England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2A 2LL
		27 November 2014

1. MR JUSTICE OUSELEY: This is an appeal by the billing authority, South Tyneside Council, against the decision of a Valuation Tribunal of 8 April 2014. By that decision it allowed the appeal of Mr Aitken, to the effect that the standard percentage reduction to council tax reduction or support should not apply to him, because of his disability.
2. The jurisdiction of the tribunal did not encompass such matters as were raised but not pursued before it as to whether the council tax reduction scheme adopted by the council discriminated unlawfully against disabled persons. It was confined, so far as material, to the question of whether the calculation had been undertaken correctly.
3. The appeal from the Valuation Tribunal decision, lies to this court; the Valuation Tribunal for England, (Council Tax and Rating Appeals) (Procedure) Regulations 2009. The jurisdiction is an error of law jurisdiction which encompasses serious procedural errors, see regulation 43.
4. The second respondent, Mr Aitken, does not appear. He has sent through his solicitors, Irwin Mitchell, a letter to the court saying that he has not been able to secure either Legal Aid or a conditional fee agreement, and accordingly he withdraws from the appeal on the proviso that no order for costs is sought by the appellant. No order for costs is sought by the appellant authority.
5. The Valuation Tribunal commented on the complexity of the statutory scheme, not helped by the way in which correspondence from the authority explained what the position was. It is not an entirely straightforward scheme to understand, partly because of the way in which the provisions for the reduction in council tax draw upon language more suited for the award of benefit in various social security statutes.
6. The position, essentially, is this. A person is obliged to pay council tax. There used to be a national policy for the reduction of council tax liabilities for those who were disabled. In December 2012, the position changed, with Local Authorities able to decide on their own reductions. South Tyneside Council, as with most, adopted the default scheme prepared by the Government.
7. This default scheme is comprised in the Council Tax Reduction Schemes (Default Scheme) (England) Regulations 2012, SI 2886. The council adopted the scheme with amendments as it was entitled to.
8. Up until December 2012, Mr Aitken qualified for what is known as disability premium, but in December 2012 Mr Aitken's benefits were reassessed by the Department for Work and Pensions as part of a wider welfare reform programme which it had been phasing in since December 2008.
9. At that stage, he was assessed as qualifying to continue to receive Disability Living Allowance, but also to receive what was known as Employment and Support Allowance, "ESA", with the support component. As the Valuation Tribunal pointed out, a person in receipt of ESA with the support component suffered from the most severe disabilities.
10. In terms of figures, the Local Authority contended that Mr Aitken was entitled to £13.92 weekly council tax support in reduction of the tax, which effectively eliminated his weekly council tax liability.
11. The council introduced a standard reduction in its support of 30 per cent. They applied that 30 per cent standard reduction to Mr Aitken. That meant that his weekly council tax support was reduced by £4.17, from £13.92 to £9.74. It is that weekly reduction of £4.17 which was at issue before the Valuation Tribunal and is at issue in this appeal.
12. To understand how that works, it is necessary, then, to turn to South Tyneside's Council's local council tax support scheme. The scheme adopts the default scheme. It sets the standard percentage reduction at 30 per cent, so the question is whether on the scheme the appellant was entitled not to have his support reduced by that standard percentage.
13. Clause 32A of the scheme says that where a person is entitled to a reduction (in council tax) under this scheme, the amount of reduction to which he is entitled is:

(2) "Where the person is within class D [which is the class into which Mr Aitken falls, because he is not a pensioner and his income is less than an applicable amount], that amount is the amount which is the maximum council tax reduction in respect of the day in the applicant's case, subject to the standard percentage reduction."

14. As I have indicated, the maximum council tax reduction appears to have been 100 per cent, subject to the standard percentage reduction to that reduction, which is 30 per cent. By clause 32(a)(7):

"The standard percentage reduction referred to in sub-paragraph 2 [...] will not apply where the person is in receipt of a disability premium (as defined in schedule 3, part 3, paragraphs 9 and 10), or a severe disability premium (as defined in schedule 3, part 3, paragraph 11) [...]"

15. The schedule 3 is schedule 3 to the default scheme. Schedule 3 part 3 sets out what are called "premiums", and deals with a number of premiums. That language is used because the premiums referred to are varying degrees of increasing welfare support. But in certain instances receipt of those premiums can lead to the application or non-application of the standard percentage reduction. In certain instances, the premium for these purposes is not a premium at all.
16. Paragraph 9 of part 3 deals with disability premium. Paragraph 11 deals with severe disability premium. Receipt of either of those premiums means that the standard percentage reduction in council tax support does not apply. Unless the standard percentage reduction is disapplied, it will apply.
17. Part 3 continues, having dealt with disability and severe disability premium, to deal with enhanced disability premium. If, as the council contends, Mr Aitken is in receipt of an enhanced disability premium, he does not qualify for the disapplication of the standard percentage reduction. It is the council's case that he does receive an enhanced disability premium.
18. Paragraph 12 reads:

1. "Subject to sub-paragraph (2), the condition is that --

(a) the Secretary of State has decided that the applicant has, or is to be treated as having, limited capability for work-related activity;"

19. It is clear that the language of welfare statutes is incorporated into the way in which premiums are defined. The curious language, whereby the most severe disability is dealt with in terms of someone having, or being treated as having, "limited capability for work-related activity" can best be understood by reference to the language of the clear provisions of section 1 of the Welfare Reform Act 2007 which deals with employment and support allowance.
20. The basic conditions for its receipt by section 1 sub-section 3 include that the applicant "has limited capability for work."
21. By sub-section 4:

"A person has limited capability for work if, (a), his capability for work is limited by his physical and mental condition, and, (b), the limitation is such that it is not reasonable to require him to work."

22. It is clear that someone in receipt of ESA, as Mr Aitken is, falls within the scope of someone who has, or is to be treated as having, limited capability for work-related activity. He is therefore in receipt of an enhanced disability premium, and the standard reduction is not disapplied to him.
23. It may seem curious that the person with the more severe disability does not benefit from the disapplication of the standard percentage reduction, but I do not find it difficult to believe, although I have not been shown the figures, that the award of ESA is sufficiently high to off-set such a disadvantage.
24. The tribunal does not need to consider whether an applicant is capable of work or is capable of a limited amount of work. He is a person who, by virtue of receipt of ESA, is, or is to be treated as, having a limited capability for work-related activity if he receives the support payment, as here.
25. I can understand that the tribunal had some difficulty with the language of limited capability, but it is clear enough that "limited" in this context does not mean "some but reduced"; "limited" is capable of covering so limited a capability as a nil capability. Accordingly, the tribunal ought to have found that the standard percentage reduction was not disapplied by sub-paragraph 7.
26. The tribunal erred in law in failing to address the relevant provision which is paragraph 12 of the scheme of part 3 of the default scheme, and failing to consider or address the implications of Section 1 of the Welfare Reform Act to which it is clearly linked. It erred in law in its consideration of whether Mr Aitken was in receipt of the defined disability premium.
27. Its reasoning is not always clear and the decision does not always follow an entirely logical process, but it appears that the tribunal was concerned about the language relied on by the council because of the counter-intuitive consequence that the more severely disabled person was treated as having a limited capability for work when he had none. But that is a misunderstanding of the way in which the statute intends the word "limited" to be understood.
28. The tribunal erred in its approach to the disability premium because although conditions in paragraph 9 and some in paragraph 10, notably 10.1(a), were satisfied, condition 10.8 was not satisfied. Condition 10.8 is that:

"The applicant is not entitled to the disability premium if he has, or is treated as having, limited capability for work."

29. It is clear that paragraphs 9 and 10, then 11, then 12, have to be read as a sequence of premiums. It is obvious that 10.8 is intended to mean that those who fall within 12, do not fall within 10. Mr Aitken satisfied 12. He fell outside the scope of 10 by virtue of paragraph 10.8 and its cross-reference to ESA under the Welfare Reform Act.
30. The tribunal is not concerned with whether someone has a capability to work. It is sufficient, notwithstanding the language of the paragraphs, for them to see what the individual is receiving. The conditions are not ones which they themselves have to be satisfied apply, if the Secretary of State is providing the relevant sum of money. The position, therefore, was concluded by the fact that the appellant was in receipt of ESA.
31. Accordingly, for the errors of law to which I have referred, the tribunal decision must be overturned and the appeal allowed and the standard percentage reduction must be applied to Mr Aitken. I allow the appeal, therefore, with no order as to costs.

MR ARMSTRONG: My Lord, I am grateful.