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High Court rules that benefit cap income calculation is irrational for claimants paid 4 weekly

Stuart
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CPAG wins High Court challenge of the application of the benefit cap.to a claimant’s award, despite the fact that she works 16 hours per week at a national living wage, simply because she is paid 4 weekly rather than monthly -

The judge agreed that the DWP’s approach to earnings in UC is inconsistent with its aim of incentivising work and making work pay:  -

‘… the impact of the regime contained in the Regulations discourages work when the work available is paid on a lunar month basis. In such cases, for the majority of months the Regulations subject the First Claimant to the benefit cap, as if she were not working, resulting in her receiving an arbitrarily reduced overall UC award. The scheme is said to be designed to be responsive to changes in earned income, and to make work pay to the fullest possible extent. But in these circumstances, it is neither.’

Pantellerisco and others v SSWP is available from CPAG’s website and we’ll get a summary out later today…

Gareth Morgan
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That must, by extension, mean that 2-weekly and weekly pay-cycles are also being treated irrationally.

Vonny
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Brilliant decision but won’t this need the regs to change before any use to claimants

Gemap
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Vonny - 21 July 2020 02:19 PM

Brilliant decision but won’t this need the regs to change before any use to claimants

Further to Vonny’s point, if I had a similar case and wanted to appeal to the First Tier Tribunal then what remedy would I ask the Tribunal to apply?

Elliot Kent
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I think its just the same as the position with the post-COA Johnson cases. To win at FtT you would need to make good on the A1P1 argument which the High Court pointedly ignored and then that gives rise to the RR jurisdiction so possibly you could make an argument based on disapplication.

The CPAG MR template for Johnson cases also raises the idea that because the provisions were found to be unlawful in that case, it becomes impossible to lawfully calculate the claimant’s earned income so no deduction for earned income ought to be applied. Perhaps you could try and adopt that argument to this case.

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The Court of Appeal is hearing the Secretary of State’s appeal against the High Court ruling in Pantellerisco today from 10.30 - for those who like to watch, the hearing will also be livestreamed.

https://www.judiciary.uk/you-and-the-judiciary/going-to-court/court-of-appeal-home/the-court-of-appeal-civil-division-live-streaming-of-court-hearings/

Timothy Seaside
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I just spent a few minutes watching. I know lawyers aren’t generally great at maths, but even so I am slightly shocked at this - three CA judges and two barristers together in a room and not one of them can understand why there is a difference in the outcomes for people depending on whether they are paid four weekly, fortnightly or weekly. The DWP counsel (boo) was hoping to get away with “there just is” and “it’s mathematical”, but they ended up with looking at a diagram from a select committee report, and Underhill LJ saying he was hoping Simler LJ would be able to explain it to him at lunch.

I hope they will see that this is the whole point of the problem - mathematical calculations which produce very different results depending on an arbitrary factor such as frequency of pay, are intrinsically unfair. And to some extent the fact that these intelligent lawyers can’t understand it, just proves the point.

[ Edited: 15 Jun 2021 at 12:08 pm by Timothy Seaside ]
Gareth Morgan
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Timothy Seaside - 15 June 2021 12:04 PM

I just spent a few minutes watching. I know lawyers aren’t generally great at maths, but even so I am slightly shocked at this - three CA judges and two barristers together in a room and not one of them can understand why there is a difference in the outcomes for people depending on whether they are paid four weekly, fortnightly or weekly.

I’m being unimpressed as well.

Mr Jim
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Bet they can calculate their fees! Lol.

Timothy Seaside
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Mr Jim - 15 June 2021 12:37 PM

Bet they can calculate their fees! Lol.

I wonder if their clerks would agree with you.

Paul_Treloar_AgeUK
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Timothy Seaside - 15 June 2021 12:04 PM

I just spent a few minutes watching. I know lawyers aren’t generally great at maths, but even so I am slightly shocked at this - three CA judges and two barristers together in a room and not one of them can understand why there is a difference in the outcomes for people depending on whether they are paid four weekly, fortnightly or weekly. The DWP counsel (boo) was hoping to get away with “there just is” and “it’s mathematical”, but they ended up with looking at a diagram from a select committee report, and Underhill LJ saying he was hoping Simler LJ would be able to explain it to him at lunch.

I hope they will see that this is the whole point of the problem - mathematical calculations which produce very different results depending on an arbitrary factor such as frequency of pay, are intrinsically unfair. And to some extent the fact that these intelligent lawyers can’t understand it, just proves the point.

It was painful to watch wasn’t it?

Elliot Kent
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It was rather troubling.

Perhaps no-one in the court had a calendar to hand. Let’s say you get paid each Monday and your AP is a calendar month. Now count the Mondays - there are 8 4-payday months and 4 5-payday months. If you are paid fortnightly, then its every other Monday - there are 10 2-payday months and 2 3-payday months. Every fourth Monday and there is only 1 2-payday month. Well there is your answer.

Gareth Morgan
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Mr Finch
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Elliot Kent - 15 June 2021 09:45 PM

It was rather troubling.

Perhaps no-one in the court had a calendar to hand. Let’s say you get paid each Monday and your AP is a calendar month. Now count the Mondays - there are 8 4-payday months and 4 5-payday months. If you are paid fortnightly, then its every other Monday - there are 10 2-payday months and 2 3-payday months. Every fourth Monday and there is only 1 2-payday month. Well there is your answer.

I was mentally shouting at the judge that if you’re paid weekly, you don’t ever get 8 payments in a month, only 5.

Ianb
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Mr Finch - 16 June 2021 01:36 PM

I was mentally shouting at the judge that if you’re paid weekly, you don’t ever get 8 payments in a month, only 5.

..or 4

Stuart
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Court of Appeal allows Secretary of State for Work and Pensions’ appeal against Pantellerisco ruling, concluding that benefit cap earnings assessment is not irrational and unlawful in case of a four-weekly paid claimant.

In concluding remarks, Lord Justice Underhill says -

‘There is a limit to the extent that it is possible to anticipate every particular effect of a highly complex scheme of this kind, and it may emerge following implementation that there are aspects which are (at least) sub-optimal and where changes should be made: I note what Ms Krahé says at para. 63 of her first witness statement about the DWP’s “test and learn” philosophy. Where that happens, it does not in my view automatically follow that the legislation was irrational in the respects in question: it cannot be the case that whenever imperfections in a legislative scheme are corrected by amendment in the light of experience the original version is to be characterised as irrational on the basis that it should have been got right first time round. Whether that is a fair conclusion will depend on the circumstances of the particular case, including the nature of the defect. It may, separately, be irrational for steps not to be taken to resolve the problem once identified: this was the basis of the finding in Johnson (see para. 42 above). But, again, whether that is so will depend on the particular case. For the reasons which I have given I do not believe that irrationality on either basis has been established here.’ (paragraph 90)

Thanks to Tom Royston and CPAG for a copy of today’s judgment via twitter.