2012 06 Welfare Benefits

Sunday 1 July 2012

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Case law

HG v Secretary of State for Work and Pensions (SPC) [2011] UKUT 382 (AAC): This concerned a Polish claimant, HG, who came to live in the UK with her daughter, Mrs D, and the daughter’s British husband. Although the daughter worked, Mrs G’s Pension Credit claim was refused because the daughter had dual Polish and UK nationality. Judge Jacobs adopted the same approach above, i.e. that whilst dual nationality prevented her daughter from relying on Directive 2004/38 because she was residing in the member state of which she was a national, hence not exercising EU treaty rights, the EEA Regulations 2006 were worded more generously, such that Mrs G could rely on her daughter’s status as a ‘qualified person’. (Click here for trascript).

Secretary of State for Work and Pensions v KP (JSA) [2011] UKUT 241 (AAC): The UT dismissed an appeal where an A8 national started work in January 2009 and applied for a Worker Registration Certificate in April 2009, with a certificate being issued in May 2009. Judge Ward dismissed the claimant's JSA appeal but gave leave for him to appeal to the Court of Appeal on the question of whether a worker registration certificate was retrospective to when employment began. (Click here for transcript).

Humphreys v Revenue and Customs [2012] UKSC 18 (click here for transcript): The case concerned a claimant who was the father of two children. Between January 2004 and December 2005, both children lived with their mother but retained substantial contact with the claimant, spending most weekends and half of all school holidays with him. The claimant applied for CTC, but HMRC determined that the mother had main responsibility for the children and the claimant's application was rejected. The CTC was paid solely to the mother. The claimant appealed arguing that the legislative scheme breached article 14 when read with article 1 of the ECHR in that it indirectly discriminates against men because, on the whole, fathers are more likely than mothers to have secondary, but nonetheless significant, responsibility for the care of their children. The Supreme Court unanimously dismissed the appeal. The Court said the test for r justifying discrimination in the context of state benefits is that set out in Stec v United Kingdom (2006) 43 EHRR 1017 - which held that the court will generally respect the legislature’s policy choice unless it is ‘manifestly without reasonable foundation’. The Court also said that in the context of state benefits, under the ECHR “…the normally strict test for justification of sex discrimination …gives way to the ‘manifestly without reasonable foundation’ test”. Lady Hale added that this does not mean, however, that the justifications put forward will escape careful scrutiny by the courts. On the question of whether the rule is justified the Court noted that the claimant's main complaint was that the scheme left him with nothing to provide for the needs of his children when they stay with him. On the one hand, the HMRC pointed out that the aim of the scheme was to reduce child poverty and CTC was paid to the main carer on the expectation that that person incurred most of the expenditure in looking after the child/children. Splitting the CTC between two carers of modest means could result in neither of them being able to provide for the children's needs. The Court reasoned that the no-splitting rule was a reasonable rule for the state to adopt and that the indirect discrimination in this case was justified:

"If funds are targeted at one household, it is likely that a child living in that household will be better off than he or she would be if the funds are split between two households with modest means. The state is, in my view, entitled to conclude that it will deliver support for children in the most effective manner, that is, to the one household where the child principally lives. This will mean that that household is better equipped to meet the child's needs. It also happens to be a great deal simpler and less expensive to administer, thus maximising the amount available for distribution to families in this way." (At para [29]). … It is also reasonable for a government to regard the way in which the state delivers support for children, and indeed for families, as a separate question from the way in which children spend their time. (At para [31]).

DWP Guidance

In Cases C-424/10 Ziolkowski and C-425/10 Szeja and Others v Land Berlin the CJEU held that a union citizen, who has been resident for more than five years in a Member State on the sole basis of the national law of that Member State, cannot acquire a right of permanent residence if during that time s/he was not exercising treaty rights in accordance with Article 7(1) of the Citizens' Directive (i.e. as a worker, jobseeker, student etc.) The DWP has issued guidance on the case in DMG Memo 18/12. – Permanent right to reside – Decision by the CJEU (April 2012) (click here for link to DWP website). This advises that in order for a period in the UK to count towards the period of five years needed to qualify for the permanent right to reside in the UK, the individual throughout that period must satisfy the conditions set out below: That the person.

  • was a worker or self-employed person in the host Member State or
  • retained worker status in the host Member State whilst temporarilyincapable of work or whilst involuntarily unemployed and seeking work or
  • was both self-sufficient and had comprehensive sickness insurance forthemselves and their family members or
  • was a student who was both self-sufficient and had comprehensivesickness insurance for themselves and their family members or
  • was a family member accompanying or joining a person who satisfied the above conditions and
  • that person had leave to enter and remain under UK domestic law and complied with any conditions of that leave. (Note: this does not include temporary admission).

The DWP has issued new guidance to local authority housing benefit departments providing an update on the household benefit cap due to be introduced from April 2013. The guidance confirms that (i) the cap will be set at £500 per week for couples and lone parents and at £350 per week for single adults and (ii) the benefit cap will be delivered, from April 2013, via local authorities through deduction from housing benefit (HB). In the future it will be delivered as part of universal credit. For link to HB/CTB General Information Bulletin G6/2012 (June 2011). (Click here for link to DWP website).

The DWP has issued revised guidance on the right to reside of a primary carer of a child in education based on Reg (EEC) 1612/68, art 12; Ibrahim v London Borough of Harrow, Case C-310/08, & Teixeira v London Borough of Lambeth, Case C-480/08 and advised that there is no requirement for a common period of work and education. Memo DMG 21/12 ‘Right To Reside - Parent and Primary Carer of a Child in Education in the UK’(May 2012) (click here for link). This is contrary to what was said in the previous Memo DMG 30/10 (May 2010), namely that:

"For the parent and primary carer to derive a right to residence from Article 12, there must be some common period where both the migrant worker was employed in the UK and the child of that migrant worker was in general education in the UK."

The revised guidance states that there is no requirement for a common period of work and education. Paragraphs 7 and 8 of DMG 21/12 advises:

"With immediate effect, when DMs [decision makers] are considering whether a claimant has an EU right to reside derived from the rights of a child in education in the UK, they should not require that there has been a period when the EEA national or Swiss parent of the child was working and the child was in education at the same time.

The requirement is that the child must have been resident in the UK at the time when an EEA national or Swiss parent was exercising a right to reside in the UK as a worker. That is sufficient to trigger the EU right of that child to be installed in the general education system of the UK which in turn means that the parent and primary carer has an EU right to reside in the UK in order to render the child’s right effective."

Policy Issues

On 15 June 2012 the DWP published draft universal credit and benefit cap regulations. In addition, the Social Security Advisory Committee (SSAC) issued a call for evidence on the draft regulations in which it says that it is particularly keen to examine the coherence of the package of regulations in terms of implementation, and whether there are gaps and/or unintended consequences that need to be addressed. In its press release of 15 June 2012 the SSAC says it would welcome views on the following specific areas:

(a) the rules and arrangements for EU migrants;

(b) support for mortgage interest;

(c) self employment and the minimum income floor;

(d) the implications of a substantial shift to online claiming;

(e) the date of claim and backdating;

(f) the payment period;

(g) the links with in-work rules, for example on the grace period;

(h) the potential impact of the cap across a range of policy areas other than social security; and

(i) the implications for the monitoring and evaluation of the impact of the cap and any necessary areas for mitigation.

The deadline for responses is 27 July 2012.

For the link to the SSAC’s Press Statement (click here).

The draft regulations are available on the DWP website (click here).

DWP Research Report 798: ‘Monitoring the impact of changes to the Local Housing Allowance system of housing benefit: Summary of early findings’ was published on 15 June 2012. It represents the first output from the independent evaluation commissioned by the government of changes to local housing allowance (LHA) and housing benefit (HB) in the private rented sector. The findings include the following:

  • just over two-thirds of claimants had a ‘shortfall’ in the sense that their LHA was less than their rent, with new claimants (79 per cent) more likely to have a shortfall than existing claimants (65 per cent);
  • the most commonly cited actions to make up the shortfall were to economise on essential (42 per cent) or non-essential (36 per cent) items in their household budget. Three out of ten claimants had drawn on their other benefits (such as Jobseeker’s Allowance (JSA)). And over a third had borrowed money from family or friends to make up the shortfall;
  • the most common response to the arrears by landlords (or their agents) was to ask for the money to be paid back gradually over time (48 per cent). Fifteen per cent of claimants in arrears reported that their landlord (or the agent) had served them, or had threatened to serve them, with a notice to quit. A further eight per cent said their landlord had verbally asked them to leave.
  • a quarter of all LHA landlords stated that they had undertaken at least one of the following actions – to evict tenants, not to renew or to terminate tenancies – because of the effect of the LHA measures on tenants’ ability to afford the rent; and
  • around a third of all LHA landlords when asked about their plans for the future actions stated that they would either ‘consider’ or ‘planned’ ceasing to let to HB/LHA tenants in the next 12 months.

DWP research report 798 is available from the DWP website (click here).


The Immigration (European Economic Area) (Amendment) Regulations 2012 (2012/1547) were published on 19 June 2012. According to the Explanatory Memorandum the Regulations give effect to the judgments of the ECJ in the cases of Chen (C-200/02), Ibrahim(C-310/08) and Teixeira(C-480/08), Lassal(C-162/09), Dias(C-325/09), McCarthy (C-434/09) and Ziolkowski and others (C-424/10 and 425/10). (Click here for link to legilsation).

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