IB v Gravesham BC and SSWP (HB)
Housing benefit (HB) – students – notional loan income – principled and conscientious objection to taking out a student loan
Summary
The claimant was able to get HB as a full-time student. He chose not to take out a student loan for fees and maintenance, based on his conscientious belief that charging and paying interest were forbidden by his religion (the claimant was a Muslim). He supplied the money himself from his savings and through part-time work. The local authority treated the claimant as having income based on the student loan he could have taken out, and as a result, his income was too high to qualify for HB. The First-tier Tribunal refused the claimant’s appeal.
Judge Poynter allowed the claimant’s further appeal and substituted a decision that the claimant was not to be treated as possessing the student loan. The relevant rule was at regulation 64(3) of the Housing Benefit Regulations 2006, SI No.213. That requires that a student is treated as possessing a student loan in respect of an academic year where ‘he could acquire a student or a postgraduate loan in respect of that year by taking reasonable steps to do so’. On the facts of this case, it was not a reasonable step for the claimant to have taken a loan. The correct approach involved disapplying previous authority on this, that of Commissioner (as he then was) Powell in CH/4429/2006. That decision held that the word ‘reasonable’ in the rule was merely about the mechanical steps necessary to take out the loan and not matters such as the motives and religious beliefs of the claimant.
Judge Poynter declined to follow CH/4429/2006 as he considered it wrongly decided. Instead, he decided that ‘a judgment as to what is reasonable falls to be made having regard to all the personal circumstances of a claimant and, of course, all the other relevant circumstances’ (paragraph 8). In this case, although the claimant undoubtedly had the capacity to take the steps required to acquire the loan, it ‘would not have been reasonable for him to have violated his strongly held and conscientious religious beliefs by doing so’ (paragraph 9). The judge emphasised the fact-sensitive and personal nature of his judgment. It was not a decision that all Muslim students who do not take out a student loan are similarly exempt from the rule, or that students of other religions, or none, must always have the notional loan applied to them (and so Judge Poynter rejected the argument of the Secretary of State that his decision would involve a breach of the Equality Act 2010 regarding students of no religion). Contrary to CH/4492/2006, considered Judge Poynter, one of the ‘reasonable steps’ under regulation 64(3) was deciding whether to apply for a loan; it followed that the decision maker must be satisfied that it would have been a reasonable step for the claimant to have applied for a loan before he could be treated as notionally possessing one. There was nothing mechanical about the claimant’s choice there: ‘even those students whose only concerns are that they do not wish to leave university with a substantial amount of debt’, held Judge Poynter, ‘will need to undertake some moderately complex calculations’ to decide if they could manage without the loan (paragraph 95). The judge disagreed with the Secretary of State that interpreting regulation 64(3) as he had done would be administratively unworkable and invite ‘potentially opportunistic’ claims (paragraph 144). Most students simply cannot get HB anyway; and students who wish to make an ‘opportunistic’ claim would actually have to decline the student loan for which they were eligible, and somehow fund their tuition and maintenance themselves – with earnings taken into account for HB.
‘Finally’, held the judge, ‘if the position is still insufficiently clear, then under the principles established by the House of Lords in Kerr v Department of Social Development, [2004] UKHL 23 (also reported as R 1/04 (SF)), it is for claimants to establish that their objections to taking out student loans are principled and conscientiously held and are not merely an attempt to obtain a perceived financial advantage’ (paragraph 66).
Comment from CPAG
Thanks to the claimant for sending us this decision. Both it and CH/4429/2006 are decisions of a single Judge of the Upper Tribunal/Commissioner and, in that sense, are of equal weight. However, the present decision is the most recent and has the advantage of a lengthy review of the reasoning of CH/4429/2006, so it should be preferred. It is a significant change in the approach to what the ‘reasonable steps’ are for treating a claimant as notionally entitled to a student loan. However, the judge’s caveats about the fact-sensitive nature of the judgment and the requirement for the claimant’s objection to the loan being ‘principled and conscientiously held’ are important.