Pump Court Chambers

Mind the gap the problem with the benefits cap

Blog 24th March 2015

On 18th March 2015 the Supreme Court decision in R (on the application of SG and others (Appellants) v Secretary of State for Work and Pensions (Respondent) [2015] UKSC 16 was published. In a majority decision of 3-2 the government’s benefit cap policy was not overturned. Therefore what happens with the policy moving forward will be left to be resolved by politicians and not the courts. However the Lord Justices criticised the policy for breaching international law on the rights of children, but will any future government take heed of such comments in light of the need for cuts in public spending? The judgments of Lord Carnwarth and the dissenting judgment of Lady Hale make for very interesting reading and one hopes, at least food for thought for the next government in May 2015.

Benefits Cap – What is it?

Thousands of ordinary families have been struggling with the impact of the benefits cap since its introduction through the Welfare Reform Act 2012 and Benefit Cap (Housing Benefit) Regulations 2012. The benefit’s cap is just that; a cap on the total benefits a family can receive if they are in receipt of housing benefit or universal credit. The cap if claiming housing benefit is £500 a week if you’re a couple – with or without dependent children, £500 a week if you’re a lone parent with dependent children and £350 a week if you’re a single person without children. As can be seen from the policy it does not take into account individual needs or circumstances. The impact is obvious; many families cannot afford to live in their current homes and have been forced to move their families or risk homelessness or arrears. As Lord Reed noted in his judgment, non-working households with several children, living in London, are the most likely to be affected.

We see the impact of this on a daily basis for our clients who rack up arrears and are forced to locate to different areas. We also see the consequential impact this has on the welfare of the children involved and the arrangements for the children, for example from having regular contact with a separated parent, the children could be moved a great distance having a knock on adverse affect on contact arrangements. In terms of the children’s welfare they could be living in overcrowded conditions with little financial support to meet their day-to-day needs. It was also argued on behalf of the appellants that the cap also affects victims of domestic violence, because they may be temporarily housed in accommodation, which is relatively expensive. Victims of domestic violence are also statistically predominantly, but not exclusively, women.

Issue before the court

The appeal was brought by two single mothers who had fled domestic violence and were threatened with homelessness as a result of the benefits cap. The main issue before the supreme court was whether the Regulations were unlawful under the Human Rights Act 1998 on the basis that the benefits cap has an unjustifiably discriminatory impact on women in relation to their right to the peaceful enjoyment of their possessions, contrary to article 14 of the European Convention on Human Rights. The decision of the court was that the indirectly discriminatory effect of the legislation was justified and therefore the policy was lawful despite the adverse affect on female single parent households; statistically more single parent households being female.

Lord Reed in giving the lead judgment notes that it was conceded that the Regulations result, indirectly, in differential treatment of men and women in relation to welfare benefits.

The question is whether the cap is a proportionate means of meeting legitimate aims. Lord Reed accepted giving a full reasoned judgment that the aims of the cap are legitimate and therefore could not be said to be manifestly without justification, that being the test as set out in Humphreys v Revenue and Customs Commissioners [2012] UKSC 18; [2012] 1 WLR 1545, where Lady Hale stated at para 22 that the normally strict test for justification of sex discrimination in the enjoyment of the Convention rights gives way to the “manifestly without reasonable foundation” test in the context of welfare benefits.

International law

An interesting argument relied upon the United Nations Convention on the Rights of the Child (“UNCRC”), which has not been incorporated by Parliament into UK law, but which can be relevant to the application of the ECHR. However it was not open to the Supreme Court, as they found, to interpret or apply treaties to which Parliament has not given effect.

Lord Carnwath in his crucial swing vote judgment set out the limitations on the court, as the UNCRC has not been incorporated into UK law. He however was of the view that the cap did not comply with article 3 (1) of UNCRC, but the consequences would have to be played out in the political rather than the legal arena. On compliance with article 3(1), he reasons that, “the Government’s reliance on limiting expenditure and the need for a “clear upper limit” on benefits ignores the distinctive statutory purpose of child-related benefits: to meet the needs of children as individuals. The cap means children lose these benefits for reasons unrelated to their own needs. If excluding those benefits emasculates the scheme, this raises questions about the viability of a scheme so dependent on child-related benefits.”

Lady Hale gave a dissenting judgment questioning whether the legitimate aims of the cap justify the discrimination involved in its implementation. The “manifestly without reasonable foundation” test applies to both the aims of the interference with property rights, and the proportionality of the discriminatory means employed. The UNCRC has not yet been generally translated into domestic law, but Strasbourg case-law shows that article 3(1) UNCRC is relevant to proportionality and discrimination as well as informing the substantive content of Convention rights, even in cases where the discrimination is not against the children but their mothers.

“What has to be considered is whether the benefit cap as it applies to lone parents can be justified independently of its discriminatory effects. In considering that, it is necessary to ask whether proper account has been taken of the best interests of the children affected, i.e. whether the Government complied with article 3(1). It is clear to Lady Hale that it did not. The cap deprives some children of provision for their basic needs, which cannot be in their best interests. It does so in order to incentivise their parents to seek work, but discriminates against lone parents, who are least likely to be able to do so. In light of article 3(1), the indirect sex discrimination inherent in the cap’s implementation is not a proportionate way of achieving its aims.” Many may agree with her sentiments.

The gaps in welfare benefits and the ability of those benefits to meet the individual needs of children therefore remain. Should the government be pressed to give affect to the UNCRC in UK domestic law and is this something more of us family lawyers should be actively supporting? Certainly with its ethos being to consider the best interests of children, as being the court’s paramount consideration it is clear that if it were incorporated the court may have reached a very different decision in this case. In the meantime we will be asking are there any other ways of plugging the gap in the benefits cap for the families affected and will the next government take heed of the court’s views. In the meantime the reality may be that many families continue to face very uncertain outcomes as to how to obtain roofs over their heads and the family courts will continue to grabble with the consequential affects the gap caused by the benefits cap creates for separated families and those fleeing domestic violence. One can only hope the debate continues.

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