Shelter | The bedroom tax: court case should prompt government to scrap policy

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09 November 2016

The bedroom tax: court case should prompt government to scrap policy

by Heather Spurr

A crucial judgement today on the bedroom tax creates complications for the government and means they will have to make changes to the policy. Ministers should look at the problems created by this measure and act to finally abolish it.

The Supreme Court today handed down a number of long-awaited judgements on the bedroom tax. They represent a victory for some social housing tenants but a setback for others.

The tenants, most of whom have a family member with disabilities, challenged the government’s bedroom tax policy – which reduces their housing benefit if they have one or more ‘spare’ bedroom. They argued that the measure, which was introduced in 2013, is discriminatory and breaches the Equality Act.

In its judgement the Supreme Court found the bedroom tax did discriminate against a woman who cannot share a bedroom with her husband because of her disabilities. It also dismissed an appeal by the Department for Work and Pensions (DWP) relating to a couple who need an overnight carer for their grandson with severe disabilities.

But it found against a woman whose home has been converted into a ‘sanctuary scheme’ to protect her against domestic violence, and some other families who challenged the government and said that discretionary help was sufficient to meet their concerns.

We can draw two key points following today’s judgement:

The Supreme Court accepted that there was unlawful discrimination against families that need an extra bedroom due to reasons directly connected to a disability. Private sector tenants receiving Local Housing Allowance (LHA) should gain this protection too.
Discretionary Housing Payments (DHPs) and whether a tenant receives them are significant to the success of a legal challenge.
‘Without reasonable foundation’

Jacqueline Carmichael, who has a number of disabilities, including spina bifida, lives in a two bedroom flat with her full-time carer husband. Because of her disabilities, the couple cannot share a bedroom. Susan and Paul Rutherford care for their disabled grandson, who has profound mental and physical disabilities, and live in a three bedroom, specially adapted home. Carers provide respite and stay in the house two nights a week.

Housing benefit rules currently entitle claimants to an additional bedroom in the case of children – but not adults – who cannot share a bedroom because of their disability and allow an additional bedroom if an adult needs an overnight carer. Today’s ruling said there was no reason to distinguish between disabled adults who cannot share a room and disabled children – or between adults and children who need an overnight carer. The judges therefore found the original decisions relating to the Carmichaels and the Rutherfords were “manifestly without reasonable foundation”.

But importantly, the court also found against a number of other claimants, including James Daly, the father of a child with severe disabilities who stays with him every weekend – but not often enough to qualify for housing benefit to cover the additional bedroom. The court found that although he had a powerful argument to claim DHP, they had not been unlawfully discriminated against as the bedroom was not needed specifically because of his son’s disability.

Woman ‘A’ lives in a three bedroom house that was converted into a secure space under the ‘sanctuary scheme’ after she moved in. But significantly, the court found that there was no automatic link between living in a sanctuary scheme and requiring an extra bedroom. Woman ‘A’ moved into the three bedroom house because there were no two beds available at the time and although the court found there are strong reasons for her staying, these are unrelated to the size of the property.

Crucially, the court found that the fact that people have strong reasons for staying in their property is taken account of through DHP payments.

Shelter provided evidence in support of ‘A’s case and we have always argued that Discretionary Housing Payments are relied on too broadly. Households in specific and vulnerable situations need a guarantee that they will not be made homeless because they cannot afford the rent. Disappointingly they will still be reliant on unpredictable and discretionary funds.

The headache for government?

The Carmichael and the Rutherford decisions were significant, and mean that the DWP will need to amend the bedroom tax regulations. A spokesperson for the department has already said “we will take steps to ensure we comply with the judgement in due course”. We hope this happens as soon as possible.

The importance attached by the court to DHPs may be troubling for councils’ already overstretched DHP pots. Figures published in July show that 121 councils in England and Wales last year were forced to top up their DHP pots with their own funds because of rising demand. The government increased its DHP funding by £25m for 2016/17. However it is likely that councils’ pots will become increasingly strained as new policies such as the reduction to the benefit cap take effect.

Today’s decisions present a mixed picture for social tenants, but also for government. It will have to change the bedroom tax policy in order to comply with the law, and after that, there will be crucial questions about whether councils are equipped to deal with rising demand for DHPs. Today’s judgements should serve as an important cue for ministers to finally abolish this policy.

Links:
Link to my Storify feed: 09/11/16 | @PaulRutherford8 #BedroomTax judgement in @UKSupremeCourt

Nearly Legal | With and without foundation – Bedroom tax in Supreme Court

nearly-legal

09 November 2016

With and without foundation – Bedroom tax in Supreme Court

MA & Ors, R (on the application of) v The Secretary of State for Work and Pensions [2016] UKSC 58
R (on the application of Carmichael and Rourke) (formerly known as MA and others) (Appellants) v Secretary of State for Work and Pensions (Respondent)
R (on the application of Daly and others) (formerly known as MA and others) (Appellants) v Secretary of State for Work and Pensions (Respondent)
R (on the application of A) (Respondent/Cross-Appellant) v Secretary of State for Work and Pensions (Appellant/Cross-Respondent)
R (on the application of Rutherford and another) (Respondents) v Secretary of State for Work and Pensions (Appellant)

The Supreme Court has handed down its judgment in the culmination of years of cases on the discriminatory impact of the ‘removal of the spare room subsidy’ – the bedroom tax. The outcome was mixed, even including a split judgment on one case, but in at least one respect, the bedroom tax regulations were held to unlawfully and unjustifiably discriminate against households with disabled members.

The lead judgment of Lord Toulson makes clear that the accepted test was whether the relevant parts of regulation B13 were ‘manifestly without reasonable foundation’, dismissing an argument from the MA appellants that ‘weighty reasons’ were required in disability discrimination cases, particularly as the overall policy of Reg B13 was not being attacked. Stec applied  and Humphreys v Revenue and Customs Comrs [2012] 1 WLR 1545 approved.

In the Rutherford and Carmichael appeals, the Supreme Court held that where there is a clear medical need for an ‘extra’ room, it is not enough that discretionary housing payments may be awarded and this is a sufficiently clear class of case that the regulations should have made an exemption.

In both the Rutherford case – a child needing an overnight carer – and the Carmichael case – partners unable to share a room due to disability – the court pointed out the ‘inexplicable inconsistency’ in the Secretary of State’s different treatment of adults and children needing separate rooms or overnight carers. The Secretary of State’s appeal of Rutherford was dismissed and the Carmichael’s appeal allowed. Our note on Rutherford in the Court of Appeal is here

The other MA cases raising disability discrimination were not successful. There was no direct medical need for the ‘extra’ room, rather what the court called a ‘social need’ which was related to a disability in various different ways. The Supreme Court found that these could not be considered as a class and each case needed individual consideration of the circumstances and the merits of the social need. As such, the use of the DHP system to address the wider rage of disability related reasons for needing, or wanting the ‘extra’ room was justified.

The details of the other MA cases on appeal are:

51. Mr Daly occupies a two-bedroom property. His severely disabled son, Rian, stays with him regularly, but he is not within the list of those who qualify for a bedroom under Reg B13(5) because he spends less than half his time with his father. This has nothing to do with the fact of his disability. Mr Daly may have a powerful case for a DHP award, so that he can continue to pay his rent from state benefits for Rian’s sake, but I accept the Secretary of State’s argument that he has no proper basis for challenging the HB and DHP structure on equality grounds.

52. Mr Drage is the sole occupier of a three-bedroom flat, which is full of accumulated papers. He suffers from an obsessive compulsive disorder. His hoarding of papers is no doubt connected to his mental illness, but that is very far from showing that he has a need for three bedrooms. It is not unreasonable for his claim for benefit to cover his full rent to be considered on an individual basis under the DHP scheme.

53. JD lives with his adult daughter, AD, who is severely disabled, in a specially constructed three-bedroom property. They have no objective need for that number of bedrooms. Because the property has been specially designed to meet her complex needs, there may be strong reasons for JD to receive state benefits to cover the full rent, but again it is not unreasonable for that to be considered under the DHP scheme.

54. Richard Rourke and his step-daughter live in a three-bedroom property. One of the bedrooms is used for the storage of equipment. It is another example of a case where it is not unreasonable for Mr Rourke’s claim for benefit sufficient to cover the whole of the rent to be considered on an individual basis under the DHP scheme.

In the case of A, a woman who was raped, suffered domestic violence, harassment and stalking, who was allocated a 3 bed home that was fitted out with safety equipment and panic room under the Sanctuary Scheme, the Supreme Court overturned the Court of Appeal’s finding of discrimination by sex. While confirming that “for as long as A, and others in a similar situation, are in need of the protection of sanctuary scheme housing, they must of course receive it”, the majority of the 7 Judge panel found that this was also a situation that required case by case evaluation, rather than an exemption for a class of people, and as such, use of the DHP scheme was justified. 2 Judges disagreed and would have found sex discrimination. Baroness Hale, with Lord Carnwath, found (at 77)

Indeed, the respondent does not seriously dispute that Ms A needs to stay where she is. The Secretary of State accepts that she needs to stay in a sanctuary scheme and probably in this very house. The justification suggested for the interference, or the discrimination, is the availability of discretionary housing payments to make up the shortfall in her rent. But if the discretionary housing payment scheme is not good enough to justify the discrimination against the Rutherford and Carmichael households, it is not good enough to justify the discrimination against Ms A’s household either. Its deficiencies were acknowledged in the Court of Appeal’s decision in Burnip v Birmingham City Council [2012] EWCA Civ 629[2013] PTSR 117, para 46. They are well-summed up by Mr Drabble QC on behalf of the Rutherford and Carmichael families: it is discretionary, cash-limited and produces less certainty; it has a stricter means test; it offers different and less attractive routes of judicial challenge; it can be onerous to make applications; and it encourages short term, temporary and conditional awards. For a woman in a sanctuary scheme to have to endure all those difficulties and uncertainties on top of the constant fear and anxiety in which she lives cannot be justified. This is not a question of the allocation of scarce public resources: it is rightly acknowledged that public resources will have to meet this need one way or another.

The court of appeal finding of sex discrimination (our note here) was overturned.

Where does that leave us?

The Secretary of State will have to amend the regulations to provide for exemptions for households with disabled people with a (clear) medical need for the room. Amending after the Court of Appeal decision in Burnip took many months and a judicial scolding. It is to be hoped this time will be quicker.

For others with a need for an additional room but not currently exempted, even if the need is disability related, they will continue to have to seek DHPs. As the reduced benefit cap bites, this will become much harder.

A has already stated she will be appealing her case to the European Court of Human rights. But any decision by the ECtHR will be years done the line.

On a personal note, I must congratulate the Carmichaels and the Rutherfords, who I have talked to often over the last few years. Both families have shown remarkable strength and determination in seeing their cases through, in incredibly difficult personal circumstances. Their efforts and those of CPAG and their legal teams should see thousands of people with a clear medical need for a room exempted from the bedroom tax.