Monthly Archives: January 2016

The ever confusing tale of the bedroom tax

Sam Madge-Wyld tries to make sense of the bedroom tax.


January has been a very quiet month for the courts and housing law. Happily, and not just because it gives me something to write about, the Court of Appeal handed down its second decision on the bedroom tax (spare room subsidy if anyone from the Government is reading) in the case of R (Rutherford and A) v Secretary of State for Work and Pensions [2016] EWCA Civ 29. Before considering Rutherford it is first necessary, however, to delve back into history and consider two earlier cases

Burnip v Birmingham City Council and other appeals [2012] EWCA Civ 629

The cases of Burnip and Gory pre-date the bedroom tax, but are relevant because they concern reg,13D, Housing Benefit Regulations 2006 as it is what the bedroom tax was modelled on. Under reg.13D, a private sector tenant’s local housing allowance (i.e. the maximum amount of housing benefit they are entitled to) is calculated, in part, on the number of bedrooms to which the tenant is entitled.

Mr Burnip was the tenant of a two-bedroom property. He had spinal and muscular dystrophy and required an overnight carer. He claimed that he therefore needed the extra bedroom for his overnight carer. He applied for housing benefit, but, as he was only entitled to one bedroom under reg.13D, his housing benefit was not sufficient to cover his rent. He received some discretionary housing payments from the local housing authority, but these were not sufficient to cover his rent. He was therefore required to use additional money that he received in the form of a student loan, incapacity benefit and disability living allowance to pay his rent.

Likewise, Ms Trengrove was the tenant of a two-bedroom property. Owing to her disability, she required an overnight carer and she claimed that she needed the extra bedroom for her carer. Her housing benefit was also limited by reg.13D and her rent was not sufficient to pay all of her rent. The local authority made some discretionary housing payments which met the shortfall but the payments were not continuous.

Mr Gorry was the tenant of a four-bedroom house. He lived in it with his wife and their three children. His two daughters were disabled. One had Down’s Syndrome, the other had Spina Bifida. Owing to their disabilities, the daughters could not share a bedroom. Regulation 13D provided that he was only entitled to three bedrooms, on the basis that his two daughters were required to share a bedroom. The authority made some discretionary housing payments but these did not always meet the shortfall and were not continuous. The family were therefore required to use Mr Gorry’s incapacity benefit and disability living allowance to cover the shortfall.

All three argued that reg.13D discriminated, in contravention of Article 14, ECHR, against people who were disabled. The Court of Appeal found that the statutory criteria, namely reg.13D, was prima facie discriminatory. It would therefore be unlawful unless it could be justified. Henderson J, giving the second part of the judgment, posed the question in this way:

“Can it be said that the wider benefits context provides an objective and reasonable justification for the discrimination against Mr Burnip which we have found to be established in relation to the amount of his HB?”

His answer to that question was no. First, other benefits, which were provided for other reasons (e.g. to meet ordinary living expenses) were not intended to be used for paying a tenant’s rent. Secondly, discretionary housing payments were in principle available as a possible way of bridging this gap, but they could not be regarded as a complete or satisfactory answer to the problem. This was because, according to Henderson J

“The payments were purely discretionary in nature; their duration was unpredictable; they were payable from a capped fund; and their amount, if they were paid at all, could not be relied upon to cover even the difference between the one and two bedroom rates of LHA, and still less the full amount of the shortfall. To recognise these shortcomings is not in any way to belittle the valuable assistance that discretionary housing payments are able to provide, but is merely to make the point that, taken by themselves, they cannot come anywhere near providing an adequate justification for the discrimination in cases of the present type.”

Henderson J also held that it was also relevant that the exception sought was for only a very limited category of claimants, namely those whose disability is so severe that an extra bedroom is needed for a carer to sleep in or, where separate bedrooms are needed for children who, in the absence of disability, could reasonably be expected to share a single room. Such cases are by their very nature likely to be relatively few in number, easy to recognise, not open to abuse, and unlikely to undergo change or need regular monitoring. The cost and human resource implications of accommodating them should therefore be modest, quite apart from the point that in some cases the effect of refusing the claim could well be to force the claimant into full-time residential care at much greater expense to the public purse.

It followed that in all three cases the discrimination could not be justified. It was manifestly without reasonable foundation.

R (MA) v Secretary of State for Work and Pensions [2014] EWCA Civ 13

The effect of the bedroom tax (or reg.B13) was similar to the bedroom entitlement covered by reg.13D. Under reg.B13, tenants of social housing’s entitlement to housing benefit is reduced by 14% or 25% if they are deemed to have one or two “spare” bedrooms.

As with reg.13D, there are certain exceptions, but, as everyone reading this will know, there are a large number of disabled adult and other tenants who have been greatly affected by the cut in housing benefit. The claimants in R (MA) v Secretary of State for Work and Pensions [2014] EWCA Civ 13 serve as examples of the types of claimant who have been affected. Jacqueline Carmichael has spina bifida, hydrocephalus, is doubly incontinent, is unable to weight bear, and has recurring pressure sores. As a result she needed a special hospital-type bed in her bedroom with an electronic pressure mattress. She was unable to share this bed with her husband and there was insufficient room in her bedroom for an additional bed. Like, Mr Burnip she therefore needed an additional bedroom.

Likewise, JD lived with her disabled 26-year-old daughter, AD. AD has severe physical disabilities, learning disabilities and visual impairment. She has cerebral palsy with quadriplegia and she is registered blind. She has been assessed as having the approximate mental age of a three-year-old and is reliant on others to make decisions for her. She is doubly incontinent, and needs 24-hour care and support with every aspect of her life. To meet AD’s needs the property she and JD lived in was specially adapted. Her brother had previously lived with them, but had since moved out. This meant that the property was deemed to have a spare bedroom.

Richard Rourke was a wheelchair user. He has spinal arthritis, sciatica, sleep apnoea, diabetes and hereditary progressive deafness. For the most part, he lived in a three bedroom bungalow on his own, but, outside of term time, with his step-daughter Rebecca, who is herself a wheelchair user. Mr Rourke was deemed to have two spare bedrooms.

They, along with a number of other applicants, contended that reg.B13 was discriminatory for the precisely the same reasons that had caused the Court of Appeal to have found reg.13D to be discriminatory in Burnip. Like in Burnip, the Court of Appeal found that reg.B13 was, if considered in isolation and without regard to the separate provision of discretionary housing payments, prima facie discriminatory. Unlike in Burnip, however, the Court of Appeal found that the discrimination was justified, because the Secretary of State had also made available the provision of discretionary housing payments.

At this point you may be forgiven for wondering how the Court of Appeal could make, what appear to be, two decisions that conflict with each other. Isn’t the Court of Appeal bound by precedent? If you are thinking that you are likely to be even more confused when you learn that the Court of Appeal did not say that Burnip had been wrongly decided or that the law on justification had in anyway changed.

So, how did the Court of Appeal reach a different result? The cases of Burnip, Trengrove and Gory were all found to be different to the present set of cases. Henderson J had acknowledged that these two types of cases would be very limited and were likely to be “relatively few in number, easy to recognise, not open to abuse and unlikely to undergo change or need regular monitoring”. That was not the case in MA where the complainants did not fall within a tightly defined narrow class of claimant; the proposal in MA, 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, was simply not practicable to implement. Accordingly, for these types of case, in which no bright line existed, it was preferable for a flexible DHP fund to be used to meet the need of claimants. Moreover, since Burnip, the DHP fund had been topped up, was supplemented by guidance and kept under review. The problems identified by Henderson J did not apply.

Finally, the Secretary of State had been entitled to treat the needs of children who require an overnight carer (i.e. Mr Gorry) more favourably than the case of adults who require an overnight carer (i.e Ms Carmichael). This was because the Secretary of State was obliged to treat the rights of the child as a primary consideration as per Art.3.1, UN Convention on the rights of the child.

Rutherford and A

MA, as you would expect, was appealed to the Supreme Court. The Supreme Court, however, opted not to hear it until it decided the benefit cap case, i.e. R (SG) v Secretary of State for Work and Pensions [2015] UKSC 16. That decision took a long time to be handed down.

In the meantime, a couple of other cases, with different facts, challenged the lawfulness of the bedroom tax: Rutherford and A. Mrs Rutherford was the grandparent of W. They lived in a three bedroom house. W suffered from profound mental and physical disability caused by a very serious and rare genetic disorder (Potocki-Shaffer syndrome). He required round the clock care from at least two people. Mrs Rutherford and her husband provided the majority of that care with the assistance of an overnight carer who required a bedroom in which to sleep. Under reg.B13, they were deemed to have a spare bedroom and their entitlement to housing benefit was reduced by 14%. The shortfall had always, however, been met by the provision of DHPs.

A lived in a three bedroom house. In 1993-4 she had a brief, casual relationship with a man, X, who was subsequently convicted of attempted murder; he had, overtime, been exceptionally violent to her. Whilst in prison he started to harass her and in 2002 he sought her out. A child was conceived as a result of his rape of her and was born in 2003. The child lives with A. In 2012, as a result of X subsequently trying to find her, A’s property was adapted under the Sanctuary Scheme. This made the property more secure and made provision for it to be monitored. One such adaption was to adapt the third bedroom into a safe room. There are around 5,800 households whose properties that have been adapted under the scheme, of which around 280 have had their housing benefit reduced by 14% or more by the bedroom tax.

Both claimants argued that reg.B13 unlawfully discriminated against them. As in both Burnip and MA, the Court of Appeal held that reg.B13 was prima facie discriminatory. The question was therefore whether the discrimination was justified. To answer that question the court had to decide whether the cases were Burnip type cases (i.e. of a narrowly defined class) or an MA type cases (i.e. a broad class). The problem for the Secretary of State was that A was plainly a narrow defined class, i.e. persons who had been the subject of extreme violence and whose properties had been adapted under the Sanctuary Scheme and there were only 280 housing benefit applicants under this class. The reasoning of the Court of Appeal in MA that explained why the provision of DHPs justified the discrimination, and which distinguished Burnip, could not apply to the facts of A. Unless Burnip was overturned the Court of Appeal was bound to follow it. It is of note, however, that the Court of Appeal appeared uncomfortable with this finding and indicated that they had seen “great force” in the Secretary of State’s argument that DHPs were available for such applicants and, provided authorities followed the Secretary of State’s guidance, they would be provided to cover any shortfall in housing benefit.

The Court of Appeal also found that the discrimination in Rutherford could not be justified, albeit for different reasons. In Rutherford, the Court of Appeal could find no rational reason for why disabled adults, who required an overnight carer, were entitled to a spare bedroom and yet disabled children, who also required an overnight carer, were not. This was especially so where the Secretary of State was obliged to treat the rights of the child as a primary consideration (and indeed had argued this as a reason for treating Ms Carmichale differently to Mr Gorry’s children).

The Supreme Court

This is almost certainly not the last word on the matter. The Court of Appeal in Rutherford implicitly recognised within its reasoning that the law on this area is a mess. As so often happens when cases are distinguished on their facts, but the reasoning is left untouched, anomalies and absurdities result. It has to be said, however, that such anomalies are also likely result from badly written, ill thought out and politically motived policy. It would have been far easier for the Secretary of State to have instructed his department to define narrow classes of case that plainly justified the provision of full housing benefit, if it was the Secretary of State’s intention to require local authorities, through guidance, to provide an equivalent sum in DHPs. Unless of course, the true motive was to make it harder for such people to claim full housing benefit. No court, however, is every going to entertain the latter argument.

The first question for the Supreme Court will be whether the bedroom tax survives. It will be very surprising if it does not as it has recently decided that the even more discriminatory benefit cap policy, which did not even have benefit of DHPs and that breached Art.3.1, UN Convention on the Rights of the Child, was justifiable. The second question, will then be whether the Burnip and MA distinctions survive and, if so, what other classes, if any, fit within the Burnip class. As the Supreme Court was split on the benefit cap it is impossible to make a sound prediction, but it will probably turn on the evidence of the Secretary of State concerning the provision of DHPs and the robustness of its guidance.

Hopefully, we will not have as long to wait for their decision as we did for their decision on the benefit cap.


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Something wicked this way comes

Sam Madge-Wyld considers the housing law agenda for 2016

Housing and Planning Bill

Since our last post on the Right to Buy (detailing the requirement for local authorities to sell their highest value homes to fund the extended right to buy for housing associations) and the Housing and Planning Bill there have been three further important amendments to the Housing and Planning Bill. First, the Bill will provide that all new secure tenancies will be fixed-term tenancies of between two and five years. Authorities will therefore be prohibited from granting life-time periodic tenancies to new tenants. Secondly, the rules on succession will be changed to prevent anyone, other than a deceased tenant’s partner, from succeeding to a secure tenancy. Moreover, the deceased partner will only succeed to a five year fixed term secure tenancy.

The implication of these late amendments are stark: under the Localism Act 2011 the then Government was keen to give authorities a choice in what tenure it allocated and how to set its succession policies. Those days are gone and it will no longer be possible for local authorities to grant life-time tenancies, save for in a limited number of circumstances that the Secretary of State may specify in regulations. Moreover, the life-time tenancies that do remain will, on a tenant’s death, convert into five year fixed-term secure tenancies and may only be passed onto the deceased tenant’s partner meaning that it will not be long until, like the Rent Act tenant, the life-time secure tenant will be rare. The change will also mean that all other family members, who are presently qualified to succeed, would no longer be able to succeed to a secure tenancy even if they had lived with the former tenant for a period of 12 months before the deceased tenant’s death.

Thirdly, the Government, perhaps aware of the concern, which we expressed in our own post (X-REF), that the forced sale of council homes will mean the end of council owned housing in London, has also moved an amendment which will allow local authorities in Greater London to enter into agreements with the Secretary of State that will enable local authorities to retain some of the money generated by the sale of high value council housing. However, it is unclear how authorities will be able to afford to build two new homes from the sale of one, especially if it isn’t even entitled to keep all of the proceeds. Moreover, many authorities require the capital proceeds from sales to pay down the debt they received when the housing revenue account subsidy was abolished four years ago.

In any event, there are only going to be a limited number of sites within an authority’s borough that it owns and that are capable of being developed. Once those sites are exhausted, the cost of converting brown field sites into homes or of acquiring empty land so as to enable the building of two homes may dwarf the proceeds of any sale.

The Bill is still to go to the House of Lords, and so may be amended further, but it is likely to be passed at some point later this year.

Immigration Bill

The Immigration Bill, as presently drafted, intends to amend the Immigration Act 2014 to provide that a landlord will be guilty of a criminal offence, as opposed to simply being liable to pay a civil penalty, if his premises are occupied under a residential tenancy agreement by a person without a right to rent and the landlord knows or ought to know that they person occupying the premises is disqualified from doing so. A landlord that commits this offence is liable to a sentence of up to five years of imprisonment, an unlimited fine or both. Incredibly, as presently drafted, there is no reasonable excuse defence, which means that a landlord becomes liable to prosecution as soon as he is deemed to be aware of the fact that someone is occupying his premises without a right to rent.

To mitigate the effects of this, the Government also proposes to make it far easier for landlords to remove tenants without a right to rent. Unlike under the Immigration Act 2014, the landlord may determine any tenancy by giving the tenant a notice to quit the premises within 28 days wherever the Secretary of State has notified him that the occupier does not have a right to rent. On its expiry the landlord can either recover possession without a court order (as such tenancies are excluded from the Protection From Eviction Act 1977), issue a warrant of possession in the High Court or issue a claim for possession in the county court under a new mandatory ground for possession. It remains to be seen whether landlords will, with the threat of a possible prosecution, resort to evicting tenants themselves or if they continue to instruct bailiffs to do so.

Curiously, there is no right of appeal against the service of a notice by the Secretary of State on the landlord, which must mean that it is potentially challengeable in the High Court by way of judicial review. Presumably, if the Secretary of State’s notice is quashed, for example because the tenant does have a right to rent, then the subsequent notice served by the landlord will also be invalid and potentially open the landlord to damages for trespass or breach of the covenant for quiet enjoyment.

The Bill has already passed its committee stage in the Lords and so is likely to be passed into law in the first few months of the year. It should also not be forgotten that the Immigration Act 2014, in its current guise, will itself come into force across England on 1 February 2016.

Cases in the Supreme Court

In addition to the main legislative changes, we can also expect judgment in McDonald v McDonald at some point after it is heard in March. The Supreme Court will tell us whether, and if so in what circumstances, an occupier of land owned by a private individual can raise an Article 8 defence to a claim for possession. In the same month, the Supreme Court will also hear MA & Others v Secretary of State for Work and Pensions, and determine whether the bedroom tax is, like the benefit cap, lawful.

Then in May, the Supreme Court will consider, in Edwards v Kumarsamy, whether a landlord can be found liable under a residential tenancy agreement for the existence of disrepair that exists in a part of the building that is not located within the tenant’s dwelling, and which is not within his control, in circumstances where he has no knowledge of the disrepair.

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