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

The Supreme Court considered challenges to Regulation B13 of the Housing Benefit Regulations 2006 (the social sector “under-occupation” cap or so-called "bedroom tax") on equality grounds. The claimants argued that the cap, as applied to certain disabled persons and to women in sanctuary-scheme accommodation, breached article 14 ECHR taken with article 8 and/or A1P1 and in one case breached the Public Sector Equality Duty (Equality Act 2010, s.149).

The court applied the established ECHR margin of appreciation and the "manifestly without reasonable foundation" test, as explained in Stec and Humphreys, to challenges to a welfare measure. It treated the structure of Reg B13 together with the Discretionary Housing Payment (DHP) scheme as a coherent policy choice by the Secretary of State.

On the facts the court held that there was unlawful discrimination in two narrow, comparable cases where there was a transparent medical need for an additional bedroom: Mrs Carmichael (adult partner unable to share a bedroom for disability reasons) and the Rutherford family (child requiring overnight care). Those claimants were entitled to protection analogous to the Burnip and Gorry categories. By contrast, other MA claimants (Daly, Drage, JD and Rourke) failed because their circumstances were properly addressed through the DHP scheme or did not show an objective need for extra bedroom entitlement. The court rejected the article 14/8 claim by A (a woman in a sanctuary scheme) and dismissed her Equality Act claim. The Secretary of State’s overall policy and use of DHPs was held not to be manifestly without reasonable foundation except in the narrow situations noted.

This litigation concerned whether the social-sector housing under-occupation cap (Regulation B13, Housing Benefit Regulations 2006, as amended) unlawfully discriminated against people with disabilities and women in sanctuary-scheme accommodation.

• Background and relief sought: Claimants were tenants of registered social landlords receiving housing benefit (HB). They sought judicial review relief on equality grounds: breaches of article 14 ECHR taken with article 8 and/or A1P1; and, in one case, breach of the Public Sector Equality Duty under the Equality Act 2010 (s.149). The appeals brought before the Supreme Court came from two Court of Appeal decisions ([2014] EWCA Civ 13 and [2016] EWCA Civ 29) and underlying Divisional Court decisions ([2013] EWHC 2213 (QB)).
• Legal issues framed: (i) whether the correct test for justification of the impugned differential treatment was the Convention proportionality test requiring "weighty reasons" for discrimination or the Stec/Humphreys test that permits a wide margin of appreciation and asks whether the measure is "manifestly without reasonable foundation"; (ii) whether Reg B13, as applied to particular claimants, amounted to unjustified discrimination under article 14 taken with article 8 and/or A1P1; (iii) whether the Secretary of State breached the Public Sector Equality Duty (s.149 Equality Act 2010); and (iv) the role and adequacy of Discretionary Housing Payments (DHPs) as mitigation.
• Reasoning and findings: The court affirmed that, in the context of welfare benefits, the Stec/Humphreys approach and the "manifestly without reasonable foundation" standard applies, but requires careful scrutiny of the Secretary of State’s reasons. It recognised that Reg B13 and the DHP scheme formed a policy package. The history of policy development and official consideration of disabled claimants and adapted accommodation supported the Secretary of State’s general approach of using DHPs rather than wide, bright-line exemptions.
• Material subsidiary findings: (a) there are limited, easily recognisable categories where an additional bedroom is transparently required for medical reasons (eg Burnip — overnight carer; Gorry — disabled children who cannot share) and in those narrow categories justification for applying the cap is lacking; (b) distinctions drawn in Reg B13 between adults and children in these contexts (for example Mrs Carmichael v child in Gorry) lacked reasonable justification; (c) sanctuary-scheme residents (A) do not necessarily have an objective need for additional bedroom space and the protective rationale for sanctuary housing did not, on the facts of A’s case, render the cap manifestly without reasonable foundation; (d) the Secretary of State had in general complied with the PSED in relation to disability and gender, given the focused consideration recorded in the policy process and equality impact assessments, although Lady Hale dissented on the PSED and discrimination point in A’s case.

The practical relief: the court allowed relief for Mrs Carmichael and the Rutherfords (finding unlawful discrimination in those narrow categories), dismissed the remaining MA claimants’ equality challenges, and allowed the Secretary of State’s appeal in A’s case (A’s article 14 and Equality Act claims failed in the majority judgment).

Varied. The Supreme Court applied the Stec/Humphreys "manifestly without reasonable foundation" approach to welfare benefits and scrutinised the Secretary of State’s policy and its implementation through Reg B13 together with the DHP scheme. It concluded that the cap was unjustified in narrowly defined, easily identifiable cases where there is a transparent medical need for an extra bedroom, and accordingly allowed Carmichael’s appeal and dismissed the Secretary of State’s appeal in the Rutherford case. It dismissed the other MA claimants’ equality challenges on the basis that DHPs and individual assessment were an appropriate means of addressing non-uniform disability-related needs. It allowed the Secretary of State’s appeal in A’s sanctuary-scheme case and dismissed A’s Equality Act claim. The reasoning relied on careful scrutiny of policy development, the role of DHPs, and the ECHR margin of appreciation for social and economic measures.

Appeals to the Supreme Court from two Court of Appeal decisions: R (MA and others) v Secretary of State for Work and Pensions [2014] EWCA Civ 13 and R (A and Rutherford) v Secretary of State for Work and Pensions [2016] EWCA Civ 29. Earlier judicial review proceedings were heard in the Divisional Court, R (MA and others) v Secretary of State for Work and Pensions [2013] EWHC 2213 (QB). The Supreme Court heard consolidated appeals and gave judgment on 9 November 2016 (UKSC 2016/0025, UKSC 2016/0029 and related appeals listed at the head of the judgment).