With the beginning of the bedroom tax looming up for April and upwards of 700,000 households affected, I’ve been thinking about the position when the inevitable rent arrears possessions start to appear – probably by about October – and also whether the statute itself is open to challenge.
A quick reminder – from April all working age social housing tenants (and from October 2013 some pensioners, when both members of a couple will need to be over state pension age to escape) will see a deduction of 14% of rent from their housing benefit (not 14% of housing benefit) if they are deemed to have one surplus bedroom, 25% for two. The DWP Circular on the Regulations is here. There are no ‘dispensations’ for bedroom entitlement beyond the basic allocation of one bedroom for:
- An adult couple
- Other adults aged 16 or over
- Two children of the same sex aged under 16
- Two children aged under 10 regardless of gender
- Any other child under sixteen
- A non-resident carer who occasionally stays the night
The DWP has suggested that Discretionary Housing Payments should be used in difficult circumstances. However. the DHP fund has had an increase of £30 million, while the ‘expected saving’ to housing benefit is some £500 million, suggesting that only one in sixteen affected might be helped by DHP. Further, the DHP boost is for a year and not ring-fenced.
There is no definition of a bedroom in the regulations. What constitutes a bedroom has effectively been left up to social landlords.
Rather belatedly, the main news media have caught on and it is stories of those needing an extra bedroom for reasons of disability, or where children stay between two parents (of whom only one will get the bedroom allowance), that have made headlines. (Here and here for example).
The DWP have acknowledged that only a proportion of those affected will be able to ‘downsize’. In many areas, particularly in the north, social housing providers state that they have very few one bed properties, so those looking to downsize will either be frustrated, or forced into the private sector, ironically increasing the housing benefit bill. (For posts on the effect of the bedroom tax on Housing Benefit, see here and here).
So, what everyone in the sector is expecting is a significant increase in people in rent arrears, unable to downsize but unable to make up the shortfall from subsistence benefits. It is also worth noting that the DWP minister, Steve Webb, has repeatedly suggested that ‘two or three hours’ extra work, for those in work, would be enough to cover the bedroom tax shortfall. This, idiotically, takes no account of the deductions in HB for additional work. The actual picture is set out here – with an example of someone on 16 hours at minimum wage would need to work not two or three hours more but 32 hours, just to escape the £14 deduction.
While landlords are giving priority transfers to those affected seeking to downsize, (and thereby completely clogging up transfers for the foreseeable future), there simply won’t be enough smaller properties. In addition, there are many who will not consider that they are able to downsize. For a survey of the make up of households affected, see Hilary Burkitt’s research, which we’ll return to.
While social landlords are struggling to see how they can cope with the situation, it seems inevitable that there will be a significant increase in rent arrears possession cases, with arrears largely or wholly due to the bedroom tax deductions from housing benefit. The first swathe could be expected from October 2013 onwards.
With this slow motion disaster in mind, I’ve been thinking about possible challenges to the bedroom tax, whether to the regulations per se, or to the implementation of them by local authorities and social landlords. These are sketchy thoughts, nothing more, and hopefully there will be other grounds for challenge and/or defence brought forward.
Challenge to the regulations.
I have heard of a challenge at early stages in Scotland (also affected by the bedroom tax) based upon the difference between the 14% deduction and the actual difference in rent between a 3 bed and a 2 bed property. The challenge is by the tenant, apparently supported (and funded) by the landlord. I have no further details. This is potentially interesting, as given that the DWP have acknowledged that a large number of those affected will not be able to downsize, it would be tricky for the Government to argue that the 14% is in effect a penalty for not moving or incentive to move. There has to be a connection to rent. That said, the DWP’s announced method for arriving at the 14% for one bedroom is claimed to be “broadly based upon rent differentials for new lettings in a typical local authority area” (See the EIA here at page 2). Clearly, any percentage deduction reached would have to involve some degree of averaging, and therefore there would always be relative winners and losers. A simple challenge that the rent differential in one set of circumstances was lower than 14% doesn’t strike me as in itself a strong ground. However, a challenge to the 14% (and 25%) as being based on inadequate research, a bad evidence base, or unjustified assumptions might have stronger grounds. I’m very interested to hear more about this challenge if anybody knows details.
The other challenge that springs to mind is based upon Burnip v Birmingham CC, Trengove v Walsall MBC, and Gorry v Wiltshire C  EWCA Civ 629 (Our report here). In Burnip, the private sector housing benefit bedroom rules were found by the Court of Appeal to be discriminatory against those who needed an extra bedroom for a carer or because their children could not share a room as a result of disability on Article 14 grounds. As Hilary Burkitt’s research has made clear (albeit from a limited sample, though the same size as the DWP’s), some 72% of affected households had a member who is disabled or suffers from a major health concern. No specific exemptions are made in the regulations for disability requiring an extra room, save for a provision for carers staying overnight. The finding in Mr Gorry’s case might be particularly relevant here. The key points from Burnip would be that the shortfall was discriminatory because a) their HB was based on one room less than their objective needs, and b) – breaking new ground - drawing on Thlimmenos v Greece (2001) 31 EHRR 15, the right is also violated “when states without an objective and reasonable justification fail to treat differently persons whose situations are significantly different”.
It is also worth noting Henderson J’s points about DHP and disability benefits – quoting Dave in our Burnip report
‘(a) incapacity benefit and DLA are designed to meet ordinary living expenses and not intended to meet housing needs – that is HB – so, it would be wrong in principle to regard “those subsistence benefits as being notionally available to him to go towards meeting the shortfall between his housing- related benefits and the rent he had to pay” (); (b) discretionary housing benefit payments were not a complete or satisfactory answer to the problem that he needed two bedrooms but was assessed on the basis of one bedroom only because they are (i) discretionary, (ii) payable from a capped fund; (iii) could not be relied on to meet the difference between one/two bedroom rates; and (c) the difficulty in finding suitable accommodation and the probable need for adaptations mean that it is likely to require a long-term commitment for which there was a need for “… a reasonable degree of assurance that he will be able to pay the rent for the foreseeable future, and that he will not be left at the mercy of short term fluctuations in the amount of his housing-related benefits”’
I have heard a whisper that a Burnip style challenge is being prepared. I know nothing more. Burnip is due to be heard by the Supreme Court, which may change everything.
[11/02/13 - it has been pointed out to me that para 9 of the DWP Circular noted above suggests people in a 'Gorry' situation, with a severely disabled child unable to share a room, may have a bedroom tax exemption on an individual case basis, following the Court of Appeal decision. However, this does not address other arguably similar situations, for example an adult couple unable to share a bedroom through disability]
Challenges to implementation/defences in the County Court
The difficulty with the bedroom tax is that it renders the usual defences, or arguments, in arrears possession cases redundant. If arrears are wholly bedroom tax related, then there is no possibility of recovering benefits (though that will be outside the scope of legal aid funding from April 2013) or arguing for an adjournment or suspension on terms. There will be no realistic prospect of rent plus £X per week to arrears being viable. The general prospect is frankly that arrears will rise. For that reason, an article 8 defence will also be of little use.
Any defence must therefore be on the basis that the implementation of the bedroom tax is wrong in that case, and this will most likely take the form of a public law defence.
One option might be whether the bedroom is actually a bedroom. As noted above, the statute and regulations have left the definition of a bedroom up to social landlords. I don’t know of any social landlord conducting a review of its properties.
While the bedroom tax statute is silent on what constitutes a bedroom, there is plenty of statute that could provide a definition, e.g Part X Housing Act 1985 – the statutory overcrowding provisions:
- more than 110 sq feet (10.2 sq metres approx) = 2 people
- 90 – 109 sq ft (8.4 – 10.2 sq m approx) = 1.5 people
- 70 – 89 sq ft (6.5 – 8.4 sq m approx) = 1 person
- 50 – 69 sq ft (4.6 – 6.5 sq m approx) = 0.5 people.
- Less that 50 sq ft = not suitable as sleeping accommodation
Then there are the HMO regulations, Housing Act 2004, which sets a minimum of 6.5 sq m as a bedroom where there is a communal living room (or 10 sq m where there isn’t.)
Some local authorities also have their own HMO licensing standards, which set minimum bedroom sizes.
Arguably, any or all of these would be of relevance to whether what is identified in the tenancy agreement as a bedroom is lawfully so-called, and thus whether the bedroom tax should apply.
Another possible route, for adapted homes, is whether a bedroom is lawfully identified as such where it cannot practically be used as a bedroom. Some properties adapted for disabled use have former bedrooms adapted for other purposes, such that they could not be used as a bedroom at all by the tenant’s household. Where the landlord has carried out the adaptations, can the landlord then rely on the description of number of bedrooms in the tenancy agreement for the purposes of the bedroom tax, or is there an effective duty to review and revise that description?
These would only be even possible defences in specific cases, where the facts were right, of course. Assuming that they would actually run. If successful, though, they should result in the bedroom tax being removed for the bedroom or bedrooms at issue, potentially retrospectively.
These are only some initial thoughts and barely worked through. And it is likely that challenges to the bedroom tax will be a matter of nibbling at the edges, of finding specific circumstances that, in one way or another might be discriminatory in breach of Article 14, or a public law defence issue, or possibly an equality duty issue. Even a successful Art 14 discrimination challenge would only mean a limited incompatibility (and we know how long those can wait to be corrected).
Any other thoughts on potential challenge and defences are welcome.
If there are potential challenges that go to the heart of the bedroom tax, for example on the means by which the percentage reductions were arrived at, then I would be very interested to hear of them.
[Update 4 March 2013: A JR of the bedroom tax regulations has been issued on 1 March 2013. See here. ]