Hardy, R (on the application of) v Sandwell Metropolitan Borough Council

A local authority may take disability living allowance care component into account when assessing discretionary housing payments, but it must genuinely exercise its discretion. A blanket policy of including it as income is unlawful where it fails to have due regard to relevant guidance, the purpose of the benefit and the circumstances of disabled applicants. Discretionary housing payments form an integral part of the housing-benefit scheme for disabled applicants affected by the size criteria. Decisions about such payments may therefore engage Article 14 of the Convention and the Equality Act 2010. Treating disability-related income exactly like ordinary income may constitute indirect or Thlimmenos discrimination unless justified. The authority must also comply with the public sector equality duty.

The claimant and his wife, both disabled, occupied an adapted three-bedroom council house. Following the introduction of social-housing size criteria, their housing benefit was reduced, leaving a rent shortfall. The defendant Council awarded discretionary housing payments after treating both spouses’ care components of disability living allowance as income, while disregarding their mobility components.

The claimant challenged the Council’s policy and individual decisions on grounds including failure to follow the Department for Work and Pensions guidance, unlawful fettering of discretion, discrimination under Article 14 of the Convention and the Equality Act 2010, breach of the public sector equality duty, failure to make reasonable adjustments, and irrationality. The central issues were whether the Council could adopt its approach and whether the resulting decisions were lawful.

1. Policy and discretion. The Discretionary Financial Assistance Regulations 2001 confer a broad discretion over whether to award discretionary housing payments, their amount and their duration. The guidance permits authorities to decide how to treat income and expenditure, including whether to disregard disability-related benefits. The Council’s blanket policy of including disability living allowance care component resulted from the mistaken belief that it had no power to disregard it. The Council therefore failed to have due regard to the guidance, failed to exercise its discretion properly and unlawfully fettered future decisions.
2. Discrimination. Discretionary housing payments must be considered within the housing-benefit scheme as a whole. For disabled applicants affected by the size criteria, they are an integral means of avoiding an otherwise discriminatory shortfall and fall within the ambit of Article 1 of the First Protocol. Decisions concerning them are also sufficiently related to Article 8 interests in retaining an adapted home. Article 14 was therefore engaged.
3. The Council’s approach treated disability-related income in the same way as ordinary income, producing unfavourable treatment for disabled applicants whose needs and expenditure may be irregular and difficult to predict. That amounted to a prima facie case of indirect or Thlimmenos discrimination. The approach was not justified as a proportionate means of achieving a legitimate aim and alternatively breached section 29(6) of the Equality Act 2010.
4. Equality duties. The Council breached the public sector equality duty because it had not assessed its policy in light of the 2013 housing-benefit changes and relevant guidance. Its monitoring exercise was merely a tick-box exercise. The reasonable-adjustments ground added little to the discrimination finding.
5. Statutory purpose and irrationality. The legislative scheme expressly ring-fenced the mobility component but did not give equivalent general protection to the care component. It was therefore possible to take the care component into account when calculating another benefit; doing so was not irrational in itself. That conclusion did not prevent a particular policy from being unlawful on public-law or human-rights grounds.
6. The Council’s decision of 12 September 2013 and its further decisions on the claimant’s discretionary housing payments were quashed. Further orders were to be determined after hearing the parties.