R (SG) v Secretary of State for Work and Pensions

This appeal concerned the lawfulness of subordinate legislation implementing a cap on welfare benefits for non-working households. The principal human rights challenge was that the cap indirectly discriminated against women, contrary to article 14 of the European Convention on Human Rights read with article 1 of Protocol No 1 (A1P1). The court analysed whether there was differential treatment, whether the Regulations pursued a legitimate aim and whether the means were proportionate.

Key legal principles and material grounds:

• Article 14 read with A1P1 requires justification where prima facie discrimination arises; the applicable justification test for general socio‑economic measures is whether they are "manifestly without reasonable foundation".
• The Welfare Reform Act 2012 (section 96) required the cap to be set by reference to average net earnings and left detailed design to regulations; the Regulations fixed the cap and listed the benefits within its scope (including child benefit and child tax credit) and specified specified exceptions.
• The Secretary of State advanced legitimate aims: securing the economic well‑being of the country, incentivising work, and setting a reasonable limit on state support. The majority found those aims legitimate and that the Regulations were within the State's margin of appreciation and not manifestly without reasonable foundation.
• The court considered the relevance of the United Nations Convention on the Rights of the Child (UNCRC, article 3(1)). The majority held that even if the UNCRC is relevant it did not show that the differential impact made the Regulations unjustified; two members of the court (Lady Hale and Lord Kerr) dissented, concluding that article 3(1) required that children’s best interests be treated as a primary consideration and that on that basis the Regulations, as applied to lone parents and their children, were incompatible.

This was an appeal from the Court of Appeal ([2014] EWCA Civ 156) following a Divisional Court judgment ([2013] EWHC 3350 (QB)). The claimants were lone parents (and their children) affected by the Benefit Cap (Housing Benefit) Regulations 2012 implementing a statutory benefit cap under the Welfare Reform Act 2012 s 96. They sought declarations and relief on the ground that the Regulations indirectly discriminated against women, contrary to article 14 ECHR read with A1P1, and advanced related arguments under article 8 and under UNCRC article 3(1).

Nature of claim/application:

• The claim challenged the compatibility of the Benefit Cap Regulations with the Convention rights under the Human Rights Act 1998, primarily alleging unjustified indirect sex discrimination because the cap disproportionately affected lone parents who are predominantly women.

Procedural path:

• The matter proceeded from the Divisional Court to the Court of Appeal and then to the Supreme Court (this appeal).

Issues framed by the court:

1. Whether the Regulations engaged A1P1 and whether there was differential treatment (conceded by the Secretary of State).
2. Whether the measure pursued a legitimate aim (assessed as securing economic well‑being, incentivising work, and limiting overall state support).
3. Whether the differential effect was justified — the proportionality/manifestly without reasonable foundation inquiry in the context of social and economic policy.
4. What role, if any, UNCRC article 3(1) (best interests of the child) should play in the proportionality assessment.

Court’s reasoning (concise):

• The majority (Lord Reed, Lord Carnwath, Lord Hughes) accepted that the Regulations have a disproportionate effect on women but concluded that the three stated aims are legitimate and that the Regulations (including the inclusion of child‑related benefits within the cap and the exceptions provided) fall within the State's wide margin of appreciation for social and economic policy and are not manifestly without reasonable foundation. The majority placed weight on the statutory framework (section 96), the parliamentary scrutiny and the availability of transitional and discretionary housing payments as mitigation.
• The majority examined whether less discriminatory alternatives that would achieve the same aims were available; they concluded that excluding child benefit or tailoring the cap to household size would substantially undermine the scheme's fiscal savings and incentives and no practicable alternative had been shown.
• On the UNCRC point the majority held that even if the UNCRC could inform the Convention rights, the asserted failure to treat children’s best interests as a primary consideration did not, on the material before the court, render the differential treatment unjustified. They emphasised constitutional limits, margin of appreciation and the courts' duty to give weight to Parliament’s considered assessment.
• Two members of the court (Lady Hale and Lord Kerr) dissented. They concluded that article 3(1) UNCRC requires that the best interests of affected children be treated as a primary consideration and that the Secretary of State had not given such primacy in the formulation of the Regulations. Lady Hale would have declared Part 8A of the Housing Benefit Regulations incompatible with the Convention to the extent that it applied to lone parents, because the application deprived certain children and their parents of means necessary for basic needs and was not a proportionate means of achieving the legitimate aims.

Outcome: the majority dismissed the appeals; a significant dissent would have declared the Regulations incompatible as to lone parents.

Appeal dismissed by a majority. The majority held that the Benefit Cap Regulations, as framed under section 96 of the Welfare Reform Act 2012, pursue legitimate aims — securing the economic well‑being of the country, incentivising work and setting a reasonable limit on state support — and that, in the field of social and economic strategy, the State enjoys a broad margin of appreciation. The differential impact upon women was not shown to be unjustified: exclusion of child‑related benefits or tailoring the cap to household size would have substantially undermined the aims and savings, and no less discriminatory alternative that would achieve the aims was demonstrated. The court gave weight to the statutory prescription that the cap be set by reference to earnings, to the detailed parliamentary scrutiny of the policy and to mitigation measures (including transitional arrangements and additional funding for discretionary housing payments). Two Justices dissented (Lady Hale and Lord Kerr), concluding that UNCRC article 3(1) required that the best interests of affected children be treated as a primary consideration and that the Regulations, as applied to lone parents and their children, were incompatible with the Convention.

On appeal from the Court of Appeal, Civil Division ([2014] EWCA Civ 156); earlier considered by the Divisional Court at first instance ([2013] EWHC 3350 (QB)).