Thomas Raine: Court of Appeal: The ‘Bedroom Tax’ is Discriminatory

Thomas RaineOf all the government’s welfare reforms the most politically controversial has been the removal of the spare room subsidy, or as it more commonly known, the ‘bedroom tax’. The policy, which was put into effect by the Housing Benefit (Amendment) Regulations 2012, determines the amount of housing benefit (HB) to which social sector tenants are entitled by reference to the number of bedrooms in their home. Where the number of bedrooms in a claimant’s home exceeds that to which they are entitled their HB is reduced, by 14% where there is one excess bedroom and 25% where there are two or more excess bedrooms.

In R (Rutherford and Ors) v Secretary of State for Work and Pensions [2016] EWCA Civ 29 two appellants who had suffered a reduction in their HB under the 2012 regulations successfully argued that the bedroom criteria unlawfully discriminated against them contrary to Article 14 of the European Convention on Human Rights taken Article 1 of the First Protocol.

The first appellant (A) lived with her son in a three-bedroom house which had been adapted under a Sanctuary Scheme to protect her from a violent former partner. A’s HB was reduced by 14% as she was deemed to be under-occupying by one bedroom. However, A’s local authority awarded her Discretionary Housing Payments (DHPs) which covered the shortfall between her HB and rent.

The second appellants were a disabled boy (W ) and his grandparents who lived in a three-bedroom house. W required round the clock care for which his grandparents received help from professional carers. The carers stayed at the family home two nights a week and needed a bedroom. W’s HB was reduced by 14% leaving a shortfall against the rent but, apart from a brief period, this was covered by DHPs. The judge had found nothing to suggest that the local authority would refuse to make up the shortfall in future.

Both appellants complained about the lack of an exemption in the regulations for HB claimants in their position (i.e. victims of domestic violence living in adapted accommodation and disabled children who required overnight care). Rather than an explicit legal entitlement to an appropriate amount of HB, the appellants had to rely on DHPs to provide for their housing needs. In both cases it was accepted that the lack of specific exemptions in the regulations amounted to prima facie discrimination against the appellants. The question was whether such discrimination was justified.

Following Burnip v Birmingham City Council [2012] EWCA Civ 629 and R (MA) v Secretary of State for Work and Pensions [2014] EWCA Civ 13, the Secretary of State was required to show that the discriminatory effect of the regulations was not ‘manifestly without reasonable foundation’. In MA, Lord Dyson MR observed (at [80]) that this was a “stringent” test for those alleging a violation of Article 14. The court had to be satisfied that there was a “serious flaw in the scheme which produces an unreasonable discriminatory effect.”

The Secretary of State argued that the scheme had to be considered as a whole, including both HB and DHPs. DHPs were a better way of providing for the appellants’ housing needs as they afforded local authorities the flexibility to target resources at those most in need. Additional funding had been allocated to the DHP scheme for those affected by the 2012 regulations. Both A and W received DHPs to compensate for their reduced HB, demonstrating that the scheme was working.

The court rejected the Secretary of State’s justification. Central to its reasoning was a particular reading of two earlier Court of Appeal judgments concerning the discriminatory impact of the HB regulations. In Burnip, three disabled claimants challenged the bedroom criteria as applied to private sector tenants. The court decided that a system which relied on DHPs to plug the gap between HB and rent amounted to unjustified discrimination. In MA, however, the Court of Appeal rejected an Article 14 challenge brought by five disabled people who were affected by the 2012 regulations.

For the court in Rutherford and Ors the key distinction between Burnip and MA was the width of the class to which the claimants belonged. In Burnip the claimants belonged to a limited class which was few in number, easy to recognise, and not open to abuse. Two of the claimants were disabled adults who required overnight carers and the third were disabled children who could not share a bedroom. In contrast, the claimants in MA comprised a broader class of disabled people who required additional bedrooms for various reasons. The Secretary of State was entitled to rely on DHPs as it was impracticable to introduce an exemption covering such a broad group. Both A and W fell within a narrower class and were therefore found to be covered by Burnip.

This reading of Burnip and MA is mistaken. The key distinction between the two cases was not the width of the class to which the claimants belonged, but the strength of the respective DHP systems. In Burnip, the decisive issue was the failure of DHPs to plug the gap between HB and rent. For all three claimants, DHPs were not enough to compensate for the reduction in HB. The court laid down a principle (at [47]) that disabled people required a reasonable degree of assurance that rent would continue to be paid. On the facts of the case, DHPs were not providing such an assurance. However, the court did not find that DHPs would always be an inadequate solution to the discriminatory effect of the regulations. Provided that there was a reasonable degree of assurance that rent would continue to be paid, a system which used DHPs could be compatible with Article 14.

This is what the court found in MA. In MA, the DHP scheme at issue was a substantial improvement on that which was inadequate in Burnip. The government recognised that the bedroom criteria would cause hardship for disabled people and considered how to mitigate it (see MA [15]-[36]). Rather than trying to frame various exemptions in the regulations the government preferred to provide more money for DHPs so that local authorities could assess particular needs. This would ensure that resources were more effectively targeted. The court accepted this justification in MA.

In W’s case, the appellants were subject to the improved DHP scheme which was upheld in MA. The evidence suggested that the scheme was working as the government intended, with DHPs covering the shortfall between HB and rent. At first instance, the judge found (at [54]) that there was adequate assurance that DHPs would continue to be made. The principle laid down in Burnip was therefore satisfied. Whilst it could have been structured differently, the scheme was providing the family with the support they needed and would continue to do so.

In relation to A’s case, it is questionable whether Burnip applied given that the principle laid down in that case concerned disabled people only. However, even if it were extended to A’s circumstances, its requirements were satisfied. A had suffered no financial detriment. She continued to live in her adapted home, with her rent covered by a combination of HB and DHPs. As the court acknowledged (at [54]), DHPs could in theory be insufficient but “there is no evidence that it will be; on the contrary, so far it has been sufficient.” The system was working.

Both W and A were part of a small and easily identifiable group as were the claimants in Burnip. However, as argued above, the narrowness of the class to which the claimants belonged was not the decisive factor in Burnip. It was the failure of the DHP system to provide for the claimants’ needs. In Rutherford and Ors, the court did not acknowledge this. The court observed (at [54]) that whilst A had not been disadvantaged that was also the position in Burnip. That was not the position in Burnip. The Burnip claimants had been disadvantaged as they were not receiving an appropriate amount of benefit. There was a material difference between the circumstances of A and W and the claimants in Burnip.

The court therefore failed to provide a convincing justification for distinguishing MA and instead following Burnip. The Secretary of State had explained why the policy was structured as it was and his reasons were not ‘manifestly without reasonable foundation’. Unlike the claimants in Burnip, both A and W were receiving, and were likely to continue receiving, an appropriate amount of benefit. Applying the test set out in MA, there was not a serious flaw in the scheme which produced an unreasonable discriminatory effect.

The cases will now proceed to the Supreme Court, perhaps alongside MA, which is due to be heard in March. The Supreme Court will have the opportunity to clarify the relationship between Burnip and MA which was misunderstood by the Court of Appeal.

Thomas Raine is a Public Law PhD Candidate at Glasgow University.

(Suggested citation: T. Raine, ‘Court of Appeal: The ‘Bedroom Tax’ is Discriminatory’ U.K. Const. Law Blog (29th Jan 2015) (available at