Three single-parent families lost their judicial review challenge to the regulations implementing the £500 weekly cap on benefits in R(JS and others) v Secretary of State for Work and Pensions [2013] EWHC 3350 (QB). Mike Spencer discusses the ruling and the implications for other families affected by the benefit cap.
The benefit cap
Section 96 of the Welfare Reform Act 2012 gave the Secretary of State for Work and Pensions the power to introduce a cap on the amount of welfare benefits a person may receive. The cap must be set by reference to ‘the estimated average weekly earnings of a working household in Great Britain’, net of tax and national insurance (NI) contributions. The details of the cap, such as the benefits included and any exceptions, are left for the Secretary of State to lay down in regulations.
The cap was introduced by way of a phased roll out in four pilot areas in London in April 2013, and nationally in September 2013. The Benefit Cap (Housing Benefit) Regulations 2012 insert a new Part 8A into the Housing Benefit Regulations 2006. They fix the cap at £350 for a single claimant with no children and £500 for all other households. Child benefit, child tax credit and housing benefit are all included within the cap, even though they can also be claimed by people in work. Exceptions are provided for families who are entitled to working tax credit (WTC) or are receiving disability living allowance (DLA), personal independence payment (PIP) or the support component of employment and support allowance. There is a ‘grace period’ for families who have been entitled to WTC within the last 39 weeks. A further exception provides for families who are in ‘exempt accommodation’, which includes some but not all women’s refuges.
The government’s stated aim in introducing the cap is to introduce greater fairness between those on benefits and those in work, increase work incentives and to make fiscal savings. However, much criticism has focused on the point that the cap is calculated by reference to average earnings and not average income, and therefore does not take account of the benefits paid to families who are in work.
The judicial review challenge
The claimants were all single mothers and their children living in London. They included:
•a single mother with four children, the youngest of whom is eight months old. The family have been recognised as homeless and is living in temporary accommodation provided by the local council. As a result of the cap, the family will be forced to live on £2.98 per person per day to pay for all their living costs and utilities;
•a single mother with three children, the youngest of whom is two. The family lives in a two-bedroom flat in outer London. They are the victims of ‘horrific’ domestic violence and were placed in a refuge and then in homelessness accommodation to escape abuse. They face a £55 cut in their weekly income;
•a single mother living with three children living in East London, who are also victims of domestic violence. She has another daughter who lives in foster care and wants to return, but cannot because of the cap. The family are Orthodox Jews so are keen to stay near their community. The cap will reduce their income by £85.40 per week.
The claimants argued that the regulations introducing the cap discriminated on various grounds contrary to Article 14 of the European Convention on Human Rights, breached their rights under Article 8 of the European Convention on Human Rights and/or the UN Convention on the Rights of the Child and were irrational under common law.
NGO interventions
Women’s Aid, CPAG and Shelter’s Children’s Legal Service provided evidence and the latter two also made written and oral submissions.
CPAG argued that the government’s justification of ‘fairness’ does not stand up to scrutiny. In particular, the inclusion within the cap of benefits that are also paid to working families, such as child benefit, child tax credit and housing benefit, means the cap does not create fairness between working and non-working households. CPAG submitted evidence to show that a single mother with four children who is working and earning the average wage could be entitled to £546.84 per week in state support in addition to her wages. A similar family earning the minimum wage would still be at least £100 better off than it would on out-of-work benefits, even before the cap.
Shelter provided evidence to show that local authority discretionary housing payment (DHP) policies were not catering adequately for the needs of families affected by the cap and made submissions on the implications on homelessness. In addition, both CPAG and Shelter argued that the cap has been implemented in a way that does not save the government any money. When the incidental costs are factored in, including implementation costs, DHPs and costs to homelessness and social services departments, there is evidence that the cap will cost more than it saves.
The Court’s ruling
The case was heard on 5 November 2013. The Court dismissed the claim for judicial review.
With regard to Article 8, the Court found that the imposition of the cap ‘does have a sufficient impact on the enjoyment of family life’ to bring it within the ambit of Article 8 (paragraph 69), but that the breach was justified and proportionate.
With regard to Article 14, the Court pointed out that ‘it is clear, and indeed conceded, that the benefit cap has a disproportionate adverse impact on women’ (paragraph 76). As such the cap was indirectly discriminatory. The crucial issue was justification. The Court applied the test in Humphreys v Revenue and Customs [2012] UKSC for discrimination in the social security context, but found that it could not be said that the cap was ‘manifestly without reasonable foundation’.
The judges found CPAG’s arguments advanced by Richard Drabble QC on the fairness of the benefit cap to be ‘forceful and cogent’. They commented that Mr Drabble ‘makes a good case’ for submitting that there will be a number of cases under this policy where it is simply untrue to say those subject to the cap will face essentially the same problems as many in work. However, while there will be particularly hard cases, ‘it must be remembered that they are not typical of the effect of the policy in the country as a whole’. Furthermore, they pointed out that Parliament had explicitly rejected amendments to exclude child benefit and exempt homeless families in temporary accommodation. In the final analysis, the cap represented a ‘political concept of fairness’.
No doubt many consider these exceptions to be too limited and the cap to be too parsimonious. But that is ultimately a policy issue, and for the reasons we have given we do not think it can be said that the scheme is so manifestly unfair or disproportionate as to justify an interference by the courts.
The claimants in this case have expressed their intention to appeal against the ruling.
What can advisers and affected families do now?
What to do now depends in part on the circumstances of any particular family affected by the cap. There is a right of appeal where the cap is applied in housing benefit cases (although there is no of appeal if it is applied to universal credit). While the judgment is binding on the First-tier Tribunal, many people affected by the benefit cap will still want, and can pursue, their appeals.
If the claimants in JS and others are granted permission to appeal to the Court of Appeal, lone parents can still appeal and ask for their cases to be stayed pending a decision in the Court of Appeal.
Advisers with clients who are not lone parents can pursue appeals on the basis that their circumstances were not considered by the Court and may therefore still be argued in appeals. For example, whether the cap discriminates against carers (carer’s allowance is included within the cap and the DLA/PIP exemption does not apply to non-dependent adults in the household) or pregnant women (maternity allowance is also included in the cap).
Clients should also be advised on whether the calculations applying the cap are correct and whether they meet or could be helped to meet any of the exceptions, and given advice on applying for a DHP.
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