The Queen (on the application of Michael Hardy) v Sandwell Metropolitan Borough Council Zacchaeus 2000 Trust (Intervener)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Phillips |
| Judgment Date | 30 March 2015 |
| Neutral Citation | [2015] EWHC 890 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/16824/2013 |
| Date | 30 March 2015 |
[2015] EWHC 890 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Birmingham Civil Justice Centre
3 Bull Street, Birmingham, B4 6DS
Mr Justice Phillips
Case No: CO/16824/2013
and
Tim Buley (instructed by Irwin Mitchell LLP) for the Claimant
Richard Clayton QC (instructed by Legal Services, Sandwell MBC) for the Defendant
Christopher Knight (instructed by Leigh Day) for the Intervener
Hearing dates: 31 October, 4 November 2014
The issue in this case is whether it is unlawful for a local authority to take into account the care component of disability living allowance ("DLA(c)") when assessing the amount of a discretionary house payment ("DHP").
The claimant ("Mr Hardy") and his wife live in a three bedroom council house ("the Property") which has been adapted to help them deal with their disabilities. They are entirely reliant on state benefits for their income. Until April 2013, the rent for the Property was discharged in full by Housing Benefit ("HB").
In April 2013 regulations came into force introducing HB "size criteria" for public sector accommodation, measures which were and remain highly controversial. They are referred to by proponents as removing the "spare room subsidy" and by detractors as imposing a "bedroom tax". Their effect in this case was that the Property was deemed to be under-occupied. As a result, Mr Hardy's HB entitlement was automatically reduced by 25%, leaving a shortfall £23.32 per week.
Mr Hardy applied to the defendant ("the Council") for DHPs to make up the shortfall. The Council calculated that Mr and Mrs Hardy's income, excluding the mobility component of their disability living allowance ("DLA(m)"), but including DLA(c), exceeded their expenses by £16.63 per week. Assuming that that surplus income could be applied towards their rent, the Council awarded DHPs at the rate of £6.69 per week, a decision which it confirmed on 13 September 2013 after a second reconsideration.
Mr Hardy challenges that decision by way of judicial review on the following grounds:
i) that the Council's policy of taking DLA(c) into account as a matter of course in assessing the rate of DHPs to award is contrary to the Department for Work and Pensions' Discretionary Housing Payments Guidance Manual Including Local Authority Good Practice Guide issued in April 2013 ("the DHP Guidance") and an unlawful fetter on the Council's discretion;
ii) that the Council's decision constitutes unlawful discrimination arising from disability contrary to Article 14 of the European Convention on Human Rights (ECHR);
iii) that the Council violated the Public Sector Equality Duty ("the PSED") imposed by section 149 of the Equality Act 2010 ("the 2010 Act"); and failed to make reasonable adjustments to its policy as required by section 29(7) of the 2010 Act.
The Intervener (a charity providing advice and support to those on low incomes, in particular in dealing with perceived injustices in the welfare system) supports the above grounds of challenge, but further contends (i) that the Council's conduct also constitutes discrimination in the exercise of a public function, contrary to sections 15, 19 and 29(6) of the 2010 Act and (ii) that including DLA(c) as income in a means-assessment process which is not itself related to the provision of care is contrary to the statutory scheme and is therefore irrational.
The factual background
Mr Hardy is 60 years old. He worked full-time, most recently as a bus/coach driver, until 2009, when he had to retire on grounds of disability. Mr Hardy emphasises that he worked hard and paid taxes all his adult life until his disabilities became too much to him.
Mr Hardy suffers from a heart condition and has had a pacemaker fitted. He also has arthritis and requires a walking stick. He has been assessed as requiring the higher rate of DLA(m) and the middle rate for DLA(c). Mr Hardy's wife also suffers from arthritis and is undergoing regular orthopaedic surgery. It is anticipated that she will soon require the use of a wheelchair. She is in receipt of the higher rate for both DLA(m) and DLA(c).
The Property is in Oldbury, in the Council's area. Mr and Mrs Hardy have lived there since 1987. Their children have left home. Although the Property is regarded as having three bedrooms, the third is very small and is now used as a study. The house has been substantially adapted to meet their needs, including the installation of a stair lift, adaptations to the bathroom and shower and alterations to the driveway and the kerb outside the house. These works were paid for by Mr Hardy from his income, including DLA(c).
The Council has assessed Mr Hardy and his wife as being in need of at least a two bedroom property in the Oldbury area. This is in part because of their role in caring for Mrs Hardy's mother, who suffers from dementia: although she lives locally, she sometimes has to stay at the Property when her health is particularly bad.
Following the 2013 changes to HB, Mr and Mrs Hardy, as a couple, are treated for HB purposes as needing only one bedroom. They are therefore deemed to be under-occupying the Property, resulting in a percentage reduction in their HB of 25% (as they have two "additional" bedrooms; one additional bedroom results in a 14% reduction). Indeed, Mr and Mrs Hardy are not eligible for a one-bedroom council property, so they will inevitably be deemed, for HB purposes, to be "under-occupying" any council property they are allocated. They have bid for numerous smaller council properties suitable to their needs, but have been unsuccessful to date.
On 7 January 2013, in anticipation of the shortfall in his rent which would arise from April 2013, Mr Hardy made a written application to the Council for DHPs on the Council's standard form. As required, Mr Hardy provided details of his and Mrs Hardy's monthly income and expenditure. In respect of expenditure, the form provided for a "Monthly Amount" to be identified for each item on a list of ordinary regular expenses (such as utilities, food and travel costs). There was small section at the end for other expenditure, but no specific invitation to provide details of spending (regular or otherwise) on items referable to dealing with or arising from a disability.
On 19 March 2013 the Council wrote to Mr Hardy informing him that he would be awarded DHPs at the rate of £6.69 per week for the period 8 April 2013 to 29 September 2013 on the following basis:
" The DHP calculation has been made to take into account the level of your ongoing income from April 2013, this includes your Income Support, your Incapacity Benefit, Carer's Allowance, your [DLA(c)] and your Wife's [DLA(c)], which totals £311.95 per week. The amount you and your wife receive in respect of [DLA(m)] is excluded from the income assessment for DHP purposes.
Deducted from the income assessment is the expenditure you declared on your DHP application, which totals £295.32 per week, therefore when your expenditure is deducted from the income used in the DHP calculation you have a surplus income of £16.63 per week (£311.95-£295.32).
As you have surplus income of £16.63 per week, this can be used towards your weekly rental shortfall of £23.32 per week, this leaves you may rental shortfall deficit of £6.69 per week and on that basis a DHP award will be given amounting to £6.69 per week to cover that Deficit."
Mr Hardy requested a review of that decision. By letter dated 4 April 2013 the Council refused to change its position, stating:
" Although your [DLA(c)] is disregarded as an income for Housing Benefit purposes there is no provision in the DHP Policy to disregard this income so it is included in the assessment of your income when calculating your eligibility for a DHP."
In response to a letter before claim from Mr Hardy's solicitors, the Council agreed to reconsider its decision. By letter dated the 27 June 2013 the Council confirmed that it had reconsidered the matter but that the decision remained unchanged. The Council explained its decision as follows:
" I have enclosed a copy of the Council's Discretionary Housing Payment policy. Although the Council does not take into account [DLA(m)], and this is not stated in the policy, I can confirm the decision not to include this income has been taken in accordance with Discretionary Financial Assistance Regulations 2001, Part 2 paragraph 1.
In the analysis of this regulation it states that specific provision is made for the mobility component of disability living allowance to be disregarded in the calculation of other benefits. Sections 73 (14) of the [Social Security Contributions and Benefits Act 1992] states:
'A payment to or in receipt of any person which is attributable to his entitlement to the mobility component, and the right to receive such a payment, shall (except in prescribed circumstances and for prescribed purposes) be disregarded in applying any enactment or instrument under which regard is to be had to a persons[sic] means'
The decision by the council to include [DLA(c)] as an income for [DHP] purposes, has been taken on the basis of Turner v London Borough of Barnet Housing Benefit Review Board … which confirms that [DLA(c)] can be taken into account as an income for DHP purposes. In this case the court was presented with arguments of disability discrimination but did not consider this was in fact taking place.
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