Benefit cap JR

I’ve been really slow to write this up, for which many apologies, but I have just got bogged down in other things.  The benefit cap JR got lost amongst that other stuff partly because it was almost predictable after MA that the Divisional Court would find a way to uphold it.

Actually, though, having read it again the other day for a different reason, the benefit cap challenge – R(JS) v SSWP [2013] EWHC 3350 (QB) – was very clever (CPAG and Shelter were joined as interveners – CPAG’s arguments can be found here) and the appeal is to be heard pretty soon, having been expedited by Richards LJ.  The Divisional Court challenge was to the SI which sets out the benefits taken into account in the cap, not the primary legislation itself.  Unlike MA, the Claimants dropped their public sector equality duty challenge.  So, the judgment only concerns the Art 14/Art1Prot1/Art 8 discrimination claims and a rather bold Wednesbury challenge.  The actual facts of the three cases themselves are enough to make you weep at the thoughtless, insensitive, appallingly callous, effectively segregationist policy.  They involve single female parents with multiple children, two of whom had left violent partners and one of whom is Roma and a devout Roman Catholic.

As the Divisional Court puts it, the benefit cap is most likely to hit large households which live in high-rent areas. “It is a striking feature of the scheme – and lies at the heart of this application – that the cap applies equally to a childless couple in an area with cheap and plentiful social housing as it does to a lone parent mother of several children in inner London compelled to rent on the private market. But the aim of the scheme is in part to encourage those subject to the cap back to work; alternatively, to move to different areas of the country where rents are cheaper and housing benefit correspondingly less”. Further, “It was obvious from the outset that the introduction of the cap would have severe and immediate consequences for claimants who had been receiving substantially in excess of the relevant amount. The Government sought to mitigate the difficulties by providing additional funds to local authorities to make discretionary housing payments (DHPs) as a transitional measure in hard cases”. The basic point is that the eligible amount for housing benefit is reduced by the excess over either £350 or £500pw (for singles and others respectively). However, where a member of the household is entitled to (for example) working tax credit, then the benefit cap does not apply. The cap is a pretty crude mechanism for forcing cheap part-time labour.

The problem for the Claimants in this case, fairly obviously, was that such labour was not open to them. The DWP’s argument, in part, was that they are in the process of tightening up child support arrangements by absent parents, the usual DHP (ie discretionary housing payments) argument, but mainly that, even if there was discrimination, it did not reach the threshold required of “manifestly without reasonable justification”. Frankly, not much would reach that threshold, even more so when one appreciates that the jurisprudence on challenging Statutory Instruments suggests that the threshold is even higher for constitutional reasons, even when the SI itself had not been debated.

The court disposed of two arguments pretty quickly: the first was that the DWP had failed to take into account the best interests of the children, and the second whether the local authority would have to pick up households affected by the cap under Part 7, Housing Act 1996, as homeless persons. As regards the former, it was clear that they had done; and, as regards the latter, it was likely that the local authority would have to do so (even though the duty was not analagous to the kinds of decisions made by working people (as Shelter pointed out) and the household would probably be shunted many miles away.

We were not in Article 8 territory really here, but that did not matter because we were clearly in A1P1 territory and also, pretty clearly, the cap discriminates against women. The other grounds of discrimination were said to be race, religion and age in the grounds; arguments that it discriminated against those against whom domestic violence had been perpetrated and large families were neither here nor there, albeit interesting in the context of the breadth of “other status” in Art 14.

As regards justification, the DWP made clear that the policy has three aims: (1) introduce greater fairness in the welfare system between those receiving out-of-work benefits and tax payers in employment; (2) make financial savings where the benefit cap applies (the most recent estimate is that applying the cap is expected to save £110 million in 2013/14 and £185 million in 2014/15) and, more broadly, help make the system more affordable by incentivising behaviours that reduce long-term dependency on benefits; and (3) increase incentives to work.

The submissions on justification, which were accepted, should be repeated because they are just so awful (basically, some people will suffer but that’s ok because the neo-liberal state will be saved):

As we have said, the Secretary of State has recognised that the policy will bear particularly harshly on larger families and single parents. That is necessarily the case when current needs are no longer wholly being met by welfare benefits. But he submits that it is his considered view that the anticipated short term benefits will be achieved, and that certainly there will be some savings. In any event, in order to change the welfare culture which will inevitably result in long term savings, very serious steps have to be taken to remove disincentives to work and to encourage those on benefit back to work. Whilst it may be true that some of these claimants or similarly placed single parents may already have a sufficient incentive to work, that is not necessarily the case with all on benefits. Beneficiaries have to be forced if necessary to take difficult decisions either to cut their spending requirements, perhaps by moving to another place, or to increase their income by obtaining a job. Moving is certainly not a desirable outcome in many cases, but many people in work have to take similar unpalatable steps to secure sufficient family income, and there is every reason to suppose that these claimants and others similarly placed would be able to live far more cheaply elsewhere than they do in London. DHPs have been made available to help families in the short term. So, for example, they can be used to assist someone changing homes to cheaper accommodation to pay any deposit and the first weeks’ rent. Nor is it the case that any of these families would be put on the street; the local authority would have a duty to house them in cheaper accommodation if they were otherwise destitute.
The Secretary of State also points out that if the difficulties highlighted by the claimants were to be eliminated by removing from the cap the benefits which can be claimed by those at work (as CPAG have suggested fairness requires), the result would be, in effect, to make the cap irrelevant in almost all cases. It would bite in very few cases indeed and would to all intents and purposes involve the effective dismantling of the policy.

The really interesting stuff is later. It was argued by Richard Drabble for CPAG that the cap is fixed in an entirely arbitrary way, unrelated to need or to fairness:

The principle that a person receiving benefit should not receive more than the average wage sounds a reasonable, and indeed a not ungenerous, principle. It suggests that the beneficiary will have to cope in the same way as any other family on a similar income. That is what the Government has been at pains to emphasise as a justification for the policy, but it is wholly misleading. The reason is that if someone is in work and receiving the average wage that is only a proportion of his income. He will in addition be entitled to a range of benefits, and in particular child benefit and housing benefit, which are payable to those in work and out of work alike.

The effect therefore is that the cap will frequently create a dramatic and unjustified differential between those in benefit and those in work.

As the court accepted, it was unclear whether Parliament or anyone had quite appreciated the full impact of the in/out of work differential. But, as the DWP makes clear, that’s fine: “There will be particularly hard cases, and these claimants provide examples, but it must be remembered that they are not typical of the effect of the policy in the country as a whole. As Mr Eadie points out, that is inevitably the case when policy is cast in broad terms, and it is well established that ‘bright line’ rules are necessarily to some degree arbitrary but that does not render them disproportionate.” Somehow the Divisional Court manages to find that the policy “in a general sense” strikes a fair balance between the in/out of work – “a broad political concept of fairness”, as the court puts it, perhaps with a sneer at the unfairness of it.

It will be interesting to see what the Court of Appeal makes of it.

m4s0n501
Posted in Benefits, FLW case note, Housing law - All and tagged , .

14 Comments

  1. It should be noted that the government froze the cap limits for 2014/15 and so will not rise in line with wage inflation (AWE) which tends to work against their argument that the cap(s) represent average wages

  2. Only a relatively small number of claimants receive more than £500 a week in benefits other than HB, and are therefore in line for capping to some extent irrespective of where they live (generally this means people with six children who have no income at all apart from benefits and who are not otherwise exempt from the cap by virtue of a family member’s disability). Fewer still receive so much in non-HB benefits that their HB is reduced to zero. The savings from such cases are statistically insignificant, I would think, although you can always rely on the red-tops to find one and stitch them up by tricking them into cooperating with a human interest story and photo shoot.

    But the vast majority of benefit cap cases are people in the London area who are only capped because of the ludicrous private rents there. HB is largely to blame for this – unrestricted HB rates up to April 2011 allowed the market to get completely out of control. Even the capped rates in force since April 2011 are quite high and vulnerable to abuse by people configuring their households in creative ways (eg multiple joint tenants with a shared non-dependant can increase the yield for a property to double the LHA or more). The benefit cap penalises people who have no choice but to pay London rents, and if the intention is partly to force landlords to drop rents this is no way to get the genie back in the bottle. Statutory rent controls are apparently out of the question to any government that believes the market will magically meet all demand at the price on offer, but there is a solution: HB could roll back to the pre-2008 rules where HB cannot exceed an amount determined individually for each property rather than a flat rate across the board as we have now. Individual valuations would mean that property worth less than the LHA flat rate could not attract a total amount of HB in excess of that property’s value. The landlords would have to like it or lump it because the London private rented sector is funded by whatever HB will pay. Greater savings would be achieved without the unfairness and arbitrariness of the cap. I don’t buy the idea that all this property would be snapped up by self-funding tenants if HB rates were cut – virtually no-one can afford to pay London rents without claiming HB. The landlords would blink first.

  3. I have to confess to being conflicted on the benefit cap. Being a legal aid solicitor in a deprived northern town and seeing people on benefits getting more than me is annoying.

    I see the point of the cap and frankly it appears reasonable to set it about that level.

    Frankly I am not a fan of ifs and buts when it comes to be people being able to manage their affairs; better they know what they get and that be the end of it. A lot of time and money can be wasted by having too many boxes and then everyone trying to fit themselves into them.

    Therefore I can’t say a disagree with the government on the policy. Also sometimes it is better to do the painful thing and do it quickly and definitively and let the chips fall where they will.

    On the other hand it is harsh on the individuals and it is inevitable that this sort of thing could be done better and involve less harshness.

    IN short I am not happy about how it is done but can see why it is being done. In the end we elect people to make decisions and as long as that decision is lawful, even if we don’t like it, then it should stick.

    The real root of this problem is London. It just isn’t really part of the rest of the UK in terms of housing. As soon as this is recognized and London is allowed to run its own policy (in terms of housing and homelessness) the better. The problems occur when you try and make housing policy to fit London and the rest of the UK at the same time.

    • Chris, have you forgotten that the Tories LOST the last general election? They have no mandate, and any decisions they make have very little legitimacy, if any at all. They have managed to cobble together an unrepresentative, illegitimate government only because the Libdems couldn’t resist grabbing their first shot at power since 1923, and ethics were not a consideration. Lawful decisions? Oh yes, they’re lawful. So were decisions made by the Third Reich.
      The Tories’ policies have nothing to do with fairness, and everything to do with their freemarket fetishism, plus them seizing an opportunity to destroy as many as possible of the gains the working class has made in the last 40 years (check the whole spectrum of their policies, not just the benefit cuts.) Finally, if you’re not happy with the salary you get as a legal aid lawyer, you’re not obliged to continue working under legal aid contracts. I’m seeing plenty of vacancies advertised for qualified solicitors with corporate firms. Though I doubt your employers are actually paying you £71.70 per week, which is what your benefit claiming clients would get from Jobseekers Allowance.

      • On the basis of share of the vote we have not have legitimate government for about the last 50 years i’d bet (not looked up the statistics).

        There was an opportunity to go for AV (not the system I would want but better than FPP) but that was soundly rejected.

        The system in this country is that whoever can command the majority in the House of Commons is asked to form the Government. Don’t like it, then work for an alternative voting system (I am in favour of STV).

        I don’t like the conservative, I don’t like all the decision of the current government or the last labour government. How I accept that the Government has to make choices that will makes someone’s position worse in either absolute terms or in relative terms.

        Therefore as the government has legitimate authority under the constitution and the decision cannot be said to be irrational (or at least has not been found to be by the Courts i.e. it is pursuing a legitimate aim) and it has been enacted lawfully; logically it must be accepted as lawful whether you agree with it or not.

        As for my job I like the work and doing what I do. However this does not stop me from Identifying problems with the system.

        One of the major problems in our system is that it has made a section of the population reliant on Government hand out. They take little or no responsibility for their actions or the situations they get themselves into. Also simply put in some circumstances they’d be crazy try and work.

        I think there needs to be a fundamental look at the tax and benefits system, but all we are likely to get is messing with the edges and more complexity making things less clear cut.

        Hmm rant over, some might say I am avoiding work on this Friday. in short don’t define legitimate by what you want it to be. You can not like a decision or serious disagree with it, but don’t ascribe malevolent motivations to people who are tasked with making those decisions.

        • Having read CPAG’s arguments I’m afraid they were always destined to fail. Whilst some of them are valid I think the time has come when people cannot continue to have as many children as they like either as a way of accruing state income or relying on the state to support them. It is tough on those who have already made the decision about their family planning and the children are already here, but you have to start somewhere..when I was growing up getting pregnant without the family setup in place was the worst thing you could do, least of all have to tell your parents….so it was a social limiter…and yes there are some horrendous tales of those who did and what befell them..but we have to start somewhere…perhaps the Govt (this one or any other) should have announced that they would cap benefits from a date in the future, spelling out that you would not get extra benefits for any child after the second one…eeek! that sounds like post-war China but it has to be done somehow. If anyone can justify people not family planning and expecting the state to pay in all circumstances I would love to hear it..especially from CPAG!

          • Chris, with the greatest of respect, this has nothing to do with the ratio of the High Court judgment. Or even CPAGs arguments. That is a fatal flaw in your comment from line 1.

            There is also the small problem that what you are suggesting simply isn’t true in the sweeping way you say it is.
            a) the benefit cap applies to families.
            b) the figures on single parenthood include the separated married and divorced (About 50% of single parents).
            c) The rate of single parent parent families at some 25% of families has remained consistent since the mid 1990s. It has increased since the 1970s, but so has the divorce rate (see b.).
            d) Your assumption that people were receiving benefits before having children is unsustainable on the evidence.

            You are, at best, extrapolating from a tiny number of anecdotal experiences to a basis for policy. I am not, on the whole, a fan of knee jerk policy making based on prejudice and flying in the face of the available evidence. Can I suggest that if you do want to make that kind of assertion round here, you come up with some actual evidence?

            • With the greatest respect Giles I never mentioned single parent families. And I am basing it on actual evidence of advising people on the ground in a family situation and who rely heavily on benefits rather than earned income. It is of course a nice utopian desire that the poor should have the same choices as the well off as regards having as many children as they want, but in reality it is not the case if the tax-payer (and not the family) have to foot the bill. I was merely pointing out why the Government has very cleverly hit a scoring point with most of the general public. So it doesn’t matter what you and I believe or can evidence, it is politically popular.

            • Then what did you mean by “when I was growing up getting pregnant without the family setup in place was the worst thing you could do, least of all have to tell your parents….so it was a social limiter…”?

              But in any event, you still rely on very limited anecdotal experience to make sweeping assertions about a whole range of people. You also still appear to consider that whether you (and ‘the public’) like the policy has some bearing on the legal validity of CPAG’s arguments in the High Court. As already pointed out to you, they don’t.

              As you are not actually commenting on the case, or indeed the statistics on the situations of those affected by the cap, instead appearing to view it as some sort of deterrent for having children, I think you can stop now.

            • Just for sake of clarity.

              I made the 1st comment and the reply about legitimate governments.

              I am not the Chris going on about the arguments, as I have not read the case. Nor know anything about social attitudes towards single parents.

              Just need to be careful when there are 2 Chris’s about. I’ll use Chris S if I want to comment again I think

            • Yes Giles I will stop now..it was Friday afternoon and I was bored because it was so quiet…and my response was not even close to a legal argument. I think someone else’s point ( can’t remmeber who) about London needing to be taken out of the housing equation was a good one though because the effects of the benefit cap and bedroom tax are not so acute out here in t’ the sticks’. For example a £10 per week shortfall is probably affordable for a family on a range of benefits.

  4. Totally agree I’m afraid- I’ve defended too many people in court telling me ‘I don’t pay rent’ when faced with having to agree to a top up because HB is short of the full amount. Anything which re-orders society into one in which all people recognise that they cannot live for free has to be done..unfortunately there will be some real victims along the way

  5. Hi Chris

    I think you’ve missed the crux of the legal challenge, which is that the policy behind the Benefit Cap is discriminatory. It quite clearly is, both in an indirect and Thlimmenos sense.

    The question is whether that discrimination is justified. The current legal position is that it is justified, though many of us would disagree.

    Surely the government should have researched the full effects of the policy and written it in a way that prevents or at least minimises discrimination, as per the thrust of CPAG’s argument.

    But that’s only a test of whether the policy is lawful, not of whether it is ethical or sensible, and I find it to be neither. Not because I’m against there being a cap on benefits, but because I’m against it being so broadly applied so as to affect people disproportionately, unfairly, and in a way that discriminates against certain groups. It’s simply poor policy that leads to unfairness, inequality and child poverty, though its premise and aims may be well-founded.

    Why must there be victims along the way to reform? Well-researched and well-considered legislation that better considers personal circumstances could potentially avoid this.

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