Supreme Court quashes decision to declare mother ‘intentionally homeless’

18 June 2019 by Guest Contributor

Samuels v Birmingham City Council [2019] UKSC 28

In unanimously allowing an appeal against a decision to declare the appellant intentionally homeless due to her inability to pay her rent, the Supreme Court affirmed that non-housing benefits are not designed to create a surplus that can be used to account for insufficient housing benefits.

Factual Background

The appellant, Ms Samuels, was an assured shorthold tenant of a property in Birmingham, where she lived with her four children. Having fallen into rent arrears she was given notice to leave and subsequently applied to the respondent council as homeless under Part VII of the Housing Act 1996. The council instead decided that she was intentionally homeless on the grounds that her current accommodation was affordable and it was only due to the appellant’s deliberate decision not to pay the rent that had resulted in her becoming homeless.

At the time that Ms Samuels left the property she was entirely dependent on social security benefits which amounted to a total of £1,897.84 per month. This figure comprised: (a) housing benefit (£548.51); (b) income support (£290.33); (c) child tax credit (£819.00); and (d) child benefit (£240.00). Excluding the housing benefit, the total available for living expenses was £1,349.33.

Ms Samuels’ rent was £700, leaving a shortfall of £151.49 when compared to her housing benefit, whilst she calculated her other monthly expenditure to be £1,234.99, comprising: (a) food/household items (£750); (b) electricity (£80); (c) gas (£100); (d) clothes (£50); (e) TV license (£43.33); (f) school meals (£43.33); (g) travel (£108.33); (h) telephone (£20); and (i) daughter’s gymnastics (£40).

Overall, Ms Samuels was left in the unfortunate position of having expenses totalling £1,934.99 with only £1,897.84 worth of social security benefits to cover these expenses.

The Council’s case-officer noted the £151.49 shortfall, yet concluded, in light of the expenditure figures above, that there would have been “a significant amount of disposable income from which to fund your shortfall.” The officer specifically described the £750 spent on food/household items as “excessive for a family of your size.”

The decisions of the lower courts

Part VII of the Housing Act 1996 provides that the council has a duty to secure accommodation for someone who has become homeless, providing that they have not become homeless intentionally. This

depends on whether she deliberately did or failed to do anything in consequence of which she ceased to occupy accommodation which was available for her occupation and which it would have been reasonable for her to continue to occupy.

Section 177(3) allows the Secretary of State to specify matters to be taken into account when determining whether accommodation is reasonable to occupy. The Homelessness (Suitability of Accommodation) Order 1996 (SI 1996/3204) provided that the affordability of the accommodation was an important consideration as to an accommodation’s suitability.

In particular, the Order states that the council should consider the financial resources of the individual, including ‘salary, fees and other remuneration’ and ‘social security benefits’ and the costs associated with occupying the accommodation, such as rent and ‘other reasonable living expenses.’

In addition, s.182(1) requires the council to have regard to guidance given by the Secretary of State. The relevant guidance at the time was the Homelessness Code of Guidance for Local Authorities which was issued in 2006. Paragraph 17.39 stated that account must be taken of:

(a) the financial resources available to him or her (ie. all forms of income), including, but not limited to:

(i) salary, fees and other remuneration (from such sources as investments, grants, pensions, tax credits etc);

(ii) social security benefits (such as housing benefit, income support, income-based Jobseekers Allowances or Council Tax benefit etc) …

and paragraph 17.40 further states:

the Secretary of State recommends that housing authorities regard accommodation as not being affordable if the applicant would be left with a residual income which would be less than the level of income support or income-based jobseekers allowance that is applicable in respect of the applicant.

In the County Court, counsel for Ms Samuels had submitted that the officer had failed to have regard to the above paragraph. This submission was rejected by the court which found that the guidance was only a ‘recommendation’ and that even if paragraph 17.40 had not been fully considered it was “an error which does not invalidate the decision.”

The Court of Appeal dismissed the appeal, finding that the 1996 Order and guidance indicates that “a judgment has to be made on the basis of income and relevant expenses as a whole.”

With regards to the failure of the officer to have regard for paragraph 17.40 the lower courts relied on Balog v Birmingham City Council [2014] HLR 14 as authority for the proposition that officers “are not obliged to identify each and every paragraph of the guidance which bears upon the decision they have to make.” The Court of Appeal was satisfied that overall the officer had considered the income support adequately and was justified in reaching his conclusion.

The Supreme Court’s decision

The appellant essentially made two submissions:

1. The reference to ‘income support’ in the guidance and Order should be understood to include Child Tax Credit.
2. More importantly, the council was wrong to consider that the non-housing benefit contained a surplus that could be used to offset the shortfalls caused by the insufficient housing benefits. The appellant relied on several authorities to support this, most notably Mathieson v Secretary of State for Work and Pensions [2015] UKSC 47 and Burnip v Birmingham City Council [2012] EWCA Civ 629, both of which stated that non-housing benefits only provided sufficient income for a family to operate at subsistence level.

Lord Carnwarth, who gave the sole judgment of the court, stated that the first issue was not “critical to the resolution of [the] appeal”, but that he agreed with the appellant’s case, noting that it would be nonsensical for the guidance to continue to use income support as a measure of affordability if it “excluded from income support any allowance for the children of the family.”

Turning to the second issue, Lord Carnwarth noted that whilst the 1996 Order did not specifically require the exclusion of non-housing benefits, it does require a comparison with the applicant’s ‘reasonable living expenses.’ The Court agreed with the appellant’s submission that benefits are not designed to provide financial surplus to the family, they are designed to provide the family with sufficient funds to live a very basic lifestyle.

In the present case, the review officer had approached the affordability assessment in the incorrect manner. The officer focused on whether Ms Samuels’ had the financial flexibility to make up for the £151.49 shortfall, whereas the focus should have been on Ms Samuels’ reasonable living expenses, having regard to the needs of both herself and her children, and assessing whether these expenses were reasonable.

Given that the appellant’s expenses (£1,234.99) amounted to less than her non-housing benefit allowance (£1,349.33), Lord Carnwarth found it

difficult to see by what standard that level of expenses could be regarded as other than reasonable.

Conclusion

The Supreme Court agreed with the appellant that the non-housing benefits provide only enough income to subsist and it is therefore not designed to produce a surplus that can be used to cover shortfalls caused by insufficient housing benefits.

In the present case, the Court was clear that the appellant’s living expenses were reasonable and given that the 1996 Order requires affordability to be a key criteria for determining the suitability of accommodation, the £151.49 housing shortfall made it unreasonable for the council to have declared that it was a property that was ‘reasonable for her to continue to occupy.’ Therefore, it was untenable for the council to declare Ms Samuels as intentionally homeless.

Thomas Beasley is presently working as a paralegal and will commence the BPTC in September 2019.