The Supreme Court quashed Birmingham City Council’s decision that Ms Samuels was intentionally homeless after she lost her tenancy through rent arrears. Affordability had to be judged by an objective assessment of her reasonable living expenses, including those of her children, rather than by asking whether she had enough flexibility in her budget to meet the shortfall between her rent and her housing benefit.
The homelessness decision
Ms Samuels relied on benefits to support herself and her children. Her housing benefit did not cover the whole rent, and arrears built up. When she lost the tenancy, the council decided she was intentionally homeless because it considered the rent affordable.
Law Teacher writing support
Writing a law essay?
We choose a writer who is an expert in your area of law and qualified to at least the academic level you select. Most of our writers hold a master’s degree or PhD, have teaching experience, or both.
Send us your question and, if you wish, any marking criteria. We’ll write an essay to your instructions.
Her budget showed a shortfall between her housing benefit and her rent. The reviewing officer considered whether money allocated to housekeeping could have covered it. The issue was how he should assess the family’s reasonable living expenses.
The reviewing officer treated the revised housekeeping figure as excessive. He concluded that ordinary budgeting should have enabled her to meet a weekly shortfall of £34 from weekly income in excess of £311, and that the accommodation was therefore affordable. The letter mentioned the Homelessness Code of Guidance only in general terms.
Affordability under the 1996 Act
A person is intentionally homeless under section 191(1) if she deliberately does or fails to do something in consequence of which she ceases to occupy accommodation which was available and which it would have been reasonable for her to continue to occupy. The Homelessness (Suitability of Accommodation) Order 1996 requires the authority to take affordability into account, including all financial resources, social security benefits, rent and other reasonable living expenses. Authorities must also have regard to the Code of Guidance. Paragraph 17.40 recommended treating accommodation as unaffordable if residual income would fall below the applicable level of income support or income-based jobseeker’s allowance, an amount varying with the household, and asked whether housing costs could be met without depriving the applicant of basic essentials.
The courts below
The county court dismissed Ms Samuels’ appeal. HH Judge Worster treated the Code as a recommendation which had been considered, and held that any incomplete consideration of paragraph 17.40 did not invalidate the decision. The Court of Appeal also dismissed the appeal. Richards LJ rejected the argument that benefits should be treated as subsistence income not intended to meet housing costs. He held that the Order required income and expenses to be considered as a whole, without giving benefits any special status. The residual income after the rent shortfall appeared to exceed income support, and paragraph 17.40 did not require child tax credit to be included in that comparison.
Why the review decision was wrong
Lord Carnwath, with whom Lady Hale, Lady Black, Lord Lloyd-Jones and Lord Kitchin agreed, held that the Order requires every source of income, including all social security benefits, to be taken into account. Nothing in it excludes non-housing benefits. Reasonable living expenses must nevertheless be assessed objectively; the assessment cannot rest on the case officer’s subjective view. Affordability must also be judged on the basis that the accommodation is to be available indefinitely.
Paragraph 17.40 guides that assessment by reference to income support. Even if that recommendation is not read as covering benefits paid for children, those benefit levels remain relevant. They are not generally designed to leave a surplus above subsistence needs, and they are no less material when the reasonable expenses of other household members are being assessed. The duty to safeguard and promote the welfare of children is also relevant. The guidance says that the applicable amount varies with the composition of the household and refers to a tariff in respect of “such benefits”, indicating that benefits other than income support may be considered.
The reviewing officer asked the wrong question. He asked whether Ms Samuels had sufficient flexibility to bridge the shortfall. He should have asked what her reasonable living expenses, other than rent, were, having regard to her needs and those of the children, including the promotion of their welfare. The scheduled expenses of £1,234.99 were well within the £1,349.33 available from non-housing benefits. Without any other objective standard, it was difficult to see how that level of expenditure could be treated as unreasonable. Arguments about the historical meaning of “income support” in paragraph 17.40 were not critical to this conclusion.
Verdict: The Court unanimously allowed the appeal and quashed the council’s review decision. Whether to accept the full housing duty was a matter for the council to reconsider in light of the judgment.
