Caine, R (On the Application Of) v Secretary 0f State for Work and Pensions (Rev 1)

A welfare-benefit calculation is not irrational merely because it does not reimburse every element of a claimant’s actual expenditure. In assessing a challenge to a complex benefits scheme, the court asks whether the relevant choice falls outside the range of reasonable decisions, taking account of simplicity, consistency, administrative workability, cost and the scheme’s wider objectives. A bright-line rule may lawfully be over- or under-inclusive where a reasonable balance has been struck.

For discrimination under Article 14 read with A1P1, the relevant question in the welfare-benefits context is whether the difference in treatment is manifestly without reasonable foundation, or manifestly disproportionate to the legitimate aim. A small and variable difference arising from the conversion of weekly housing costs into monthly amounts was not unlawful.

The claimant, a weekly social-housing tenant receiving Universal Credit, challenged the statutory conversion of weekly housing costs into a monthly amount. Schedule 4 to the Universal Credit Regulations 2013 required weekly payments to be multiplied by 52 and divided by 12, with an adjusted formula for rent-free weeks.

She argued that the formula understated actual annual liability by one day in an ordinary year and two days in a leap year. She relied on common-law irrationality and Article 14 of the Convention read with A1P1, comparing weekly tenants with monthly tenants. The central issues were whether the formula created a legally significant problem requiring correction and whether any resulting difference in treatment lacked reasonable foundation.

1. Claim dismissed. The formulas in paragraph 7 of Schedule 4 to the Universal Credit Regulations 2013 were not irrational and did not breach Article 14 read with A1P1.
2. The challenge was governed by the Wednesbury standard. The court had to decide whether the Secretary of State’s choice of conversion ratio, and her continuing review of the issue, fell outside the range of reasonable decisions. The methodology in R (Johnson) v Secretary of State for Work and Pensions [2020] EWCA Civ 778 and R (Pantellerisco) v Secretary of State for Work and Pensions [2020] EWHC 1944 (Admin) was applied.
3. The claimant’s case wrongly assumed that Universal Credit housing support had to reimburse every penny of a tenant’s housing costs. The scheme provided a contribution, calculated through a simple and consistent monthly system. The possible difference was small, variable and dependent on the claimant’s circumstances. It did not produce the stark, arbitrary or cliff-edge effects present in Johnson and Pantellerisco.
4. The use of 52/12 was rationally connected with consistency across Universal Credit, simplicity, ease of explanation, administrative workability and the fact that most weekly tenants make 52 payments in a year. Reasonable minds could differ about the preferred conversion method, but that did not make the chosen method irrational. A tolerable bright-line rule may be used in a social-policy scheme.
5. For Article 14, it was assumed in the claimant’s favour that weekly tenancy was an “other status” and that a difference in treatment could arise. Welfare benefits fell within the ambit of A1P1. Applying the manifestly without reasonable foundation standard, the difference was justified by the legitimate aims of the scheme and was not manifestly disproportionate.
6. The application for judicial review was dismissed.

First-instance judicial review in the Administrative Court. The judgment refers to the Court of Appeal decision in R (Johnson) v Secretary of State for Work and Pensions [2020] EWCA Civ 778 and the Administrative Court decision in R (Pantellerisco) v Secretary of State for Work and Pensions [2020] EWHC 1944 (Admin) as authorities on rationality.