Upper Tribunal (Administrative Appeals Chamber)

Decision of the Upper Tribunal
(Administrative Appeals Chamber)

As the decision of the First-tier Tribunal (made on 1 May 2015 at Newcastle-upon-Tyne under reference SC228/14/00878) involved the making of an error in point of law, it is SET ASIDE under section 12(2)(a) and (b)(ii) of the Tribunals, Courts and Enforcement Act 2007 and the decision is RE-MADE.

The decision is: the decision of the local authority is confirmed. The claimant is liable to a 14% reduction under regulation B13 of the Housing Benefit Regulations 2006.

Reasons for Decision

1.         This case has been linked with CH/2088/2015. The facts are comparable and the First-tier Tribunal’s reasons identical in substance. Those reasons contain the latest analysis by Judge Moss of the legislation that governs the so-called bedroom tax, which for practical purposes is a reduction in the amount of housing benefit payable to claimants who have more bedrooms than they require in law. The legal position is governed by regulation B13 of the Housing Benefit Regulations 2006. That regulation causes considerable problems for parents who have shared care arrangements for their children.

A.        History and background

2.         The claimant lives in a house with three bedrooms. He uses one of the bedrooms. He and his former wife have three children. The eldest, a son, lives with the claimant, who receives child benefit and child tax credit in respect of him. He uses a second bedroom. The other children are twins. When they visit, they use the third bedroom. As I understand it, the living arrangements for the twins are as follows. In term time, they live mainly with their mother, but spend Friday, Saturday and sometimes Sunday nights with the claimant. In the school holidays, the position is reversed. The claimant also takes care of the twins if they are ill, as their mother has work commitments. All this has been arranged amicably between the parents, for the benefit of their children, without the need for court orders.

3.         From the point of view of the twins, they have two homes. Apart from a few items that they carry back and forth, they have two set ups at each home along with two sets of friends.

4.         The local authority decided under regulation B13 that the claimant only required two bedrooms (for himself and his son) and reduced his housing benefit accordingly. Local authorities have power to make discretionary housing payments to claimants in the claimant’s position in order to make up the shortfall. The claimant did at one time receive a payment, but it was withdrawn before the period with which this appeal is concerned.

5.         On appeal to the First-tier Tribunal, Judge Moss decided that no reduction was permissible under regulation B13. I gave the Secretary of State permission to appeal to the Upper Tribunal. The Secretary of State and the claimant’s representative have made submissions. The local authority has not made separate submissions from the Secretary of State.

6.         I will come to the judge’s detailed reasoning after setting out the legislation and two of my previous decisions.

B.        The legislation

7.         Housing benefit is governed by section 130 of the Social Security Contributions and Benefits Act 1992. Section 130(1) provides:

130  Housing benefit

(1) A person is entitled to housing benefit if-

(a) he is liable to make payments in respect of a dwelling in Great Britain which he occupies as his home; …

Section 137(2) provides for interpretation and the making of regulations:

137  Interpretation of Part VII and supplementary provisions

(1) In this Part of this Act, unless the context otherwise requires-

…

‘child’ means a person under the age of 16;

…

‘family’ means-

…

…

(c) except in prescribed circumstances, a person who is not a member of a couple and a member of the same household for whom that person is responsible and who is a child or a person of a prescribed description; ...

(2) Regulations may make provision for the purposes of this Part of this Act-

…

(h) as to the circumstances in which a person is or is not to be treated as occupying a dwelling as his home; …

8.         These are the relevant provisions of the Housing Benefit Regulations 2006 (SI No 213):

2 Interpretation

(1) In these Regulations-

‘the Act’ means the Social Security Contributions and Benefits Act 1992;

…

‘child’ means a person under the age of 16;

…

‘family’ has the meaning assigned to it by section 137(1) of the Act; …

7 Circumstances in which a person is or is not to be treated as occupying a dwelling as his home

(1) Subject to the following provisions of this regulation, a person shall be treated as occupying as his home the dwelling normally occupied as his home-

(a) by himself or, if he is a member of a family, by himself and his family; …

B13  Determination of a maximum rent (social sector)

(1) The maximum rent (social sector) is determined in accordance with paragraphs (2) to (4).

(2) The relevant authority must determine a limited rent by-

(a) determining the amount that the claimant's eligible rent would be in accordance with regulation 12B(2) without applying regulation 12B(4) and (6);

(b) where the number of bedrooms in the dwelling exceeds the number of bedrooms to which the claimant is entitled in accordance with paragraphs (5) to (7) , reducing that amount by the appropriate percentage set out in paragraph (3); and

(c) where more than one person is liable to make payments in respect of the dwelling, apportioning the amount determined in accordance with sub-paragraphs (a) and (b) between each such person having regard to all the circumstances, in particular, the number of such persons and the proportion of rent paid by each person.

(3) The appropriate percentage is-

(a) 14% where the number of bedrooms in the dwelling exceeds by one the number of bedrooms to which the claimant is entitled; and

(b) 25% where the number of bedrooms in the dwelling exceeds by two or more the number of bedrooms to which the claimant is entitled.

(4) Where it appears to the relevant authority that in the particular circumstances of any case the limited rent is greater than it is reasonable to meet by way of housing benefit, the maximum rent (social sector) shall be such lesser sum as appears to that authority to be an appropriate rent in that particular case.

(5) The claimant is entitled to one bedroom for each of the following categories of person whom the relevant authority is satisfied occupies the claimant's dwelling as their home (and each person shall come within the first category only which is applicable)-

(a) a couple (within the meaning of Part 7 of the Act);

(b) a person who is not a child;

(ba) a child who cannot share a bedroom;

(c) two children of the same sex;

(d) two children who are less than 10 years old;

(e) a child.

(6) The claimant is entitled to one additional bedroom in any case where—

(a) a relevant person is a person who requires overnight care; or

(b) a relevant person is a qualifying parent or carer.

(7) Where-

(a) more than one sub-paragraph of paragraph (6) applies the claimant is entitled to an additional bedroom for each sub-paragraph that applies;

(b) more than one person falls within a sub-paragraph of paragraph (6) the claimant is entitled to an additional bedroom for each person falling within that sub-paragraph, except that where a person and that person's partner both fall within the same sub-paragraph the claimant is entitled to only one additional bedroom in respect of that person and that person's partner.

(8) For the purposes of determining the number of occupiers of the dwelling under paragraph (5), the relevant authority must include any member of the armed forces away on operations who-

(a) is the son, daughter, step-son or step-daughter of the claimant or the claimant's partner;

(b) was the claimant's non-dependant before they became a member of the armed forces away on operations; and

(c) intends to resume occupying the dwelling as their home when they cease to be a member of the armed forces away on operations.

(9) In this regulation ‘relevant person’ means-

(a) the claimant;

(b) the claimant's partner;

(c) a person (“P”) other than the claimant or the claimant's partner who is jointly liable with the claimant or the claimant's partner (or both) to make payments in respect of the dwelling occupied as the claimant's home;

(d) P's partner.

20 Circumstances in which a person is to be treated as responsible or not responsible for another

(1) Subject to the following provisions of this regulation a person shall be treated as responsible for a child or young person who is normally living with him and this includes a child or young person to whom paragraph (3) of regulation 19 applies.

(2) Where a child or young person spends equal amounts of time in different households, or where there is a question as to which household he is living in, the child or young person shall be treated for the purposes of paragraph (1) as normally living with—

(a) the person who is receiving child benefit in respect of him; or

(b) if there is no such person—

(i) where only one claim for child benefit has been made in respect of him, the person who made that claim, or

(ii) in any other case the person who has the primary responsibility for him.

(3) For the purposes of these Regulations a child or young person shall be the responsibility of only one person in any benefit week and any person other than the one treated as responsible for the child or young person under this regulation shall be treated as not so responsible.

C.        Previous decisions

9.         I first dealt with the issue of shared residence in MR v North Tyneside Council and the Secretary of State for Work and Pensions [2015] UKUT 34 (AAC). That was a short decision in which I accepted the Secretary of State’s analysis of the error in Judge Moss’s decision in that case:

6. I accept the Secretary of State’s argument that the tribunal’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.

7. Regulation B13(5) provides that a claimant is 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 is one of those categories, which is defined as ‘a person under the age of 16’ by regulation 2(1). That provision has to be read, not in isolation, but in the context of the housing benefit legislation as a whole.

8. Regulation 7(1)(a) is part of that context. It provides 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 defines ‘family’ as ‘a member of the same household for whom that person is responsible and who is a child’. This leads to regulation 20(2)(a), which provides 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’.

10.      I returned to the issue in Secretary of State for Work and Pensions v AM and Northumberland County Council [2015] UKUT 360 (AAC), also on appeal from Judge Moss. That case has a confused history, because Judge Moss changed his decision and then provided further legal analysis. I dealt with his arguments as follows:

The judge’s mistakes

38. The judge went wrong in law by failing to interpret the Regulations as a whole. He is right that they are split into Parts. That is a matter of convenience and structure. It can be relevant to interpretation. But I can see nothing in the structure of the Regulations as a whole or in the content of individual regulations to justify interpreting regulation B13 on its own and in isolation from the basic concepts that apply to all other provisions. I remain of the view that I expressed in MR. That decision is binding on the First-tier Tribunal and local authorities. Marchant cannot be distinguished simply on account of the layout of the legislation. The chance of the layout did not affect the reasoning of the Court of Appeal, which is directly in point.

39. It would be permissible to rely on that rather tenuous distinction if it were necessary in order to comply with the interpretative duty under section 3 of the Human Rights Act 1998, but it is not. I accept the Secretary of State’s argument that the trend of the Convention caselaw is that Article 8 does not impose a duty to confer a social security benefit except in the most exceptional circumstances. Cotton is an authority for that proposition. I emphasise that there is no evidence to suggest that the family relationship between the grandson and his grandparents, or even between the grandson and his mother, would cease or suffer irreparable harm if the grandson were not able to spend part of his time with his grandparents.

40. As to Gorry, this was distinguished in MA, as different policy considerations were in operation in respect of the social sector duty under regulation B13. As to MA, the claimant’s difficult is in showing that he is a victim for the purposes of section 7(1) of the Human Rights Act 1998. As the information now available shows, the claimant is potentially entitled to a discretionary housing payment when his circumstances justify one being made and he has at times received a payment. That ensures protection that the courts have recognised as important, although perhaps not necessarily decisive, throughout the various challenges to regulation B13. In those circumstances, I do not consider it appropriate to stay this case to await the decision of the Supreme Court.

41. As far as Article 27(3) of the UN Convention is concerned, it expressly recognises that it is subject to what the resources of the State can afford and regulation B13 has to be seen as part of the Government’s social policy to reduce public expenditure.

Child benefit is relevant

42. The incidence of child benefit is relevant, because regulation 20 makes it so. The grandson does not spend equal time with his mother and grandparents, but there is a question as to which household he is living in for the purposes of housing benefit, the answer is determined by the award of child benefit. That is what regulation 20(2)(a) provides. I have already explained why regulation B13 cannot be read in isolation from the Regulations as a whole.

D.       The judge’s reasoning in this case

Article 8

11.      Judge Moss referred to the claimant’s Convention right under Article 8 of the European Convention on Human Rights:

ARTICLE 8

RIGHT TO RESPECT FOR PRIVATE AND FAMILY LIFE

1. Everyone has the right to respect for his private and family life, his home and his correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.

He has made clear that he was not deciding that there had been a breach of that Article, either read alone or in conjunction with Article 14, which deals with discrimination. Rather he was using Article 8 as part of his analysis of the correct interpretation of regulation B13. He was only entitled to do that in accordance with section 3(1) of the Human Rights Act 1998:

3 Interpretation of legislation

(1) So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights.

Homes and households

12.      Judge Moss distinguished between a person’s home and a household, relying on DG v Her Majesty's Revenue and Customs [2013] UKUT 631 (AAC), a tax credit case. He noted that regulation B13(5) refers to the persons who occupy ‘the claimant’s dwelling as their home’, but nowhere does the regulation mention a household. He then reasoned that this phrase had been used deliberately because one of the purposes behind the legislation was to reduce public expenditure by forcing claimant’s to move to smaller accommodation or letting out rooms. This led to a detailed example of a single mother and her child renting two spare rooms in a claimant’s three-bedroomed property, emphasising that the two families would form separate households and bringing him back to his distinction between home and household. He next said that people may have more than one home and, after a passage emphasising the normality and desirability of children spending time with each parent, concluded that the twins in this case had a home with each parent. That is a bald summary of several pages of detailed reasoning, but I trust that it fairly captures the essence of his analysis.

13.      In all his decisions that I have seen, Judge Moss has shown a desire to ensure that the housing benefit legislation should not disrupt the sensible arrangements made by parents for the residence of their children or the orders that the courts have made to that effect. I wish I could accept his legal analysis, but I cannot. The flaw, as I have repeatedly pointed out, is that regulation B13 is not a freestanding provision that can be interpreted without reference to any other part of the housing benefit legislation.

14.      As the judge noted, regulation B13(5) uses the expression ‘occupies the claimant’s dwelling as their home’. That expression relates back to the basic condition of entitlement under section 130(1). Regulation 7 brings in the concept of the claimant’s family. The definition of ‘family’ brings in the concepts of household and a child for whom the claimant is responsible. The former contradicts Judge Moss’s assertion that ‘household’ is not relevant. The latter leads to regulation 20, which brings in child benefit as the determining factor. All that follows from the language of regulation B13 itself, which leads back to the basic concept of entitlement and from there, by way of deeming provisions and definitions, to the concept of household and the significance of child benefit.

15.      Both regulation 7 and regulation 20 are worded generally to apply to ‘a person’. They are not limited to claimants and are capable of applying to the mother in this case as much as to the claimant.

16.      I do not see any way in which the interpretative duty under section 3 of the Human Rights Act 1998 can produce a different outcome. The judge’s argument is premised on regulation B13 being freestanding. Once that premise is shown to be invalid, as the language of the regulation itself does, there is no scope for any other interpretation than the one I have given, which is the inexorable result of the chain of relevant provisions.

E.        Applying my interpretation

17.      The outcome of this appeal is inevitable given my interpretation of regulation B13. The determinative factor is the award of child benefit in respect of the twins to their mother. As she receives the child benefit, they are treated as normally living with her and she is the only person with responsibility for them in any benefit week. That is what regulation 20 provides. This feeds into regulation B13 by identifying who occupies the claimant’s dwelling as their home. The twins do not normally live with the claimant, so he is not entitled to a room for them. The local authority was entitled to apply a 14% reduction. The First-tier Tribunal was wrong to decide otherwise, so I have set its decision aside and restored the local authority’s decision.