Council wins appeal in lead case on bedroom tax and shared residence of child

The Upper Tribunal has upheld a local authority’s appeal in the lead case on the application of the “bedroom tax” to the shared residence of a child.

The claimant mother in the case of MR v North Tyneside Council and Secretary of State for Work and Pensions (Housing and council tax benefits : other) [2015] UKUT 34 (AAC) (22 January 2015) lived in a council property with two bedrooms.

She was awarded housing benefit and council tax benefit from 2008, at which time her son was living as part of her household and she was receiving child benefit for him.

In January 2012, the local authority superseded the decision awarding benefit to take account of the fact that the claimant’s son was now living with his father.

From 1 April 2013, the local authority further reduced the award by 14% on the ground that the claimant needed only one bedroom under regulation B13 of the Housing Benefit Regulations 2006.

By that date, the claimant’s son was the subject of a shared residence order under which he spent alternate weeks with his mother and father. His father was receiving child benefit and tax credit in respect of him, although by agreement these were shared between the parents.

The claimant won in the First-tier Tribunal, which declined to find that her son occupied her home for the week he lived with her under the residence order.

This, the FTT judge said, would cause onerous administrative consequences if local authorities had to recalculate entitlement to benefit every week. Instead, the judge found that the claimant’s son occupied her dwelling on a continuing basis with temporary weekly absences. He also found that the son occupied his father’s home on the same basis.

The judge treated ‘dwelling’ and ‘home’ in regulation B13 as undefined ordinary words that he had to apply to the facts of the case. The reality was that the son was cared for equally by his parents and that the payment of benefits was structured as it was merely for administrative convenience. The son was able to have more than one home, to live in more than one household and to occupy more than one property on a normal basis.

The FTT judgment has now been set aside by Upper Tribunal Judge Edward Jacobs, who ruled that the claimant’s benefit should be calculated on the basis that on and from 1 April 2013, she was entitled to only one bedroom for the purposes of regulation B13 of the Housing Benefit Regulations 2006 with the result that her entitlement to benefit was reduced by 14%.

The UT judge noted that the Administrative Court had dealt with the human rights issues that arise in this type of case in R (Cotton and others) v Secretary of State for Work and Pensions and others [2014] EWHC 3437 (Admin).

In Cotton, Mr Justice Males decided that a failure to make provision for shared residence could involve or amount or to a violation of Article 8 of the European Convention on Human Rights, but only in exceptional circumstances.

Judge Jacobs said the MR case dealt with an approach that some tribunals had employed to assist claimants faced with a reduction in their housing benefit.

“I understand why tribunals have wanted to assist claimants who found themselves in the predicament of having their benefit reduced despite their need to retain a bedroom for when their child is staying, but the method used is based on a misinterpretation of the legislation,” he found.

Judge Jacobs said he accepted the argument put forward by the Secretary of State for Work & Pensions that the FTT’s approach was based on a misunderstanding of the structure of the housing benefit legislation.

“The flaw was to treat the meaning of the words used in regulation B13(5) as freestanding, when they had to be read in the context of other provisions,” he said.

The UT judge noted that Regulation B13(5) provided that a claimant was entitled to one bedroom for each of the categories of person listed ‘whom the relevant authority is satisfied occupies the claimant’s dwelling as their home’.

A child was one of those categories, which was defined as ‘a person under the age of 16’ by regulation 2(1).

But Judge Jacobs said that provision had "to be read, not in isolation, but in the context of the housing benefit legislation as a whole.”

He added that Regulation 7(1)(a) was part of that context. This provided that ‘a person shall be treated as occupying as his home the dwelling normally occupied as his home … by himself and his family’.

Section 137(1)(c) of the Social Security Contributions and Benefits Act 1992 meanwhile defined ‘family’ as ‘a member of the same household for whom that person is responsible and who is a child’.

This led to regulation 20(2)(a), which provided that when ‘a child … spends equal amounts of time in different households … the child … shall be treated … as normally living with the person who is receiving child benefit in respect of him’.

Judge Jacobs said the son would have been entitled to a second bedroom for himself under regulation B13(5)(e), if he were occupying the dwelling as part of the claimant’s family (regulation 7(1)(a)); and that depended on whether his mother was responsible for him (section 137.

“This depends on how much time the son spends with each parent and who received child benefit in respect of him,” the judge continued.

“As he divides his time equally between his parents and as his father receives child benefit in respect of him, his mother is not responsible for him by virtue of regulation 20(2)(a). The result is that the son does not qualify for a second bedroom under regulation B13.”

The UT judge said North Tyneside had been right to reduce the claimant’s entitlement by 14% under regulation B13(3)(a).

“The tribunal made an error of law by misinterpreting the legislation. I must therefore set its decision aside,” Judge Jacobs found.

“As there is no dispute about the facts and there can be only one proper application of the law to those facts, I have re-made the decision to confirm the local authority’s application of regulation B13.”

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