2013 02 Welfare Benefits

Friday 1 March 2013

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London Council’s research highlights potential disadvantage in comparison to boroughs where cap to be rolled out over summer

On 1 February 2013, Inside Housing reported that the four boroughs forced to trial a £500-a-week benefit cap will spend their whole share of an emergency hardship fund (discretionary housing payments (DHPs)) within five months unless they move people to cheaper areas or obtain more funding. Inside Housing reports research by London Councils as showing that the four boroughs, Bromley, Enfield, Croydon and Haringey will receive £8.16m in DHPs in 2013/2014. However, London Councils estimate that the cost of ‘topping up’ rents will be £22.4m and, if the councils were to top up rents completely, the DHPs would run out in little more than four months. Accordingly, this puts the local authorities in the pilot scheme at a disadvantage in comparison to those boroughs where the benefit cap will be phased in over the summer of 2013.

For more information, see "Benefit pilots in funding crisis" at insidehousing.co.uk (click here for link).

Most problems with the work capability assessment process lie firmly within the DWPsays Commons Public Accounts Committee

In a new report published 8 February 2013, the Commons Public Accounts Committee examined the DWP's management of its contract for medical services. In the summary the Report says:

"The Department for Work and Pensions (the Department) relies on medical assessments to help its decision makers reach an appropriate decision on a claimant's entitlement to a range of benefits. Work Capability Assessments are used to assess new applications for Employment and Support Allowance and to reassess existing recipients of Incapacity Benefit. This is damaging public confidence and generating much criticism of ATOS, but most of the problems lie firmly within the DWP."

The Report highlights the following issues:

  • the fact that the DWP's decisions were overturned in 38% of appeals casts doubt on the accuracy of its decision-making, and yet the DWP seems to be unduly complacent about the number of decisions upheld by tribunals;
  • the WCA process has a disproportionate impact on the most vulnerable claimants, and the standardised 'tick-box' approach fails to adequately account for rare, variable or mental health conditions;
  • the DWP's dependence on one supplier - Atos Healthcare - to undertake all medical assessments and its inability to develop a competitive market for medical assessment providers has left it vulnerable, with limited leverage to remedy poor performance.

The Public Accounts Committee's Report on the "Department for Work and Pensions: Contract management of medical services" is available from the Parliament website (click here for link).

New Gingerbread and Children's Society Briefing on Universal Credit

On 11 February 2013, a new brief was published by Gingerbread and the Children's Society called 'Single parents and universal credit: singled out?', contains the following key findings:

  • almost all 2 million single parent households will be affected by the introduction of universal credit;
  • 200,000 more single parent families will lose out under the new system than will gain - 900,000 will lose out compared to 700,000 who will gain;
  • around 240,000 single parents under the age of 25 may lose around £780 per year as a result of reductions in the level of their personal allowances under universal credit;
  • 25,000 single parents will be affected by the loss of the severe disability premium - losing up to £3,035 per year - and those on the enhanced disability premium will lose a further £770 per year.

The briefing note "Single parents and universal credit: singled out?" is available from the gingerbread website (Click here on link).

Iain Duncan Smith asks DWP officials to look again at how 'bedroom tax' affects disabled people and carers

On 14 February 2013, the chief executives of seven charities - Carers UK, MS Society, Mencap, Macmillan Cancer Support, Disability Rights UK, Carers Trust and Contact a Family - wrote an open letter to Chancellor George Osborne and Mr Duncan Smith asking for disabled people and carers to be exempted from the size criteria restrictions which are due to come into force in April 2013 (click here for link to letter).

Speaking to the BBC on 21 February 2013 the Secretary of State for Work and Pensions Iain Duncan Smith said he understood the concerns of the seven charities and that he had already issued an instruction to DWP officials asking them to look again at how the new policy affects those groups (click here for story on BBC website).

However, on the same day the DWP press office tweeted -'No change in spare bedroom policy. As with all reforms, we will monitor closely as it comes in this April.' (click here for link).

Fom more information, see 'Government backtracks on pensioner bedroom tax' from Inside Housing 22 February 2013 (click here for link).

Camden Council to move more than 700 families out of London in response to benefit cap

On 14 February 2013, the Guardian reported Camden Council as saying that it will be contacting 761 households because of the benefit cap. The Council is reported to be looking for affordable properties as far afield as Bradford, Birmingham and Leicester, and says that it has been forced to act because whilst rents of three-bedroom properties in Camden are at least double the government's maximum welfare payment of £340 a week for such properties in north London, families with three children will have a £175 a week limit for housing benefit due to the cap.

For further details see Camden council plans to move 761 poor families from London on the Guardian website (click here).

Government plans tighter restrictions on EU nationals’ access to benefits

According to Secretary of State for Work and Pensions Iain Duncan Smith.

Speaking on the BBC's Andrew Marr Show on 17 February 2013, the government is planning tighter restrictions on EU nationals' access to benefits.

Mr Duncan Smith disclosed that he wants some EU citizens to be entitled to benefits only if they have been resident in the UK for at least a year, as opposed to the current three months.

Mr Duncan Smith indicated that he was considering making the habitual residence test harder to satisfy and restricting eligibility to child benefit for EU nationals with non resident children.

For more details see "Iain Duncan Smith prepares for 'big battle' with EU over benefits" on the BBC News website (click here for link).

Legal aid for applications to First-tier Tribunal for permission to appeal on a point of law.

On 20 February 2012, the Civil Legal Aid (Preliminary Proceedings) Regulations 2013 (SI.265/2013) were published (click here). These confirm that in cases relating to welfare benefits applications to the First-tier Tribunal for permission to appeal on a point of law to the Upper Tribunal will not be within the general scope of civil legal aid.

NB: This means that it is only when the appellant has appealed without help and reaches the second stage when the application to appeal can be renewed before the Upper Tribunal that legal aid will be available in the form of advice and assistance.

Rent arrears in pilot of housing benefit direct payments at 12 per cent, says Southwark Council

According to Southwark Council (which is one of the six local authorities involved in the DWP's Direct Payment Demonstration Projects) rent arrears in a pilot of housing benefit direct payments up to the end of December 2012 stood at 12 per cent, as opposed to a benchmark of 2 per cent for council tenants where housing benefit was paid to the landlord. Speaking to the Guardian on 20 February 2013, Councillor Richard Livingstone, cabinet member for finance in Southwark said that if the same levels of arrears were applied across the council, Southwark would face debts of roughly £14m on its annual rents receipts of £115m.

For further details see "Universal credit: more tenants face eviction and rent arrears" at the guardian website (click here for link).


In R (Stirling) v London Borough of Haringey [2013] EWCA Civ 116, (Sir Terence Etherton, Sullivan and Pitchford LJJ), the Court of Appeal considered a claim for judicial review of a local authority's decision on its council tax support scheme to come into effect from April 2013. The challenge was on the grounds that the consultation (which was required by Schedule 1A of the Welfare Reform Act 2012) was unfair. The Court rejected the argument that the consultation process was unfair because it did not mention other options which it had decided not to incorporate into its published draft saying that unlike some enactments, paragraph 3(1) of Schedule 1A prescribes a sequential process in which a draft scheme is prepared, and against that statutory context fairness does not require the Council in the consultation process to mention other options which it has decided not to incorporate into its published draft scheme. The Court also rejected the argument that the Council was required to draw consultees' attention to the publication, in October 2012, of the transitional grants scheme (which provides further central government funding to councils limiting, by prescribed amounts, the council tax contribution expected from those on a low income) holding that it was not required to do so. (click here for judgment).

In R (Reilly & Anor) v Secretary of State for Work and Pensions [2013] EWCA Civ 66, (Pill, Black LJJ and Sir Stanley-Burnton) the Court of Appeal has ruled that regulations creating government back-to-work schemes are unlawful. The case concerned Ms Reilly who had participated in the 'sector-based work academy scheme' against her wishes, working for two weeks in a branch of Poundland, and Mr Wilson who had refused to participate in what for him was the compulsory Community Action Programme, under which he was required to undertake up to six months unpaid work for up to 30 hours per week, a refusal that led initially to the imposition of sanctions in the form of depriving him of his jobseeker's allowance for six months.

The Court held that the regulations creating the back-to-work schemes (the Jobseeker's Allowance (Employment, Skills and Enterprise Scheme) Regulations 2011) failed to provide a 'prescribed description' of the schemes as required by section 17A of the Jobseekers Act 1995. As a result, the regulations were unlawful and were quashed. The Court agreed with the High Court that the DWP letters warning claimants of potential sanctions failed to comply with the statutory requirement that claimants must be made aware of their obligations and of the circumstances in which, and the manner in which, sanctions will be applied. The Court rejected the appellant's human rights argument holding that the back-to-work schemes, properly made under theJobseeker's Act 1995, would not engage article 4 of the ECHR (which prohibits slavery and forced labour). (Click here for judgment).

On the day of the judgment (12 February 2013) the Employment Minister Mark Hoban responded to the judgment in a written statement to Parliament (click here for link) in which he said:

"We are seeking permission to appeal against the Court of Appeal’s judgment and, if permission is granted, we will take our case to the Supreme Court. As we are currently seeking permission to appeal, claimants who have already served a sanction will not be able to appeal on the basis of the Court’s decision until our appeal is heard. We are considering a range of options to ensure we do not have to repay these sanctions. Today we intend to lay new regulations which will come into force immediately and enable us to continue to refer jobseekers allowance claimants to our employment schemes and to provide the best chance for people to find employment.'

On 21 February 2013 the Child Poverty Action Group (CPAG) wrote to the DWP asking it to correct guidance to Jobcentre Plus staff which incorrectly states that claimants are not entitled to appeal against sanctions on the basis of the Court of Appeal judgment. A copy of the letter can be found on CPAG's website (click here for link).

In Szpak v Secretary of State for Work and Pensions [2013] EWCA Civ 46, (Pill, Hughes and Rimer LJJ) the Court of Appeal considered whether a worker registration certificate was retrospective to the start of the employment it related to. The claimant, an A8 national, started work in January 2009 but did not apply for a worker registration certificate in April 2009; it was issued in May 2009. He then started work with another employer on 3 September 2009, applied for a worker registration certificate, which was issued on 17 September; this job ended on 31 January 2010. The Upper Tribunal had said that the claim for income-based JSA could only succeed if the worker registration certificate relating to the claimant's first employment was retrospective to when that employment started, so that he would have the necessary 12 months' continuous registered employment. After considering the legislative framework the Court concluded that a registration certificate when received had no retrospective effect as to the status of the employer as an 'authorised employer'. Its effect was exclusively prospective. The Court rejected the claimant's alternative argument that the penalty imposed on him in consequence of his late application for registration under the worker registration scheme was a disproportionate one and so incompatible with the European Union law principle of proportionality by reference to Lord Hope's speech in Zalewska v Department for Social Development (Northern Ireland) [2008] UKHL 67 in which he expressed the opinion that the consequences of a late registration were not disproportionate (click here for judgment).

In Secretary of State for Work and Pensions v RR [2013] UKUT 021 (AAC) (click here for judgment) a panel of three judges of the Upper Tribunal were convened to consider whether an EU national had a right to reside under Zambrano (C-34/09). The claimant is a German national. She first came to the United Kingdom in 1985. She was initially employed in casual work from 1985 to 1991, but then worked as a receptionist and general administrator in a health club for a period of some nine years between 1991 and 2000, earning around £100 per week. The claimant’s daughter was born on 1 June 2000. The father is a British national and the daughter acquired British nationality. The claimant’s relationship with her partner broke down and the claimant and her daughter returned to Germany in April 2002. The claimant worked in Germany from May 2003 until June 2006. The claimant returned to the UK in July 2006 intending to make the UK her home. She had received a modest legacy. She also held the offer of employment in the UK as a research assistant. This would involve working from home, where she would need a reliable internet connection in order to carry out her duties. The claimant could not find accommodation which would be suitable for her work, and she claimed and was awarded Jobseeker’s Allowance from 12 October 2006. In December 2006, the claimant was found to have breast cancer and required urgent medical treatment, and on 29 December 2006 she claimed income support. This was refused on the basis that the claimant could not establish a right to reside in the UK on the date of claim. The claimant appealed against this decision arguing that she should be treated as having a right to reside by virtue of being a worker under EU law because of her comprehensive work history in the UK, the presence of her daughter in education in the UK and because she had already passed the habitual residence test in respect of her claim to JSA. The claimant also stressed that the original job offer remained open to her and had not been withdrawn. A First-tier Tribunal allowed her appeal, but the Secretary of State appealed.

The Upper Tribunal held that the claimant had a right to reside on the basis that the claimant fell within the concept of a “worker” in Article 39 EC as a person exercising rights of free movement for the purpose of taking up an offer of employment actually made. In relation to Zambrano the Upper Tribunal agreed with a submission made by counsel for the Secretary of State that:

".. the principles established in the Zambrano case, as explained and elaborated in later cases, now make it plain that the establishment of a right to reside will only arise where all the persons upon whom the children who are Union citizens are dependent are third country nationals, with the consequence that refusal to grant a derivative right of residence flowing from the Union citizenship of the children would have the practical effect that the children would be required to leave the territory of the Union as a whole" (At paras [63], [66]).

The Upper Tribunal also considered arguments that the claimant had a right to reside as a primary carer of children in education under Article 12 of Regulation 1812/68 [now Article 10 Regulation (EU) No. 492/2011] as interpreted by Case-480/08 Teixeira. It was common ground that in order to be eligible for Income Support as an EU national based on an Article 12 right of residence, a claimant needs to show that: (i) s/he is the primary carer of a child; and (ii) the child was born in the UK and is in state education here; and (iii) s/he has worked as a migrant worker in the UK and (iv) that there is no need to show that the work occurred at the same time (or during a period) the children were in education (Cases C-147/11 and C148/11 Czop and Punkova, para [26]). The Upper Tribunal held that the British nationality of the child does not preclude reliance on Article 12. The Upper Tribunal also gave guidance on whether a claimant is precluded from relying on work undertaken in the UK due to any absences from the UK. At paras [80]-[81] the Upper Tribunal said:

“We have concluded that whether an absence from the host Member results in the loss of the ability to claim the integration rights in Article 12 will be a matter to be determined in the light of all the circumstances of each case. Where a person has established a habitual residence in another Member State for a substantial period, we consider that the right to rely on a period of employment in an earlier period of residence in order to trigger the rights in Article 12 will be lost. Where the absence can properly be characterised as temporary having regard to all the circumstances, the right will not be lost. We observe that the test will always arise by considering what has happened in the past rather than what might happen in the future.

The most relevant factors will be (a) the reasons why the person ceased to be resident in the host Member State in which the rights are being asserted; (b) the activities which the person undertook in the country to which he or she went, including economic activity in that country; (c) the roots which the person put down in the new country of residence; (d) the contact and its quality which the person retained with the host Member State; and (e) the length of absence from the host Member State. The longer the absence, the more difficult it will be to rely on the earlier period in work.”

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