IB v Gravesham Borough Council & Anor

For regulation 64(3) of the Housing Benefit Regulations 2006, “reasonable steps” to acquire a student loan are not confined to the mechanics of making an application. The decision-maker must consider all the circumstances, including the claimant’s personal characteristics and sincerely held conscientious or religious objections. The assessment is fact-sensitive and must also give weight to the wider public interest in the allocation of public funds. A claimant is not under a duty to apply for the loan; the regulation instead determines when a loan is treated as income. A sincere religious objection to paying interest may therefore make it unreasonable to take the steps required to acquire the loan.

The claimant was a full-time student who fell within an exception to the general exclusion of full-time students from housing benefit. He did not apply for maintenance and tuition-fee loans because he sincerely believed that paying interest was forbidden by his Muslim faith. Gravesham Borough Council treated the maintenance loan as notional income under regulation 64(3) of the Housing Benefit Regulations 2006, extinguishing his entitlement. The First-tier Tribunal dismissed his appeal, considering itself bound by CH/4429/2006. The Upper Tribunal had to decide whether “reasonable steps” concerned only the mechanics of applying for a loan or required consideration of the claimant’s personal circumstances.

1. Appeal allowed. The First-tier Tribunal had made an error of law. Its decision was set aside and the Upper Tribunal re-made the decision under section 12 of the Tribunals, Courts and Enforcement Act 2007.
2. Regulation 64(3) does not impose a duty or requirement to apply for a student loan. It specifies when a loan not actually acquired is to be treated as income. The steps required to acquire a loan include deciding whether to accept its terms, as well as completing and submitting the application.
3. The phrase “reasonable steps” cannot be confined to application mechanics. It requires an assessment of what it would have been reasonable for the particular claimant to do in the particular circumstances. Relevant circumstances include personal characteristics and sincere conscientious or religious objections. The court declined to follow CH/4429/2006, which had treated “reasonable” as qualifying only the mechanical steps of acquisition.
4. The claimant’s sincere and strongly held religious conviction that paying interest would be a major sin made it unreasonable for him to take the steps needed to acquire the loan. His personal circumstances outweighed the likely minor loss to public funds. The maintenance loan was therefore not treated as income under regulation 64(3), and did not fall within regulation 64(1).
5. The alternative discrimination arguments did not need to be decided. The judge nevertheless considered that the construction advanced by the Secretary of State would involve differential treatment of persons in significantly different situations, but that any resulting discrimination would have been justified under Schedule 22 to the Equality Act 2010.
6. The case was remade by allowing the claimant’s appeal, setting aside Gravesham’s decisions of 23 January and 22 February 2018, and directing recalculation of housing benefit from 4 September 2017, or the earlier date on which the notional loan was first taken into account.

• Upper Tribunal (Administrative Appeals Chamber) — The appeal succeeded. The First-tier Tribunal’s decision was set aside and the decision was re-made: [2023] UKUT 193 (AAC).
• First-tier Tribunal (Social Entitlement Chamber) — The claimant’s appeal against Gravesham’s housing benefit decisions was dismissed on 10 October 2018. The Tribunal treated itself as bound by CH/4429/2006.