Landmark Supreme Court ruling on criteria for affordability of accommodation and intentional homelessness

Wednesday 12 June 2019

Shu Shin Luh and Connor Johnston of Garden Court Chambers, led by Martin Westgate QC of Doughty Street Chambers, instructed on behalf of the interveners Shelter and the Child Poverty Action Group. This case has been reported in the media including the Guardian and Independent.

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This morning, the Supreme Court handed down judgment in the case of Samuels v Birmingham City Council [2019] UKSC 28. The appeal was brought by Ms Samuels against a decision of the Court of Appeal, upholding a finding by the council that she had become ‘intentionally homeless’ within the meaning of Housing Act 1996 Pt 7, having left her home in 2011, together with her young children, after she fell into arrears with her rent.

The council, in a decision made in 2013, had reached the view that Ms Samuels’ home had been affordable for her. There was enough flexibility in her weekly income – which consisted of income support, child benefit and child tax credit – to meet the shortfall between her housing benefit and her rent. As such, the loss of her home was the result of her deliberate failure to pay her rent. Ms Samuel’s position was that the property was not affordable for her: in order to pay the shortfall between her housing benefit and her rent, she would have been left with a residual income below the level of income support, child benefit and child tax credit, which she received. These benefits, she argued, were never intended to meet housing costs. They were set at subsistence levels and left no surplus to meet other costs.

The Supreme Court allowed Ms Samuels’ appeal. In deciding whether a property is affordable, and reasonable to continue to occupy, the council had been required to consider all of Ms Samuels’ income, including all social security benefits, and compare that with her ‘reasonable living expenses’. The assessment of reasonable living expenses is an objective one which must be carried out on the basis that the accommodation is to be available indefinitely, and with regard to the need to promote and safeguard the welfare of the children in the household pursuant to s11 Children Act 2004.

Benefit levels are not generally designed to provide a surplus above the subsistence needs of a family. In the absence of any other objective guidance on the issue, those benefit levels should be treated as representing a reasonable level of expenditure. The amount that Ms Samuel’s was spending each month fell ‘well within the amount regarded as appropriate by way of welfare benefits’ and yet still did not leave her with sufficient resources to pay her rent in full. In those circumstances the court found it ‘hard to see on what basis the finding of intentional homelessness could be properly upheld’ and expressed the hope that ‘the council will on reconsideration be able to accept full responsibility for Ms Samuels and her family’.

This is the first occasion on which the Supreme Court has considered the affordability of accommodation in the context of determining whether a person has become homeless intentionally, and the wider context of the case encompasses a series of measures imposed by central government in recent years making it more difficult for tenants who are reliant on welfare benefits to pay their rent in full. These include the bedroom tax, the benefit cap and the freeze on the local housing allowance. The decision is likely to have significant implications on the way in which local housing authorities assess affordability and deal with applicants in receipt of welfare benefits who have lost their homes as a result of rent arrears.

The Appellant Ms Samuels was represented by James Stark and Tom Royston of Garden Court North, instructed by the Community Law Partnership. Shu Shin Luh and Connor Johnston of Garden Court, led by Martin Westgate QC of Doughty Street Chambers, were instructed on behalf of the interveners Shelter and the Child Poverty Action Group.

The intervention focussed on the variability in the assessment of affordability across the country, the historical development and setting of welfare benefits levels and evidence of increasing incidences of homelessness as a result of inability to afford rents in the private sector. The court observed that the interveners’ evidence showed ‘what appears to be an unfortunate lack of consistency among housing authorities in the treatment of “affordability”, and a shortage of reliable objective guidance on reasonable levels of living expenditure’ and urged the government to consider taking steps to address this issue and giving ‘clearer guidance to authorities undertaking this very difficult task’.

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