The bedroom tax in the Supreme Court
The Supreme Court has handed down its much-anticipated ruling over the so-called 'bedroom tax' or 'spare room subsidy'. John Fitzsimons analyses the outcome.
In seven conjoined appeals, including R (on the application of Carmichael and Rourke) (formerly known as MA and others) (Appellants) v Secretary of State for Work and Pensions (Respondent) [2016] UKSC 58, the Supreme Court has recently considered the discriminatory effect of the so-called ‘bedroom tax’, introduced under Regulation B13 of the Housing Benefit Regulations 2006 (SI 2006/2013) (“Reg B13”). Its decision represents the culmination of several years of litigation.
Six of the appeals concerned the deemed under-occupation of social housing by those with disabilities, while the seventh concerned the deemed under occupation by a woman living in “sanctuary scheme” accommodation.
The Supreme Court unanimously found that in two of the disability cases (Carmichael (“JC”) and Rutherford (“SR”)) the Secretary of State had breached article 14 ECHR in conjunction with article 8 by failing to make an exemption to the general rule for the claimants’ specific medical need for an extra bedroom. In the other four disability cases (JD, James Daly, RR and MD), the Court unanimously found that no exemption to Reg B13 was required and that the Discretionary Housing Payments (“DHP”) system was appropriate to deal with such cases.
In the case of a woman living in sanctuary scheme accommodation (“A”), the Supreme Court accepted that a vulnerable domestic violence victim must receive the protection of “sanctuary scheme” accommodation for as long as she needs it. However, Lord Toulson, with whom the majority agreed, took the view that the Government was not required to create a formal exemption within Reg B13 for those who live in such schemes. Lady Hale (with Lord Carnwath agreeing) dissented in this seventh case.
Background facts
Lord Toulson’s judgment divided the seven cases into three factual categories. Each case involved people whose rent was previously met in full (or in the case of JD, in part) by Housing Benefit (“HB”) but which had been reduced by between 14% and 25% following the introduction of Reg B13. DHP made up the shortfall in only three of the seven cases (JC, JD, and A).
Category A - Cases concerning adults with disabilities
1. JC has spina bifida, hydrocephalus and other related issues. Her husband is her full time carer. Due to her medical needs, her husband cannot share the same bed with her and needs a separate room.
2. RR lives with his stepdaughter in a three-bedroom property. They both have disabilities. They require the third bedroom to store equipment.
3. MD lives alone in a three-bedroom flat and has significant mental health problems including obsessive-compulsive disorder. He does not sleep in any of the bedrooms, which are full of papers he has accumulated.
4. JD lives with an adult daughter AD in a three-bedroom property. AD suffers with cerebral palsy, quadriplegia and registered blindness. JD provides full time care for her.
Category B - Cases concerning children with disabilities
5. James Daly’s son has severe disabilities and uses a wheelchair. As Mr Daly is separated, his son stays with him on weekends, at least one day during the week and for part of school holidays. He occupies a two-bedroom property.
6. SR’s grandson suffers from profound mental and physical disability. He requires 24-hour care by two people. SR and her husband care for him in a three-bedroom house. A carer stays in the third bedroom two nights a week.
Category C - Cases concerning sanctuary scheme accommodation
7. A is a victim of domestic violence and lives with her son in a three-bedroom sanctuary scheme house. Her property has been adapted to provide a high level of security and she receives on-going security monitoring.
Background to proceedings – Court of Appeal
The claimants argued that Reg B13 violated their rights under article 14 ECHR taken with article 8 and/or article 1 of the First Protocol. A also contended that the Public Sector Equality Duty (“PSED”) under the Equality Act 2010 had been breached.
The cases originated from two separate sets of proceedings. The first concerned JC, RR, MD, JD and James Daly. Their claims, formerly known as MA and others, were rejected by the Divisional Court (Laws LJ and Cranston J) [2013] EWHC 2213 (QB), and the Court of Appeal (Lord Dyson MR, Longmore and Ryder LJJ) [2014] EWCA Civ 13. Dean Underwood’s analysis of the Court of Appeal judgment can be seen here.
In summary, the Court of Appeal applied the “manifestly without reasonable foundation” test when seeking to establish whether the discriminatory effect of Reg B13 could be justified. It held that the discrimination was justified, as it was not practicable to exempt an imprecise class of persons to whom the bedroom criteria would not apply. The DHP scheme was deemed flexible and appropriate because the nature of a person’s disability and disability-related needs may change over time.
Notably, the Court of Appeal rejected the argument that the case of JC, who needed to sleep in a separate room from her husband because of her disability, was materially indistinguishable from Gorry v Wiltshire County Council, the decision which led to an exemption in Reg B13 (Reg B13(5)(ba)) concerning children unable to sleep in the same room by reason of a disability.
The second set of proceedings arose in the cases of A and SR. Their appeals were heard together and upheld in the Court of Appeal (Lord Thomas CJ and Tomlinson and Vos LJJ) [2016] EWCA Civ 29. SR’s requirement for a bedroom for her grandchild’s carer was deemed indistinguishable from that of an adult with disabilities requiring an overnight carer, to which the decision in Burnip v Birmingham City Council [2012] EWCA Civ 269 and a subsequent amendment to Reg B13 (Reg B13(6)(a)) applied.
This reasoning was also applied in the case of A, because the category of persons living in sanctuary schemes was relatively small, easy to identify, not liable to abuse the scheme, unlikely to undergo change and not in need of regular monitoring. Accordingly, the Court held that there had been a breach of article 14 in both cases. The Court rejected the PSED arguments.
This combination of Court of Appeal cases with differing results meant that for the purposes of the Supreme Court case, the Secretary of State was the respondent for the first set of proceedings and the appellant for the second. A also included a cross appeal against the rejection of her PSED claim.
The Supreme Court
The correct test
The Supreme Court first considered whether the lower courts applied the correct test in asking themselves whether the discriminatory treatment about which the claimants complained was ‘manifestly without reasonable foundation’. The claimants argued that the correct test in the context of disability discrimination should be ‘weighty reasons’.
Lord Toulson’s judgment followed the Court of Appeal by citing Lady Hale in Humphreys v Revenue and Customs Comrs [2012] 1 WLR 1545 (“Humphreys”). In that case, Lady Hale approved the ‘manifestly without reasonable foundation’ test as being the proper approach to justification in cases involving state benefits. Lord Toulson emphasised that the fundamental reason for applying the manifestly without reasonable foundation test was that choices about welfare systems involve policy decisions on economic and social matters which are pre-eminently matters for national authorities.
Despite the claimants submitting that their case did not concern the policy of Reg B13 but rather the manner of its implementation, Lord Toulson explained that in his view, the Secretary of State was addressing the broad question of whether he should try to deal comprehensively with all problems of those who have any kind of disability within the precise rules of the regulation, or whether to accommodate them by a linked system of discretionary benefits. Accordingly, this was “a clear example of a question of economic and social policy, integral to the structure of the welfare benefit scheme…” Humphreys and the manifestly without reasonable foundation test were thus affirmed.
The fall-back argument
As a fall-back argument, the claimants contended that the courts below failed to give the Reg B13 scheme sufficiently careful scrutiny and that, as a matter of principle, the availability of DHPs could not justify a reduction in the HB to which persons suffering from disabilities would be entitled but for Reg B13.
Lord Toulson considered that the Secretary of State’s decision to structure the scheme as he did was reasonable. However, he noted that the Burnip and Gorry cases had shown that some people suffer from disabilities such that they have a transparent medical need for an additional bedroom. The Court of Appeal classed such cases as ones where the individuals’ medical condition was easy to recognise and gave rise to the need for a separate bedroom. Accordingly, there was no reasonable cause to apply the same restriction on HB as if the bedrooms were truly under-occupied.
Lord Toulson observed that the situations of JC and SR were counterparts to Burnip and Gorry: there was therefore no reasonable justification for the differences in the treatment of those situations. He dismissed the Secretary of State’s appeal in SR’s case and allowed JC’s appeal, finding a violation of article 14 taken with article 8.
The other four disability cases (RR, MD, JD and James Daly) were covered by the possibility of DHP and in the Court’s view, this was not unreasonable. These cases did not disclose any direct medical need for the extra room; they instead disclosed a ‘social need’, which was related to disability in various different ways.
In the context of A, Lord Toulson distinguished Burnip as a case in which there had been a transparent medical need for an additional bedroom, whereas A had no such need. He accepted that A and others in a similar situation must continue to receive sanctuary scheme protection when needed, but observed that this does not require the Court to hold that A has a valid claim for unlawful sex discrimination. A had not established that the adoption of Reg B13 had deprived her, or was likely to deprive her, of a safe haven. Finally, despite a failure to identify in an equality impact assessment the very small group of people within the sanctuary schemes requiring an extra room, the PSED was not breached.
Lady Hale (dissenting in the A case) (with whom Lord Carnwath agreed)
Noting that the State had provided A with a three-bedroom safe haven house which she had not needed, Lady Hale observed that denying her the benefit she needed in order to be able to stay is discrimination pursuant to Thlimmenos v Greece (2000) 31 EHRR 154: treating her like any other single parent with one child when in fact she ought to be treated differently.
She dismissed the argument that the possibility of DHP offered a justification for the discrimination. This led her to list DHPs’ deficiencies: they are discretionary, cash-limited and produce less certainty; they have a stricter means test; they offer different and less attractive routes of judicial challenge; it can be onerous to make DHP applications; and it encourages short term, temporary and conditional awards. Furthermore, she noted that if DHPs were inappropriate in justifying the discrimination against SR and JC, the same could be said for A’s case.
Addressing the argument that there are insuperable practical difficulties with drafting an exception to the size criteria in Reg B13 to cater for victims of gender-based violence, Lady Hale explained that such cases cannot be equated with other people who would prefer to stay where they are. In the latter cases it is not clear that such groups would constitute a “status” for article 14 purposes; even if they did, their needs would require individual evaluation.
The State’s positive obligation under the ECHR to provide effective protection against gender-based violence animated Lady Hale’s dissent and she observed that for this small group of victims, an exemption to Reg B13 is the only way to make that protection effective. She reached her conclusion without examining the PSED issue but in any event took the view that this was not properly complied with. She concluded that the PSED requires public authorities at least to consider the impact of their decisions and actions on the victims of gender-based violence.
Comment
This case has provided welcome certainty that the ‘manifestly without reasonable foundation’ test is indeed the appropriate test in the context of justifying disability discrimination in state benefits cases. Furthermore, Lord Toulson’s judgment provides a useful insight into the Supreme Court’s resistance to arguments attempting to distinguish policy from the manner of its implementation. Any such attempts to couch a discrimination complaint in terms of an attack on matters of detail would render it “too easy for a skilled lawyer to circumvent the general rule” and will thus not be looked upon kindly by the Court.
In practical terms, this judgment can be seen as a further blow to the Government’s benefits reform agenda. It will once again lead to an amendment of the regulations, this time in order to provide for exemptions for households with disabled people with a clear medical need for the room. Those who do not fall within the exemptions must continue to resort to DHP applications despite the many flaws Lady Hale outlined with such an option. Finally, in the case of A, her solicitors have said they intend to challenge the finding of the Court in the ECtHR. They will undoubtedly rely on Lady Hale’s compelling dissent and as such, the bedroom tax litigation will trundle on.
John Fitzsimons is a Pupil Barrister at Cornerstone Barristers. He can be contacted This email address is being protected from spambots. You need JavaScript enabled to view it..
