DWP defeats challenges to benefit cap and under-occupation charge

The Government’s flagship policies for a ‘benefit cap’ and an ‘under-occupation charge’ are discriminatory but the Department for Work & Pensions has justified this effect, the Court of Appeal has ruled today.

Law firms acting for the claimants in the two cases – R (SG) v SSWP [2014] EWCA Civ 156 (the benefit cap case) and MA & Ors v Secretary of State [2014] EWCA Civ 13 (the under-occupation charge or ‘bedroom tax’ case) – immediately announced that they would seek to appeal to the Supreme Court.

The under-occupation case (MA) related to the reduction from 1 April 2013 in housing benefit for those deemed to have one spare bedroom (a 14% cut) or two spare bedrooms (a 25% cut).

In MA it was argued on behalf of disabled claimants that:

• The reduction in eligible rent as a result of changes to housing benefit regulations discriminated against disabled persons such as the claimants without justification and therefore violated their rights under article 14 ECHR when read in conjunction with article 1 of the First Protocol of the Convention;
• The Secretary of State for Work & Pensions introduced the measures in breach of the public sector equality duty in s. 149 of the Equality Act 2010.

The Divisional Court rejected both grounds of challenge in a ruling issued in July 2013.

Upholding that judgment today, the Master of the Rolls found that:

1. The Secretary of State had justified the discriminatory effect of the policy;
2. The Secretary of State was 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 disability) to whom the bedroom criteria would not apply;
3. The nature of a person’s disability and disability-related needs may change over time (even over a period of a few weeks). The greater flexibility of discretionary housing payments (DHPs) was more appropriate at least for those of whom it cannot be said with confidence how long their disability-related needs will persist;
4. DHPs are administered by local authorities who are accountable locally for the money they spend. Local authorities are not subject to the same financial discipline in relation to housing benefits as they are in relation to DHPs.

Anne McMurdie of Public Law Solicitors, who are representing three claimants, said: “In figures provided during the course of the hearing the Government made clear that the fund for discretionary payments will be reduced by £15m next year.”

Another law firm, Leigh Day, sought alongside Public Law Solicitors to argue on behalf of adult claimants that their position was indistinguishable from disabled children who were exempted from the reform.

But the Court of Appeal also ruled that this differential treatment was justified.

Leigh Day’s Ugo Hayter said: “We are extremely disappointed by this judgment and we are baffled by the findings of the Court of Appeal.

“The Court recognised that our clients and thousands of disabled people across the UK had a need for accommodation not provided for by the new housing benefit rules, however the Court decided that disabled tenants should not have their housing needs met on an equivalent basis to their able bodied counterparts, just because they are disabled.”

“Instead disabled tenants are being forced to rely on short term and discretionary payments.”

Hayter added: “We are currently considering whether an appeal to the Supreme Court is possible.”

A Department for Work and Pensions spokesperson said: “We are pleased that the courts have once again found in our favour and agreed this policy is lawful.

“Reform of housing benefit in the social sector is essential to ensure the long term sustainability of the benefit. But we have ensured extra discretionary housing support is available for vulnerable people.”

The DWP meanwhile also defeated the challenge to the £26,000 ‘benefit cap’ introduced through the Welfare Reform Act 2012 and the Benefit Cap (Housing Benefit) Regulations 2012.

The claimants in SG comprised the mother and youngest child of two families, each a single parent family. They had fled violent marriages and lived in private rented accommodation because they could not get council housing.

They contended that because of their particular circumstances they would suffer harsh consequences as a result of the cap and that other lone parents would be similarly affected.

The Court of Appeal said the key issues were whether the 2012 Regulations:

• unlawfully discriminated against (a) women generally or (b) women who were victims of domestic violence, in breach of article 14 read with A1P1;
• infringed article 3(1) of the United Nations Convention on the Rights of the Child (“UNCRC”);
• unlawfully discriminated against families in breach of article 14 read with article 8 of the Convention;
• infringed article 8 of the Convention as a free standing claim; and
• were unlawful at common law on the grounds of irrationality.

The Court dismissed the claim. The Master of the Rolls said: “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 MR added that the Government had recognised that the scheme may need to be modified in the light of experience, pointing to a statement from a senior DWP official that there would be a full evaluation of the benefit cap exploring its effectiveness and analysing the appropriateness of the policy design and delivery model.

The Master of the Rolls continued: “[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.

“On the main issue of whether it unlawfully discriminates against women (including victims of domestic violence) and families, the question is whether the cap is manifestly without reasonable foundation. For the reasons that we have given, we are satisfied that the cap plainly does have a reasonable foundation.”

A DWP spokesperson said the Department was pleased that the courts had ruled again that the benefit cap complied with the European Convention on Human Rights.

They added: “The benefit cap sets a fair limit to what people can expect to get from the welfare system – so that claimants cannot receive more than £500 a week, the average household earnings.”

Rebekah Carrier of Hopkin Murray Beskine Solicitors said the claimants hoped to take the case to the Supreme Court.

She said: “In particular it is disappointing that the Court declined to decide important issues of principle affecting the large numbers of women and children made homeless by domestic violence every year.The Government promised to address htis in April 2013, ten months ago, but has failed to do so.

“The Court recognised the problem and expressed concern about the Government’s delay in addressing it, but they have abandoned many domestic violence victims to their fate until the Government chooses to act. That is not good enough for my clients, or for the many women who will face a stark choice about whether to stay with a violent partner, or flee and risk losing their home or being destitute.”