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Tory ministers have lost a landmark Court of Appeal fight over Universal Credit rules that discriminated against severely disabled people.

Campaigners celebrated today as the Department for Work and Pensions (DWP) lost a bid to overturn two High Court rulings against the six-in-one benefit.

It means ministers must now either give up their fight, which has spanned two years and cost the taxpayer more than £130,000 in legal fees, or take it to the Supreme Court.

The two men who brought the case, TP and AR, who were among 13,000 who lost out on disability premiums when they moved over to Universal Credit.

TP, a 54-year-old man with terminal non-Hodgkin lymphoma, and AR, a 38-year-old man who suffers from severe mental health issues, received around £170 a month less each.

In June 2018, the High Court found the DWP acted "unlawfully" by denying them top-up payments. After the DWP helped them, judges backed a second claim saying their repayments were too small.

But despite halting new severely disabled claimants moving to UC, and handing back payments to those who'd lost out, the government continued appealing the case.

(Image: Alamy Stock Photo)

And today the DWP refused to rule out appealing to the Supreme Court.

AR said: "We hope that the Court of Appeal ruling will finally bring an end to our fight for severely disabled people not to be disadvantaged by Universal Credit.

"It is still so shocking to us that we have had to fight so long and so hard just to get the government to see that their policy is unfair."

The men's solicitor Tessa Gregory, from Leigh Day, said the government must "waste no more time or resources fighting this legal case" and "get on with what it should have been doing in the first place".

She added: "Today's finding that thousands of severely disabled people have been subject to unlawful discrimination should be a wake-up call.

"The Government states that Universal Credit is protecting the most vulnerable.

"But that has not been the experience of our clients, who faced a dramatic reduction in their monthly income when they moved on to the new benefits system.

"When that was found to be unlawful, they were offered a monthly top-up which didn't even cover half of that loss."

Sir Terence Etherton, the Master of the Rolls, Lord Justice Singh and Lady Justice Rose found that the High Court was not wrong to hold that the discrimination was unjustified and unlawful.

A DWP spokesman said: "We will continue to make transitional payments to those previously receiving the severe disability premium where eligible, and have already paid £51.5 million to more than 15,000 people.

"We are carefully considering this judgment."