AR & SXC, R (On the Application Of) v Secretary of State for Work and Pensions

Under article 14, the phased introduction of a welfare scheme may discriminate where a trigger event causes one group of severely disabled claimants to suffer a substantial loss while an analogous group retains higher benefits. Moving across a local authority boundary can constitute an identifiable status, particularly when combined with severe disability.

The state must justify the difference in treatment itself. The manifestly without reasonable foundation standard applies to social and economic policy, but it still requires a sufficient evidential explanation. Administrative difficulty may justify estimated rather than individualised payments. Budgetary considerations alone cannot justify discriminatory under-compensation.

The Secretary of State appealed from two Administrative Court judgments concerning the transition from legacy disability benefits to Universal Credit. In TP (No. 1), Lewis J held that regulations which required severely disabled claimants moving across a local authority boundary to claim Universal Credit, without transitional protection, unlawfully discriminated contrary to article 14 read with A1P1: [2018] EWHC 1474 (Admin).

In TP (No. 2), Swift J held that fixed transitional payments for severely disabled natural migrants, substantially below the protection available to the regulation 4A group, were likewise discriminatory: [2019] EWHC 1116 (Admin). The central issues were whether the groups received differential treatment on a relevant status and whether each difference was manifestly without reasonable foundation.

1. Both appeals dismissed. The Court unanimously upheld the declarations of unlawful discrimination. Its decision concerned only the respondents and people in materially similar positions, not the validity of Universal Credit as a whole.

2. In TP (No. 1), a realistic comparison disclosed differential treatment. A severely disabled person who moved across a local authority boundary had to claim Universal Credit and suffered an immediate substantial loss. A similarly disabled person moving within the same authority could retain Housing Benefit and the associated legacy benefits. The fact that neither group formally received a separate transitional payment did not remove that practical difference.

3. Moving home across a local authority boundary was an identifiable characteristic capable of constituting an “other status” under article 14. Alternatively, the status was that of a severely disabled person making such a move. Rose LJ agreed in the result, preferring the latter formulation because the claimants’ disability, vulnerability and particular difficulty in moving made the distinction legally significant.

4. The applicable justification standard was whether the difference in treatment was manifestly without reasonable foundation. The object requiring justification was the difference between the comparator groups, not merely the overall Universal Credit policy. Lewis J had decided the substantive outcome, rather than finding only a defective decision-making process. In the absence of evidence explaining the cliff-edge loss, his proportionality assessment was not wrong.

5. In TP (No. 2), the SDP natural migrant group and the regulation 4A group were already treated differently under the enacted regulations. It was therefore unnecessary to speculate about the future expansion of managed migration. Swift J had applied the correct deferential standard and was entitled to find no sufficient explanation for the distinction.

6. Administrative difficulty could justify using an estimated fixed payment instead of calculating each natural migrant’s precise historic loss. The £80 payment was therefore not inherently unreasonable. The material shortfall, however, principally resulted from excluding the enhanced disability premium on grounds of increased expenditure. Cost alone could not objectively justify discrimination. Nor could a fear that other claimants might bring legally valid claims.

7. The Secretary of State should have disclosed to Lewis J that Ministers had already decided to change the regulations to address the cliff-edge problem. The omission was made in good faith, but the ministerial decision was material and went beyond tentative policy thinking or confidential civil-service advice.

1. Court of Appeal (Civil Division): Both appeals were dismissed by [2020] EWCA Civ 37.
2. Administrative Court—TP (No. 2): Swift J held that the differing transitional arrangements for SDP natural migrants and the regulation 4A group were unlawfully discriminatory and quashed the relevant measure: [2019] EWHC 1116 (Admin).
3. Administrative Court—TP (No. 1): Lewis J held that requiring severely disabled cross-boundary movers to transfer to Universal Credit without transitional protection was unlawfully discriminatory: [2018] EWHC 1474 (Admin).