The legal challenge to the ‘bedroom tax’ – a new hope

Desmond Rutledge reviews the prospects of the bedroom tax litigation succeeding in the light of the recent Supreme Court judgment in the household benefit cap case.

Welfare Benefits and Human Rights

The importance of social security is recognised in a range of international instruments.  A right to social security was adopted in the UN Declaration of Human Rights in 1948 (art 22) and was subsequently enshrined in the International Covenant on Economic, Social and Cultural Rights in 1966 (ICESCR) as a right of “everyone” (art 9).  The ICESCR also makes clear that circumstances where an individual is permitted to become destitute would be in breach of the right to an adequate standard of living, which includes adequate food, clothing and housing (art 11).The UN Convention on the Rights of the Child similarly provides, in Article 27, for recognition by States of the right of every child to an adequate standard of living.  The United Kingdom has ratified these Conventions but the Government considers that the principal means of securing these rights should be through legislation enacted by a democratically accountable Parliament.

The European Convention on Human Rights (ECHR), on the other hand, has been made part of domestic law by virtue of the Human Rights Act 1998.  The ECHR, however, only provides a limited form of protection to social welfare rights.  The scope for arguing that a social security benefit claimant can invoke the ECHR is based on the landmark case of Stec and others v UK (Admissibility) (2005) 41 EHRR SE18.  This established the principle that legislation which confers entitlement to welfare benefits falls within the scope of Article 1 of the First Protocol (‘A1P1’) which protects the right to peaceful enjoyment of possessions.  Possessions for this purpose include entitlement not only to those social security benefits which have been “paid for” by national insurance contributions, but also those welfare benefits which the State provides on a non-contributory basis to supply its people with the basic necessities of life.  The Court said:

“In the modern, democratic State, many individuals are, for all or part of their lives, completely dependent for survival on social security and welfare benefits. Many domestic legal systems recognise that such individuals require a degree of certainty and security, and provide for benefits to be paid—subject to the fulfilment of the conditions of eligibility—as of right. Where an individual has an assertable right under domestic law to a welfare benefit, the importance of that interest should also be reflected by holding Article 1 of Protocol No. 1 to be applicable.” (At para [51]).

The Court went on to say that although Protocol No. 1 does not include the right to receive a social security payment of any kind, if a State does decide to create a benefits scheme, it must do so in a manner which is compatible with Article 14.  It follows that where the State voluntarily decides to create an entitlement to welfare benefit for some, it must not, under Article 14, withhold it from others in the same or in analogous situations without good reason.  These principles were subsequently applied by the House of Lords in R (RJM) v Secretary of State for Work and Pensions [2008] UKHL 63.

It remains the case that most of the high profile human rights challenges in the field of social security based on an alleged violation of Article 14 when read with A1P1 have not been successful, largely because the threshold the claimant has to meet to show that the benefit rule amounts to a violation of Article 14 is a high one.  The Strasbourg case law has repeatedly stated that: a wide margin is usually allowed to the State under the Convention when it comes to general measures of economic or social strategy, and that the Court will generally respect the legislature’s policy choice unless it is “manifestly without reasonable foundation”: Stec v United Kingdom (2006) 43 EHRR 47, para [52].  Moreover, the normally strict test for justification for sex discrimination gives way to the “manifestly without reasonable foundation” test in cases involving state benefits: Humphreys v The Commissioners for Her Majesty’s Revenue and Customs [2012] UKSC 18.

In summary, in the area of welfare benefits the court will normally defer to the considered decision of the legislature.  However, if the legislation does result in unjustified discrimination, then it is the duty of the courts to say so (R (SG and others) v Secretary of State for Work and Pensions [2015] UKSC 16, para [160]).  This forms the backdrop to the challenge to the bedroom tax based on human rights.

Burnip – the bedroom rule in the private sector

Burnip v Birmingham City Council & Anor [2012] EWCA Civ 629 was concerned with the application of the ‘bedroom rule’ in the housing benefit regulations as regards private rented accommodation which discriminates against those who needed an extra bedroom for a carer (Burnip and Trengove) or because their children could not share a room as a result of disability (Gorry).

The calculation of housing benefit in the private rented sector is based on the Local Housing Allowance rules and this, in turn, is based on the number of bedrooms which the claimant and his or her family is deemed to need.  The bedroom rule (the size criteria) in Regulation 13D(3) of the Housing Benefit Regulations 2006, SI 2006/213 states that LHA entitlement is based on one bedroom for various categories of occupiers.  However, there was no provision in the bedroom rule for an extra bedroom for an overnight carer (who is not a member of the claimant’s household).  As a result, there was a shortfall in the rent for the appellants that was significantly greater than for other claimants because their housing benefit was based on one room less than their objective needs.

The appellants’ case was that the rule had an adverse impact on the disabled or failed to take account of the differences between the disabled and the able-bodied (the latter drawing on Thlimmenos v Greece (2001) 31 EHRR 15).  The Court held that discrimination was established on either approach.  Maurice Kay LJ also said that, if necessary, he would have used the UN Convention on the Rights of Persons with Disabilities as an aid to the interpretation of article 14 so that if its meaning had been elusive or uncertain, that uncertainty would have been resolved in favour of the appellants (paras [19]-[22]).

Henderson J dealt with the issue of justification in his judgment. He rejected the Secretary of State’s argument that the appellants’ entitlement to other social security benefits provided the necessary justification for the lack of provision of housing benefit to meet their additional needs.  Henderson J said it was necessary to draw a clear distinction between the benefits which Mr Burnip was entitled to claim for his subsistence, and those which he was entitled to claim in respect of his housing needs.  Henderson J then went on to consider the effect of the availability of discretionary housing payments (DHPs).  At paragraphs [46] and [47] Henderson J said:

“Discretionary housing payments were in principle available as a possible way of bridging this gap, but they cannot in my judgment be regarded as a complete or satisfactory answer to the problem. This follows from the cumulative effect of a number of separate factors. The payments were purely discretionary in nature; their duration was unpredictable; they were payable from a capped fund; and their amount, if they were paid at all, could not be relied upon to cover even the difference between the one and two bedroom rates of LHA, and still less the full amount of the shortfall. To recognise these shortcomings is not in any way to belittle the valuable assistance that discretionary housing payments are able to provide, but is merely to make the point that, taken by themselves, they cannot come anywhere near providing an adequate justification for the discrimination in cases of the present type.

A further aspect of the problem is that housing, by its very nature, is likely to be a long term commitment. This is particularly so in the case of a severely disabled person, because of the difficulty in finding suitable accommodation and the probable need for substantial physical alterations to be made to the property in order to adapt it to the person’s needs. Before undertaking such a commitment, therefore, a disabled person needs to have a reasonable degree of assurance that he will be able to pay the rent for the foreseeable future, and that he will not be left at the mercy of short term fluctuations in the amount of his housing-related benefits. For the reasons which I have given, discretionary housing payments cannot in practice provide a disabled person with that kind of assurance.”

Henderson J said this reasoning also applied to the linked cases of Trengove and Gorry.

The restrictions placed on housing benefit in the private rented sector by the size criteria, based on the number of bedrooms deemed necessary in Regulation 13D, is a classic example of a ‘bright-line rule’.  The Court of Appeal’s decision in Burnip is a welcome example of the judiciary not treating a bright-line rule (or the policy which prompted the rule) with undue deference.

The bedroom rule in the social sector – Burnip distinguished

The appellants in R (MA and Others) v Secretary of State for Work and Pensions [2014] EWCA Civ 13, [2014] PTSR 584 challenged the introduction of the bedroom rule for social sector tenants of working-age by the Housing Benefit (Amendment) Regulations 2012, SI 2012/3040.  The appellants’ arguments were based largely on Burnip (see above).  However, both the Divisional Court and the Court of Appeal held that Burnip could be distinguished on the facts.  Lord Dyson MR at paragraph [71] of his judgment said that since Burnip the DHP fund had been increased, and there had been repeated statements by the DWP that the fund would be kept under review and topped up if necessary.  The Court felt that those matters significantly weakened the arguments which persuaded Henderson J and the other members of the Court of Appeal to find that the DHP route was not a fair or proportionate response to the discriminatory effects of the size criteria for disabled claimants renting in the private sector.

The decision in MA and Others therefore represents a reassertion of the deferential approach taken by the courts to issues regarding the allocation of resources.

Plugging the discriminatory gap

The approach taken in MA and Others was followed in Rutherford & Others v Secretary of State for Work and Pensions [2014] EWHC 1631 (Admin) where Stuart-Smith J held:

  • DHPs are intended to be paid when a person with an ascertained need for an additional bedroom would otherwise be the subject of discrimination on grounds of disability due to the shortfall in their rent.
  • On the evidence available to the Court of Appeal in Burnip, there was a conspicuous failure to plug the gap by the awarding of DHPs.
  • However, the evidence before the Court of Appeal in MA and Others showed that the system did plug the discriminatory gap and that it could provide a reasonable degree of assurance that the rent would be paid for the foreseeable future.
  • Against this background, it could not be argued that DHPs were an irrational response because the system, taken as a whole, plugged the identified discriminatory gap.

In short, the position after MA and Others is that the combination of three factors: (i) the increased funding of the DHP scheme; (ii) the existence of DHP Guidance which identifies disabled claimants in need; and (iii) that local authorities are expected to honour their public law duties – provides sufficient justification to avoid a breach of the ECHR.

SG and Others and the relevance of international law

R (SG and Others (previously JS and Others) v Secretary of State for Work and Pensions  [2015] UKSC 16 is not a case about the bedroom tax; it is a challenge to the household benefit cap – the rule which imposes a cap on the amount of welfare benefits which can be received by claimants in non-working households.  However, the way in which the Court dealt with this challenge has implications for the bedroom tax litigation.

The Benefit Cap (Housing Benefit) Regulations 2012, SI 2012/2994 fixed the cap at £350 a week for a single claimant without dependent children, and £500 for all other claimants.  The  benefits taken into account include housing benefit, child benefit and child tax credit, which means that, in practice, non-working households with several children, living in areas with high rents, are most likely to be affected.  The appellants’ case before the Court was that: –

  • i). the regulations introduced by the Secretary of State are indirectly discriminatory on grounds of sex under article 14 of the ECHR when read with ‘A1P1’ because most non-working households receiving the highest levels of benefit were lone parent households, and most lone parents were women;
  • ii). the Secretary of State has failed to treat the best interests of children as a primary consideration when making the Regulations, as required by article 3.1 of the United Nations Convention on the Rights of the Child (“UNCRC”);
  • iii). compliance with article 3.1 of the UNCRC is determinative as to the question of justification (this additional argument was advanced in post-hearing submissions).

The Supreme Court, by a majority, dismissed the appellants’ appeal.  In a lengthy judgment, consisting of 270 paragraphs, the Justices made the following rulings (by a majority):

  • i). The household benefit cap scheme is lawful having regard to the aims, endorsed by Parliament, of fiscal savings, incentivising work and imposing a reasonable limit on the amount of benefits which a household can receive (Hale and Kerr dissenting);
  • ii). the Secretary of State failed to show that the introduction of the benefit cap was compatible with the UK’s obligations under the UNCRC (Reed and Hughes dissenting);
  • iii). Article 3(1) of the UNCRC does not, however, form part of the proportionality assessment and therefore it made no difference to the outcome of the appeal (Hale and Kerr dissenting).

The majority gave the following reasons for holding that despite the breach of article 3.1 of UNCRC this did not have any bearing on whether the legislation unjustifiably discriminated between men and women in relation to their enjoyment of A1P1 property rights:

  • Whilst international law has a role in informing the interpretation and application of Convention rights, for this approach to be relevant there has to be a direct link between the international treaty relied on and the discrimination alleged.
  • Burnip is an example of a case where there is a direct link between the alleged discrimination relating to the treatment of the disabled and the UN Convention on the Rights of Persons with Disabilities (CRPD), which covers the same subject matter.
  • Here the necessary link is missing. The alleged discrimination is in respect of lone mothers’ enjoyment of A1P1 property rights.  The interests of the mothers can be disassociated from those of their children because they are the benefits claimants, not the children.
  • Article 3(1) of the UNCRC has no application because the children’s rights are not directly In a claim based on article 14 when read with A1P1, there is no legal relationship between the fact that the Benefit Cap affects more women than men, on the one hand, and the (assumed) failure of the legislation to give primacy to the best interests of children, on the other.

Despite the outcome in SG & Others the judgment represents a significant development in the use of human rights arguments in cases involving welfare benefits.

First, the judgment confirms that the court can have regard to principles of international law in order to interpret the ECHR where the claimed right is directly relevant to the domestic issue to be decided.

Secondly, the judgment endorses the use of the Convention on the Rights of Persons with Disabilities in Burnip.

Thirdly, the judgment establishes that, even in cases where there is a wide margin of appreciation, the court is to look with particular care at any justification put forward by the State for a measure which places the United Kingdom in breach of its international obligations under another human rights treaty to which it is party.

The implications for the bedroom tax litigation

The appellants in MA and Others were granted permission to appeal by the Supreme Court on 22 December 2014.  Maurice Kay LJ’s reference to the CRPD as an aid to the construction at paragraphs [19]-[22] of the judgment in Burnip is likely to be the basis for submissions on justification.  As the CRPD is intended to complement existing international human rights treaties, the court may also be referred to the International Covenant on Economic, Social and Cultural Rights  and the authoritative interpretation of those rights in the General Comment produced by the UN Committee on Economic, Social and Cultural Rights, e.g. General Comment No. 4: The right to adequate housing (art. 11 (1), 1 January 1992, as well as General comment No. 5: Persons with disabilities, 1 January 1990.  The Court might also be invited to consider the Report of the Special Rapporteur Raquel Rolnik on adequate housing (30 December 2013) based on an official visit to the United Kingdom from 29 August to 11 September 2013 which contains a recommendation that: “the removal of the spare-room subsidy should be suspended immediately and be fully re-evaluated in light of the evidence of its negative impacts on the right to adequate housing and general well-being of many vulnerable individuals and households”.

Whatever the rights and wrongs of the removal of the spare room subsidy policy, it is difficult to see how a scheme where working -aged claimants with physical and mental disabilities, as well as those who are chronically ill who are deemed to have a spare room do not receive full housing benefit as of right, can be reconciled with the United Kingdom’s obligation to take all appropriate measures to abolish discrimination against persons with disabilities.

The recent developments in case law therefore represent a new hope that when the Supreme Court comes to examine the justification advanced by the Government – the use of the DHP scheme to plug the discriminatory gaps – it will take into account whether the impact of having such a scheme is consistent with the European and worldwide consensus on the need to protect people with disabilities from discriminatory treatment.

This piece is based on the paper ‘Rights to food and freedom from poverty’ which was presented by Desmond Rutledge at a Garden Court Chambers seminar on 4 June 2015.

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