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Benefit cap legal challenge rejected by the High Court

This article was first published in the Solicitors Journal.

A call for a judicial review of the so-called "benefit cap" has been turned down by the High Court, ending, for now, speculation about the lawfulness of a controversial welfare reform (R (on the application of JS & Ors) v The Secretary of State for Work and Pensions and (1) Child Poverty Action Group (2) Shelter Children's Legal Services (Interveners) [2013] EWHC 3350 (QB)).

The Welfare Reform Act 2012 introduced a limit to the amount of prescribed welfare benefits that certain claimants can receive ("the cap"). The cap is determined by reference to estimated average earnings (£26,000 p.a.) and is currently fixed at £350 per week for single, childless claimants and £500 per week for others.

The policy of the cap is: to introduce greater fairness between those receiving out-of-work benefits and tax payers in employment; encourage claimants to work and/or move to areas with lower rents, thereby lessening the fiscal burden; and prevent the debilitating effects of long-term benefit dependency.

For cultural or educational reasons, none of the adult claimants (three single-parent mothers) wanted to move from London. They were unable to work or to make up the shortfall between their benefit entitlement and living expenses. Discretionary Housing Payments ("DHPs") would provide only temporary respite.

Women disproportionately affected

The cap, it was claimed, discriminated against women and large families, on grounds of sex, race, religion and age, in the enjoyment of rights under article 8 of the European Convention on Human Rights, article 1 of the First Protocol ("A1P1") to the convention, in breach of Article 14 ECHR.

It had - it was conceded - a disproportionate adverse effect on women, particularly lone parents and those fleeing domestic violence whose refuges were not exempt accommodation. Although article 8 ECHR was engaged, however, it added nothing to the argument advanced under A1P1. The test of justification was the same for both.

The secretary of state enjoyed a wide discretion in matters of social policy and had considerable leeway to frame the cap so as to best achieve its objectives. Parliament had fully appreciated that the employed would have more income than the unemployed. Although DHPs could not come near to providing justification for the policy (Burnip v Birmingham City Council [2012] EWCA Civ 629 [2013] PTSR 117), it was a factor that carried some weight in the proportionality exercise.

The claimants' cases were not typical of the effect of the cap on the country as a whole and although the "bright line" rules of broad policy were necessarily arbitrary to a degree, that did not render them disproportionate. It could not possibly be said that the scheme's rationale was "manifestly without reasonable foundation" (see R (MA) v Secretary of State for Work and Pensions and others [2013] EWHC 2213 (QB)).

The claimants' circumstances fell well short of demonstrating a breach of Article 8. Even if it were breached, the particular circumstances would have to be typical of a class before the scheme would require amendment. The difficulty of defining the class with any precision would arguably justify any failure to provide an exception to the rule.

The secretary of state had met the requirements of the United Nations Convention on the Rights of the Child, by treating the best interests of children as a primary consideration. Their interests were outweighed - and arguably served - by the countervailing considerations of reducing long-term benefit dependency and encouraging benefit claimants to work.

The court also rejected the third claim based on irrationality. The secretary of state had consulted about the matters complained about: the effect on those fleeing domestic violence and those in temporary accommodation. While the cap would bear particularly harshly on parents with young children, unable to work, the Court would not use its common law powers to interfere with Government decisions about how to allocate funds save in those exceptional cases where the method of allocation infringed some basic human right.

Unaffordable rent

The Court referred to the adverse effect on women fleeing domestic violence whose bona fide refuges were not exempted from the regulations, noting that a failure to address the issue could found a future challenge.

Local housing authorities will note the court's observation that it was "inconceivable that an applicant, whether already housed or seeking housing, could properly be regarded as intentionally homeless where the rent has become unaffordable simply through the application of the benefit cap. Moreover, it would no longer be reasonable to expect them to remain in the accommodation."

No doubt the Court of Appeal will be asked again to consider the role played by DHPs given its assessment in Burnip, in which their availability was broadly considered incapable of justifying Article 14 discrimination, and that in MA, in which, again broadly, it was the foundation of justification.