Humphreys v The Commissioners for Her Majesty’s Revenue and Customs

In article 14 challenges concerning state benefits, even sex discrimination is justified where the policy choice is not manifestly without reasonable foundation. This less stringent standard still requires careful scrutiny of the legitimate aim and the reasonable relationship between the measure and that aim.

A rule paying child tax credit to only one shared-care household may satisfy that standard where it rationally concentrates support on the child’s principal home, integrates the tax and benefit systems, and avoids costly and unstable apportionment. Hardship to a minority carer does not itself invalidate a rational bright-line rule. The indirect discrimination caused by the no-splitting rule was therefore justified.

Humphreys v The Commissioners for Her Majesty’s Revenue and Customs concerned a father who cared for his two children for at least three days each week. His child tax credit claim was refused because their mother had the main responsibility for them under the Child Tax Credit Regulations 2002.

The father succeeded before the Appeal Tribunal but failed before the Upper Tribunal and the Court of Appeal: [2010] EWCA Civ 56. On appeal to the Supreme Court, it was accepted that child tax credit fell within article 1 of the First Protocol and that the single-payment rule indirectly discriminated against fathers. The central issue was whether that discrimination was justified under article 14. A further remedial issue would arise only if the rule was incompatible with the Convention.

Lady Hale delivered the judgment of the court. Lord Walker, Lord Clarke, Lord Wilson and Lord Reed agreed.

1. Disposition. The appeal was dismissed unanimously. The court agreed with the Upper Tribunal and the Court of Appeal that the no-splitting rule was justified.
2. Applicable standard. For discrimination arising from general measures of economic or social strategy concerning state benefits, the state’s policy choice should be respected unless it is manifestly without reasonable foundation. The ordinarily strict justification standard for sex discrimination gives way to that approach in this context. Since the standard applied to direct sex discrimination in Stec v United Kingdom and Runkee v United Kingdom, it applied a fortiori to the indirect discrimination in this case. The less stringent standard did not exempt the Government’s reasons from careful scrutiny.
3. Reasonable foundation. The state was entitled to concentrate support in the household where the child principally lived. Doing so was reasonably capable of improving the child’s circumstances and enabling the principal household to meet everyday and capital expenditure. Splitting the award could leave neither household with enough to meet substantial needs.
4. The no-splitting rule was also integral to the creation of a seamless tax-credit system. Apportionment between households with different and changing incomes would create difficult means-testing questions, increased administrative expense and possible reductions in the support available to the principal carer. The state could reasonably treat the delivery of financial support as distinct from the variable arrangements under which separated parents divided their children’s time.
5. Comparison with earlier authority. The result in Hockenjos v Secretary of State for Social Security did not govern the present scheme. That case concerned child additions to jobseeker’s allowance linked to receipt of child benefit. Child tax credit formed part of a materially different, annual and integrated tax-and-benefit structure. It was unnecessary to decide the precise difference between the Convention and EU justification tests.
6. Remedy. Had incompatibility been established, the statutory appeal would have presented serious remedial difficulty. Disapplying Rule 2.2 could have made the father entitled to the full award under section 7(2) of the Tax Credits Act 2002, despite the mother already receiving it, while leaving no machinery for apportionment or recovery. That issue did not require determination.

• United Kingdom Supreme Court: By [2012] UKSC 18, unanimously dismissed the appeal and upheld the conclusion that the no-splitting rule was justified.
• Court of Appeal: By [2010] EWCA Civ 56, dismissed the father’s appeal and held that the child tax credit rule was justified.
• Upper Tribunal: In CTC/2608/2008, dated 4 February 2009, rejected the father’s challenge.
• Appeal Tribunal: In references 201/07/453 and 08/337, dated 16 June 2008, allowed the father’s challenge.