R (on the application of Daly & Ors) v Secretary of State for Work and Pensions [2016] UKSC 58

Disabled tenants and a domestic violence victim in a sanctuary scheme challenged the social sector housing benefit cap (the 'bedroom tax') as discriminatory under Article 14 ECHR. The Supreme Court upheld claims by Carmichael and the Rutherfords but rejected the others, including A's sanctuary scheme claim.

Facts

These conjoined appeals concerned the impact of Regulation B13 of the Housing Benefit Regulations 2006 (the so-called ‘bedroom tax’ or ‘removal of the spare room subsidy’), which caps housing benefit (‘HB’) for social sector tenants deemed to be under-occupying their accommodation by 14% (one excess bedroom) or 25% (two or more). The claimants were tenants of registered social landlords who either had disabilities, lived with disabled family members, or lived in ‘sanctuary scheme’ accommodation specially adapted to protect women at severe risk of domestic violence.

The key claimants were: Jacqueline Carmichael (unable to share a bedroom with her husband due to her disabilities); the Rutherfords (grandparents caring for a severely disabled grandson requiring an overnight carer two nights weekly); James Daly (father of a disabled son who stayed regularly but less than half the time); Mervyn Drage (mental health problems, sole occupier of a three-bedroom flat); JD (carer for her severely disabled adult daughter AD in a specially adapted home); Richard Rourke (widower with a disabled stepdaughter); and A (a victim of severe domestic violence in a sanctuary scheme three-bedroom home).

A discretionary housing payment (‘DHP’) scheme was available to meet shortfalls in individual cases. Regulation B13(5)(ba) permitted an extra bedroom for a child who could not share due to disability (following Burnip v Birmingham City Council and Gorry), and Regulation B13(6)(a) allowed an extra bedroom where the claimant or partner required overnight care, but not where a child required overnight care.

Issues

The Court had to decide: (1) whether Regulation B13 unlawfully discriminated against the claimants contrary to Article 14 ECHR taken with Article 8 and/or A1P1; (2) whether the correct legal test was ‘manifestly without reasonable foundation’ or ‘weighty reasons’; (3) whether the Secretary of State had complied with the Public Sector Equality Duty (‘PSED’) under section 149 of the Equality Act 2010.

Arguments

For the claimants

The claimants argued that the ‘manifestly without reasonable foundation’ test was inappropriate; weighty reasons were required to justify disability or sex discrimination. They contended their objection was not to the general policy but to its discriminatory application against vulnerable groups, and that DHPs were an inadequate substitute for entitlement because they were discretionary, cash-limited, less certain, subject to a stricter means test, and offered weaker routes of challenge.

For the Secretary of State

The Secretary of State argued that the choices made were matters of economic and social policy entitled to a wide margin, that a blanket exemption for the disabled was unworkable given the diversity of disability-related needs, and that DHPs offered flexibility to address individual circumstances that might change over time.

Judgment

The correct test

Lord Toulson (with whom Lord Neuberger, Lord Mance, Lord Sumption and Lord Hughes agreed) affirmed that the correct test was ‘manifestly without reasonable foundation’, as established in Stec v United Kingdom and applied by Lady Hale in Humphreys v Revenue and Customs Comrs [2012] 1 WLR 1545. Choices about welfare systems involve policy decisions on economic and social matters pre-eminently for national authorities. The test applies even where the challenge is to specific aspects of a wider scheme, as the detail forms ‘an integral part of a high policy decision’. However, the test still requires ‘careful scrutiny’.

Application of the test

The Court held there was a reasonable foundation for the general decision not to create a blanket exception for those with disabilities and to use DHPs to address individual need. However, two categories were materially different: cases where there is a ‘transparent medical need for an additional bedroom’.

Carmichael and the Rutherfords

Mrs Carmichael’s position was directly comparable to the Gorry children (who could not share a bedroom because of disability) but was excluded from Regulation B13(5)(ba), which is confined to children. The Rutherfords’ position was comparable to Burnip (adult requiring overnight care) but Regulation B13(6)(a) does not extend to children requiring overnight care. There was ‘no reasonable justification for these differences’. Lord Toulson endorsed Lord Thomas CJ’s observation that the Secretary of State’s inconsistent treatment was ‘ironic and inexplicable’: justifying provision for disabled children but not disabled adults by reference to the best interests of the child, while making opposite provision for carers. Article 14, taken with Article 8, was violated in both cases.

Other MA claimants

Daly, Drage, JD and Rourke’s claims were dismissed. Their circumstances involved strong personal reasons for additional accommodation but not a transparent medical need linked to bedroom numbers. It was not unreasonable for such cases to be assessed under the DHP scheme.

A and sanctuary schemes

The majority allowed the Secretary of State’s appeal in A’s case. A’s need was not for more bedroom space but to remain in her current property. This was unrelated to the size of the accommodation and was analogous to many other cases (such as carers for elderly parents, or JD and AD) where individual evaluation through DHPs was appropriate. The Secretary of State’s approach was not manifestly without reasonable foundation.

PSED

The PSED was held to have been complied with in both proceedings. The Court of Appeal’s findings on careful consideration of disability and gender-based discrimination were upheld. Lord Toulson added that there is no automatic correlation between being in a sanctuary scheme and needing an extra bedroom.

Dissent (Lady Hale, with whom Lord Carnwath agreed) in A’s case

Lady Hale held that A’s case was different from the disability cases: her need was to stay where she is. The state has a positive obligation to provide effective protection against gender-based violence (citing Opuz v Turkey), which is itself a form of discrimination against women under CEDAW. Denying A the housing benefit she needs to remain in her sanctuary scheme accommodation constituted unjustified discrimination contrary to Article 14 read with Article 8. The deficiencies of the DHP scheme that rendered it inadequate for the Rutherfords and Carmichaels equally rendered it inadequate for A. She would also have allowed A’s PSED cross-appeal, finding that the Equality Impact Assessment failed to address victims of gender-based violence.

Implications

The decision confirms that the ‘manifestly without reasonable foundation’ test applies to discrimination challenges in welfare benefits, including where the challenge concerns particular aspects of a wider scheme rather than the policy as a whole. However, the test demands ‘careful scrutiny’ and is not a deferential rubber stamp.

The judgment establishes a narrow but important principle: where there is a ‘transparent medical need’ for an additional bedroom directly linked to disability — comparable to Burnip and Gorry — the application of the bedroom cap will not be justified, and DHPs cannot remedy the discrimination. This is confined to cases where the need for the extra room is medical and easily recognisable.

By contrast, where the need to remain in larger accommodation arises for personal, social, or protective reasons unrelated to the number of bedrooms, the DHP scheme can lawfully be relied upon, even where the case for remaining is compelling. The decision preserves the structure of the social security scheme as a matter for the executive while requiring clear exceptions where Parliament has already recognised analogous medical need in some cases but inconsistently excluded others.

The case matters to local authorities administering HB and DHPs, to disability rights advocates, and to those advising vulnerable tenants. Following this judgment, Regulation B13 required amendment to address the Carmichael and Rutherford situations. The decision leaves open broader questions about the adequacy of discretionary schemes in protecting Convention rights, an issue strongly contested in Lady Hale’s dissent regarding sanctuary scheme residents.

Verdict: The Supreme Court allowed Mrs Carmichael’s appeal and dismissed the Secretary of State’s appeal in the Rutherford case, holding that Regulation B13 violated Article 14 taken with Article 8 in those cases. The appeals of the other MA claimants (Daly, Drage, JD and Rourke) were dismissed. The Secretary of State’s appeal in A’s case was allowed, and A’s cross-appeal on the Public Sector Equality Duty was dismissed. Lady Hale and Lord Carnwath dissented in A’s case.

Source: R (on the application of Daly & Ors) v Secretary of State for Work and Pensions [2016] UKSC 58