Upper Tribunal (Administrative Appeals Chamber)

Decision of the Upper Tribunal
(Administrative Appeals Chamber)

This decision is given under section 11 of the Tribunals, Courts and Enforcement Act 2007:

The decision of the First-tier Tribunal under reference SC946/13/09555, made on 14 April 2014 at Manchester, did not involve the making of an error on a point of law.

Reasons for Decision

A.        History and background

1.         This case concerns the amount of housing benefit properly payable to the claimant by virtue of regulation B13 of the Housing Benefit Regulations 2006. That regulation is commonly called the bedroom tax, although that is a misnomer. It is properly a reduction on account of over accommodation by having more bedrooms than the claimant requires. In the claimant’s case, he is subject to a 14% reduction for having two bedrooms when only one is required.

2.         The claimant lives in a flat with two bedrooms. He does not dispute that. His argument is that the additional room was added to his flat, as it was to others, as part of a refurbishment. He did not want the additional bedroom. The evidence shows that there have been two concessions made to the claimant. First, the landlord has let the flat to the claimant on the basis that it is still a one-bedroom flat and charges rent accordingly. Second, the local authority makes special payments to the claimant’s rent account to make up the shortfall that arises from the application of regulation B13.

3.         The claimant exercised his right of appeal against his local authority’s decision applying a 14% reduction with effect from April 2013. The First-tier Tribunal dismissed his appeal, but gave him permission to appeal to the Upper Tribunal. The Secretary of State was joined as a party in this tribunal. I have received submissions from the Secretary of State’s representative and from the claimant. The local authority has not made separate argument from the Secretary of State.

4.         The claimant has asked for an oral hearing. The Upper Tribunal has a discretion whether or not to hold a hearing: rule 34(1) of the Tribunal Procedure (Upper Tribunal) Rules 2008. The test to apply is whether ‘fairness requires such a hearing in the light of the facts of the case and the importance of what is at stake’: R (Osborn) v Parole Board [2014] AC 1115 at [2(i)]. Rule 34(2) provides that this tribunal must take account of the claimant’s views. I have exercised the discretion against holding a hearing and have decided the appeal on the papers, because I consider that the issues have been adequately analysed in the written submissions and that an oral hearing would not add value of that analysis.

B.        Why I have dismissed the appeal

5.         I gave a direction on 21 July 2015, in which I set out some provisional thoughts:

Regulation B13 provides for a reduction depending on the number of bedrooms. That raises the question of how a room is classified. There is a letter at page 42 of the papers, which says that the landlord has let the property to the claimant as a one-bed roomed property and charged rent accordingly, despite the addition of the second bedroom that the claimant did not want. Why should I not take that as determinative? The purpose of regulation B13 is to prevent public funds in the form of housing benefit being used to provide for accommodation that is excessive to the claimant’s needs. That is not happening in this case, because the rent is only assessed as for a one-bed roomed property.

6.         The Secretary of State’s representative has responded, arguing:

·                The purpose of regulation B13 is partly to prevent public funds being used for housing that is in excess of the claimant’s needs, but its central purpose is not financial but to ensure that accommodation is not under occupied. In support, she cited the Court of Appeal in MA v Secretary of State for Work and Pensions [2014] EWCA Civ 13 at [2], [17] and [18]. That case is now before the Supreme Court with a hearing date in March 2016.

·                Under the decision of the three-judge panel in Secretary of State for Work and Pensions v Nelson [2014] UKUT 525 (AAC), the landlord’s classification of the room in question was a starting point, but not decisive.

·                This appeal was academic in the sense that it had no practical effect on the claimant as the local authority was making special payments to cover the shortfall of housing benefit.

7.         The claimant has disagreed with those points. He has argued that his case is a test case, that the issue arises for claimants in other local authority areas who have to meet the shortfall themselves, and that the burden inevitably falls on the tax payer.

8.         I accept the representative’s argument that the policy underlying regulation B13 has been presented as dealing with over occupation, although it was introduced in the context of budget cuts in the overall benefit bill. I also accept her argument that the local authority’s classification is not decisive. I accept the claimant’s argument that this case involves a principle that affects other claimants whose position has not been protected by their local authorities.

9.         My jurisdiction, like that of the First-tier Tribunal, is limited to deciding whether the local authority interpreted and applied regulation B13 correctly. The issue that arises is whether the additional bedroom that was created in the claimant’s flat is a bedroom within the meaning of that regulation. That issues arises in a different way in this case from the many others that have come to the Upper Tribunal. The question that usually arises is: is the room in question suitable for use as a bedroom? That question does not arise in this case. There is no dispute that the room is suitable. There are two factors that I need to consider. First: the claimant did not want the bedroom. Second: he is not paying rent on the basis that he is living in a two-bedroom property.

10.      I can deal with first factor briefly. This is irrelevant. What matters for the purposes of regulation B13 is whether the claimant has a bedroom in excess of his needs, not how he came to have one.

11.      The second factor requires more analysis. Regulation B13 on its face involves a factual enquiry: does the number of bedrooms in the property exceed the number to which the claimant is entitled? The enquiry does not turn on the basis on which the premises are let. That is why the Upper Tribunal in Nelson did not treat the local authority’s classification as decisive. It may be a relevant factor in the factual enquiry, but it is not the end of the enquiry, nor is it the enquiry itself. Nor does the regulation turn on, or even involve, the basis on which the rent has been calculated or charged. This too may be relevant as part of the factual enquiry of the number of bedrooms, but it is not the end of the enquiry or the enquiry itself. Although it is common knowledge that the number of bedrooms is one of the factors that determines the rent that a landlord will charge, the regulation does not at any point involve an enquiry into the basis on which the rent is calculated,. That is apparent from the structure of the regulation, which in turn reflects the policy underlying the provision, as set out in MA. There is a difference between the conditions that must be satisfied before the regulation applies and the effect if it does apply. It is right that the effect of the regulation is to reduce the maximum rent for housing benefit purposes, but that is the consequence. It is not part of the enquiry that determines whether the regulation applies.

12.      For those reasons, I have decided (despite my provisional view set out in my direction) that the First-tier Tribunal interpreted regulation B13 correctly and did not make an error of law.

13.      I have not taken into account so far that the local authority is meeting the shortfall in the claimant’s benefit entitlement. That is not relevant to my jurisdiction over entitlement. It does, though, have this effect: as a result of the special payment, the claimant is not a victim for the purpose of his Convention rights under the Human Rights Act 1998. He could not, therefore, argue that the regulation is discriminatory in his case or that it presents or involves a breach of this Convention right to a home under Article 8.