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A benefit or a burden?

R (Blundell & Ors) v Secretary of State for Work and Pensions [2021] EWHC 608 (Admin)

A recent high court ruling found that the blanket policy applied to Universal Credit by the Department for Work and Pensions [DWP] is irrational and unlawful. The policy allows the DWP to deduct up to 30% from an applicant’s Universal Credit towards any social obligations such as court fines. However 30% is the maximum deduction that can be taken, and the DWP have discretion to deduct as little as 5% depending on the applicant’s circumstances.

The challenge was brought by the charity Shelter on behalf of four applicants who were all re-building their lives after a period of rough sleeping. Shelter argued that the policy to deduct the full 30% from the applicants’ Universal Credit towards any court fines was so high that is was enough to cause arbitrary hardship.

Shelter found that the policy was illogical and not thoroughly evaluated before being introduced; despite the DWP reducing the maximum deduction rate from 40% to 30% and that this will be further reduced to 25% in October 2021. It seemed the maximum deduction itself was not the issue, but the fact that the DWP were not using their discretion in individual cases, which was hugely affecting applicants, especially the four applicants here.

The DWP is entitled to make deductions in order to enforce social obligations such as child maintenance payments, council tax arrears and court fines. However, although the four applicants in this case had requested deductions due to financial difficulty, these were not considered despite their personal circumstances and the fact that they were only recently relieved of their homelessness.

Working with individuals who were once homeless, we understand that there are many responsibilities and challenges that arise within a short space of time such as being able to manage finances, tenancy and most importantly well-being. This is extremely difficult when huge deductions are made from a person’s benefits towards fines; meaning they may struggle to manage all of these responsibilities and could resort to re-offending in order to purchase daily essentials such as food whilst also attempting to pay their rent.

The Secretary of State in the above case argued that applicants could apply to the fines officer or magistrates court to remove the deductions from the benefits order; so applicants could make their own payments as and when they wish. However, this argument was rejected as it was more likely that individuals would default where they were to arrange the payment themselves, especially where they have never had the chance to manage their affairs before. Shelter also found that applicants should still continue paying their fines as it benefits the public by enabling fines to be paid where collection was not always possible, and provided the applicant with a way to make the payments in a reliable and consistent manner.

The high court in this case ruled that the deduction was unlawful as it fettered discretion and did not take into account personal circumstances. The approach was inflexible and removed the discretion which was provided for through legislation.

Mr Justice Kerr ruled that the deduction policy needed amending to include discretion for DWP decision makers to take into account personal circumstances when it came to paying court fines or other social obligations.