housing) but that does not alter the fundamental position that housing is paid in arrears (and upon the housing having been provided). There are no prospective payments under Universal Credit.”
“APA will be considered on a case-by-case basis. A claimant can have one or more APA based on their individual circumstances. Universal Credit staff make the decision whether to award an APA taking account of numerous factors and using the tier 1 and tier 2 guidance as set out in Annex A. These are used as an indicator to decide if these arrangements are appropriate to an individual. For example: • is the claimant managing to pay their bills on time, particularly their rent, and have they fallen into arrears in the past, or are they currently in arrears? • do they think they will be able to manage a monthly budget, taking account of their income and outgoings over a calendar month? • if the claimant is part of a couple, are they used to managing their money together and do they think they will be able to manage the single Universal Credit payment to the household? • is the claimant vulnerable (maybe they have addiction problems or are previously homeless)? The APA factors include the following: • addiction problems • rent arrears • mental health issues • learning difficulties • previously homeless.” • is the claimant managing to pay their bills on time, particularly their rent, and have they fallen into arrears in the past, or are they currently in arrears? • do they think they will be able to manage a monthly budget, taking account of their income and outgoings over a calendar month? • if the claimant is part of a couple, are they used to managing their money together and do they think they will be able to manage the single Universal Credit payment to the household? • is the claimant vulnerable (maybe they have addiction problems or are previously homeless)? • addiction problems • rent arrears • mental health issues • learning difficulties • previously homeless.”
“A MPTL can be made when: • a claimant is in arrears with their rent for an amount equal to, or more than, 2 months of their rent • a claimant has continually underpaid their rent over more than 2 months, and they have accrued arrears of an amount equal to or more than one month’s rent • any of the other Tier 1 and Tier 2 APA factors apply • a claimant was previously in receipt of Housing Benefit and it was paid to their landlord, a MPTL can be considered providing the claimant continues to meet the Tier 1 or Tier 2 APA factors.” • a claimant is in arrears with their rent for an amount equal to, or more than, 2 months of their rent • a claimant has continually underpaid their rent over more than 2 months, and they have accrued arrears of an amount equal to or more than one month’s rent • any of the other Tier 1 and Tier 2 APA factors apply • a claimant was previously in receipt of Housing Benefit and it was paid to their landlord, a MPTL can be considered providing the claimant continues to meet the Tier 1 or Tier 2 APA factors.”
“Universal Credit will mean that people will be consistently and transparently better off for each hour they work and every pound they earn. It will cut through the complexity of the existing benefit system to make it easier for people to get the help they need, when they need it. By utilising tried and proven information technology, we will streamline the system to reduce administration costs and minimise opportunities for error or fraud. Our reforms put work, whether full time, part time or just a few hours per week, at the centre of our welfare system. As such it extends a ladder of opportunity to those who have previously been excluded or marginalised from the world of work.”
“Ensuring that parents continue to receive financial support with the costs of childcare is crucial if they are to have an incentive to work.”
“44. As a minimum, it would be feasible to pay an additional element for childcare on top of the basic Universal Credit award, at similar rates to those currently offered, but to simplify the way costs are calculated and support is paid. If information about costs was collected through a self-service process this could improve the timeliness of support and reduce the scope for under and overpayments. 45. But there may be better approaches. For example: • providing support for childcare through a voucher or discount system, rather than as part of the Universal Credit award; • recognising childcare through an additional earnings disregard rather than an additional payment.” • providing support for childcare through a voucher or discount system, rather than as part of the Universal Credit award; • recognising childcare through an additional earnings disregard rather than an additional payment.”
“65. The majority of lone parents are women and the employment rate for lone parents, at 57 per cent, is 13 percentage points lower than the average. Of those not working, many cite the reason for this as problems with finding work that offers them the hours and flexibility to meet their childcare needs, others highlight a preference for caring for their children themselves, and others are concerned with the costs of formal childcare. Of all lone parents, around 80 per cent are either in employment, looking for a job, or would like to work. Universal Credit presents an opportunity to promote equality with respect to employment and narrow the employment gap. 66. The new system is expected to be particularly beneficial to lone parents, including those who wish to work a small number of hours as the Government will now pay support for childcare for those working under 16 hours per week. Evidence suggests that most lone parents looking for work want to fit this in with their children’s schooling, so are looking predominantly for work that is part-time and preferably within school hours. 67. Incorporating childcare support into Universal Credit and its taper will protect work incentives and ensure that help with childcare costs is targeted towards low earning families. Once the increase in the take-up of benefits due to greater simplicity of the system is considered, changes to the structure of childcare will provide increased financial support for families. Extending childcare support also presents an opportunity to promote gender equality through helping parents take up employment.”
“The policy will restructure the benefit system, to create one single incomereplacement benefit for working-age adults which unifies the current system of means-tested out of work benefits, tax credits and support for housing. It will improve work incentives by allowing individuals to keep more of their income as they move into work, and by introducing a smoother and more transparent reduction of benefits when they increase their earnings. It will reduce the number of benefits and the number of agencies that people have to interact with and smooth the transition into work. This will make it easier for claimants to understand their entitlements and easier to administer the system, thus leaving less scope for fraud and error. It will ensure that appropriate conditions of entitlement are applied to claimants. The effects of the policy will be to reduce the number of workless households by always ensuring that work pays.”
“6. The Universal Credit system will improve work incentives in three ways: • ensuring that support is reduced at a consistent and predictable rate, and that people generally keep a higher proportion of their earnings; • ensuring that any work pays and, in particular, low-hours work; and • reducing the complexity of the system, and removing the distinction between in-work and out-of-work support, thus making clear the potential gains to work and reducing the risks associated with moves into employment. 7. In addition, the simpler system will reduce the scope for fraud, error and overpayments thus ensuring that the right benefit is paid to the right people at the right time.” • ensuring that support is reduced at a consistent and predictable rate, and that people generally keep a higher proportion of their earnings; • ensuring that any work pays and, in particular, low-hours work; and • reducing the complexity of the system, and removing the distinction between in-work and out-of-work support, thus making clear the potential gains to work and reducing the risks associated with moves into employment. The Explanatory Memorandum to the UC Regulations 34. 34 The Explanatory Memorandum to the UC Regulations says this about the CCE: “For many parents, childcare is essential to support their return to work and their progression in work. Within Universal Credit, support for childcare is provided in the form of an additional childcare element. The element is to be available to all lone parents and couples where both members are in work (with certain exceptions), and is not dependent on a claimant working a specific number of hours.”
“44. UC was designed to cause significant changes in behaviour, to provide incentives for work, to increase earnings, to encourage self-sufficiency and to simplify the system and make it fairer. It was also designed to remove perverse incentives. Those aims are described in greater detail in paragraph 18 of Ms Parker’s first witness statement. UC was not designed to ‘provide an indemnity against all costs arising from need. It represents, instead, a judgment by Parliament about how much money should be paid in particular circumstances, having regard to the different needs of different types of claimant and the amount of money available’. There is no flat rate; the amount of UC depends on a number of factors which will vary from case to case. 45. Monthly assessment and payment are cornerstones of the policy, because that pattern mimics working life: most people in work are paid monthly. The same approach applies whether a claimant is working or not. A claimant who is not in work therefore has to budget in the same way as a claimant who is in work. This means that UC can be calculated and paid in the same way whether a person is in or out of work, or moves between the two, and whether his earnings are from employment, self-employment or a mixture.”
“Although the decision to reduce my hours in the summer brought an enormous relief because I no longer worried about childcare costs on a daily basis, it is also very frustrating because I want the opportunity to further my career and to increase my earnings and ultimately I would be less reliant on the welfare state if only I could get support for childcare costs in advance. My UC award now is higher than it would have been, had I been able to continue working more hours. The outcome of this claim matters to me because, if the rule which prevents the payment to childcare costs upfront is set aside, I will be able to increase my working hours and decrease my dependence on benefits.”
“As a result of the fact that I had to use my savings to pay for the first month of childcare fees, as well as the problem of fluctuating childcare fees, I have no financial buffer against any unexpected bills… [D]ue to my very limited disposable income, I am finding it extremely difficult to pay back my loans, and even to be in a position to pay bills that are expected. I keep thinking to myself that I will have to pay off my debts when my daughter goes to school (and thus when I will be paying less, or no, childcare fees), but I know that the interest will have increased the loan amount considerably by that time. This is such a stressful situation to be in, and the stress is making me very depressed. I have recently started taking antidepressants, in part because I worry so much about my financial situation.”
“18. The requirement to pay the childcare costs upfront (which is then exacerbated by the delay and fragmentation in repayment) was extremely problematic for my cash flow. I desperately needed the money I was paying to my childcare providers to be able to pay my other bills and not fall behind. I was supporting two children on my own, I have nobody else who could help me with my fixed outgoings, such as my rent and bills. 19. To say that it was a stressful time is an understatement. Between October 2019 - March 2020 (when I finally resigned from my job), I was in a constant state of worry and panic about my finances and how on earth I was going to pay the various bills that I needed to pay. Indeed, I had to enter into repayment plans with my landlord and for my electricity and gas bills. It was so upsetting and humiliating. I had studied for so long and had been so excited to embark on a new journey. However, I found that I couldn’t concentrate on my job because I couldn’t understand how I could possibly afford to pay for childcare in this way: paying the entire cost myself and then waiting for UC support with it, even though the upfront cost was such a substantial part of my income that it prevented me from meeting my other costs in the meantime.”
“17. Parents on low incomes do not have the savings to pay for childcare costs upfront, and even where they are able to cover the first month out of their own savings, this leaves them with no funds left to cover other unexpected bills or emergencies. We have witnessed families quickly incurring debt, either to family and friends or through other means such as loans, which pushes them into ongoing hardship due to the need to keep up with debt repayments. 18. Following the first month of childcare costs, parents then repeatedly encounter problems with paying for childcare at any point at which costs fluctuate, which they frequently do. The childcare element of Universal Credit appears to be designed with the intention that, once the first month is covered, parents can then use the previous month’s childcare element to pay for the following month’s costs. This may work in cases where costs remain the same on a month-to-month basis, but our research has found that, in contrast to rent or other bills, childcare costs are highly volatile and subject to regular fluctuations… This is primarily due to costs during the holidays, both for children of school age and pre-school children using three hours entitlements, as these entitlements are only available during term time. Most low income parents with a child aged two and above therefore find that their childcare costs increase every six weeks, before decreasing again in term time, causing them to have to repeatedly find extra money for childcare and wait to be reimbursed. Additionally, parents need to find money for increased costs when they increase their working hours, change their childcare arrangements or have to pay for more childcare than the previous month due to differing lengths of months.”
“Any delays in childcare payments to nurseries could potentially be catastrophic for the business, their staff and all the children at that setting if, for example, it cannot pay staff, meet its other necessary liabilities, and if ultimately it is forced to close… [D]ata from the Department for Education shows that 54% of private providers and 74% of voluntary providers were either making a loss or just breaking even.”
“Some providers even suggested in their response that the only way around these problems was for them to provide ‘receipts’ to parents at the stage when they became contractually liable to make payments, but before the care is provided or payment was made, in order to enable parents to claim childcare costs through UC upfront. For example, one child care setting said about parents reliant on UC ‘they require a receipt saying I’ve been paid to get the payment [from UC] so I have to say they’ve paid when they’ve not’.”
“45. Monthly reporting of paid out costs is simple to submit to UC. Information is simply provided through their journal and, where evidence is required, it can be submitted by a smart phone or a laptop if the claimant can’t get to a Jobcentre or prefers not to use the post. 46. Entitlement is calculated monthly and payments are more accurate than under the legacy system, ensuring that support is provided when needed. It is designed to give certainty about what and when payment will be received, with the aim of giving confidence and independence to budget on a monthly basis. … 50. In terms of tackling fraud and error, the CCE in UC is based on the reporting of a claimant’s actual childcare costs. This is the key feature of the system which ensures its accuracy. Unlike in WTC, this removes the risk of a parent, unknowingly (in error) or otherwise (fraudulently), wrongly projecting or calculating their ‘average’ costs as well as mis-reporting for not reporting changes in those costs throughout the year… … 52. Payment of childcare costs in advance could potentially lead to precisely the same problems of claimants receiving over or under payments for childcare or simply estimating costs incorrectly. Not only would this increase risk of error and fraud, but it would also result in overpayment being recouped from the subsequent month’s UC award. This would affect the claimant’s ability to budget and undermine the predictability and simplicity of UC. 53. Further to this, the structure of UC means that certain elements cannot be ring fenced or separated from the monthly award and paid before the end of the assessment period. As UC is paid monthly in arrears, entitlement is decided at the end of each assessment period. With regard to childcare costs specifically, attempting to extract or ring fence individual components from the calculation would ignore the interaction between the different stages of the calculation and would not correctly reflect how UC is designed in the legislation and how it operates in practice.”
“We may also be asked during Second Reading about what we are planning to do to simplify the way we provide support. A key source of error and fraud currently is the requirement for customers to estimate average cost over the year. Basing the award in UC on actual costs – either reported each month, or whenever costs change – would be much simpler.”
“Payment direct to provider Pros The main advantage of this option is that it will guarantee payment to providers. This would help protect against fraud and could potentially reduce the extent to which providers require up-front costs (which can cause problems for parents moving into work). Cons We believe that payment to providers could also introduce more complexity, with customers having to inform us each time they change their provider, and providers having to explain the amount of payment outstanding to parents (which would become particularly complicated when there was more than one childcare provider being used). It also undermines moves to bolster the personal responsibility and capability of individual recipients. Stakeholders have said that they would favour payment to individuals on the basis it would give them control over their finances. Vouchers We would expect that this would be administered by one of the existing providers that issue voucher payments for employers. Pros This option could in theory protect against fraud by ensuring the payment could not be used for other purposes, whilst removing some of the problems with paying direct to providers as the claimant would still be in control of the payment. It could also make support more transparent for customers - a recent HM Revenue & Customs research report found ‘a lack of transparency about how much money the CCE would cover’. This could potentially have impacts on work incentives although there was no indication that making support clearer would actually change existing claimants’ behaviour. Cons HMRC analysis suggests that fraud is a very small proportion of overall CCE error and fraud. Any reductions in fraud may not translate into savings if the vouchers simply encourage parents to use the childcare they sign up to. There would be administrative costs - we have provisionally estimated that a voucher system could cost in the region of£10 -20 million a year. Separating out the payment for childcare would go against the principles of Universal Credit, requiring us to specify how much of the net award is for childcare. It would require the customer to liaise with two organisations for childcare support, and HMRC evidence has found that the existing voucher scheme is seen ‘to be complicated by those who were not receiving it, especially compared to the relative simplicity of receiving tax credits’.”
“Claimants will be asked to report childcare costs that they have paid out during the UC assessment period, they will have to report costs online monthly, and childcare costs reported will be linked to cash paid and therefore may not fully reflect childcare usage during the UC assessment period.” (Emphasis in original.)
“Why doing cash paid rather than invoiced?”
“needed to fit in with everyone’s billing types, and didn’t want to have to do any reconciliation”
“Although stakeholders were pleased with our intention to allow parents to claim upfront childcare costs, they did raise a concern about the work incentive implications of parents have to pay that initial amount out of their own money. Action: to consider interaction with other support available to help parents pay upfront costs – i.e. budgeting loans within universal credit and support via the JCP Flexible Fund.”
“73. Throughout the formation of the policy, a forefront consideration in [childcare costs element] is that it mostly affects women, and its availability having a direct effect on their participation in the labour market… There has been consideration of lone parents as an individual group as well. This is to ensure they receive sufficient assistance, and do not lose out in comparison to couples… 74. As a result of this, and the other changes implemented as part of these reforms, more lead carers, including lone parents, returned to work and were more likely to be in work than ever before. The lone parent employment rate was 69.0% in October to December 2019, up 1.1% on the year and up 12.9% since October to December 2010. 75. In addition to this… in the current system there are no indications of significant fraud or error. In comparison to 25% of all childcare payments in WTC, the steps taken have achieved their goal.”
“81. As noted, paying every set of a claimant’s childcare costs directly to childcare providers, by vouchers or other means, would require removing it from the UC award. Not only is this directly contrary to policy intent but, as described elsewhere, this would require an enormous investment and resources to be diverted from other areas of the department’s delivery. Equally, as addressed earlier in the statement, key stakeholders themselves advised against paying directly to childcare providers. 82. While there are suggestions that this could be done in a manner comparable to housing, the fluctuations in CCE, seasonal and otherwise, would make this impossible to do with any consistency, it would require CCE to be paid on estimates because payments would have to be made upfront. Housing costs are fixed. They are not comparable schemes. 83. Finally, implementing a discretionary basis on which payments could be made upfront would create a level of administrative complexity that the current system is deliberately made to avoid. Not only would it increase the rate of fraud and error, as opposed to repayment of actual cost paid, it would also require a complex set of rules and UC Regulations which decisionmakers would have to administer and take into account (increasing the risk of human error), and which would also require an appeal system. The Secretary of State has determined that the public funds in this area are best used by putting money into the hands of claimants, rather than a more complex and time-consuming administrative system.”
“The discrimination arises indirectly. The cap affects all non-working households which would otherwise receive benefits in excess of the cap. Those are predominantly households with several children, living in high cost areas of housing. The heads of such households are entitled, in the absence of the cap, the relatively high amount of child benefit, which is payable in direct proportion to the number of children. They are also entitled, in the absence of the cap, to relatively high amount of housing benefit, which reflects the rental cost of the accommodation in which the household lives, and tend therefore to reflect to some extent the size of the household and, more particularly, the level of rental values in the area. In practice, this means that nonworking household with several children, living in London, are most likely to be affected. The majority of nonworking households of children with children are single-parent households, and the vast majority of single parents are women (92% in 2011). A statistically higher number of women than men are therefore affected by the cap. The great majority of singleparent nonworking households are however unaffected by the cap.”
“The court has established in its case law that discrimination means treating differently without an objective and reasonable justification persons in relevantly similar situations… The court has also accepted that a general policy or measure that has disproportionately prejudicial effects on a particular group may be considered discriminatory notwithstanding that it is not specifically aimed at that group.”
“Given the statistics as to the proportion of those affected who are single women as compared with the proportion who are single men, a concession is understandable. It is indeed almost inevitable that a measure capping the benefits received by non-working households will mainly affect households with children, since they comprise the great majority of households receiving the highest level of benefits. It follows inexorably that such a measure will have a greater impact on women than men, since the majority of non-working households with children are single-parent households, and the great majority of single parents are women. That consequence could be avoided only by defining ‘welfare benefits’ so as to exclude benefits which are directly or indirectly linked to responsibility for children, a possibility to which it would be necessary to return.”
“180. The prejudicial effect of the cap is obvious and stark. It breaks the link between benefit and need. Claimants affected by the cap will, by definition, not receive the sums of money which the state deems necessary for them adequately to house, feed, clothe and warm themselves and their children. Furthermore, the greater the need, the greater the adverse effect. The more children there are in a family, the less each of them will have to live on. Ms SG, for example, will receive no more benefit if her 12-year-old son rejoins the family, even though a court (either here or in Belgium) has decided that it is in his best interests to do so. This prejudicial effect has a disproportionate impact on lone parents, the great majority of whom are women, and is also said to have such an impact on victims of domestic violence, most of whom are also women. 181. The disproportionate impact on lone parents is relatively straightforward to explain. The relevant comparison is between those housing benefit claimants who are, and those who are not, affected by the benefit cap. Lone parents constitute around 24 % of all claimants for housing benefit, but have so far constituted between 59% and 74% of those affected by the cap. This is more than double their proportion in the housing benefit population as a whole. Overall some 92% of lone parents are women. Hence it is not surprising that the Government predicted, in its first Equality Impact Assessment of the Benefit Cap (March 2011, para 27), that single women, mostly lone parents, would constitute 60% of those affected. 182. The reasons for this are fairly obvious. It is much more difficult for lone parents to move into paid employment, even for the 16 hours which would take them out of the cap. It is more difficult for them to do so, the more children they have, because of the problems of delivering and collecting children from different schools or day care placements, the problems of making appropriate day care arrangements for very young children and for all children during the school holidays, the problems of responding to their children’s illnesses, accidents and to casual school closures. The more children they have, the harder it will be for them to move into work; and the more children they have, the harsher will be the effects of the cap. These problems arise irrespective of the ages of the children, but are obviously more acute when any or all of them are under school age.”
“Unlike, for example, the equal protection clause of the Fourteenth Amendment to the United States Constitution or section 15 of the Canadian Charter,article 14 of the Convention is not a freestanding guarantee of equal treatment, but applies only in the context of securing the Convention rights.”
“This approach treats each of the convention rights as surrounded by a penumbra area in which, although the right itself is not engaged, action by the state must not violate article 14.”
“although A1P1 places no restriction on a state’s freedom to decide whether or not to have in place any form of social security scheme, or to choose the type or amount of benefits to provide under any such scheme, where a contracting state has in force legislation providing for the payment as of right of a welfare benefit, then ‘that legislation must be regarded as generating a proprietary interest falling within the ambit of [A1P1] for persons to satisfy its requirements’ (para 53)”
“The relevant benefit is the individual element of child tax credit payable in respect of the child and the condition of entitlement about which the claimants complain is the requirement that the person claiming the benefit is not claiming it in respect of more than one child. Accordingly, applying the test of whether, but for that condition, SC and CB would have had a right, enforceable under domestic law, to receive the benefit in question, the answer is plainly ‘yes’.”
“Unlike an overall cap on the amount of the benefits, which is capable of being characterised in that way, the two-child limit is structured so as to deny to persons caught by the provision a discrete individual element of benefit which is otherwise payable in respect of each child for whom the person claiming the benefit is responsible.”
“(1) whether the objective of the measure is sufficiently important to justify the limitation of a protected right; (2) whether the measure is rationally connected to the objective; (3) whether less intrusive measure could have been used without an unacceptably compromising the achievement of the objective; and (4) whether, balancing the severity of the measures effects on the rights of the persons to whom it applies against the importance of the objective, to the extent that the measurable contribute to its achievement, the former outweighs the latter.”
“it is clear that, where a public authority has addressed the particular issue before the court and has taken account of the relevant human rights considerations in making its decision, a court will be slower to upset the balance which was struck. Conversely, where there is no indication that this has been done, ‘the court’s scrutiny is bound to be closer and the court may have no alternative but to strike the balance for itself, giving due weight to such judgments as were made by the primary decision-maker on facts he or it did consider’: see Belfast City Council v Miss Behavin’ Ltd[2007] 1 WLR 1420 , para 47 per Lord Mance…”
“50… the margin of discretion may, of course, take on a rather different hue when, as here, it becomes clear that a particular measure is sought to be defended (at least in part) on grounds that were not present to the mind of the decision-maker at the time the decision was taken. … 52… Obviously, if reasons are proferred in defence of a decision which were not present to the mind of the decision-maker at the time that it was made, this will call for greater scrutiny then would be appropriate if they could be shown to have influence the decision-maker when a particular scheme was devised. Even retrospective judgments, however, if made within the sphere of expertise of the decision-maker, are worthy of respect, provided that they are made bona fide.”
“A suggestion that any matter which comes within the realm of social or economic policy should on that account alone being immune from review by the courts cannot be accepted. It must be shown that a real policy choice was at stake. While it is not essential that the policy options were clearly in play at the time the choice was made, obviously, when they were, the cause for reluctance by courts to intervene is enhanced. In the present case, however, for the reasons earlier given, not only were socio-economic factors not at the forefront of the decision-making process at the time that the decision to include the nomination procedure was made, but the attempt to justify retention of the procedure on those grounds was characterised by general claims, unsupported by concrete evidence and disassociated from the particular circumstances of the claimant’s case. I do not consider therefore this is a factor of any significance in this instance.”
“How does the criterion of whether the adverse treatment was manifestly without reasonable foundation fit together with the burden on the state to establish justification…? For the phraseology of the criterion demonstrates that it is something for the complainant, rather than for the state, to establish. The rationalisation has to be that, when the state puts forward its reasons for having countenanced the adverse treatment, it establishes justification for it unless the complainant demonstrates that it was manifestly without reasonable foundation. But reference in this context to any burden, in particular to a burden of proof, is more theoretical than real. The court will proactively examine whether the foundation is reasonable; and it is fanciful to contemplate its concluding that, although the state had failed to persuade the court that it was reasonable, the claim failed because the complainant had failed to persuade the court that it was manifestly unreasonable.”
“I do not find that the foundation for the clear discrimination in this case is reasonable and, in such circumstances, it appears to me to be indeed ‘fanciful’ to find that Mrs Langford’s claim should fail because the discrimination, although unreasonable, is not manifestly so.” “I do not find that the foundation for the clear discrimination in this case is reasonable and, in such circumstances, it appears to me to be indeed ‘fanciful’ to find that Mrs Langford’s claim should fail because the discrimination, although unreasonable, is not manifestly so.”
“That, I believe, provides a helpful framework for how to approach irrationality in this case too. We need to consider what are the disadvantages of deciding not to ‘fine-tune’ the Regulations thereby allowing the nonbanking day salary shift problem to persist unresolved; what are the disadvantages of adopting a solution to the non-banking day salary shift problem; would a solution be consistent or inconsistent with the nature of the universal credit regime; and has a reasonable balance been struck by the SSWP – or rather is it possible to say that no reasonable Secretary of State would have struck the balance in the way the SSWP has done in this case?”
“82. Devising a computer program capable of recognising and responding to the huge number of factors covering every aspect of a claimant’s family and financial circumstances – their earned income and unearned income, their receipt of other state benefits or compensation payments that may need to be taken into account or disregarded, their responsibility for children or other caring responsibilities, their own disability or that of a household member, their housing situation and so forth must be an exercise of mind-boggling complexity. Taking full account of all the SSWP’s evidence and bearing in mind [counsel for the Secretary of State’s] warning, I cannot accept that the program cannot be modified to ensure that the computer can recognise that the end date of a particular claimant’s assessment period coincides with their salary pay date so that if the latter date falls on a nonbanking day the receipt of two roughly equal payments is likely to be the result of the salary payment being made a day early and the second payment should be moved into the next assessment period. It may not solve the problem in every instance but it would go a long way towards doing so. 83. Regulation 21A, which I described earlier, is one of many provisions of the regulations that has “A” added to the regulation or paragraph number, denoting that it has been inserted at a later stage. Each of these reflects a refinement of the system in response either to a problem that became apparent or to an amendment or other enactment which affected the operation of the universal credit scheme. All these changes seem to have been accommodated without fatally upsetting the computer. Further, as has been discussed in other cases in this court, the rollout of universal credit involves the implementation of a managed migration pilot now provided for in the Universal Credit (Managed Migration Pilot and Miscellaneous Amendments Regulations 2019 (SI 2019/1152). It is in the nature of a pilot scheme that it is intended to throw up problems so that they can be sorted out before the new scheme is implemented across the whole of the country. It must be the case that the computer program is sophisticated enough to enable that to happen. If this problem had emerged for the first time as a result of the experience of some of the first migrated cohort of 10,000, I cannot accept that the department would have responded by saying that it was now too late to modify the scheme and that nothing could be done to resolve it without throwing away all the money so far spent.”
“Much of that discussion focuses on different issues such as the choice of a monthly rather than weekly length of assessment period, the decision to disengage the assessment period from the calendar month so that it runs for a month from the date of claim rather than corresponding to the calendar month and the decision that earnings are not averaged.”
“First they contain nothing to show that the problem of advance payment of salary was highlighted to the minister and a decision taken to do nothing about it. Secondly, they show that where the Minister had concerns that manipulation of the system might lead to much higher income in some assessment periods and low or zero income in other assessment periods he was assured that the computer might be programmed to recognise unexpected and significant fluctuations so that they could be investigated. I recognise that ultimately that was not incorporated in the scheme but the Minister was not told that there was nothing that could be done about such issues without compromising the automated nature of the calculation process.”
“I am inclined to agree with Rose LJ that the relevant form of unlawfulness is best characterised as irrationality, though I also agree it has echoes of the Padfield principle. But ultimately these various characterisations are simply aspects of the fundamental question of whether Parliament can have intended the rule making power to be exercised in a way which produces so arbitrary an harmful and impact on the respondents and the very many other claimants who are in the same position. I do not believe that it can.”
“Much is made in the applicant’s submissions and in those of the third-party intervener of the extreme financial hardship which may result from the policy… However, the court is not in a position to make an assessment of the effects, if any, on the many thousands in the same position as the applicants and nor should it try to do so. Any welfare system, to be workable, may have to use broad categorisations to distinguish between different groups in need… The court’s role is to determine the question of principle, namely whether the legislation as such unlawfully discriminates between persons who are in an analogous situation.”
“Whatever their individual effects, provisions for a reduction of benefits to well below the poverty line will strike at family life”
“The fact that they affect a greater number of women than men has been shown to have an objective and reasonable justification. No one has been able to suggest an alternative which would have avoided that differential impact without compromising the achievement of the Government’s legitimate aims. Put shortly, it was inevitable that measures aimed at limiting public expenditure on welfare benefits, addressing the perception that some of the out-of-work were receiving benefits which were excessive when compared with the earnings of those in work, and incentivising the out-ofwork to end employment, would have a differential impact on women as compared with men. That followed from the fact that women formed the majority of those who were out of work and receiving high levels of benefit. The Government’s considered view, endorsed by Parliament, that the achievement of those aims was sufficiently important to justify the making of the Regulations, notwithstanding their differential impact on men and women, was not manifestly without reasonable foundation. I would accordingly dismiss the appeals.”
“When a statutory instrument has been reviewed by Parliament, respect for Parliament’s constitutional function calls for considerable caution before the courts will hold it to be unlawful on some ground (such as irrationality) which is within the ambit of Parliament review. This applies with special force to legislative instruments founded on considerations of general policy.”
“This has consequences for us all, not just those trapped on benefits who no longer see work as the best route out of poverty. The social and economic costs of the current system’s failures are borne by society as a whole, since worklessness blights the life chances of parents and children and diminishes the country’s productive potential. The UK has one of the highest rates of children growing up in homes where no one works and this pattern repeats itself through the generations…”
“A key source of error and fraud currently is the requirement for customers to estimate average cost over the year. Basing the award in UC on actual costs – either reported each month, or whenever costs change – would be much simpler”
“Why doing cash paid rather than invoiced?”
“A claimant who is not in work… has to budget in the same way as a claimant who is in work. This means that UC can be calculated and paid in the same way whether a person is in or out of work, or moves between the two, and whether his earnings are from employment, selfemployment or a mixture.” (d) These considerations provide a reasonable foundation for the conclusion, reached by Ministers after consideration of the views of stakeholders and reviewing the pros and cons, that childcare costs should not be met by direct payment to the provider or by a voucher system. The decision to favour a simpler system, with a single monthly payment, so as to minimise deviations from the architecture of the scheme, is the kind of socio-economic choice on which democratic decisionmakers are entitled to a relatively broad discretionary area of judgment. It is not the kind of decision this Court can properly stigmatise as lacking a reasonable foundation. (e) But direct payments to providers and vouchers were not the only possible alternatives to the Proof of Payment Rule. The key focus of the argument in these proceedings has been on the difference between proof of payment (on the one hand) and proof of liability to pay (on the other). The Secretary of State’s justification for selecting the former as the basis for entitlement for the CCE invokes another aspect of the “architecture” of the scheme: the principle that payment under UC is made “in arrears”
“has a reasonable balance been struck by the SSWP – or rather is it possible to say that no reasonable Secretary of State would have struck the balance in the way the SSWP has done in this case?”