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Summary

This decision of the High Court is regarding a claim for compensation for financial loss by a claimant (SXC) who was one of the claimants in the decision TP, AR and SXC v Secretary of State for Work and Pensions [2019] EWHC 1116 (Admin) (the ‘liability decision’). In that decision, it was held that rules then in draft form unlawfully discriminated against the claimants (via a breach of the European Convention on Human Rights – ‘the Convention’.) That was because the Secretary of State had not given a sufficient explanation why draft rules, in providing for transitional SDP amounts of UC for certain severely disabled claimants who had transferred to UC, treated them differently from those who would receive full ‘transitional protection’ at the point they are subject to the managed migration process. The claimant now sought financial compensation for that discrimination.

Mr Justice Swift (who had also made the liability decision) rejected the claim, as an award of compensation was not necessary to afford just satisfaction in this case (in essence, the judge considered that the mere requirement on the Secretary of State to think again was sufficient remedy). He did not consider whether the finalised version of the rules providing for transitional SDP amounts (the Universal Credit (Managed Migration Pilot and Miscellaneous Amendment) Regulations 2019, No.1152 – the ‘New Regulations’) also unlawfully discriminated against the claimant. Those regulations differ from the draft rules in that they provide for increased amounts, but still left the claimant with a shortfall of £63.48 per month compared with her previous benefit entitlement. However, the judge did comment: 

‘…it was no part of my conclusion in the liability judgment that the only lawful outcome must be to treat the group including SXC the same way’ as those who would receive full transitional protection. The judge also said: ‘…since it was no part of the conclusion in the liability judgment that parity was required to meet what is required to meet Convention rights, there is no reason why, for the purposes of this judgment, I need or should assume that the provision now made for transitional payment is unlawful. The legality of the New Regulations is not an issue in these proceedings. On the assumption that the new provisions for transitional payment are lawful, and given that payments under the new regulations are backdated to the date each relevant benefits claimant migrated to universal credit, there is no room for a conclusion that SXC has suffered any financial loss as a result of the discrimination she suffered’ (paragraph 16).

Comment from CPAG

As the judge made clear, this case was not about the legality of the finalised rules regarding the transitional SDP amount. That may yet be an issue in a later case. However, the judge was at pains to make clear his view that his previous decision on the draft rules ( ie, in TP, AR and SXC) is not authority that the finalised rules will necessarily be vulnerable to challenge merely because they do not provide the same protection as the full transitional protection afforded to those who undergo managed migration to UC.

Summary

The claimant was a European national, living in Northern Ireland. She had a right to reside under national law, by virtue of having pre-settled status under the European Union (EU) Settlement Scheme. However she had no right to reside derived from European law – ie, under the ‘Citizenship Directive’ 2004/38/EC. She and her children were without income. On 17 June 2020, she was refused universal credit (UC) as, due to amendments made by the Social Security (Income-related Benefits) (Updating and Amendment) (EU Exit) Regulations (Northern Ireland) 2019, No.89 (the ‘amendment regulations’), right to reside by virtue of pre-settled status was not sufficient for entitlement to benefit. The claimant challenged that, arguing that the amendment regulations discriminated against her on the basis of her nationality as a European national by comparison to British nationals whose rights under national law were sufficient. Before the end of the ‘transition period’ on 31 December 2020 that followed the departure of the UK from the EU, the First-tier Tribunal referred the case to the Court of Justice of the European Union (CJEU).

The CJEU held that discrimination on the basis of nationality did not arise on this case. That was because the relevant anti-discrimination provision at issue was Article 24 of Directive 2004/38/EC and not (as contended for by the claimant) Article 18 of the Treaty on the Functioning of the European Union. Article 18 was only engaged when there is no specific anti-discrimination rule in the area concerned, and here there was, as Article 24 applied where an individual had moved to and resided in a member state of which s/he was not a national.

As the claimant had no right to reside under the Directive, she could not rely on the anti-discrimination provision at Article 24 of the Directive. To accept otherwise would run counter to the objective of ensuring economically inactive migrants did not become a burden on the social assistance system of the host member state (previous authority from the court to this effect in Dano, Case C 333/13, 11 November 2014, was cited).

However, that was not the end of the matter. It remained that the claimant, as an EU citizen, who had moved to a member state, had rights under European law. The authorities were obliged to comply with her rights under the Charter of Fundamental Rights of the European Union. In particular, under Article 1 of the Charter such a person who had a right to reside under national law and was in a ‘vulnerable’ situation had a right to live in ‘dignified conditions’ (paragraph 89). In the present case, the claimant was a single person with two children, without resources, who had fled a relationship due to domestic violence. In such a situation, the claimant could be refused social assistance only after ascertaining that her rights under the Charter would not be violated. The court concluded: 

‘provided that a Union citizen resides legally, on the basis of national law, in the territory of a member state other than that of which he or she is a national, the national authorities empowered to grant social assistance are required to check that a refusal to grant such benefits based on that legislation does not expose that citizen, and the children for which he or she is responsible, to an actual and current risk of violation of their fundamental rights, as enshrined in Articles 1, 7 and 24 of the Charter. Where that citizen does not have any resources to provide for his or her own needs and those of his or her children and is isolated, those authorities must ensure that, in the event of a refusal to grant social assistance, that citizen may nevertheless live with his or her children in dignified conditions…’ (paragraph 93).

Comment from CPAG

Arguably, the court decision means that where rules do not provide for such a consideration of the claimant’s circumstances, refusal of benefit is unlawful under European law. However, the lawfulness of the Great Britain equivalent of the Northern Ireland amendment regulations now fall to be considered by the Supreme Court in Fratila and another (AP) v Secretary of State for Work and Pensions.

Decision in brief

It is correct (and accepted by the Secretary of State) that the claimant’s refugee status was voidable only prospectively and, on the facts, that was only from after the benefit awards had ceased anyway – however (even though the claimant was not a person subject to immigration control at the relevant times), the claimant had been overpaid benefit – claim by a person that was not real meant that the claims provisions in section 1 of the Social Security Administration Act 1992 not satisfied – the overpayments were recoverable from the claimant as use of a false identity to claim benefits was a ‘material fact’ for purpose of section 71 of the Act.

Decision in brief

Housing benefit and child tax credit awarded before discovery of fraudulent nature of asylum claim – decisions subsequently changed and overpayments raised – refugee status had been revoked by time claimant’s appeals heard by First-tier Tribunal, although not at the time of the decisions under appeal – tribunal refused claimant’s appeals on basis of the public policy principle that no one should take benefit from her/his own wrongdoing – on the facts of the case the tribunal had not erred in law, but that was in the unusual circumstances of the case including that refugee status had been revoked by the time the tribunal heard the appeal – if that had not been the case then (following countervailing public policy principles of consistency and certainty) the outcome may have been different

Summary

In this decision, the Scottish Court of Session rejected a petition for judicial review of the decisions by the Secretary of State for Work and Pensions and the Scottish Ministers to change the eligibility rules for the winter fuel payment (WFP) (including the equivalent in Scotland) for the winter 2024/25. The change was to means test entitlement by restricting entitlement to those entitled to pension credit. The WFP rules were amended to make that change in England and Wales in regulations that came into effect on 16 September 2024. The rules on the equivalent devolved Scottish benefit, the pension age winter heating payment (PAWHP), were amended to the same effect from 13 November 2024, the Scottish Ministers considering that under the circumstances there was no real option but to mirror the WFP changes for 2024/25. Under an agency agreement, the PAWHP was paid by the DWP for that winter.

The claimants were Scottish residents who had lost entitlement to the PAWHP. They were married and lived in Scotland and were both of pension age. Neither qualified for pension credit. They argued that the decisions by the Secretary of State regarding the WFP and by the Scottish Ministers regarding PAWHP were unlawful on a number of grounds, including breach of duties under the Equality Act 2010, failure to consult, irrationality and ‘Wednesbury’ unreasonableness and breach of the Human Rights Act 1998.

In the Outer House of the Court of Session, Lady Hood refused the petition for judicial review. She did consider that, in the particular circumstances of the case, the claimants should be allowed to challenge both the Secretary of State’s and the Scottish Ministers’ decisions before the court. But none of the claimants’ arguments for unlawfulness were made out. The Secretary of State did have due regard to her duties under the Equality Act, as did the Scottish Ministers regarding their duties. There had been no statutory duty to consult, and neither had either respondent promised to do so. On irrationality, the threshold was high and the fact that the decisions could result in hardship for those excluded was not enough to render them irrational in the legal sense. Lady Hood noted that the European Convention on Human Rights (which was implemented in the UK by the Human Rights Act) did not guarantee socio-economic rights and nor was it engaged regarding whether payments like the WFP and PAWHP ought to be provided on a universal basis. There had been no relevant breach.

Summary

In this judicial review decision, the High Court held that the minimum income floor (which may apply to self-employed claimants of UC) was not unlawful on grounds of discrimination, irrationality or breach of equality duties.

The claimant was self-employed with two young children, and because of low earnings was subject to the minimum income floor in her UC. Because her local authority adopted UC income figures in calculating council tax support, she got no means-tested help with her council tax. She argued that the minimum income floor (at regulation 62 of the Universal Credit Regulations 2013, No.376) unlawfully discriminated against her as a self-employed person, contrary to Article 14 of the European Convention on Human Rights (ECHR). She also argued that regulation 62 was irrational at common law, and that the Secretary of State had failed to observe equality duties (under the Equality Act 2010) in introducing the regulation.

Mrs Justice Elisabeth Laing rejected all those arguments. She did accept that UC was within the ambit not only of Article 1 of Protocol 1 of the Convention (ie, was a ‘possession’), but also that it was ‘at least arguable’ that it fell within the ambit of Article 8 (right to family life) in that it included components for housing and for children (paragraph 91). But the judge doubted that there was a valid comparison with employed claimants (who are not subject to the minimum income floor). Such claimants were not in an analogous position and in particular there was no ‘directly effective practical equivalent’ for a self-employed claimant to the work requirements placed on an employed claimant (paragraph 103). Even if that was wrong, the difference in treatment was justified as not ‘manifestly without reasonable foundation’. One of the purposes of the minimum income floor was ‘to influence the behaviour of those in minimally profitable self-employment’ (paragraph 114), and although it did create an incentive to give up such activity in favour of seeking employment, it did not create a perverse incentive to give up self-employment in general (paragraph 116). Regarding rationality, the regulation properly encouraged consideration of whether to give up minimally profitable self-employment, and had been subject to extensive parliamentary scrutiny. The high threshold for irrationality was not met (paragraphs 119–122). Regarding equality duties, there had been an equality impact assessment regarding UC, the Secretary of State had taken a deliberate policy decision to assess the scheme as a whole, and the judge was satisfied that constituted the necessary due regard (paragraphs 123–125).

Summary

In this judicial review decision, the High Court held that the equalisation between men and women of the state pension age, and the raising of the pension age, was not unlawful on the grounds of discrimination on grounds of age or sex. The claimants were women born in the 1950s and who were affected both by the equalisation of, and raising of, the pension age. They argued that the changes were unjustified direct discrimination on grounds of age regarding those born after 6 April 1950, that they were indirect discrimination on grounds of sex against women, and that inadequate notice of the changes had been given amounting to breach of legitimate expectations and unfairness under common law.

Lord Justice Irwin and Mrs Justice Whipple rejected all of those arguments. The age discrimination argument was firstly predicated on European Union (EU) law. But the court accepted that the general principle of non-discrimination applies only where EU law is implemented into domestic law, not where the domestic law is not within the scope of EU law. Those arguments must fail because the relevant domestic legislation was not within the scope of EU law (paragraphs 33–41). Alternatively, the claimants argued that the arrangements unlawfully breached Article 14 of the European Convention on Human Rights (ECHR) in the way it disadvantaged women on the basis of their age combined with gender. Rejecting that, the court held that previous authority demonstrated that a state can introduce a new legislative scheme from a given date and by extension introduce such change in a graduated way. Even to the extent that a difference in treatment had occurred, the changes were ‘macro-economic and political’, were properly open to government, and were justified as not ‘manifestly without reasonable foundation’ (paragraphs 43–54).

The claimants’ arguments regarding sex discrimination could not succeed under EU law, as determination of pension age for pensions was not within the scope of EU discrimination law. There was no unlawful breach of the ECHR as there was no direct discrimination against women, and although the court doubted that the changes actually discriminated against women even indirectly, the difference in treatment was justified as not ‘manifestly without reasonable foundation’, for the same reasons as applied regarding age discrimination (paragraphs 57–74). Regarding notification, the court held that parliament had never created a legitimate expectation that pension age would only change after consultation on an individual basis, and there had in fact been ‘extensive consultation’ on a wider basis (paragraph 18).

Summary

In this decision of the European Court of Human Rights (ECtHR), it was held that the application of the so-called ‘bedroom tax’ to a claimant who is the victim of domestic violence and is living in Sanctuary Scheme accommodation, with the property adapted to provide a ‘panic’ room, is unlawful. (The court also held that in another case – JD – the bedroom tax is not unlawful in its application to a claimant with a severely disabled child in a three-bedroom house.) Both claimants had previously had their claims dismissed by the Supreme Court in the UK.

The claimant in A was a woman who had been the victim of domestic violence (in this case, involving rape). She lived in a three-bedroom house in the social sector, with her son. Following repeated contact from the rapist, the claimant was referred to the ‘Sanctuary Scheme’. She and her son lived in a rented three-bedroom house (allocated because of the shortage of two-bedroom houses). The attic had been modified to render it a ‘panic room’. The bedroom tax was applied regarding the third bedroom. She had been awarded discretionary housing payments (DHPs) on a temporary basis.

The ECtHR held that the application of the bedroom tax (at regulation B13 of the Housing Benefit Regulations 2006, No.213) was in breach of Article 14 of the European Convention on Human Rights, when read together with Article 1 of Protocol 1. The claimant had been discriminated against on the grounds of sex (as the victims of domestic violence were overwhelmingly women). The difference in treatment was not justified. The test was whether the measure was ‘objectively and reasonably justified’ – ie, it will be unlawful if it does not pursue a ‘legitimate aim’ or if there is no ‘reasonable relationship of proportionality between the means employed and the aim sought to be realised’ (paragraph 83). The court rejected, in the context of alleged discrimination, the domestic test for justification – ie, of whether or not it was ‘manifestly without reasonable foundation’ (see R (DA and DS) v Secretary of State for Work and Pensions [2019] UKSC 21). The court considered that to be limited to where the difference in treatment was a ‘transitional measure’ designed to ‘correct historic inequalities’ (paragraphs 87–89). The court considered that the aim of the bedroom tax was in conflict with the aim of Sanctuary Schemes (which was to enable those at serious risk of domestic violence to remain safely in their own homes). The government had not provided ‘weighty reasons’ to justify prioritising the bedroom tax in such cases. That prioritisation was therefore ‘disproportionate’ (in the sense of not corresponding to the aim) and the provision of DHPs could not render it proportionate (paragraphs 103–104).

Comment from CPAG

The ECtHR’s rejection of the ‘manifestly without reasonable foundation’ test as the test of whether the difference in treatment in measures of economic or social policy was justified is highly significant. That test has featured prominently in domestic (UK) caselaw involving discrimination arguments (often resulting in findings against the claimants, including regarding challenges to the benefit cap and the two-child limit). However, formally the court’s alternative test is not yet binding on domestic authorities.

Summary

The claimant was a Romanian national living in Germany with her son since 2010. She was entitled to German child benefit and an advance of child support maintenance. She had not worked in Germany and neither was there any evidence that she was seeking work. She was without sufficient resources of her own. She was refused a German basic subsistence benefit on the grounds that she did not have the right to reside.

The claimant's appeal involved the argument that this refusal was unlawful discrimination against her on grounds of nationality, given that she was a European citizen and that European law (in particular Article 18 of the Treaty on the Functioning of the European Union ('TFEU') and Article 24 of Directive 2004/38/EC - ('the Directive') required equal treatment for European nationals with nationals of the host member state, including regarding the granting of social assistance. Rejecting that argument, the Court held that the equal treatment provision at Article 24(1) 'must be interpreted as not precluding legislation of a Member State under which nationals of other Member States are excluded from entitlement to certain "special non-contributory cash benefits"... in so far as those nationals of other Member States do not have a right of residence under Directive 2004/38/EC in the host 'Member State'.'

Although all European citizens may rely on the equal treatment provisions, the primary rule in the TFEU prohibited discrimination on grounds of nationality that was subject to 'conditions and limits' laid down in the European treaties and in the law made to implement them. Article 24 of 2004/38/EC was such a provision, and capable of providing limitations. Article 24(2) did so regarding social assistance for those with an initial (three month) right to reside merely on the basis of being a Union citizen. But here the claimant had been living in Germany for more than three months, so instead the application of Article 24(1) was at issue. As that referred to the situation where a Union citizen was residing 'on the basis of this Directive', the court held that a Union citizen could only rely on the equal treatment provision for a longer period 'only if his residence... complies with the conditions of Directive 2004/38'. Those conditions (regarding residence for longer than three months) were set out in Article 7 of the Directive, with the possibility of a permanent right of residence after five years under Article 16. In the present case, the claimant was 'economically inactive' (ie, she was not a worker or self-employed or seeking work) and on the facts the court considered her only possible right to reside would be under Article 7(1)(b), as a person with 'sufficient resources ... not to become a burden on the social assistance of the host Member state... '. Again on the facts, she was not such a person. She, therefore, could not rely on the equal treatment rule at Article 24.

Summary

In this immigration case originating in Northern Ireland, the Court of Appeal considered whether, for the purpose of whether a student with Danish nationality had ‘comprehensive sickness insurance’ and so a right to reside, access to free treatment from the National Health Service (NHS) was sufficient. The claimant was the student’s husband, was not himself an EEA citizen, and needed to show that his wife had the right to reside in order to be entitled to acquire one himself.

In a unanimous decision, the Court held access to NHS treatment was not sufficient to count as comprehensive sickness insurance. Reviewing the relevant caselaw (including in particular W(China) v SSHD [2006] EWCA Civ 1494 [2007] 1 WLR 1514), the Court held that access to the NHS was ‘nothing to the point’ of whether the claimant’s wife had comprehensive sickness insurance so that she would have a right to reside as a student under Article 7(1)(c) of EC Directive 2004/38/EC. There was no basis from departing from the finding in W (China) that use of free state medical services in fact created a burden on the host state and that contribution towards it could not be a proxy for insurance designed to remove the burden of providing health care (paragraphs 20–28).

The Court did note that it was ‘common ground that if there were reciprocal arrangements with the EEA national’s own state that would be sufficient to constitute comprehensive sickness cover’ (paragraph 53). But here there was no evidence that she was entitled to healthcare in Denmark (paragraph 54). The requirement to have comprehensive sickness insurance was not discriminatory, disproportionate or otherwise unlawful (paragraphs 38–68).

Comment from CPAG

This decision is broadly consistent with the finding about comprehensive sickness insurance and self-sufficiency in VP v SSWP (JSA).

Decision in brief

Upper Tribunal says: 

‘This is yet another case concerning the failure of the Secretary of State to put before the First-tier Tribunal an accurate list showing the least and most onerous forms of work-related activity that were available for the claimant to undertake...and the failure of the First-tier Tribunal to do anything to correct that (obvious) omission. The hope I expressed in MR v SSWP (ESA) [2020] UKUT 210 (AAC) that MR would be the last word on the provision of accurate lists of work-related activities in appeals concerning regulation 35(2) of the Employment and Support Allowance Regulations 2008 or its universal credit counterpart has proven to be a forlorn one’

Secretary of State gave assurance to Upper Tribunal judge that retraining had been provided to decision makers, but 

‘ …First-tier Tribunals may need to remain vigilant on universal credit appeals especially to ensure they have been provided with an accurate list of work-related activities. One I would have thought reasonably fail safe test is if the list does not include “work placements” then it is very likely that it is not an accurate list'

Decision in brief

Claimant objected to extra requirements for evidence about his identity - his entitlement to credits was by virtue of regulation 8A of the Social Security (Credits) Regulations 1975 and he continued to satisfy the criteria in those – wrong to consider applying the Jobseeker’s Allowance Regulations 1996 – tribunal wrongly treated the claimant as if he was in receipt of JSA and failed to apply the correct law, which was the Credits Regulations – no provision for disapplying regulation 8A on the basis that the person concerned would not have been entitled to JSA because s/he had failed to attend an interview