The bedroom tax: discrimination or simply discriminatory effects?

On 9 November 2016 the Supreme Court handed down a significant judgment on several joined cases centring on the much disputed bedroom tax.

What’s the issue?

The under-occupancy penalty, unofficially renamed the “Bedroom Tax”, was implemented under the British Welfare Reform Act 2012. The reform has been met with controversy since its introduction, due to it targeting only those on low-income who receive housing benefits. Technically not a tax, the Conservative Party announced it to be a “spare room subsidy”: housing benefits are cut by 14% for one spare room, and 25% for any further spare rooms.

The Bedroom Tax is predicted to affect 465,000 households (and 660,000 working age individuals) nationally. As a result, the government proposed they would save around £480m annually; money they claimed could be redirected to welfare needs elsewhere.

Why was the Supreme Court involved?

The Bedroom Tax has created several specific points of legal contention. Firstly, the reform implicitly suggests that households have deliberately chosen houses larger than their minimum requirement. In fact, there is minimal choice left to the individual in social housing; families are simply placed in any available property. Labour’s August 2013 claim that “more than 19 out of 20 families hit by the bedroom tax are trapped in their larger homes because there is nowhere smaller within the local social housing stock to take them” is probably inflated. Nonetheless, there is little doubt that the Government does not have a limitless supply of perfectly sized houses in suitable locations for each family. As a result, many will be facing the Bedroom Tax through no fault of their own.

Secondly, the law appears to disproportionately affect people with a disability: two-thirds of those hit by the ‘bedroom tax’ are disabled.1 Many people require a second room for a carer or equipment, and whilst the Government conceded that an adult may have an overnight carer, the same exemption was not available to children.

Both of these issues were brought against the DWP at the Supreme Court this week. 6 out of the 7 Claimants were individuals with disabilities or family members of individuals with disabilities. They argued that an extra room was needed as a result of the specific needs generated by their disability. The final Claimant was a woman, “A”, who had been allocated a 3-bedroom house in light of no 2-bedroom houses being available. This vulnerable victim of domestic abuse had converted her 3rd room into a secure ‘panic room’ for in the case of her ex-partner reappearing, at both financial and time expense to the police. The Bedroom Tax, she argued, is both discriminatory against female domestic abuse victims, and would be a waste of tax-payers money should she be relocated after great investment into her property.

Two of the Disability cases were upheld on the grounds of discrimination. A’s case was not.

The wins

This week the Supreme Court upheld that the Bedroom Tax was contrary to article 14 of the European Convention on Human Rights in two of the disability cases. In both, this was because of differences in regulations for disabled adults versus disabled children.

On the one hand, disabled children are exempt from the rule that bedrooms must be shared (up until age 10 for different sexes, and 16 for the same sex), while the Local Housing Allowance demands that ‘an adult couple’ may share a room. There was no exempting clause in the case of a disabled member in a couple, as in this case. Jacqueline Carmichael’s spina bifida required her to sleep in a separate medical bed from her husband, located in a second bedroom due to both beds not fitting in 1 bedroom.

On the other hand, a spare room was exempt from the Bedroom Tax in the case of it being used by an overnight carer for a disabled adult. Spare rooms for carers for disabled children, however, were included in the Bedroom Tax. Paul and Susan Rutherford, who care for their 16 year-old severely disabled grandson, have for 3.5 years been faced with losing 14% of their housing benefits for a third bedroom that regularly sleeps his overnight carers.

These anomalies, the Supreme Court judges ruled, were “manifestly without reason”. They deemed the policy unfairly discriminated against disabled adults and disabled children, respectively.

The losses

However, the Supreme Court ruled against 4 other cases in which the spare room was not deemed an abject necessity to the disabled person. Whilst they accepted that they had a discriminatory effect, in that many of the individuals were socially and practically supported by a spare room to store support equipment, they denied that there was a direct need for an extra room.

Similarly, the judges in A’s case found by a majority of 5-2 that a “sanctuary scheme” did not require a spare bedroom. In deciding that the “sanctuary scheme” was not dependent on the “safe room”, they found the bedroom tax did not discriminate against vulnerable women.

Righting specific issues or reflecting inherent problems?

In order to get round specific issues created by the Bedroom Tax, the DWP insists that ‘Discretionary Housing Payments’ (DHPs) are available to be allocated to those who require support in certain areas. Individual cases of seemingly discriminatory effects of the Bedroom Tax should be decided by local councils rather than “complex exemption” rules being enforced.

Not only does this invite a wave of subjective decisions passing through, but the aggregate costs of these DHPs appear to render the Bedroom Tax wholly unviable. Indeed, the spokesman for the DWP stated we would spend “over £1bn by the end of this parliament for discretionary housing payments to ensure that people in difficult situations don’t lose out.” When added to the costs of the dogged fighting and appealing by the Government all the way to the Supreme Court, this surely indicates the Bedroom Tax is financially unviable. Perhaps it would be a more efficient austerity policy to divert away from “taxing” the poorest and most vulnerable.

With the upcoming Supreme Court case on the triggering of Article 50 in December, this most recent judgment is a welcome reminder of how the independence of the judiciary is a legal check on the executive. Long may it remain so.

Authored by Jessica Webster on internship at Hodge Jones & Allen and Edward Veale.