2013 03 Welfare Benefits

Monday 1 April 2013

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Policy and Legislation

The housing benefit size criteria (aka the 'bedroom tax')

(a) Exemption for foster carers and armed forces personnel

In a written ministerial statement dated 12 March 2013, Iain Duncan Smith announced that foster carers and armed forces personnel will be exempt from the ‘bedroom tax’. Under the change foster carers and armed forces personnel who are living with their parents will be allowed an additional room. See the Housing Benefit (Amendment) Regulations 2013 (SI 665/2013) and the Rent Officers (Housing Benefit Functions) Amendment Order 2013 (SI 666/2013) which come into force from 1 April 2013.

Mr Duncan Smith's statement on housing benefit size criteria is available from the parliament website (click here).

SI 665/2013 and SI 666/2013 are available from legislation.gov.uk (click here and here).

See also the DWP guidance to local authority housing benefit departments in relation to changes - HB/CTB Circular A10/2013 (click here).

(b) DWP drops appeal to Supreme Court in Burnip, Trengove and Gorry

On 12 March 2013, ‘the Secretary of State let it be known that he would not be pursuing his appeal in the Supreme Court against the decision of Burnip, Trengove and Gorry v Secretary of State for Work and Pensions [2012] EWCA Civ 629, in which the Court of Appeal had held that the local housing allowance size criteria discriminated unlawfully against the three appellants on grounds of disability, by not including provision to meet their need for an additional room. This change of heart came 'out of the blue and was not conveyed to the claimants’ legal team (Irwin Mitchell, CPAG). Instead it simply appeared in a guidance document issued to local authorities in HB/CTB Circular U2/2013. The upshot is that from the date of the Court of Appeal judgment (15 May 2012), local authorities must allow an extra bedroom for children who are unable to share because of their severe disabilities. The Circular sets out the following guidance for assessing whether children are unable to share a bedroom:

"When a claimant says that their children are unable to share a bedroom, it will be for LAs to satisfy themselves that this is the case, for example, a claim is likely to be supported by medical evidence and many children are likely to be in receipt of Disability Living Allowance (DLA) for their medical condition. In addition LAs must consider not only the nature and severity of the disability, but also the nature and frequency of care required during the night, and the extent and regularity of the disturbance to the sleep of the child who would normally be required to share the bedroom. In all cases this will come down to a matter of judgement on facts of each individual case." (At para.7).

The Circular also states that the judgment:

  • applies to both local housing allowance size criteria and social rented sector size criteria (aka 'bedroom tax') due to be introduced from 1 April 2013;
  • does not extend to other circumstances, for example, where the claimant is one of a couple who is unable to share a bedroom or where an extra room is required for equipment connected with their disability.

For the link to HB/CTB Circular U2/2013 from the dwp.gov.uk website click here.

The DWP's decision to drop its appeal to the Supreme Court follows the Prime Minister's assertion on 6 March 2013, that those with severely disabled children would be exempt from the 'bedroom tax':

"The Prime Minister: Let us be absolutely clear that this is not a tax. Let me explain to the Labour party that a tax is when someone earns some money and the Government take some of that money away from them—that is a tax. Only Labour could call a benefit reform a tax increase. Let me be clear to the hon. Gentleman: pensioners are exempt, people with severely disabled children are exempt and people who need round-the-clock care are exempt. Those categories of people are all exempt, but there is a basic issue of fairness. How can it be fair that people on housing benefit in private rented accommodation do not get a spare room subsidy, whereas people in social housing do? That is not fair and we are putting that right. (Hansard 6 Mar 2013: Column 950)

The Child Poverty Action Group's Legal Officer, Mike Spencer, challenged the Prime Minister's assertion in a blog for the Nearly Legal site, pointing out that the government was in fact fighting CPAG in the courts to prevent any such exemption:

"The Prime Minister was almost certainly referring to the Court of Appeal’s decision in Burnip, Trengove and Gorry v Secretary of State for Work and Pensions. Mr Gorry, who is represented by CPAG, has two young daughters, one of whom has Downs Syndrome and the other spina bifida, the effect of which is that it is they are unable to share a room. … The Court found that this amounted to discrimination on grounds of disability contrary to Article 14 of the European Convention on Human Rights.

The irony behind David Cameron’s claim is that the government has appealed against Gorry to the Supreme Court and is urging local authorities to suspend payments for severely disabled children while the appeal is ongoing."

For the link to the Nearly Legal website (click here).

For comment see 'Bedroom tax: drastic u-turns, partial concessions, and spin' - Patrick Butler's Cut Blog in the Guardian dated 14 March 2013 (click here) and 'Appeal plans axed following bedroom tax changes' in Inside Housing (click here)

Desmond Rutledge was junior counsel in Burnip, Trengove and Gorry v Secretary of State for Work and Pensions

Up to 84% of those on low incomes expected to refuse to pay council tax

According to research carried out by the campaigning group False Economy, local authorities are anticipating that up to 84% of people on low incomes will refuse to pay council tax following the introduction of localised council tax support in April 2013.

A Guardian article dated 28 February 2013 states that:

“Ministers have cut the support for means-tested council tax benefit by £500m, and told local authorities to decide where the axe should fall. The result is that 326 town halls in England have put forward "local" council tax schemes – with residents in neighbouring regions facing wildly different penalties.

Nationally the council tax benefit cuts will mean the poor face an average bill of £247 a year from April, a charge from which they are currently exempt.

But because the sums average less than £5 a week, councils are warning that it would "in many cases be uneconomic to recover, with the costs of collection, including legal recovery costs, being higher than the bill".

The result is that councils are budgeting for large losses and potentially widespread non-payment. A series of freedom of information requests by False Economy ... found more than 70 councils were resigned to seeing swaths of residents refusing to pay the tax.” Hopkin Murray Beskine solicitors

For more information, see 'Council tax benefit cut research' from the False Economy website (click here) and the Guardian article published 27 February 2013 'Up to 84% on low incomes will not pay council tax, local authorities believe' from guardian.co.uk (click here).

On 28 March 2013 the Joseph Rowntree Foundation published a study on the new Council Tax Support (CTS) system which replaces Council Tax Benefit: The impact of localising council tax benefit’ by Sabrina Bushe, Peter Kenway and Hannah (click here for link). Key points from the Study include:

  • Some 2.4 million low-income families will pay on average £138 more in council tax in the year 2013/14.
  • 78 per cent of those affected by the changes currently pay no council tax.
  • In the year beginning April 2013, 18 per cent of councils will retain the 2012/13 levels of CTB and 71 per cent will require all working-age adults to pay at least some council tax, regardless of income.

Judicial review of spare bedroom tax regulations

Judicial review proceedings have been issued by Leigh Day & Co and Hopkin Murray Beskine Solicitors against the regulations which introduce the social rented sector size criteria (aka ‘spare bedroom tax’) into the social sector under which housing benefit will only be payable on the basis that children under 16 of the same gender will share a room, and children under 10 will share a room regardless of their gender.

The challenge has been launched by 22 claimants in total – 10 children, seven parents and five other adults. All 10 of the children in the claims are expected to share a bedroom with siblings. However, all of them have also been assessed as needing their own bedrooms – either due to disabilities, because they are at risk of violence from a sibling or because of trauma experienced as a result of abuse and domestic violence. The cases lodged by disabled adults include one where the wife sleeps on a hospital mattress to ease bed sores caused by her spina bifida, while her husband uses a single bed in their smaller second room. But from April under the new regulations they would be deemed to be under-occupying their specially adapted flat.

Mr Justice Mitting has granted permission and set a timetable for the case, saying the court would rule on whether it can go ahead by mid-March. If it does get the go ahead then a full hearing is unlikely to take place until May.

A summary of background facts to the applications for judicial review can be found on the website of Hopkin Murray Beskine solicitors (click here).

See media stories: The Guardian both dated 5 March 2013 ‘Children's rights cited in legal challenge launched against 'bedroom tax'’ (click here) and “Bedroom tax: ministers given 14 days to make case against judicial review” (click here). Inside Housing dated 6 March 2013 ‘Bedroom tax to be introduced before legal challenge’ (click here) and 'Hiigh Court allows tenants' bedroom tax challenge mm dated 27 March 2013 (click here).

NB: On 21 March 2013 Liberty has announced it will seek Judicial Review of the “bedroom tax” policy based on the impact on separated families with shared custody of children (click here for details).

Speech on immigration by the Prime Minister

In a speech on immigration on 25 March 2013 the Prime Minister David Cameron said that, in early 2014, the government will create a statutory presumption that after six months an EEA national can no longer retain their status as a jobseeker or retained worker and continue to claim benefits, unless they can demonstrate they have actively sought work throughout that period and have a genuine chance of finding work.

In addition, Mr Cameron announced the introduction of a local residency test in determining who should qualify for social housing and the requirement on landlords to check the migration status of tenants.

For more information, see Immigration speech by Prime Minister on the Number 10 website (click here).

Comment: It is settled law that an EEA citizen may have a right of residence as a work- seeker (R v Secretary of State for the Home Department, ex parte Antonissen (Case C-292/89). Since April 2006 this has been enshrined in EEA Regulations. These provide that a jobseeker can continue to retain the status of a worker for more than six months as long as they have "a genuine chance of being engaged" (reg 6(2)(b)(iii)). So it appears that the 'statutory presumption' is already part of the law.

Church Report challenges a number of 'myths' about people in poverty

On 1 March 2013, the Baptist Union of Great Britain, the Church of Scotland, the Methodist Church and the United Reformed Church published a report, 'The lies we tell ourselves: ending comfortable myths about poverty', which challenges a number of 'myths' about people in poverty. The Executive Summary states:

"The myths exposed in this report, reinforced by politicians and the media, are convenient because they allow the poor to be blamed for their poverty, and the rest of society to avoid taking any of the responsibility. Myths hide the complexity of the true nature of poverty in the UK. They enable dangerous policies to be imposed on whole sections of society without their full consequences being properly examined. This report aims to highlight some comfortable myths, show how they have come to prominence and test them against serious evidence."

The Report identifies the following 'myths about poverty':

Myth 1‘They’ are lazy and don’t want to work

'The most commonly cited cause of child poverty by churchgoers and the general public alike is that 'their parents don’t want to work'. Yet the majority of children in poverty are from working households. Inwork poverty is now more common than out of work poverty. It is readily accepted that across the country there are families in which three generations have never worked. Examples of such families have not been found, and the evidence suggests it is unlikely we ever will. How did we come to believe these things?'

Myth 2 ‘They’ are addicted to drink and drugs

'Churchgoers and the wider public cite addiction as the second most common cause of child poverty. While addiction is devastating for the families and communities touched by it, fewer than 4 per cent of benefit claimants report any form of addiction. How did we come to believe this is such a big factor in the lives of the 13 million people who live in poverty in the UK today?'

Myth 3 ‘They’ are not really poor – they just don’t manage their money properly

'Nearly 60 per cent of the UK population agrees that the poor could cope if only they handled their money properly. The experience of living on a low income is one of constant struggle to manage limited resources, with small events having serious consequences. Statistics show that the poorest spend their money carefully, limiting themselves to the essentials. How did we come to believe that poverty was caused by profligacy?'

Myth 4 ‘They’ are on the fiddle

'Over 80 per cent of the UK population believe that 'large numbers falsely claim benefits'. Benefit fraud has decreased to historically low levels - the kind of levels that the tax system can only dream of. Less than 0.9 per cent of the welfare budget is lost to fraud. The fact is that if everyone claimed and was paid correctly, the welfare system would cost around £18bn more. So how did we come to see welfare claimants as fraudulent scroungers?'

Myth 5‘They’ have an easy life

Over half the British public believes benefits are too high and churchgoers tend to agree. Government ministers speak of families opting for benefits as a lifestyle choice. Yet we know that benefits do not meet minimum income standards. They have halved in value relative to average incomes over the last 30 years. We know the ill and the unemployed are the people least satisfied and happy with life. Why have we come to believe that large numbers of families would choose this a lifestyle?

Myth 6‘They’ caused the deficit

The proportion of our tax bills spent on welfare has remained stable for the last 20 years. It is ridiculous to argue, as some have, that increasing welfare spending is responsible for the current deficit. Public debt is a problem but why is it being laid at the feet of the poorest?

The Churches' Report, 'The lies we tell ourselves: ending comfortable myths about poverty', is available at ekklesia.co.uk (click here).

See also media report 'Government 'misrepresenting' the poor, say churches' on the BBC website (click here).

Case Law

In Zacchaeus 2000 Trust, R (on the application of) v Secretary of State for Work and Pensions [2013] EWHC 233 (Admin) (Underhill J) the court considered whether regulations capping housing benefit increase by reference to the Consumer Price Index were unlawful. The Claimant, a charity concerned with the relief of poverty, argued that e Rent Officers (Housing Benefit Functions) (Amendment) Order 2012 (SI 646/2012) is unlawful because (a) it is ultra vires; and (b) that the Secretary of State in making it failed to comply with his duties under section 149 of the Equality Act 2010 as he failed to have regard to the problems associated with having to move to a different area where the rents were affordable for members of two protected groups than for others, namely: (a) disabled people; and (b) children of school age. In addition, the Claimant argued that families of claimants who are from ethnic minorities tend to be larger than those who are not from ethnic minorities, and the new regime means that members of bigger families are more likely to be homeless, or to have to move, than members of smaller families.

Dismissing the application Underhill J held that the legislation gives the Secretary of State has a wide discretion to set the terms of the scheme and this includes the power to cap increases in housing benefit at the level of general inflation, notwithstanding that rents may have increased at a greater rate. Underhill J held that the Equality Impact Assessment carried out did refer to the particular difficulties which disabled people may encounter if they have to move, and therefore the Secretary of State had a clear awareness of the potential problems and had considered how they might be mitigated. Underhill J said that there was no reason for the Secretary of State to believe that there might be an equality issue affecting the impact on children who have to move schools to require him to have specific regard to that risk. On the question of whether the cap would have a disproportionate impact on claimants with large families and thus also on claimants from ethnic minorities, the issue had been sufficiently considered in the 2011 impact assessment and there were no new issues raised by the 2012 Order that required the Secretary of State to carry out a further assessment (click here for transcript).

In ST v SSWP [2012] UKUT 469 (AAC) (S.Wright) the Upper Tribunal considered whether a failure to take account of previous ESA50 medical reports amounted to a breach of Article 6(1) of ECHR. The claimant was previously found to have limited capability for work following an ESA85 medical report. It was subsequently decided that she did not have limited capability for work following a further report (issued by the same doctor). The claimant appealed and a tribunal (FTT) upheld the DWP decision. The previous ESA85 report was not put before the tribunal. The claimant appealed to the Upper Tribunal. The Upper Tribunal decided that the failure to take account of the previous ESA85 medical report breached the claimant’s right to a fair hearing in contravention of Article 6(1) of the ECHR. Judge Wright observed that it was not common practice for the Secretary of State to put previous ESA85 medical reports before the First-tier Tribunal and said that he would therefore use the decision to address the issue more extensively. He said it is well-established that proceedings before a first-tier tribunal are ‘inquisitorial’. Accordingly the Secretary of State is under a duty to provide the relevant information held by the DWP to the FTT:

“At the very least, therefore, even if he [SofS] does not have in his possession the previous ESA85 report, at a minimum the decision makers for the Secretary of State must in every appeal response on ESA limited capability for work appeals tell the First-tier Tribunal the terms of the decision that has been superseded. If that shows, as it should have here, that the decision superseded was a decision that the appellant had limited capability for work, that at least would allow the First-tier Tribunal to give proper consideration to whether the requirements of natural justice and/or article 6(1) of the Convention required it to obtain from the Secretary of State or the claimant the previous ESA85 medical report (or First-tier Tribunal decision) on which the limited capability for work decision was based: per CIB/3985/2001 (an authority which, in my judgment, applies with just as much force to previous limited capability for work assessments as it did to past personal capability assessments).” (At para. [30]).

In the present case, the Secretary of State was under a duty to include the previous ESA85 report which related to the last operative decision, superseding but confirming the claimant’s benefit award of employment and support allowance (ESA). Judge Wright said that even if the DWP has lost or misfiled the previous ESA85, it must at least provide details of the supersession decision, so that the tribunal can consider whether it needs to obtain a copy of the ESA85 report. (Click here for decision).

NB: Aikens LJ granted permission to appeal in R (Nicholas) v Upper Tribunal Judge and the Secretary of State for Work and Pensions [2012] EWHC 2724 (Admin), in part by reference to the decision in ST v SSWP. (click here to see note on Nicholas in previous update).

In SB v SSWP [2012] UKUT 465 (AAC) (D. Williams) the Upper Tribunal considered whether there were any grounds for a tribunal to remove DLA and the need for a proper warning. The claimant had a traffic accident which left him with very serious short-term injuries and some long-term disablement. He was given an indefinite award of the lower rate mobility and highest rate care components of disability living allowance (DLA). Six years later, the award was superseded and restricted to the lowest rate care component only. The claimant appealed. A tribunal decided he was not entitled to any DLA. The claimant appealed to the Upper Tribunal. Judge Williams said there was nothing in the tribunal’s statement of reasons or record of proceedings to indicate that the claimant (who was unrepresented at the tribunal hearing) or the Secretary of State (who was represented) was made aware that the tribunal was considering removing the care component. There was medical evidence before the tribunal that one of the claimant’s arms was ‘functionally useless’ and that he needed help to prepare a meal. The Secretary of State had awarded the lowest rate care component on this basis. The tribunal erred in law by failing to warn the parties that it was considering removing this award, to enable them to discuss this, giving the claimant the opportunity to request an adjournment or withdraw his appeal. The Judge held that this was a fundamental issue of fairness:

"There is a fundamental issue of fairness here. An appellant should not be “ambushed” at a hearing with a new issue by the other party or by the tribunal. The parties were entitled to know that the tribunal was considering the removal of benefit that was not in dispute between them so that they could make submissions and give evidence on the matter. That may require an adjournment so that further evidence can be obtained or advice given by an absent representative. Or it may suggest a timely withdrawal of the appeal by the appellant. As is often the case, this appellant was represented but the representative was not present." (At para. 4). (Click here for decision).

SB v SSWP can be contrasted with MS v SSWP [2012] UKUT 463 (AAC) (N.Wikeley) where the Upper Tribunal concluded that the FTT did have jurisdiction to remove DLA on an existing award in an appeal where the claimant sought to increase the level of the award. The claimant had been awarded the highest rate care component and lower rate mobility component of DLA. She applied for a supersession to secure entitlement to the higher rate mobility component, but the DWP decided she was no longer entitled to the mobility component and was only entitled to the lowest rate care component. She appealed and a tribunal decided she was not entitled to either component or DLA. Dismissing the appeal the Upper Tribunal said that the FTT had clearly warned the appellant that they had the power to remove her existing award and given her the opportunity to seek further advice before proceeding with her appeal. (Click here for decision).

In ER v SSWP [2012] UKUT 434 (AAC) (E. Ovey) the Upper Tribunal considered the duties of appointee in an overpayment of Attendance Allowance following failure to disclose local authority funding of a care home. The claimant, aged 104, was in receipt of attendance allowance (AA) when he moved into residential care. His daughter, acting as his appointee, completed a further claim for AA confirming that he was paying the full costs of the care home. Two and a half years later, the local authority (LA) started funding a proportion of the costs. When the DWP became aware of this 18 months later they issued a decision to the effect that AA was no longer payable to the claimant and that an overpayment of £4,522.50 was recoverable from him because his daughter had failed to disclose the material fact that the LA had begun funding his placement. The claimant appealed on the grounds that his daughter had attended a meeting at the care home, arranged via a letter from the DWP Pensions Service and four LAs acting in partnership, for the purpose of undertaking a financial assessment for care home costs and a benefit check, at which she was told by the ‘visiting officer’ that he would notify all relevant authorities about the claimant’s funding and benefits. A FTT dismissed the appeal. The claimant’s appointee appealed to the Upper Tribunal.

Judge Ovey held that the FTT had erred in law by failing to address what duty the claimant’s daughter had to disclose the change in funding. The Judge said the information provided to the FTT and Upper Tribunal by the DWP did not establish that the claimant or his appointee failed in their duties under regulation 32 of the Social Security (Claims and Payments) Regulations 1987 (SI 1987/1968). The Judge noted that the AA forms completed by the daughter when her father entered residential care did ask whether the claimant was receiving LA funding, but did not indicate that AA would not be payable if the LA provided funding. The FTT had erred by failing to consider whether the visiting officer was acting on behalf of the Pensions Service and whether there had been an ‘oral modification’ of the duty of disclosure to the Disability Benefits Unit. The Judge also pointed out that a person cannot fail to disclose a fact s/he is unaware of. The evidence suggested that the claimant’s daughter was not aware that the LA was providing funding until several weeks after the meeting. The FTT erred in failing to address this. (Click here for decision).

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