SC & Ors, R (on the application of) v The Secretary of State for Work And Pensions & Ors

A statutory limit restricting child-related tax credit and universal credit to two children neither interferes with rights under articles 8 and 12 nor imposes a positive obligation to provide additional financial support. It nevertheless falls within the ambit of article 8 and article 1 of Protocol 1 for article 14 purposes.

Family size may constitute an “other status”. Differential treatment based on that peripheral status, and the measure’s indirect impact on women, were objectively justified. In social and economic policy, the court respects Parliament’s choice unless it is manifestly without reasonable foundation. Children’s best interests are a primary consideration, but they are not decisive and may be balanced against taxpayer fairness and parental financial responsibility.

The appellants were two mothers and their children whose families were affected by the statutory limit of two children for whom the individual element of child tax credit, or the corresponding element of universal credit, could be claimed. They sought a declaration under section 4 of the Human Rights Act 1998 that the primary legislation was incompatible with articles 8, 12 and 14 of the Convention.

Ouseley J dismissed the claims in [2018] EWHC 864 (Admin); [2018] 1 WLR 5425, but granted permission to appeal. The Equality and Human Rights Commission intervened in support of the article 14 case.

The central issues were whether the measure interfered with articles 8 or 12; whether it fell within the ambit of article 8 or article 1 of Protocol 1; whether family size was an article 14 status; and whether the differential treatment of larger families and the disparate impact on women were objectively justified, taking account of children’s best interests.

1. Appeal dismissed. The two-child limit was not incompatible with articles 8, 12 or 14 of the Convention. Leggatt LJ gave the judgment, with which Nicola Davies LJ and Patten LJ agreed.

2. Articles 8 and 12 were not engaged. Article 8 does not impose a positive obligation to maintain a programme of financial assistance for family life. The limit was a decision about the extent of welfare provision, not state interference with intimate or family choices. Article 12 supplied no wider entitlement.

3. The measure nevertheless fell within the ambit of article 1 of Protocol 1. But for the disputed condition limiting payment to two children, the appellants would have had an enforceable domestic right to the individual element of child tax credit. It also fell within the ambit of article 8 because child tax credit is specifically intended to support children and family life. No additional proof of a direct adverse effect on family life was required.

4. Membership of a household containing more than two children was an “other status” under article 14. A status need not be innate or independently significant outside the challenged legislation. This status was, however, peripheral rather than sensitive or suspect. Children as a general class were not disadvantaged relative to adults because there was no comparable adult benefit.

5. The acknowledged disproportionate impact on women was justified. The measure pursued legitimate fiscal and social-policy aims. Parliament had considered its gender impact, and the court could not identify an equally effective means of achieving the savings without affecting more women than men.

6. The differential treatment of larger families was also justified. Saving money or incentivising work could not alone explain why larger rather than smaller families bore the reduction. Taxpayer fairness and the aim of making benefit recipients face financial choices more similar to those relying on earnings supplied a rational basis. A workable welfare scheme could use a bright-line rule despite hardship in individual cases.

7. The interests of all children in an affected family were relevant under article 14 read with article 8. Their best interests, reinforced by article 3(1) of the UNCRC, were a primary consideration, and the executive’s failure squarely to assess them required closer scrutiny. They were not, however, a trump card. Parliament could balance them against taxpayer interests and parental financial responsibility. Its choice in primary legislation was not manifestly disproportionate.

1. Court of Appeal (Civil Division): The appeal was dismissed in [2019] EWCA Civ 615. The court upheld the dismissal of the Convention challenge, although its reasoning differed from that of the judge on ambit, status and aspects of justification.
2. High Court, Administrative Court: Ouseley J dismissed the claims in [2018] EWHC 864 (Admin); [2018] 1 WLR 5425. He refused a leapfrog certificate but granted permission to appeal.