CPAG search

Decision in brief

No smaller chalets available and no other caravan sites in area to move to – no violation of claimant’s rights as a gypsy traveller under the European Convention on Human Rights as council provided discretionary housing payments to mitigate in full the adverse effect of the bedroom tax on the claimant.

Comment from CPAG

The judge noted that it was not in dispute that in general terms ‘gypsy travellers’ have rights to respect for their homes and protection from unjustified discrimination under the Convention. The judge placed heavy reliance on the role of discretionary housing payments in avoiding a breach of the Convention. Had those payments not been in place, it would seem that such a breach may well have been an issue.

Decision in brief

Dutch invalidity benefit in payment – Holland competent state for payment of ‘sickness benefit’ – tribunal erred in deciding there was a difference in view about competent state between UK and Holland leading to entitlement to care component on a provisional basis – no evidence of a difference of view – no entitlement on basis of being a pensioner as neither the mobility component nor the care component of DLA is a pension.

Summary

The claimant was treated as having notional income from money available for withdrawal in a personal pension fund, but that he had not withdrawn. He had not withdrawn the money because the value of the plan fund was less than his contributions, and following a complaint he had been advised by the Financial Services Compensation Scheme not to withdraw available income from the fund. In the Upper Tribunal, it had been held that where the pension funds were less than the claimant’s contributions, the notional income rule at regulation 18 of the State Pension Credit Regulations 2002, No.1792 should not be applied, as any available money should in fact be treated as capital.

The Court of Appeal ruled that the Upper Tribunal judge had failed to apply the correct legal principles to the construction of regulation 18 and that the Secretary of State’s appeal should be allowed. The claimant’s original appeal against the notional income decision was dismissed (paragraph 36). The wording in regulation 18, including references to pension schemes and income withdrawal, have a clear and technical statutory meaning relating to pensions and tax legislation. In that context, ‘income’ was unconnected with the financial performance of a pension fund. To find, as the Upper Tribunal did, that it was so connected would require continuing examination of the financial performance of personal pension schemes, and it was unlikely that such a complex and unpredictable approach was intended (paragraphs 24–34).

Summary

This decision of the Supreme Court arises from a challenge to the decision of the Court of Appeal in this case (see our caselaw summary Secretary of State for Work and Pensions v Gubeladze [2017] EWCA Civ 1751). Two questions were considered: (1) whether the extension of the worker registration scheme (ie, continuing the requirement of nationals of A8 European Union (EU) member states to register employment) was lawful; and (2) whether the ‘residence’ referred to in the rules for permanent right to reside after three years’ residence in the UK followed by ceasing work meant ‘legal’ residence (ie, with a right to reside) or merely ‘factual’ residence – ie, simply residing in the UK.

The court held that (as held by the Court of Appeal) the extension of the worker registration scheme (the WRS) in 2009 was unlawful. That was because it failed to satisfy the principle of proportionality. Contrary to the argument of the Secretary of State, there was no good reason to depart from the decision of the House of Lords in Zalewska v Department for Social Development (Child Poverty Acton Group intervening) [2008] UKHL 67; [2008] WLR 2602 that any requirements of the WRS were imposed pursuant to provisions permitting derogation from EU rights and so had to be proportionate (paragraph 44). Further, although there was evidence that removing the WRS would have a small effect on the UK labour market, the Secretary of State had not provided any evidence as to how she sought to balance that against the significant detriments resulting from continuing the WRS for employers and migrant A8 workers (paragraph 56). Neither Judge Ward in the original Upper Tribunal decision nor the Court of Appeal had erred in applying the correct proportionality analysis and finding that the detriments were substantial and serious, and were plainly entitled to conclude that the extension of the WRS was disproportionate and so unlawful under EU law (paragraphs 70–74).

Regarding the meaning of ‘residence’ for permanent residence after three years’ residence followed by cessation of work, the context here was the wording of the relevant provision of Article 17(1)(a) of the ‘Citizens Directive’ (Directive 2004/38/EC). The court decided that such residence meant merely ‘factual’ residence rather than ‘legal’ residence. Considering both the purpose of Article 17 and the language used in the provision (which, unlike in Article 16, did not require the person to have ‘resided legally’), the court concluded that the court of Appeal had erred in interpreting Article 17(1), whereas Judge Ward in the Upper Tribunal had correctly concluded that the ‘residence’ referred to was factual residence (paragraphs 76–92).

Summary

In this decision, the Court of Appeal reversed a decision of the Upper Tribunal which had held that the alleged spare bedroom in the bedroom tax rules had to be capable of use by the particular category of occupant or ‘family unit’ – eg, siblings of the same sex. Rather, ‘bedroom’ should be interpreted as meaning a room capable of being used as a bedroom by any of the listed categories (paragraphs 40–41).

The claimant lived with her husband and two sons in a property described as having three bedrooms. However, two of the bedrooms were small and awkwardly shaped, and not capable of being shared by the boys. The relevant rules were in regulation B13 of the Housing Benefit Regulations 2006, No.213. In Nuneaton and Bedworth Borough Council v RH and SSWP [2017] UKUT 471 (AAC), the Upper Tribunal held that the relevant issue was the ‘connection’ issue (ie, whether the room had to be capable of occupation by the particular individual or class of individual who may occupy it) and concluded that it did have to be so capable. Before the Court of Appeal, the claimant accepted that the individual characteristics of the occupants could not be taken into account, but their classification in the rules (in this case, as children of the same sex neither of whom were aged under 10) had to be taken into account, so that the suitability of the bedroom for that category of occupant was relevant. It was also argued that the differential treatment in the rules of children of the same sex and of those aged under 10 was unlawful discrimination under the European Convention on Human Rights (‘the Convention’).

Rejecting those arguments, the Court of Appeal held that the fundamental difficulty with the discrimination arguments was that the decision in R (Carmichael and others) v Secretary of State for Work and Pensions [2016] UKSC 58 had held that the rules were compatible with the Convention. Regarding the regulations, they were to be applied ‘in respect of a notionally vacant house’ and the ‘characteristics of the particular individuals are irrelevant’, with the result that the assessment was an ‘objective’ one (paragraph 38). Further, there is nothing in the regulations to indicate the assessment is required to take account of how the bedrooms would be used ‘by a particular family unit’. If they did, the underlying purpose of the regulations would be frustrated as a tenant could decide to use the property so as to reduce the relevant number of bedrooms. The Upper Tribunal had wrongly ‘introduced a subjective element’ into the assessment, supported neither by the words of the regulation nor the intention of the legislation (paragraphs 39–40).

Summary

The claimant’s late husband was born in Pakistan and married his first wife there in 1976. He then moved to the UK, and was joined a few years later by his first wife. He became a British citizen. In 2001, he pronounced a talaq with the intention of divorcing his wife and the couple separated. In 2008, he married the claimant in Pakistan, and shortly after that obtained a decree absolute of divorce (ie, under English law) from his first wife. In 2011, the first wife died. In 2012, the claimant had a child with her husband, but her husband died in 2016 – by which time the claimant had been married to him under Islamic law for eight years and had been his only living spouse for five years. It was eventually decided that she was not entitled to bereavement benefits, on the basis that her marriage was polygamous and – as the husband was domiciled in England at the time of the marriage – not a lawful marriage under English law. That was upheld by the First-tier Tribunal.

Judge Wikeley allowed the claimant’s further appeal and substituted a decision that the claimant was entitled to the relevant bereavement benefits (which at the time of claim were bereavement payment and widowed parent’s allowance). The refusal of bereavement payment was in breach of the claimant’s human rights under Article 14 of the European Convention on Human Rights (‘the Convention’) read in conjunction with Article 1 of Protocol 1. The benefit was within the ambit of Article 14, the claimant was in an analogous situation to a ‘lawful’ widow (ie, one where the marriage is recognised under the law of England and Wales) and the discrimination against the claimant was not justified. The same was true for widowed parent’s allowance, although in any case the claimant was also entitled to that benefit (ie, including as an unmarried widow) by virtue of the decision in McClaughlin, Re Judicial Review (Northern Ireland) [2018] UKSC 48. The judge held that the relevant secondary legislation (the Social Security and Family Allowances (polygamous Marriages) Regulations 1975, No.561, which allows for lawful polygamous marriages that are ‘in fact monogamous’ to be treated as if they were monogamous), should be read down so as to be compliant with the Convention (paragraph 10).

It was conceded that, although the claimant’s 2008 polygamous marriage in Pakistan was valid under local law, it was void for the purposes of the law of England and Wales (section 11(d) of the Matrimonial Causes Act 1973) (paragraph 37). The Secretary of State submitted this meant that the claimant was simply not a ‘spouse’ of her late husband, including under the 1975 regulations, as the polygamous marriage was void under English law. But the judge considered that the claimant was in a position analogous with that of a ‘lawful’ widow (as the sole surviving widow of an overseas religious marriage, validly contracted under local law) and that the difference in treatment compared to that of a ‘lawful’ widow was not justified. He rejected the Secretary of State’s justification arguments, which included public policy concerning polygamy and the need for ‘bright lines’ in the rules. The judge considered that most people would take account of the fact that the late husband had never lived with both wives at the same time and had divorced his first wife, and that section 11 of the Matrimonial Causes Act in fact did provide that some polygamous marriages would not be void – ie, where neither party was domiciled in England and Wales at the time of the marriage. Overall, the discrimination against the claimant was not justified (paragraphs 72–86). Applying regulation 2 of the 1975 regulations so as to be compliant with the Convention (ie, to regard the claimant’s polygamous marriage as lawful), the ‘in fact’ monogamous marriage allowed the benefit claim to succeed.

Comment from CPAG

The individual facts in this case – which included that the claimant was the sole surviving partner, had been lawfully married in Pakistan and that the marriage had been ‘in fact monogamous’ – are important. The judge indicated that its reasoning might be capable of application to the new bereavement support payment, although no argument was heard about that (paragraph 21).

Summary

The claimant was working under the ‘permitted work’ rules. She was working irregular hours under a zero-hour contract. Her entitlement was superseded (and overpayment decisions issued) on the basis that, after averaging her earnings over approximate six-month periods, she had exceeded the relevant earnings limit in the permitted work rules. The First-tier Tribunal dismissed her appeal, holding that there was no weekly pattern of earnings, and that it could not identify a ‘different/fairer’ pattern.

Judge Wikeley set aside the decision and remade the substantive supersession decision, so that the claimant’s entitlement was to be calculated using averaging over a period of five weeks (rather than six months). The tribunal had erred in deciding it could not identify a different or fairer pattern (paragraph 24).

As the claimant was working variable hours under a zero-hour contract, her income plainly fluctuated. That meant that regulation 94 of the Employment and Support Allowance Regulations 2008, No.794 was engaged (via regulation 88 on calculation of income from ‘exempt’ work). Under regulation 94(6), where the claimant’s income has changed more than once, or the ‘regular pattern of work is such that the claimant does not work every week’, averaging should be carried out. That is over a recognisable cycle of work where there is one or (under regulation 94(6)(b)) in any other case over a period of five weeks, or whatever other period allows the income to be determined most accurately. The judge considered that the default five-week rolling average was the appropriate one to use (paragraph 25).

Summary

The claimant had epilepsy which resulted in seizures that were unpredictable and followed no particular pattern. He had a seizure on the day of his scheduled medical under the work capability assessment and did not attend. Both the decision maker and the subsequent First-tier Tribunal decided that he did not have ‘good cause’ for not attending and, therefore, was not entitled to ESA. This was because it considered that the claimant had unreasonably failed to adopt advice, given in the light of previous failures to attend, that he submit supporting evidence from his GP about his problems in attending, and that he had requested a home visit instead.

Judge Church allowed the claimant’s further appeal and substituted a decision that the claimant did have good cause for not attending the medical. This is that on the day he had an unpredictable seizure and was not able to attend. The decision maker and tribunal had applied the wrong test of good cause in effectively requiring the claimant to have submitted further medical evidence and requested a home visit. Specifically, on the facts the tribunal’s decision that the claimant did not act reasonably and that therefore his state of health of the day of the assessment did not amount to good cause fell outside the range of reasonable decisions open to it on the facts (paragraph 37).

The ‘good cause’ provision was provided at regulation 23 of the Employment and Support Allowance (2008) Regulations, No.794. When granting permission to appeal, Judge Church said that it was arguable that to apply a standard for ‘good cause’ which requires the claimant to plan substantially in advance, submit further evidence and seek a home visit was to set too high a bar for the claimant. The Secretary of State denied that, arguing that although the claimant’s state of health on the day was clearly relevant, regulation 24 provided that it was possible to take other matters into account, and that allowing a claimant always to rely on his state of health on the day could mean he could always fail to attend future examinations without forfeit. The judge disagreed with that. Regulation 24 clearly required the claimant’s state of health ‘at the relevant time’ to be taken into account. Although other factors could also be relevant, on the facts of this case requiring the claimant to have acted in advance was ‘unreasonably harsh’. It is open to the Secretary of State to offer a home visit. Regarding future appointments, neither the decision maker nor the tribunal was obliged to accept what a claimant says at face value; but ‘if a claimant is genuinely too unwell to attend a whole series of appointments for medical examinations that would tend to suggest that the claimant is someone who would be likely to qualify for employment and support allowance and shouldn’t, therefore, be denied the opportunity to be assessed for it’ (paragraphs 31–32).

Comment from CPAG

The decision is a corrective to notions that claimants can generally be expected to initiate arrangements such as home visits and plan ahead to the extent that illness on the day is somehow unimportant.

Summary

The claimant had been in receipt of tax credits as a single person. However, HM Revenue and Customs (HMRC) decided to remove entitlement on the basis that the claimant was married to, and not separated from, her husband. That decision was upheld by the First-tier Tribunal. There was no dispute that the claimant was married, as she was married in an Islamic ceremony in Pakistan in 2005 and was not divorced. The tribunal concentrated on whether she was separated in circumstances under which the separation was likely to be permanent. The tribunal took into account a number of facts including that the husband had no permanent address and had keys to the claimant’s property; that he had post delivered to her address; that his name was on the electoral roll at the address; that the claimant had not applied for a single person discount to the council tax; and that they had a joint bank account. The tribunal had also issued a direction that the husband was to attend the hearing, which it instructed the claimant to tell him, and drew an adverse inference from his non-attendance.

Judge Wikeley allowed the claimant’s further appeal and remitted the case to a fresh tribunal. He agreed with HMRC’s submission that although the tribunal had identified the correct legal test, it had erred by placing undue weight on certain aspects of the relationship and failing to address the claimant’s evidence about how the relationship had changed since 2009 (paragraphs 7–9).

Regarding the tribunal’s direction that the husband should attend, the judge said that although entitled to make such a direction, the tribunal seem to have proceeded on the assumption that this was up to the claimant, when the whole basis of her case was that they were estranged. The drawing of an adverse inference from his non-attendance was confused, as one reason for that could indeed be that he did not support the appeal because although he considered they were not separated, in fact they were (paragraphs 17–18). Also, the tribunal had been vague in its fact finding and reasoning. The claimant made very clear arguments explaining her living arrangements in the context of family involvement, and there were a number of ‘contraindications’ to HMRC’s case including that the claimant had no financial support from her husband, and portrayed herself as happily married in order to avoid ‘shame’ on the family, but these were not adequately addressed (paragraphs 24–35). More widely, the tribunal had not viewed the facts ‘through the prism of any relevant cultural context’. Cultural differences (between claimant and tribunal) could apply in the context of relationship breakdown and divorce, and the claimant had specifically said that her cultural background involved family pressures to behave in a certain way (paragraphs 40–48).

Comment from CPAG

The overall message for tribunals is best summed up by Judge Wikeley’s introduction to the decision: 

‘This case is a classic example of why it is important for tribunals to be alive to cultural issues when determining appeals, especially when assessing a party’s evidence about intimate matters relating to personal relationships… to rework an old saying, before you judge a woman, walk a mile in her shoes.’

Summary

The claimant was a sole trader in his business as an author, musician, publisher and creator of his own intellectual property. He wrote books and composed and recorded music, working on average 11 hours a day. He kept books of account and recorded expenses. During a sample period, his profit was around £8.44 a week. Having originally been awarded WTC, his entitlement was removed on the basis that the work was not (as required under the rules) ‘on a commercial basis’. On appeal, the First-tier Tribunal found that the claimant did not count as self-employed because ‘his activities are not commercial in the sense that they are quite unprofitable and have been so for many years’, and could not be described as ‘genuine and effective’.

Judge Poole QC allowed the claimant’s further appeal. Construing the meaning of ‘on a commercial basis’ in regulation 2(1) of the Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002, No.2005, the judge held that the tribunal had erred in finding that self-employment is not commercial on the basis that it is unprofitable (paragraph 25). That was for a number of reasons. The statutory context for the definition at regulation 2(1) was the general policy intention of making work pay, and if ‘commercial’ was read as ‘profitable’ that could wrongly exclude a number of low-paid people who were genuinely working from universal credit. The definition (as amended in 2015) was to prevent abuse of the system and bogus self-employment, not to prevent genuine self-employment from qualifying for WTC. The amendments did not use the word ‘profitable’. Using profitability as the touchstone of commerciality ignored the core meaning of commercial. ‘Commercial’, held the judge, ‘is essentially about commerce, or buying and selling, and in my opinion that should be the focus...’ (paragraph 25.4). The tribunal was also wrong to use a test of whether the work was ‘genuine and effective’. Although those words were used in explanatory material in the 2015 amendments to the definition, the judge accepted HM Revenue and Customs’ submission that ‘“genuine and effective” is not a concept which assists’ in the definition of self-employment (paragraph 27).

Comment from CPAG

This decision involves an extensive discussion of the approach to the meaning of ‘on a commercial basis’ and regarding the issue of profitability and use of a ‘genuine and effective’ test, and should be treated as the leading decision.