2014 03 Welfare Benefits

Tuesday 1 April 2014

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Localised council tax support

In a report published on 11 March 2014, the Public Accounts Committee examined evidence from the Department for Communities and Local Government on the localised council tax support schemes that replaced council tax benefit from April 2013. The report’s summary states that:

  • A significant number of local schemes currently do not meet the objective of protecting vulnerable people.
  • Some local authorities have introduced Council Tax support schemes in a way that runs counter to broader welfare reforms intended to make work pay.
  • The Department does not fully understand the impact on the demand for local services of localising Council Tax support and broader welfare reforms.

The Public Accounts Committee's report Council Tax Support is available from the parliament website – click here.

Bedroom Tax

According to a BBC report, only 6 per cent of social housing tenants have moved as a result of the 'bedroom tax'. Research based on data from 331 housing providers showed that the bedroom tax, which was introduced in part to reduce under-occupancy in the social sector, has only resulted in 30,000 tenants moving home. See ‘Housing benefits: Changes 'sees 6% of tenants move' from bbc.co.uk (click here) and The bedroom tax has failed on every count from guardian.co.uk (click here).

According to a report issued by the ‘Real Life Reform’, (click here) since the bedroom tax was introduced, social housing tenants have an average weekly debt repayment of £34.41 per week and an average debt of £2,943.

Government announces early exit of Atos from contract

On 27 March 2014, the government announced the 'early exit' of Atos from its contract for the delivery of work capability assessments. In a written ministerial statement, Work and Pensions Minister Mike Penning said that a new contract would be awarded later this year. For more information see Mr Penning's written ministerial statement - click here.

More than half of ESA claimants sanctioned between January 2012 and June 2013 had mental health problems

According to DWP statistics supplied in response to a freedom of information (FOI) request published on 26 March 2014 more than half of the employment and support allowance (ESA) claimants sanctioned between January 2012 and June 2013 had mental health problems. The figures show that, in the period from January 2012 to June 2013, a total of 25,530 adverse ESA sanctions decisions were made and that, of those, 13,240 were in relation to claimants with 'mental and behavioural disorders'. The DWP FOI response on ESA sanctions is available from gov.uk – click here.

New definition of supported accommodation for housing benefit and universal credit

On 20 March 2014 new regulations were issued in relation to housing costs for people in supported accommodation. Coming into force from 10 April 2014 (for housing benefit) and 3 November 2014 (for universal credit), the Housing Benefit and Universal Credit (Supported Accommodation) (Amendment) Regulations 2014 (SI.No.771/2014) (click here) extend provisions that prevent the housing costs of those living 'exempt accommodation' from being included in the calculation of the benefit cap. The term 'exempt accommodation' is to be replaced with 'specified accommodation' which widens the scope of the previous provision to include a wider variety of supported housing. The regulations define 'specified accommodation' so as to cover three additional categories -

  • accommodation that meets the current 'exempt accommodation' definition in housing benefit;
  • a new, wider category of supported accommodation where the care, support or supervision does not have to be provided by the claimant’s landlord;
  • refuges, including local authority refuges, where the claimant is accommodated there because they are fleeing domestic violence; and
  • housing authority hostels where the tenant receives care support or supervision.

The DWP has issued guidance in relation to new regulations - HB Circular A8/2104click here. See also Household benefit cap and Universal Credit housing costs from the National Housing Federation – click here.


The Court of Appeal in R (MA and others) v Secretary of State for Work and Pensions (Equality and Human Rights Commission intervening) [2014] EWCA Civ 13; (Lord Dyson MR, Longmore, Ryder LJJ) held that the provisions reducing housing benefit for working age social sector tenants who are deemed to be under-occupying their property (aka ‘the bedroom tax’) did not discriminate against people with disabilities, thereby upholding the decision of the Divisional Court in [2013] EWHC 2213 (QB). The Secretary of State had been entitled to take the view that it was not practicable to add an imprecise class of persons (those who need extra bedroom space by reason of their disability) to whom the bedroom criteria would not apply and the additional costs of such an approach would have been disproportionate given the difficulties in identifying those claimants: Burnip v Birmingham City Council [2012] EWCA Civ 629 distinguished. The Court rejected an alternative submission that even if the Secretary of State was able to justify discrimination against the general group of disabled persons who need an extra bedroom by reason of their disability, he could not justify discrimination against aspecific group of disabled persons, i.e. persons like Mrs Carmichael, one of the appellants, who needed an extra room directly as a result of their physical disability. The court held that the Secretary of State was entitled to decide to provide a greater degree of protection for children than for adults who are in a materially similar situation, given their vulnerability. In short, the Court was satisfied that the Secretary of State had justified the discriminatory effect of the bedroom tax but gave particular emphasis to the following factors: (i) the “manifestly without reasonable foundation” test was a stringent test; (ii) there was a need for the court to be cautious about finding a statutory instrument discriminatory, particularly when the policy had been the subject of intense Parliamentary debates and; (iii) the Secretary of State had explained why he has decided to provide for the disability-related needs ofsome disabled persons by means of a series of specific exemptions and why the needs of other disabled persons were better dealt with by DHPs than HB. On the latter point, the Court gave particular weight to (a) the difficulties in finding exemption that was well-targeted and workable, (b) that DHP funding would enable local authorities to accurately target support where it is most needed, which is in line with a localised approach. It went on to reject a submission that the Secretary of State was in breach of the public sector equality duty in s.149 of the Equality Act 2010 Act in respect of disabled claimants when formulating the policy. The Court said that the history of the evolution of the policy showed that the Secretary of State was aware of the serious impact the bedroom criteria would have on disabled persons and the question of whether there would be sufficient money available for DHPs had also been considered at great length and was being kept under review. The appeal was dismissed. The appellants are applying for permission to appeal to the Supreme Court.

Click here for the judgment.

See also HB Bulletin U2/2014: Court of Appeal judgment: MA and others (click here), in which the DWP advises that local authorities should ensure that the decision is quoted when appealing against adverse First-tier Tribunal decisions that raise similar issues, and in relation to discretionary housing payments (DHPs) says:

"Local authorities retain the responsibility for deciding whether, in cases where a claimant faces a shortfall in their rent, a DHP is appropriate and for what period. The judgment does not imply that all disabled people should be awarded a DHP, but local authorities can consider the particular needs of disabled claimants in assessing applications."

See also Why the human rights challenge to the ‘bedroom tax’ failed by Desmond Rutledge on the Garden Court Chambers Blogclick here.

In R (SG & Ors) v Secretary of State for Work and Pensions & Ors [2014] EWCA Civ 156 (Dyson MR, Longmore, Lloyd Jones LJJ), the Court of Appeal dismissed the appeal against the benefit cap and upheld the decision of the Divisional Court ([2013] EWHC 3350 (QB)) The appellants consisted of two single parent families (NG and NS), a third had withdrawn, who submitted that, given their particular circumstances, they would suffer harsh consequences as a result of the cap but that many other lone parents would be similarly affected. It was conceded by the Secretary of State that the cap had a disproportionately adverse impact on women generally but that the discrimination was justified. The Court noted that the Government's aims in introducing the cap were (i) to introduce greater fairness in the welfare system between those receiving out of work benefits and tax payers who are in employment; (ii) to make financial savings where the cap applies and, more broadly, to help make the system more affordable by incentivising behaviour that reduces long-term dependency on benefits; and (iii) to increase incentives to work. The Court said that the principal issues raised by the appeal were whether the 2012 Regulations introducing the benefit cap (Benefit Cap (Housing Benefit) Regulations 2012 (SI 2012/2994) :-

(i) unlawfully discriminate against (a) women generally or (b) women who are victims of domestic violence, in breach of article 14 read with A1P1;

(ii) infringe article 3(1) of the United Nations Convention on the Rights of the Child ("UNCRC");

(iii) unlawfully discriminate against families in breach of article 14 read with article 8 of the Convention;

(iv) infringe article 8 of the Convention as a free standing claim; and

(v) are unlawful at common law on the grounds of irrationality.

On issue (i)(a) - discrimination against women generally - the appellants submitted that: (i) the inclusion of child-related benefits and housing benefit renders the cap discriminatory against women (ii) fiscal savings cannot justify the differential treatment, and (iii) the policy did not compare like with like when drawing a comparison between the level of income in ‘working households’ and those reliant on benefits as it failed to have proper regard to the levels of ‘in-work benefits’. The Court rejected these arguments saying that while the aim of making fiscal savings could not justify differential treatment when looked at alone, it could provide justification when considered in conjunction with other legitimate objectives: Hoogendijk v Netherlands (2005) 40 EHRR SE22 considered. The scheme was not aimed at discriminating against women. The justification lay in the objective of changing the welfare dependency culture. If child-related benefits had been excluded from the cap, then the scheme would have been seriously emasculated. Secondly, if in-work benefits were removed, the result would make the cap irrelevant in almost all cases. The Court concluded that the Secretary of State had justified the discriminatory effect of the cap. It gave particular weight to the fact that: (i) the cap was an aspect of social policy on the distribution of state benefits; (ii) the essential controversial issues had been debated in Parliament; and (iii) the 2012 Regulations had been approved by affirmative resolutions of both Houses.

On issue (i)(b) - Discrimination against victims of domestic violence - the appellants submitted that while none of them were in a women's refuge or other temporary accommodation, they were nevertheless "victims" for the purpose of section 7 of the Human Rights Act 1998 because they ran the risk of being directly affected by the cap. The Court held that the Divisional Court had been right to refuse to deal with this issue as the Government intended to change the regulations in order to meet the criticisms being advanced by the appellants. The Court commented that if the changes are not made or the changes made are considered to be insufficient, then a challenge could be made to the amended regulations.

On issue (ii) - the United Nations Convention on the Rights of the Child - the appellants submitted that the Divisional Court had misdirected itself in its approach on this issue. The Court disagreed and upheld the Divisional Court’s view that there was no obligation on a decision-maker to address conflicting considerations of public policy in any particular order, saying that there was ample evidence before the Divisional Court that the Secretary of State did have regard to the interests of children as a primary consideration, including the Impact Assessment of 16 July 2012 which addressed the availability of DHPs to provide short term relief to families who might have to adapt their circumstances because of the effects of the cap.

On issue (iii) - breach of article 14 read with article 8 - the Court accepted that article 8 was engaged given that as a result of the cap families would need to move away from areas of high cost accommodation and existing support networks provided by their wider families and friends. Nevertheless, the article 14 claim was rejected for the same reasons as those given for rejecting the claim (read with A1P1) in relation to women generally.

On issue (iv) - article 8 as a free standing claim – the Court said article 8 did not impose a positive duty to provide housing or welfare benefits save in exceptional cases - where some provision is needed for the avoidance of destitution. The appellants submitted that the operation of the cap meant there was an ongoing risk to the family unit and/or that it would reduce the appellant families to a state of destitution. The court rejected this submission saying that the circumstances of the three families fell “well short” of demonstrating a breach of article 8: Anufrijeva v. Southwark LBC [2004] QB 1124 applied.

On issue (v) - unlawful on grounds of irrationality – the appellants submitted that the Secretary of State's decision to introduce the cap was irrational because he had failed to gather sufficient information to ensure that his decision was properly informed with respect to the difficulties of those fleeing domestic violence and of those living in temporary accommodation. The Court rejected this submission saying that the Tameside principle had no application in a case where the legislation had already been debated in great detail in both Houses: Bank Mellat v. HM Treasury [2013] 3 WLR 179 applied. The Court ended its judgment with the following general observations: -

“We recognise that the cap is a controversial statutory measure which will cause hardship to some (possibly many) people who are on benefit. It was well understood by Parliament and the Government that this would be the case. The legislation was carefully calibrated to produce a scheme which was judged by both of them to strike a fair balance between all members of society, in particular between those who are in work and those who not. The Government recognises that the scheme may need to be modified in the light of experience.

Meanwhile, the cap in its present form reflects the political judgment of the Government and it has been endorsed by Parliament after considerable debate. It is not the role of the court to say whether it agrees with this judgment or not. The court's sole function is to rule on whether the cap is lawful. ... For the reasons that we have given, we are satisfied that the cap plainly does have a reasonable foundation.” (At [110]-[111]).

Click here for the judgment

In Mahmoudi v LB of Lewisham & Secretary of State for Work and Pensions [2014] EWCA Civ 284 (Maurice Kay, Elias and Thomlinson LJJ), the court considered the term 'adapt the dwelling' in regulation 7 of the Housing Benefit Regulations 2006 (SI 2006/213) and held that redecoration counts as adapting a dwelling to meet disability needs thereby overturning LB of Lewisham and Secretary of State for Work and Pensions [2013] UKUT 26 AAC. The Court said the definition of adaptation previously adopted in R(H) 4/07 - that it must involve a change to the fabric or structure of a dwelling - was too restrictive, and the question to be asked was whether the process which the dwelling had undergone was a change that made it more suitable for the needs of the disabled person. Maurice Kay LJ said: -

“ ... I do not consider that Regulation 7(8)(c) can have been intended to exclude a disabled person who is kept out for two weeks while the dwelling is being decorated "to meet his disablement needs" but to include one who is kept out for the same period of time while the bathroom and kitchen are being refitted "to meet his disablement needs". Such a differentiation would lack a rational basis.”

Click here for the judgment

See also DMG Memo 6/14 Housing Costs – Adapting a Dwelling (click here) in which the DWP advises local authorities that -

“Decision makers can no longer apply the rigid requirement that works must be to the fabric of the dwelling. Redecoration and changing the floor covering are examples of changes which could meet the definition of adapt the dwelling where there is a clear connection between the work undertaken and the claimant’s disability needs.”

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