Another “Bedroom Tax” Challenge Fails

Rutherford and Ors v Secretary of State for Work and Pensions [2014] EWHC 1613 (Admin) – Read judgement here.

At the end of May, the High Court ruled that the reduction in Housing Benefit under Regulation B13 of Housing Benefit (Amendment) Regulations – commonly dubbed “the bedroom tax” - did not unlawfully discriminate against a family with a disabled child requiring an additional bedroom for overnight careers because the shortfall was covered by discretionary housing payments.

The case involved three Claimants: Mr and Mrs Rutherford and their 14-year-old grandson Warren. Warren suffers from a profound disability requiring 24-hour care from at least two people. Mr and Mrs Rutherford need the assistance of two paid careers for two nights a week. The family live in a three-bedroom bungalow rented from a housing association and specifically adapted to meet Warren’s needs. Mr and Mrs Rutherford sleep in one room, Warren in another, and a third room is used as a bedroom for overnight carers and to store medical equipment.

On 1 April 2013, Mrs Rutherford had her weekly Housing Benefit (HB) allowance reduced by 14% in accordance with the Regulation B13 (‘Reg.B13’) bedroom criteria contained in the Housing Benefit (Amendment) Regulations 2012. The Rutherfords’ application to their local council for a discretionary housing benefit (DHP) to cover the shortfall in HB was initially refused, but following a high profile media campaign, the council subsequently awarded two DHPs covering the shortfall until 6 April 2015. The Claimants argued that Reg.B13 amounted to unlawful discrimination under the European Convention on Human Rights (ECHR).

The Law

Reg.B13 calculates the amount of HB payable to a claimant in the social rented sector based upon the number of bedrooms the dwelling has in proportion to the number of people who live there. Where the dwelling exceeds the number of bedrooms to which the claimant is entitled, their HB is reduced by between 14% and 25%. It does not make provision for an extra bedroom where a disabled child in a HB claimant’s family requires overnight care from a non-resident carer. The Claimants’ argued that this constituted a breach of article 14 (prohibition of discrimination in rights) read with Article 1 Protocol 1 (A1P1) (right to peaceful enjoyment of possessions) of the ECHR.

The claimants relied heavily on Burnip and Others v Birmingham City Council and others [2012] EWCA Civ 629, a case in which the Court of Appeal (CoA) ruled that regulations governing the calculation of HB in the private rented sector were unlawfully discriminatory for failing to take account of the need for additional bedrooms for certain categories of persons with disabilities, namely adults requiring a spare room for an overnight carer and children requiring a separate room from their siblings due to disability. Since Burnip, the regulations for the calculation of HB in both the private rented and social rented sector have been amended to allow for an additional bedroom for these two categories of disabled persons, but not for disabled children who require overnight carers. The Claimants argued that there was no real difference between adults and children who require overnight care.

The Secretary of State relied upon R (MA and others) v Secretary of State for Work and Pensions and Others [2014] EWCA Civ 13. In that case the CoA found that whilst Reg.B13 discriminated against the general category of disabled persons who needed an additional bedroom by reason of their disability, that discrimination was justified. The correct test to apply was whether the justification offered by the Secretary of State was “manifestly without reasonable foundation”, i.e. did it lack an objective and reasonable justification? Given that the needs of disabled claimants vary greatly, it was held that the decision of the Secretary of State to provide for the disability-needs of some disabled claimants through Reg.B13 and others by way of more flexible DHPs was far from irrational, and hence the discriminatory nature of Reg.B13 could be justified when taken in the broader context of the HB payments scheme.

The Ruling

The Claimants submitted that the material facts of their claim were indistinguishable from Burnip and hence the reasoning in MA did not apply to them. Unlike the Claimants in MA, they fell within a small and readily definable group of disabled claimants that was neither too large nor amorphous to be expressly included within the Reg.B13. The Claimants argued that there is no principled difference between the case of adults and children requiring overnight care and therefore Reg.B13 constituted unlawful discrimination against them and others in their position. They further submitted that DHPs were an unsatisfactory alternative to statutory entitlement because they are discretionary, uncertain and cause a great amount of anxiety.

Delivering the judgment, Stuart-Smith J reiterated that the Secretary of State had a wide margin of appreciation in general measures of economic and social strategy. It was not enough for the claimants to demonstrate that Reg.B13 was flawed: it would have to be shown that, taken as part of the wider scheme of HB provision, it was seriously flawed and produced an unreasonable discriminatory effect. Whilst it was accepted that the Claimants’ case was similar to Burnip in so far as the class of HB recipients could be easily identified, the High Court nevertheless found that the Claimants had failed to demonstrate that Reg.B13 was manifestly without reasonable foundation. There were two main reasons for this.

Firstly, whereas the evidence in Burnip led to the conclusion that DHPs could not be relied upon to plug the identified discriminatory gap of the HB regulations for the private rented sector, in MA it was noted that the DHP scheme had since become better resourced and further guidance had been issued to local councils on which groups merited consideration for DHP funding.These improvements were evidenced by the fact that the Claimants’ had been awarded DHPs that ensured they suffered no financial loss as a result of Reg.B13. In the context of a scheme introduced at a time of “extreme financial austerity”, the requirement to make applications for DHP payments was held not to be a substantial detriment.

Secondly, whilst some aspects of the Governments’ reasons for the decision to treat adults and children differently could be criticised, for example, the unjustified assumption that non-resident carers would not require a bedroom, the overall justification for the differential treatment could not be characterised as irrational. Overnight care for adults was intended to allow them to live an independent life, something that children under the age of 16 could not aspire to. Further, the existence of the discretionary pot of DHPs enabled local authorities to make additional payments where they were satisfied that an extra room was necessary for children.

None of the detriments identified by the Claimants showed a serious flaw in the scheme. Bearing in mind the Secretary of State’s wide margin of appreciation, the means employed by the scheme to achieve the Government’s policy objective had not been inappropriate or disproportionate in its adverse effect. 

Comment

This ruling, which the Claimants are seeking to appeal, will undoubtedly be regarded as another setback for those wishing to challenge the Government’s austerity policies by recourse to the ECHR. Even though the amendment to Reg.B13 sought by the Claimants was fairly minor, and would have been unlikely to give rise to any significant financial cost or administrative difficulties if implemented, the High Court reaffirmed a high threshold for human rights-based challenges to matters of high public policy. In practice, establishing that a scheme is ‘manifestly without reasonable foundation’ or contains ‘serious flaws’ that produce unreasonable discriminatory effects will usually be very difficult.

The judgement may nevertheless offer some crumbs of comfort to people in a similar position to the Claimants as it made it clear that it would have been unjustifiable for the Claimants’ local council to withhold full DHP awards from them given their circumstances. Although Stuart-Smith J hastened to add that this part of the judgement was not binding on the Claimant’s council or more generally, it nevertheless lends further support to the idea that local councils should make full use of DHPs to eliminate any financial losses caused to households in similar circumstances to the Rutherfords. Furthermore, the judgement does not inoculate the Government’s scheme from future challenges:

I therefore conclude that there is at present adequate assurance that the Claimants will continue to benefit from awards of DHPs to plug the gap that would otherwise exist. If the scheme or other circumstances were to change materially, different considerations might apply…. (emphasis added) [54]

In other words, if the Government reduces the funding available for DHPs below a level at which individuals in a similar situation to the Claimants can no longer be adequately assured that their shortfall in HB will be fully compensated for in the future this could amount to a violation of their Convention rights.

Dr Joe Wills is a Lecturer in Criminal Law at the University of Leicester. A longer critique of the judgment written by the author of this post is available here. 

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