2010 11 Welfare Benefits

Wednesday 1 December 2010

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What the Green Paper Says

On 15 November 2010 the Ministry of Justice issued a green paper on Government Proposals for the Reform of Legal Aid in England and Wales’, (Cm 7967) (‘the Paper’). The consultation process runs until 14 February 2011.

The Economic Backdrop

The economic backdrop to the Paper is (a) the financial pressure on the Legal Aid Fund and (b) the recession and the need to reduce public spending. According to the Impact Assessment: ‘Scope Changes’:

“Although the principal driver for reform is financial, there are also compelling reasons for reforming legal aid. Since its inception the scheme has expanded beyond its original intentions. It now costs over £2bn a year, and, while comparisons are not straightforward, we believe is generous compared with similar schemes in other countries.”

The Paper estimates that the proposals will deliver savings of some £350 million from a total legal aid budget of £2bn. (Approximately £1.2bn is spent on criminal legal aid and the remaining £0.9bn is spent on civil legal aid, including private family matters.) An Impact Assessment reveals that the saving made by removing welfare benefits from the scope of legal aid will be £22 million. (Table 2 IA:Scope Changes).

The policy aims

According to the Paper the main policy objectives and intended effects are:

  • To ensure that legal aid is targeted to those who need it most;.
  • Legal aid will be available in civil and family cases where people’s life or liberty is at stake, or where they are at risk of serious physical harm, or immediate loss of their home
  • Telephone services will be “extended to help people find the easiest and most effective ways to resolve problems”; it is proposed that this should become the sole gateway to all legally aided work.
  • Significant changes are also proposed to the financial eligibility rules for legal aid, including reductions in in the capital and income allowances.
  • All fees for legal aid lawyers will be cut by 10% with a further proposal to reduce the fees payable in court cases.

Withdrawal of legal aid for welfare benefits

Legal aid currently funds advice in relation to decisions about benefits including advice (but not advocacy) for appeals to the First-tier (Social Security) Tribunal. The Paper states:

“We consider that these issues are of lower objective importance (because they are essentially about financial entitlement), than, for example, fundamental issues concerning safety or liberty,” (para 4.217).

In coming to this conclusion the Paper says that the government has taken into account:

  • the fact that the accessible, inquisitorial, and user-friendly nature of the tribunal means that appellants can generally present their case without assistance;
  • the appellant is only required to provide short reasons for disagreeing with the decision in plain language;
  • in many cases, decisions are overturned simply because the tribunal is able to elicit additional information which was not available to the Department for Work and Pensions;
  • that help and advice are available from a number of other sources, including Job Centre Plus, the Benefits Enquiry Line and, in some cases voluntary sector organisations, such as AgeUK, the Child Poverty Action Group, Disability Alliance and the Free Representation Unit. The Paper says the presence of these alternatives makes the provision of legal aid in these cases less likely to be justified (4.219).

Note: The Director of Policy at Disability Alliance has written to the minister stating that the implication in para 4.219 of the Paper that charities like Disability Alliance are available to help people in the advent of Legal Aid cuts is “incorrect and extremely misleading” and has asked for the statement to be withdrawn.

The section on welfare benefits in the Paper concludes:

“We therefore consider that legal aid is not justified in these cases because the issues are not generally of sufficiently high importance to warrant funding, and the user-accessible nature of the tribunal will mean that appellants are able to represent themselves. In addition, they may also have access to help and advice from other sources in order to help them resolve their issues without recourse to publicly funded legal assistance. Having taken all these factors into account, we propose to exclude all welfare benefits issues from the scope of civil legal aid,” (4.219).

Welfare benefits and onward appeals to the higher courts

According to the Impact Assessment, legal aid will be removed for onward appeals in relation to the provision of welfare benefits to the Court of Appeal and the Supreme Court, and references to the European Court of Justice as representation in the higher courts for welfare benefits will no longer be in scope (IA: Scope - Annex 2: Summary of Current and Proposed Positions, page 37).

Funding for judicial review will continue to be available in benefits cases (4.224).

Reaction to the Paper so far

Who you gonna call? - Welfare - by Jane Pritchard, the head of domestic violence and housing at Blacklaws Davis LLP and a specialist in welfare benefits advice: in the Solicitors’ Journal, 22 November 2010.

“If the recommendations made by the green paper are introduced, all current advice provision for welfare benefits would be abolished. There would be no assessment of merit or means for the purposes of establishing whether an appellant should be represented in bringing an appeal.

Few private sector solicitors still offer specialist welfare benefits advice. The recent procurement round saw the welfare benefits contracts transferred to the not-for-profit sector.

Their survival has been dependent on funding from other sources including local government. That funding appears largely now to have been withdrawn.

Therefore removal of legal aid funding as well means the whole specialist advice network disappears.

The vast majority of clients who seek assistance from a solicitor or adviser with an appeal are incapable of pursuing the process alone.

As identified in the green paper, these are the neediest groups, often disabled and highly vulnerable. The law and its application in this area is complicated, often involving concepts of Human Rights Act breaches or technical interpretations of regulation.

DWP statistics show that, from October 2008 until February 2010, 40 per cent of tribunal appeals against the new benefit assessment of ‘fit to work’ for employment and support allowance were successful. We know the DWP are getting it wrong.

The reality will be a large-scale reduction in the number of appeals brought and therefore large reductions in the number of applicants successfully, and rightly, claiming benefits they are entitled to – benefits which are often their only means of survival.”

Whitehall proposals ignore people who could fill civil legal aid void’ by Eduardo Reyes, in the Law Gazette, 25 November 2010

“LawWorks chief executive Rebecca Hilsenrath identifies key ways in which pro bono provision will be damaged by the proposed cuts to legal aid. In addition to damaging the interests of the most vulnerable in society, she says: ‘Collaterally… the proposals also threaten the legal provider base, [specifically] the viability of the frontline of not-for-profit advice agencies, the capacity of many law firms and the existence of certain legal specialisms.’

That setup, Hilsenrath explains, is central to the provision of pro bono advice: ‘The delivery and coordination of pro bono, where so much has been achieved in the last decade, depends heavily on the existence of a strong frontline of not-for-profit advice agencies, on the reach of law firms, and on the continued supply of lawyers who are specialists in the area of law involved.”

'The cuts to legal aid are closing the law to all but those with money' by Jonathan Freedland in the Guardian, 16 November 2010:

“What of those who get mired in debt? The government's own green paper concedes that this is a problem that afflicts the weakest in our society, with many of the indebted "ill or disabled". You might have thought that grounds for keeping legal aid available. Not a bit of it. Only those whose "home is at immediate risk" will get help. The rest, drowning in credit card debts – and remember the predatory interest rates some cards charge – or surrounded by loan sharks, will have to fend for themselves.

No worries, says the green paper. The importance of the issue is "relatively low" and there are "many [other] sources of help", citing assorted helplines and organisations. Trouble is, those other sources are about to dry up. The government refuses to say if it will renew the £46m budget for the Financial Inclusion Fund, which has paid for around 500 debt advisers across the country. Unable to guarantee their wages, several organisations have had to begin redundancy talks with those counsellors.

Where else could the indebted turn? Citizens Advice Bureaux and local law centres might seem the obvious answer, but they rely for funds on local authorities. And guess what: councils' budgets are being slashed too. This is becoming one of the motifs of the age of austerity: cuts that might look reasonable in a vacuum are, in fact, part of a landscape in which one door after another is being slammed in the face of those in need.”

'Legal aid cuts lack public support' by Steve Hynes (Director of LAG), in the Guardian, 16 November 2010

“Perhaps the most stunning aspect of yesterday's announcement is the government's complete lack of strategic grasp of the importance of civil legal aid services. The prime minister seems very happy to talk about the "big society", but his secretary of state for justice wants to cut the legal advice services that can help bring this policy to life. These proposed cuts will fall heavily on Citizen's Advice and other community-based legal advice services such as law centres, at a time when they are already facing cuts from other arms of central and local government. A telephone and internet service is no solution. LAG's research found that the people who need civil legal advice services are the least likely to be able to use the telephone and internet. They are the most dependent on locally based solicitors and not-for-profit agencies to get the help they need.

LAG would suggest that the essential civil legal bedrock of a civilised society is laws that protect people from injustice. For such laws to be effective, people must have the means to enforce them. Cutting off people from the legal means of redress when things go wrong in their lives is unjust and only helps create more human misery.”

Some Facts and Figures

(i) The Department of Work and Pensions and official errors

The benefit system encompasses over 27 different benefits and a total caseload of around 20 million people.

In 2009-10 the Department for Work and Pensions (the Department) paid out £148 billion in benefits and pensions to its customers.

The overall rate of administrative error within the Department led to £1.1 billion overpayments in 2009-10 (0.7 of a per cent of expenditure) and underpayments of £500 million (0.3 of a per cent of expenditure). The scale of incorrect payments each year has led the Comptroller and Auditor General to qualify the Department’s resource accounts for over 20 years.

Source: 'Minimising the cost of administrative errors in the benefit system', National Audit Office (22 November 2010).

(ii) Rise in the number of benefit and tax credit enquiries to Citizens Advice Bureaux in England & Wales

In the period 1 July to 30 September 2009 a total of 521,799 enquiries were received on benefits and tax credits. This increased to 560,615 for the period 1 July – 20 September 2010, giving an overall increase of 7%.

Problems with disability benefits continued to show the steepest rise.

  • Employment and Support Allowance problems jumped by 41% (from 36,242 in Q2 09/10 to 51,240 in Q2 10/11);
  • Disability Living Allowance problems rose 12% (from 102,324 in Q2 09/10 to 114,138 in Q2 10/11);
  • Working and child tax credit problems rose by 13% (from 47,509 in Q2 09/10 to 53,851 in Q2 10/11)

Source: ‘Increase in housing problems raises spectre of homelessness and debt' by Jill Insley in the Guardian, 24 November 2010.

(iii) The number of judges sitting in social security appeals - first-tier tribunals

There are 73 full-time legally qualified judges including 7 regional tribunal judges covering Great Britain. There are also 647 part-time judges. In 2009-10 there was a total of 62,000 judicial sitting days.

Appellants at social security appeal hearings are represented in around 40 per cent of cases, although this varies significantly by case type. The hearings usually last around forty minutes, or one hour where an interpreter is needed.

Source: Genn, H., Lever, B. and Gray, L., Tribunals for Diverse Users, DCA research series 01/06, Department for Constitutional Affairs, January 2006 and Annual Statistics for the Tribunals Service - 2009-10

(iv) Appeals on the Upper Tribunal

The Upper Tribunal (Administrative Appeals Chamber) has a performance target that all work is disposed of within 30 weeks of receipt (75% target) this is divided into appeals (20 weeks) and applications for permission to appeal (10 weeks). This was met in 92% of cases for 2009/10.

Source: Annual Statistics for the Tribunals Service, 2009-10

(v) Increase in the number of social security appeals received by the Tribunal Service

In 2009-10 a total of 339,200 Social Security and Child Support appeals were received by the Tribunal Service, an increase of 40% on 2008-09 and 48% on the 2007-08 figure.

A large amount of the increase is for appeals associated with Incapacity Benefit (IB) and Employment Support Allowance (ESA). The numbers of receipts for those types of appeal doubled in the last year. IB/ESA now account for just over half of all appeals received by the Tribunal Service.

Source: Annual Statistics for the Tribunals Service - 2009-10

(vi) How long do claimants have to wait for their appeal to be listed by the Tribunal Service?

There is a performance target of 14 weeks for the first hearing to take place within receipt of the appeal at the Tribunal Service from the DWP, local authorities and HM Revenue & Customs; this was met in 59% of cases in 2009/10, compared to 78% in 2008/09 and 87% in 2007/08.

Source: Annual Statistics for the Tribunals Service, 2009-10

(vii) Success rate at appeal

According to figures produced by the DWP the overall success rate for oral hearings attended by the claimant was 54.4 per cent, whereas for hearings attended by the claimant and a representative it was 66.6 per cent. Quarterly Appeal Tribunal Statistics: March 2006. If no one attended or the claimant opted for a ‘paper hearing’, the success rate went down to 18.7 per cent.

The figures produced by the Ministry of Justice only give the outcome. According to the ‘Annual Statistics for the Tribunals Service, 2009-10’ the overall success rate for appeals was 40%.

Case Law

Human Rights Challenges before the House of Lords and the European Court of Human Rights

Two Human Rights challenges dismissed by the House of Lords have now been considered by the European Court of Human Rights (‘ECtHR’). In both cases the claimants alleged that an aspect of social security legislation was discriminatory in its effect under art 14 of the European Convention on Human Rights, when read with art 8 or art 1 of protocol 1.

In Carson and Others v United Kingdom (Application no. 42184/05), March 16, 2010, [2010] ECHR 338; 51 EHRR 13 (Grand Chamber), Ms Carson had emigrated to South Africa which meant that when she became entitled to a United Kingdom retirement pension in 2000 she was not entitled to the annual increases and therefore the amount of pension paid would remain frozen at the 2000 rate. Ms Carson's case is typical of over 400,000 United Kingdom pensioners living abroad in countries which do not have reciprocal treaty arrangements under which cost of living increases are payable. Ms Carson complained that as she had paid the same national insurance contributions as a United Kingdom resident she should receive the same pension. She claimed her treatment was incompatible w art 14 of the ECHR.

When the case was heard by the House of Lords in R (Carson and Reynolds) v Secretary of State for Work and Pensions [2005] 2 WLR 1369, HL, their Lordships (Lord Carswell dissenting) were content to assume that being ordinarily resident in South Africa was a personal characteristic but dismissed the claim because:

  • by moving abroad Ms Carson had put herself outside the primary scope and purpose of the UK social security system;
  • national insurance contributions did not have an exclusive link to retirement pensions;
  • the position of a non-resident was materially and relevantly different to that of a UK resident.

The Grand Chamber, like the House of Lords, was unwilling to find an analogy between applicants who live in a "frozen pension" country and British pensioners resident in countries outside the United Kingdom where up-rating is available through a reciprocal agreement holding:

  • the words “other status” in art 14 could include a distinction drawn on the basis of a place of residence;
  • social security systems were essentially national in character [86]);
  • the payment of National Insurance contributions was insufficient on its own to place the applicants in a relevantly similar position to all other pensioners, regardless of their country of residence (at [84]-[85]);
  • the applicants were not in a relevantly similar position to pensioners living in countries with which the UK had concluded a bilateral agreement providing for up-rating.

The Court therefore concluded, by eleven votes to six, that there had been no discrimination and therefore, no violation of art 14 of the Convention taken in conjunction with art 1 of protocol No. 1.

Comment: In the course of its judgment, the Court made the following comment on its general approach to discrimination complaints in a welfare or pensions system:

“The Court observes at the outset that, as with all complaints of alleged discrimination in a welfare or pensions system, it is concerned with the compatibility with Article 14 of the system, not with the individual facts or circumstances of the particular applicants or of others who are or might be affected by the legislation (see, for example, Stec and Others, cited above, §§ 50-67; Burden, cited above, §§ 58-66; Andrejeva v. Latvia [GC], no. 55707/00, §§ 74-92, ECHR 2009 ...). Much is made in the applicants' submissions and in those of the third party intervener of the extreme financial hardship which may result from the policy not to up-rate pensions and of the effect that this might have on the ability of certain persons to join their families abroad. However, the Court is not in a position to make an assessment of the effects, if any, on the many thousands in the same position as the applicants and nor should it try to do so. Any welfare system, to be workable, may have to use broad categorisations to distinguish between different groups in need (see Runkee and White v. the United Kingdom, nos. 42949/98 and 53134/99, § 39, 10 May 2007). As in the cases cited above, the Court's role is to determine the question of principle, namely whether the legislation as such unlawfully discriminates between persons who are in an analogous situation,” (para 62).

Having reiterated that awide margin is usually allowed to the Contracting State when it comes to general measures of economic or social strategy, the passage above makes it clear that the Court’s role in discrimination cases is limited to insisting that when distributing public money in the form of social security benefits the state is obliged to treat like cases alike. However, the scope of the margin of appreciation granted to the Contracting State will vary according to the circumstances, the subject matter and the background. The following case is a reminder that the State will be expected to put forward weighty reasons to justify a difference in treatment based on a core value under art 14.

In J.M. v the United Kingdom (Application no 37060/06), [2010] ECHR 1361, September 28, 2010, (Fourth Section, Chamber), M alleged that she had been the victim of discrimination on the basis of sexual orientation in the assessment of her financial liability under the Child Support legislation. Under the maintenance assessment and the rule governing housing costs, her new partner was treated as a separate person. It was argued that these costs should be assessed on the same basis as if she were living with a heterosexual partner, as to do otherwise would infringe her rights under articles 8, 14 and the 1st protocol of the ECHR.

In Secretary of State for Work and Pensions v M [2006] UKHL 11; [2006] 1 FCR 497, [2006] 2 AC 91, their Lordships held (Baroness Hale dissenting) that M’s rights under the ECHR had not been infringed as (i) M’s right to family life with her children had not been affected (ii) the facts did not fall within the ambit of A1P1 and (iii) the implementation of the Civil Partnerships Act had been within the government's margin of appreciation.

The ECtHR held that:

  • the facts fell within the ambit of A1 of P1 for the purposes of Article 14 given the State's active role and the fact that the legislation compelled an absent parent to pay money to the parent with care;
  • M could compare her situation to that of an absent parent who had formed a new relationship with a person of the opposite sex. The only point of difference between her and such persons was her sexual orientation; in all other relevant respects they were similar.
  • as the purpose of the MASC Regulations was to avoid placing an excessive financial burden on the absent parent in their new circumstances, it was not readily apparent why M’s housing costs should have been taken into account differently than would have been the case had she formed a relationship with a man;
  • since the Court had concluded that sufficient justification was lacking in 2001-2002, it followed that the reforms introduced by the Civil Partnership Act some years later had no bearing on the matter.

Therefore there had been a violation of arti 14 of the Convention in conjunction with A1 of P1. M was awarded 3,000 euros in recognition that she had experienced “a certain level of frustration and distress at the non-recognition of her relationship with her partner.” The Court said it did not find it necessary to decide whether the facts of the case also fell within the ambit of art 8.

The following case from Scotland illustrates the difficulties facing welfare benefits claimants seeking to bring Human Rights challenges before the domestic courts.

In SM v Advocate General for Scotland [2010] ScotCS CSOH_15, February 16, 2010, Lord Brodie, the child J had suffered from severe health problems since birth and had been diagnosed with Prader Willi like syndrome. While he was able to sit up at about ten months, he had not materially progressed beyond this stage. An assessment was made that once J had attained the age of 18 months he would never be able to walk. When J claimed Disability Living Allowance (DLA) he was refused an award of the mobility component because under section 73 (1) (a) and (d) of the Social Security Contributions and Benefits Act 1992 (‘the 1992 Act), the higher rate of the mobility component is restricted to people aged three years and over. The component was subsequently awarded from J’s third birthday.

It was argued that there was discrimination in respect of J's enjoyment of his rights in terms of art 8 of and art 1 of protocol 1 to the ECHR because the result of applying a lower age limit of three as an absolute bar to claiming the mobility component was to exclude the cohort of disabled children of whom it could be said at age two had no realistic prospects of walking in the foreseeable future, when this had a disproportionate effect on children such as J.

The Court was told that the 1992 Act had been amended by section 67 of the Welfare Reform and Pension Act 1999, which had reduced the age from five to three following advice from the Disability Living Allowance Advisory Board ("DLAAB"). The DLAAB report had agreed that, whilst age two and a half years was the point at which most children are able to walk independently, many remained reliant on a pushchair until the age of four, and between those ages development of walking ability would vary from child to child. Some 80 % of children who, for whatever reason, could not walk at the age of two and a half can by the age of four. Accordingly if awards were made from age two, entitlement would be invalidated by changes of circumstances within just a few months in the great majority of cases. It was for this reason that age three was chosen as a ‘generous compromise’.

Dismissing J’s petition for judicial review, the Court held that the age condition in the 1992 Act as amended was justified, having regard to the following factors:

  • the ground of distinction was age, which is a ‘second category ground’ (Carson), such that the difference in treatment between those disabled children who were three or over and those who were younger did not amount to art 14 discrimination, unless it was manifestly without reasonable foundation (Stec).
  • the government had relied on the DLAAB report when determining how the 1992 Act should be amended;
  • the use of a lower age limit was rationally connected to the aim of avoiding short-term payments in respect of disabled children who were eventually able to walk;
  • the age condition was an example of a "bright line" rule which could produce hard cases and still be justified (R (RJM) v Secretary of State for Work and Pensions [2009] 1 AC 311, HL considered):

“…. defining the parameters of a social security benefit by, for example, fixing age limits, is a matter for Parliament and where the criteria adopted to identify these parameters in the relevant statute do not involve sensitive or "suspect" grounds such as sex, race or colour, the court, in determining whether the statute is compatible with the European Convention on Human Rights, must recognise that while its role is to safeguard rights that role does not extend to review of what are essentially policy choices. Here Parliament, with the benefit of appropriate expert advice, has fixed the lower age limit for entitlement to the mobility component of DLA at three years. Having regard to what was advanced by the respondent in justification, I cannot say that that was an irrational decision or that it was in pursuit of an illegitimate aim or that it was disproportionate in its effect. I do not find it be incompatible with article 14, or any other provision, of the Convention” (at [38]).

Comment: The Court also held that art 8 was not engaged on the basis that J did not have a personal autonomy which could be infringed as he was entirely dependent on his parents. An appeal will be heard in the Inner House of the Court of Session in this case.

Cases to watch

SM v Advocate General for Scotland - see above.

Humphreys v HM Revenue and Customs - on whether payment of child tax credit to principal carer only is discriminatory. Permission to appeal was given by the Supreme Court in October 2010. Mr Humphreys, who had separated from the mother and was on Income Support, claimed he was the victim of indirect sex discrimination, contrary to arti 14 of the ECHR. In the course of its judgment [2010] EWCA Civ 56, the Court of Appeal said that ECtHR case-law showed that the fact that the discrimination was on the ground of a “core” or “primary” ground did not of itself require the court to apply a more intensive scrutiny in the context of a general measure of social policy. The Court of Appeal said this must be even more so where the discrimination was indirect rather than direct (at para [50]).

Stewart v Secretary of State for Work and Pensions - on whether the eligibility rule in the Funeral Expenses scheme, which requires the claimant to be in receipt of a ‘qualifying benefit’ in order to be considered for a funeral payment, discriminates against prisoners. Permission to appeal was given by an Upper Tribunal judge and the case has been given a trial window of 08-Dec-10 to 08-Apr-11.

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