Bedroom tax court decisions – costs start to bite into savings

Yet again today, the now infamous Bedroom Tax is in the news. 

“The Bedroom Tax is becoming as disliked as the ‘poll tax’ of the 1980s”, comments Kirsty Varley, Solicitor and Higher Courts Advocate and a member of Croftons Solicitors’ specialist housing and regeneration team.  “As recently as Friday 11 October 2013 (See previous Post) we commented that since September 2013 the bedroom tax decisions have been coming in thick and fast. Today again, there are comments and opinions from official sources, executives within Registered Providers and residents themselves.” 

For every type of organisation involved in social housing – whether a social landlord, a bank offering lending facilities, supplier to the sector or professionals working in the sector – the Bedroom Tax has implications. The Courts’ guidance is being sought on various aspects of housing provision and, as some of the appeals brought have been upheld in both Scotland and now England, Croftons provides a summary of some of the reasons used to overrule applications to properties is included below.

“In essence,” adds Kirsty, “a combination of the reasons below have been successful, particularly in the first and second examples which relate to the size of the room and the use of the room.”
Taking each reason in turn:

 Size of room. The First Tier Tribunal (the FTT) decisions in Scotland (Fife) turned on various different matters. One of the reasons for the decisions quoted was the size of the room classified by the landlord as a bedroom. Under s326 Housing Act 1985, the “space standard” dictates that in order to prevent overcrowding, a bedroom suitable for one adult person should be no smaller than 70 square feet. The relevant Act in Scotland is the Housing Act (Scotland) 1987 and carries the same provisions. In some of the Scottish cases the “spare bedrooms” that were being taken into account for the purposes of the bedroom tax were smaller than 70 square feet. This was clearly inconsistent with the Statutory Overcrowding legislation. Any rooms smaller than the space standard measurements were found by the tribunal (along with other factors, including those described in 2 below) not to be spare bedrooms and therefore exempt from the bedroom tax.   Of course, these decisions have come from Scotland and therefore out of our jurisdiction so though not binding on England and Wales, could well be persuasive and are important.

Use of the room. Both intended use, as well as historic use, have also been ruled to be significant in determining whether the property has a “spare bedroom”.  In Scotland the fact that an old property with very different sized rooms that were never intended to be bedrooms when the property was built was a factor. In the decision in Lall v Westminster Benefits Agency, the fact that the tenant had worked with the landlord regarding refurbishments to the property to support his needs for equipment as a result of his disability, and that the extra rooms were intended for that purpose, was a reason not to apply the bedroom tax.

 A couple requiring two bedrooms because one member of the couple is disabled.  The decisions in Hereford and Govan to impose the bedroom tax  upon a couple who required two bedrooms because one of them was so disabled that they could not share a bedroom was judged to be an infringement of the couples Human Rights. Article 14 – Prohibition of Discrimination  – was relied upon, where it was argued that a discrete class of persons could be identified i.e. a couple who had at least one member so disabled that they were unable to share a bedroom. It was held by the tribunal that the discrimination could not be justified, and that a Discretionary Housing Payment did not justify it as there was no right to it, and it could be stopped at any time. This was also followed in Redcar and Cleveland, which found that instead of a disabled tenant living with her partner who cared for her having two spare bedrooms, for the reasons given above, she in fact only had one. Note – the discrete class of persons here distinguishes this from the failed High Court challenge, as this involved several different groups.

There will undoubtedly be more challenges and Croftons’ specialist Housing Management team will be providing updates each time.

“Registered Providers need to consider how they will deal with residents’ applications, drawing up a consistent approach while reflecting the different needs of different residents.  One size doesn’t fit all.  A resident with certain vulnerabilities, for example, may have very different needs to a young family or a single person. The bedroom tax is only applicable to those of working age and so does not affect anyone outside of this group.”

Kirsty added, “The introduction of the Bedroom Tax was designed to achieve savings, however this could prove a costly process.   We are already working with a number of Registered Providers to prepare ‘policy statements’ and a series of options, so each application can then be taken on its own merit but handled in a consistent way.  This will also keep legal costs down when applications do occur.  The challenge for all Registered Providers is to ensure that they are bearing the recent decisions in mind when classifying or reclassifying their properties where necessary, and ensuring that their approach when doing so can be justified and will not fall foul of the Equalities legislation.

For more information please contact Kirsty Varley, Solicitor and Higher Courts Advocate.

Croftons Solicitors