Memo: The decision in SSWP v AT and the inappropriate use of powers to stay decisions

Alice Welsh and Charlotte O’Brien submitted the following as a memo to the Independent Monitoring Authority and the House of Commons Work and Pensions Committee on 29th June 2023 to highlight the increase in cases seen at the Hub where DWP have inappropriately used its power to stay cases while waiting for a final decision in SSWP v AT, on the applicability of Charter Rights.

The rules at issue

(1)  The Upper Tribunal’s decision in SSWP v AT found that the DWP had a duty to assess the circumstances of applicants for Universal Credit with pre-settled status to ensure that a refusal would not expose them to a violation of their rights under the EU Charter of Fundamental Rights. The Secretary of State decided to appeal this and we are waiting for a judgment from the Court of Appeal. It is possible that whichever way this judgment goes it will face a further appeal to the Supreme Court and a potential referral to the CJEU. It may be many months before we get a final say in AT.

(2)  In the meantime, the Secretary of State has the power, under Section 25(2) of the Social Security Act 1998 to stay decision making on claims affected by the decision. This puts the decision making on hold until the case is finally determined.

Can a decision to stay be challenged?

(3)  While a decision to stay does not attract a right of appeal, the Secretary of State’s own policy, embodied in guidance, states that if a claimant is suffering hardship, there should be a decision on the benefit claim, and any award must then be paid.

(4)  For an individuals’ claim to Universal Credit to benefit from a judgment in SSWP v AT, they must be at risk of being without basic necessities. However, guidance on applying a stay states that there is a requirement that decisions makers consider whether such a decision would result in ‘hardship’, and where it would, a decision to stay should not be made. This leaves a bizarre and contradictory decision where a stay should only be applied to cases which could benefit from AT, but all of these cases would, by definition, involve risks of hardship.

(5)  It is also clear that those who believe they have a qualifying right of residence under the EEA Regulations 2016, should not have decisions on their Universal Credit entitlement stayed until a determination has been made on their eligibility. However, the Hub is seeing many cases where individuals have a qualifying right of residence, for example where they are working, being told that a decision on their entitlement will not be made until there is a decision in SSWP v AT.

(6)  This means that those with pre-settled status who have a qualifying right of residence and fulfil the conditions of Article 13 of the Withdrawal Agreement are being caught up in these decisions and are being denied access to benefits for many months and potential years to come.

Examples of inappropriate decisions to stay we have seen

(7)  At the EU Rights and Brexit Hub we have already seen many cases where we would identify decisions to stay that are incorrect or unreasonable.

Client has a right of residence

(8)  Case study A (EUR00161):

A is an EEA national who has pre-settled status and has lived in the UK since 2019. He was working as a Deliveroo courier and after an accident at work in 2021 resulted in a permanent disability he was not able to work anymore. Under the EEA Regulations 2016, and rights in the Withdrawal Agreement under Article 13 and 15 WA, the client’s circumstances should be investigated to find out if he has acquired a permanent right of residence as a worker who has ceased activity (Regulation 5(3)) under Regulation 15(1)(c). No investigation into these circumstances were made and the client’s application for Universal Credit was stayed due the pending judgment in SSWP v AT.  

(9)  Case Study B (EUR00155):

B is an EEA national with pre-settled status. She lives with her EEA national partner and their three young children (all below school age). Her partner was a worker. When they applied for Universal Credit they were awarded it as a single claim. The DWP found that the B was not entitlted but her partner was as someone with retained worker status. We have helped to challenge this decision, arguing that B is an extended family member of her partner and should derive a right of residence as a family member of an EEA national worker. While challenging this decision, DWP decided to stay the case.

(10)  Cases like these mean that those who have pre-settled status and a qualifying right of residence will face significant delays when trying to access Universal Credit. Importantly theses are cases where a stay should not be applied. As individuals whose activities in the UK bring them into the remit of either Article 13 or 15 of the Withdrawal Agreement, denying access benefits, or causing significant delay on the basis that they have pre-settled status, could be an infringement of their right to be protected from discrimination based on nationality and equal treatment under Articles 12 and 23 WA.

(11)  The decision to stay is communicated in clients’ online Universal Credit journals. The text of these decisions is:

“Your claim to Universal Credit was made on [date]. Your entitlement depends upon you having a right to reside in Great Britain and at this time you do not have such a right. However, we have not made a decision disallowing your Universal Credit because there is a legal lead case about Universal Credit which may affect your claim.

The case is SSWP v AT (AIRE Centre and IMA intervening) [2022] UKUT 330 (AAC). This was handed down by the Upper Tribunal on 12/12/22 but is being appealed to the Court of Appeal with permission already granted.

The Secretary of State for Work and Pensions has exercised his powers under Section 25(2) of the Social Security Act 1998 to stay decision making on claims affected by the decision. This means that we will not make a decision on your claim until such as time as the lead case has been decided in the Court of Appeal (or even the Supreme Court). There is no right of appeal against the Secretary of State’s decision to stay decision making on your claim, but if this decision will cause you particular hardship, please let us know.”

(12)   Importantly this communication does not provide any information on how a decision to stay can be reconsidered.

(13)  Nor does it provide information on on how an individual can demonstrate a right of residence for the purposes of accessing Universal Credit. This information is only communicated through a Universal Credit refusal letter (UCD 355) at which point a table is provided with different ways an individual could have a right of residence. Not providing this information at the point of stay means that individuals will not necessarily know whether the decision to stay their case is correct and whether they should ask for it to be reconsidered.

Client’s application for Universal Credit made before the end of the transition period

(14)  Case study C (EUR00148):

C has pre-settled status and applied for Universal Credit in June 2020, before the end of the tranisiton period. He was awarded Universal Credit during the Covid-19 pandemic and over a year later was told that he was not entitled and would be required to pay back £16,000. The client in this case decided to challenge the decision that he was not entitled to Universal Credit. However, in response to the client’s request for a mandatory reconsideration, DWP decided to stay the case due to SSWP v AT.

(15)  In this case the stay should never have been made as the facts of the case occurred before the end of the transition period, meaning that the CJEU decision in CG should be applied directly as the client was still protected by the EU treaties at the time. The communication to the client in this case did not mention that relevant cases are only where an application for Universal Credit was made after 31st December 2020. It would therefore not be possible for an individual to know that the stay had been incorrectly applied to them.

Refusal to engage with client’s mandatory reconsideration and complaint

(16)  Case study E (EUR00173)

The client was seeking to challenge a refusal to Universal Credit and put evidence together that she had a right of residence as a worker. When supported by Citizens Advice to submit an MR the client was informed that her case was stayed. Citizens Advice then helped the client to write a complaint to DWP in December 2022. They received a response from DWP stating:

“All HRT MR’s for claimants with pre settled status are on hold due to a pending upper tribunal court case, similar to the Fratila judgement. We cannot take any further action on this case until the outcome of the upper tribunal case is known. All cases are being put into a holding queue awaiting the outcome.” [emphases added].

(17)   This is very worrying response. Firstly, it is clearly incorrect; there are a number of reasons where an individual with pre-settled status is not impacted by the judgment in AT (for example where they have a qualifying right of residence, or if their application for Universal Credit was made before the end of the transition period). Universal Credit applications that are not impacted by AT should not be stayed. The policy as stated of putting all claims from people with pre-settled status on hold is an incorrect application of the law (and as such is unreasonable); it amounts to an admission of failure to take account of material facts; and it also creates a fetter on discretion.

(18)  Additionally the letter makes no mention of the ability of individuals to request that the stay is lifted due to hardship. This response to a complaint about the stay process is misleading and could result in many individuals being misinformed about their rights and result in them being unable to challenge a stay that has been wrongfully placed on a case.

What should be done?

(19)  We are still waiting for the judgment of the Court of Appeal, but when this comes out it may still be appealed further to the Supreme Court and/or involve a reference to the CJEU. As such it is likely that a final determination in this case will be many months away. It is most likely that the Secretary of State’s powers to stay cases will continue in these circumstances.

(20)  Where DWP decide to stay a case due to AT, the communication to individuals should be clear and set out exactly why the decision to stay has been made. This communication must also provide information about how a client may request that the decision to stay be reconsidered, and give example reasons for reconsideration, such as:

a. Where the benefits claim was made before the end of the transition period (31st December 2020)

b. Where the client thinks that they have a qualifying right of residence, including details of how a right of residence can be demonstrated

c. Where a decision to stay will result in hardship.

(21)  Specific decision maker guidance on decisions to stay in SSWP v AT should be provided by DWP, demonstrating how to make a decision on whether to stay these cases and explaining exactly where stays are inappropriate, including:

a. Where the benefits claim was made before the end of the transition period (31st December 2020)

b. Where there is evidence that the client may have a qualifying right of residence. This should be fully explored before a decision to stay is made.

c. Where a decision to stay will result in hardship. This should also remind decision makers that all claims for Universal Credit that may benefit from the judgment in SSWP v AT will be likely to involve circumstances where a decision not to award UC would leave claimants at risk of being without their basic necessities.

(22)  The DWP should publish statistics on the number of decisions to stay as a result of SSWP v AT and how may of these stays have been lifted.

Professor Charlotte O’Brien and Dr Alice Welsh