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Decision in brief

Polish claimant self-employed as a cleaner, working six or seven hours a week and earning below the national insurance (NI) contribution threshold – claimant was ‘gainfully employed’ and so (under Article 11 of Regulation EC No.883/2004) UK was the competent state for carer’s allowance – section 2 of the Social Security Contributions and Benefits Act 1992 does not provide that a claimant has to be liable for NI contributions in order to be gainfully self-employed.

Decision in brief

Claimant failed to disclose the cessation of his disability living allowance and his wife’s carer’s allowance (CA) – that led to an overpayment, but the calculation should correctly have included an offset (ie, reduction) in the amount due to the cessation of the CA and the consequent need to disregard that as income – regulation 13(1)(b)(ii) of the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988 (SI No.664) applies – that requires offset on the notional basis that any misrepresentation or failure to disclose had been remedied (ie, so that the cessation of CA as income was to be taken into account) – that is a hypothetical approach, so the Secretary of State’s refusal to offset on the ground that the cessation of the CA had to be reported as an advantageous change of circumstance within a month was wrong.

Decision in brief

Use of electric fan heater, hair dryer or tap to warm hands and allow wiping after defecating – tribunal erred in not considering whether use of these items constituted an aid so as to allow scoring for ‘need to use an aid or appliance to manage toilet needs or incontinence’ – in principle, they might be aids as an aid does not have to be specifically made for the purpose of overcoming a limitation (CW v SSWP (PIP) [2016] UKUT 197 (AAC) cited).

Decision in brief

Effect of Lounes v Secretary of State for the Home Department (C-165/16) [2018] 3 WLR 375 – a dependent EEA family member of a dual national can (as can a third-country national) derive a right of reside from dual national where the dual national has exercised European Union Treaty rights in the host member state (eg, UK) prior to acquiring the citizenship of that state.

Decision in brief

Scope of the definition of vulnerable adult is such that it will apply to most appellants in personal independence payment, employment and support allowance and industrial injuries appeals – in this case, claimant had autistic spectrum disorder and tribunal should have considered the Direction – but in many cases will not be a material error of law not to follow the Direction, as usual tribunal procedures will be effective – whether a failure or not will depend on the facts of the case, and tribunals should consider as part of the usual previewing of a case whether special arrangements, such as avoiding normally acceptable robust questioning, should apply – representatives should alert the tribunal to any specific arrangements considered desirable.

Note from CPAG

See article in Bulletin 272, p7.

Decision in brief

It is possible for this to apply to a formerly self-employed person as well as to a formerly employed person (Court of Justice of the European Union decisions in C-442/16 Gusa and C-483/17 Tarola cited).

Summary

In this decision of the Court of Justice of the European Union (CJEU), it is held that a self-employed woman who ceases work due to physical constraints in late pregnancy and the aftermath of childbirth retains her right to reside as a self-employed person, provided that she returns to self-employment or employment within a reasonable period after the birth of her child.

The claimant was a Lithuanian national who had been in self-employment in the UK. Soon after giving birth, she applied for child benefit. On the facts of the case, she was eventually found not to have the right to reside as her self-employment was considered to be marginal. However, she had also temporarily ceased working altogether during late pregnancy, before returning to do some marginal work after the birth of the child. The court was asked to rule whether it was possible for self-employed status to have been retained at all when the work was temporarily ceased. The UK argued that it was not.

The court rejected the UK’s argument. In this context, a distinction could not be made between a self-employed person and an employed person. The court had already held (Gusa, C-442/16, 20 December 2017) that employees and the self-employed were in a comparable vulnerable position if obliged to stop working, and therefore could not be treated differently regarding their right to reside. Applying that, a woman who ceases to be self-employed because of the physical constraints of the late stages of pregnancy and the immediate aftermath of childbirth cannot be treated differently, as regards the retention of right to reside, to a woman in employment in a comparable position.

Summary

In this decision of the European Court of Human Rights (ECtHR), it was held that the application of the so-called ‘bedroom tax’ to a claimant who is the victim of domestic violence and is living in Sanctuary Scheme accommodation, with the property adapted to provide a ‘panic’ room, is unlawful. (The court also held that in another case – JD – the bedroom tax is not unlawful in its application to a claimant with a severely disabled child in a three-bedroom house.) Both claimants had previously had their claims dismissed by the Supreme Court in the UK.

The claimant in A was a woman who had been the victim of domestic violence (in this case, involving rape). She lived in a three-bedroom house in the social sector, with her son. Following repeated contact from the rapist, the claimant was referred to the ‘Sanctuary Scheme’. She and her son lived in a rented three-bedroom house (allocated because of the shortage of two-bedroom houses). The attic had been modified to render it a ‘panic room’. The bedroom tax was applied regarding the third bedroom. She had been awarded discretionary housing payments (DHPs) on a temporary basis.

The ECtHR held that the application of the bedroom tax (at regulation B13 of the Housing Benefit Regulations 2006, No.213) was in breach of Article 14 of the European Convention on Human Rights, when read together with Article 1 of Protocol 1. The claimant had been discriminated against on the grounds of sex (as the victims of domestic violence were overwhelmingly women). The difference in treatment was not justified. The test was whether the measure was ‘objectively and reasonably justified’ – ie, it will be unlawful if it does not pursue a ‘legitimate aim’ or if there is no ‘reasonable relationship of proportionality between the means employed and the aim sought to be realised’ (paragraph 83). The court rejected, in the context of alleged discrimination, the domestic test for justification – ie, of whether or not it was ‘manifestly without reasonable foundation’ (see R (DA and DS) v Secretary of State for Work and Pensions [2019] UKSC 21). The court considered that to be limited to where the difference in treatment was a ‘transitional measure’ designed to ‘correct historic inequalities’ (paragraphs 87–89). The court considered that the aim of the bedroom tax was in conflict with the aim of Sanctuary Schemes (which was to enable those at serious risk of domestic violence to remain safely in their own homes). The government had not provided ‘weighty reasons’ to justify prioritising the bedroom tax in such cases. That prioritisation was therefore ‘disproportionate’ (in the sense of not corresponding to the aim) and the provision of DHPs could not render it proportionate (paragraphs 103–104).

Comment from CPAG

The ECtHR’s rejection of the ‘manifestly without reasonable foundation’ test as the test of whether the difference in treatment in measures of economic or social policy was justified is highly significant. That test has featured prominently in domestic (UK) caselaw involving discrimination arguments (often resulting in findings against the claimants, including regarding challenges to the benefit cap and the two-child limit). However, formally the court’s alternative test is not yet binding on domestic authorities.

Summary

In this judicial review decision, the High Court held that the equalisation between men and women of the state pension age, and the raising of the pension age, was not unlawful on the grounds of discrimination on grounds of age or sex. The claimants were women born in the 1950s and who were affected both by the equalisation of, and raising of, the pension age. They argued that the changes were unjustified direct discrimination on grounds of age regarding those born after 6 April 1950, that they were indirect discrimination on grounds of sex against women, and that inadequate notice of the changes had been given amounting to breach of legitimate expectations and unfairness under common law.

Lord Justice Irwin and Mrs Justice Whipple rejected all of those arguments. The age discrimination argument was firstly predicated on European Union (EU) law. But the court accepted that the general principle of non-discrimination applies only where EU law is implemented into domestic law, not where the domestic law is not within the scope of EU law. Those arguments must fail because the relevant domestic legislation was not within the scope of EU law (paragraphs 33–41). Alternatively, the claimants argued that the arrangements unlawfully breached Article 14 of the European Convention on Human Rights (ECHR) in the way it disadvantaged women on the basis of their age combined with gender. Rejecting that, the court held that previous authority demonstrated that a state can introduce a new legislative scheme from a given date and by extension introduce such change in a graduated way. Even to the extent that a difference in treatment had occurred, the changes were ‘macro-economic and political’, were properly open to government, and were justified as not ‘manifestly without reasonable foundation’ (paragraphs 43–54).

The claimants’ arguments regarding sex discrimination could not succeed under EU law, as determination of pension age for pensions was not within the scope of EU discrimination law. There was no unlawful breach of the ECHR as there was no direct discrimination against women, and although the court doubted that the changes actually discriminated against women even indirectly, the difference in treatment was justified as not ‘manifestly without reasonable foundation’, for the same reasons as applied regarding age discrimination (paragraphs 57–74). Regarding notification, the court held that parliament had never created a legitimate expectation that pension age would only change after consultation on an individual basis, and there had in fact been ‘extensive consultation’ on a wider basis (paragraph 18).

Summary

In this judicial review decision, the High Court held that the minimum income floor (which may apply to self-employed claimants of UC) was not unlawful on grounds of discrimination, irrationality or breach of equality duties.

The claimant was self-employed with two young children, and because of low earnings was subject to the minimum income floor in her UC. Because her local authority adopted UC income figures in calculating council tax support, she got no means-tested help with her council tax. She argued that the minimum income floor (at regulation 62 of the Universal Credit Regulations 2013, No.376) unlawfully discriminated against her as a self-employed person, contrary to Article 14 of the European Convention on Human Rights (ECHR). She also argued that regulation 62 was irrational at common law, and that the Secretary of State had failed to observe equality duties (under the Equality Act 2010) in introducing the regulation.

Mrs Justice Elisabeth Laing rejected all those arguments. She did accept that UC was within the ambit not only of Article 1 of Protocol 1 of the Convention (ie, was a ‘possession’), but also that it was ‘at least arguable’ that it fell within the ambit of Article 8 (right to family life) in that it included components for housing and for children (paragraph 91). But the judge doubted that there was a valid comparison with employed claimants (who are not subject to the minimum income floor). Such claimants were not in an analogous position and in particular there was no ‘directly effective practical equivalent’ for a self-employed claimant to the work requirements placed on an employed claimant (paragraph 103). Even if that was wrong, the difference in treatment was justified as not ‘manifestly without reasonable foundation’. One of the purposes of the minimum income floor was ‘to influence the behaviour of those in minimally profitable self-employment’ (paragraph 114), and although it did create an incentive to give up such activity in favour of seeking employment, it did not create a perverse incentive to give up self-employment in general (paragraph 116). Regarding rationality, the regulation properly encouraged consideration of whether to give up minimally profitable self-employment, and had been subject to extensive parliamentary scrutiny. The high threshold for irrationality was not met (paragraphs 119–122). Regarding equality duties, there had been an equality impact assessment regarding UC, the Secretary of State had taken a deliberate policy decision to assess the scheme as a whole, and the judge was satisfied that constituted the necessary due regard (paragraphs 123–125).

Summary

This decision of the High Court is regarding a claim for compensation for financial loss by a claimant (SXC) who was one of the claimants in the decision TP, AR and SXC v Secretary of State for Work and Pensions [2019] EWHC 1116 (Admin) (the ‘liability decision’). In that decision, it was held that rules then in draft form unlawfully discriminated against the claimants (via a breach of the European Convention on Human Rights – ‘the Convention’.) That was because the Secretary of State had not given a sufficient explanation why draft rules, in providing for transitional SDP amounts of UC for certain severely disabled claimants who had transferred to UC, treated them differently from those who would receive full ‘transitional protection’ at the point they are subject to the managed migration process. The claimant now sought financial compensation for that discrimination.

Mr Justice Swift (who had also made the liability decision) rejected the claim, as an award of compensation was not necessary to afford just satisfaction in this case (in essence, the judge considered that the mere requirement on the Secretary of State to think again was sufficient remedy). He did not consider whether the finalised version of the rules providing for transitional SDP amounts (the Universal Credit (Managed Migration Pilot and Miscellaneous Amendment) Regulations 2019, No.1152 – the ‘New Regulations’) also unlawfully discriminated against the claimant. Those regulations differ from the draft rules in that they provide for increased amounts, but still left the claimant with a shortfall of £63.48 per month compared with her previous benefit entitlement. However, the judge did comment: 

‘…it was no part of my conclusion in the liability judgment that the only lawful outcome must be to treat the group including SXC the same way’ as those who would receive full transitional protection. The judge also said: ‘…since it was no part of the conclusion in the liability judgment that parity was required to meet what is required to meet Convention rights, there is no reason why, for the purposes of this judgment, I need or should assume that the provision now made for transitional payment is unlawful. The legality of the New Regulations is not an issue in these proceedings. On the assumption that the new provisions for transitional payment are lawful, and given that payments under the new regulations are backdated to the date each relevant benefits claimant migrated to universal credit, there is no room for a conclusion that SXC has suffered any financial loss as a result of the discrimination she suffered’ (paragraph 16).

Comment from CPAG

As the judge made clear, this case was not about the legality of the finalised rules regarding the transitional SDP amount. That may yet be an issue in a later case. However, the judge was at pains to make clear his view that his previous decision on the draft rules ( ie, in TP, AR and SXC) is not authority that the finalised rules will necessarily be vulnerable to challenge merely because they do not provide the same protection as the full transitional protection afforded to those who undergo managed migration to UC.