SC, CB, CC & CD and 11 children v Secretary of State for Work and Pensions
| Jurisdiction | England & Wales |
| Judge | Mr Justice Ouseley |
| Judgment Date | 20 April 2018 |
| Neutral Citation | [2018] EWHC 864 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/3806/2017 |
| Date | 20 April 2018 |
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[2018] EWHC 864 (Admin)
Mr Justice Ouseley
Case No: CO/3806/2017
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Richard Drabble QC AND Mr Tom Royston (instructed by THE CHILD POVERTY ACTION GROUP) for the Claimants
Mr James Eadie QC AND Miss Galina Ward (instructed by GOVERNMENT LEGAL DEPARTMENT) for the Defendant
Miss Helen Mountfield QC AND Mr Raj Desai (instructed by EHRC) for the Intervener
Hearing dates: 6 and 7 February 2018
Judgment Approved
This case concerns the introduction of a limit to the number of children in respect of whom child tax credit and its replacement, universal credit, is payable. That limit, subject to a few exceptions, is two; hence the change is dubbed the “two child rule” or the “Policy,” which was how the Defendants described the legislation. I shall refer to the legislative changes as the two child provision.
S9 of the Tax Credit Act 2002 and s10 of the Welfare Reform Act 2012 were amended to bring that maximum into effect for child tax credit and universal credit respectively. The amending provisions are ss13 and 14 of the Welfare Reform and Work Act 2016, the 2016 Act.
The Claimants comprise three families in different circumstances, all in receipt of child tax credit, each with a third or subsequent child born on or after 6 April 2017, for whom no child tax credit is now payable. They seek a declaration under s4 of the Human Rights Act 1998 that the amending primary legislative provisions in ss13 and 14 of the 2016 Act are incompatible with the ECHR. First, the Claimants contend that the legislation breaches article 8, the right to private and family life, and article 12, the right to marry and found a family. Second, and whether or not those rights are breached directly, they contend that article 14, the non-discrimination provision, is breached, when taken with any of articles 8, 9, the right to freedom of thought, conscience and religion, 12 and article 1 of the First Protocol (A1P1), the right to peaceful enjoyment of possessions.
The Equality and Human Rights Commission, EHRC, appearing as Intervener, supported the Claimants with particular reference to the United Nations Convention on the Rights of the Child, UNCRC, and other international instruments.
The Claimants also seek a declaration that the power to make exceptions by regulation to the general two child limit for child tax credit and universal credit has been exercised irrationally in relation to one exception, and the regulations, or part, should be declared to be ultra vires. The power to make exceptions by regulation is contained in s9(3B) of the Tax Credits Act 2002 and s10(4) of the Welfare Reform Act 2012. The Child Tax Credit Regulations 2002 S.I. No. 2007 and the Universal Credit Regulations 2013 S.I. No. 376 were amended by the Child Tax Credit (Amendment) Regulations 2017 S.I No. 387 and the Social Security (Restriction on Amounts for Children and Qualifying Young Persons) Amendment Regulations 2017 S.I. No. 376. For convenience these together have been called the 2017 Regulations. The 2017 Regulations are said to be irrational in relation to the exception in respect of non-parental caring arrangements, because whether a child looked after by two adults, who are not his parents, natural or adoptive, became their responsibility before or after a second child was born to those two adults, affects whether the exception applies so as to enable child tax credit, or its replacement universal credit, to be payable for whichever is the third child.
As the legislation affects both children and “qualifying young persons”, without any separate issues arising between those two groups, the parties have referred to “children” as covering both. I shall adopt that convenient course.
The parties have also focussed their submissions on changes to child tax credit rather than on its replacement, universal credit. I shall focus this judgment likewise. The statutory provisions are complicated enough, the issues are the same; nothing turns on the particular wording and what goes for one, goes for the other.
The legislative provisions
S8 Tax Credit Act 2002, TCA, makes child tax credit, CTC, payable to the person or persons who are “responsible” for the child.
S9 sets out how the maximum rate at which the responsible person is entitled to CTC is to be calculated. It provides as follows, as amended by s13 of the 2016 Act, leaving aside the particular provisions for disabled children which do not arise here:
“9(2) The prescribed manner of determination must involve the inclusion of –
(a) an element which is to be included in the case of every person or persons entitled to child tax credit who is, or either or both of whom is or are, responsible for a child or qualifying young person who was born before 6 April 2017,
(b) an element in respect of each child or qualifying young person for whom the person is, either or both of them is or are, responsible, …
(3) The element specified in paragraph (a) of subsection (2) is to be known as the family element of child tax credit and that specified in paragraph (b) of that subsection is to be known as the individual element of child tax credit ….
(3A) Subsection (3B) applies in the case of a person or persons entitled to child tax credit where the person is, or either or both of them is or are, responsible for a child or qualifying young person born on or after 6 April 2017.
(3B) The prescribed manner of determination in relation to the person or persons must not include an individual element of child tax credit in respect of the child or qualifying young person unless –
(a) he is (or they are) claiming the individual element of child tax credit for no more than one other child or qualifying young person, or
(b) a prescribed exception applies.
(4) The prescribed manner of determination may involve the inclusion of such other elements as may be prescribed.
(5) The prescribed manner of determination –
(a) may include provision for the amount of the family element of child tax credit to vary according to the age of any of the children or qualifying young persons or according to any such other factors as may be prescribed,
(b) may include provision for the amount of the individual element of child tax credit to vary according to the age of the child or qualifying young person or according to any such other factors as may be prescribe…”
This case is not about the family element of CTC.
The manner prescribed for the determination of CTC is in Reg. 7 of the 2002 Regulations, as amended by the 2017 Regulations. This provides:
“7(2A) Where the claimant, or either or both of the joint claimants, is or are responsible for a child or qualifying young person born on or after 6 April 2017 (“A”), the maximum rate referred to in paragraph (2) shall not include an individual element of child tax credit in respect of A unless –
(a) the claimant is, or joint claimants are, claiming the individual element of child tax credit for no more than one other child or qualifying young person; or
(b) an exception applies in relation to A in accordance with regulation 9.”
The 2003 Regulations, as amended by the 2017 Regulations, provide for exceptions to the two child provision, in each case allowing for an additional amount of CTC to be payable for a third or subsequent child, in the following circumstances:
(i) Multiple births (apart from one child in that birth): regulation 10;
(ii) Adoption (where the adopted child was, or would otherwise be, in Local Authority care): regulation 11;
(iii) Non-parental caring arrangements (including formal and informal arrangements), and where a child is born to a child aged under 16 for whom the claimant is responsible: regulation 12;
(iv) Non-consensual conception (including where the child was conceived in the context of a controlling or coercive relationship): regulation 13.
In each case, it is the third or subsequent child in the family that must fulfil the criteria for the exception to apply.
Reg. 9(5) of the CTC Regulations 2017 provides that the order of the children within the household is to be determined by reference to the following date in relation to each child, taking the earliest date first:
(i) where the claimant, or at least one of the joint claimants, is the child's parent or step-parent (in either case, other than by adoption), the child's date of birth;
(ii) in any other case, the date on which the claimant, or either or both of the joint claimants, became responsible for the child.
I quote from the Defendant's Skeleton Argument which is more immediately understandable than the Regulation itself.
However, as R12 is the exception directly at issue, I set it out:
“12(1) This regulation applies in relation to A if the claimant or at least one of the joint claimants –
is a friend or family carer in relation to A; or
is responsible for a child or qualifying young person who is a parent of A.
(2) But this regulation does not apply in relation to A if the claimant, or at least one of the joint claimants, is –
a parent of A; or
a step-parent of A.
(3) In this regulation, “friend or family carer” means a person who is responsible for A and —
is named, in –
a child arrangements order under section 8 of the Children Act 1989, or
a residence order under article 8 of the Children (Northern Ireland) Order 1995, as a person with whom A is to live;…
(h) has undertaken the care of A in circumstances in which it is likely that A would...
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