HB v UC; contrivance

Just a quick one - I think I’m on the right track but I am loathe to prod someone into unnecessarily throwing themselves into the UC lobster pot.

A colleague saw a client who was once married and had a marital home with their spouse. They broke up twenty-odd years ago. Through the vagaries of life, client has wound up renting the former marital home from their former spouse and has been refused HB. It does seem to be a genuine commercial rental agreement otherwise and the former spouse lives elsewhere.

My reading is that the refusal of HB is correct under regulation 9(1)(c)(i) HB Regs but that if the client were to claim Universal Credit with housing costs then this bar would not apply and it would simply be a case of deciding whether this is a case of “contrived liability” without any baggage from the HB regs.

If that’s right, it would seem to suggest that there is a serious case for voluntarily claiming UC which still sounds weird to me.

Thoughts?

Yes you are right: Reg 9(1)(c) will catch them irrespective of how much water has flowed under the bridge in the meantime.  There is actually a UT decision on a similar-ish case:

http://administrativeappeals.decisions.tribunals.gov.uk//Aspx/view.aspx?id=3326

In that case the landlord was not the claimant ‘s most recent partner and they ceased to be a couple 14 years ago, but the Reg still applied.

I understand that DWP is making non-commercial/contrived decisions on UC housing costs at the merest hint of dodginess - I have heard of people who have happily claimed HB for years losing any help with rent as soon as they migrate to UC.  DWP will eventually learn the hard way that catchall contrived/non-commercial demands a high threshold of evidence from the decision maker: the UC regs have opted for simplicity over specific situations, shoulodn’t they have paused to wonder why HB Reg 9 is so long in the first place?  But of course claimants have to battle their way through layers of resistance to reach Tribunals before any of these hasty refusals start getting overturned.  So there is a risk that the claimant will gain nothing in terms of housing costs by switching to UC and depending on their income/household they could then end up better off/worse off/no change in other respects.

Thanks HB - very helpful.

The DWP position is unsurprising and had occurred to me. You would have thought it would be obvious from the wording of the regs and from ADM F2142 that this is supposed to be a very high hurdle to pass but there we go.

I’ll see what the client wants to do - thanks

HB Anorak - 21 October 2016 11:39 AM

..I have heard of people who have happily claimed HB for years losing any help with rent as soon as they migrate to UC.  DWP will eventually learn the hard way that catchall contrived/non-commercial demands a high threshold of evidence from the decision maker.

A higher threshold still I would have thought in such cases where the allegedly contrived liability not only didn’t fall foul of HB but actually pre-dated the inception of UC.  Not sure if you could contrive to claim a benefit that did not legally exist.

Good point - I remember similar discussions around deprivation and new benefits.  Would s17(2) of the Interpretation Act cover it I wonder?

I’m not sure if the enactment responsible for HB has been “re-enacted” in the sense in which that term is used in section 17(2).  Doesn’t 17(1) more accurately describe the replacement of HB with UC?  Assuming, however, that the housing element in UC does, with modifications, re-enact HB, can we then say that, eg, a determination under HB that a liability wasn’t created to take advantage of the scheme could, for the purpose of section 17(2) above, have been made under section 11 WRA and, it follows, under para 10 of Sch 2 to the UC Regs?  I think the latter’s omission of any reference to HB suggests not.  Para 10 of Sch 2 can be contrasted with, say, Reg 115 ESA Regs which expressly provides that deprivation determinations re IS or JSA can represent equally good grounds for disentitling someone to ESA as a determination that the capital was specifically deprived in order to qualify for ESA.

I think the reason people who have been found not to have fallen foul of HB should not be refused UC housing element under para 10 above is simply that it’s not legally possible to infer an intention to secure or increase the housing element when the approved date for UC’s introduction into a postcode area has not yet passed.  See para 16 of R(IS) 14/1993.  It seems that is strong authority for para 10 of Sch 2 not applying where the disputed liability was created before the individual inception date of UC, irrespective of whether a HB DM found Reg 9(1)(l) HB applied beforehand.  The words “was contrived” in para 10 of Sch 2 would also appear to rule out any opportunity for a UC DM to find that the contrivance was of a continuing nature after the appointed date, just as an act of deprivation of capital is fixed in time.

This is obviously different to saying that UC contrivance provisions cannot be retrospective, eg someone who waits several months after contriving the liability before claiming UC might still be caught, provided the liability was originally set up after the relevant UC appointed date.

I was thinking more the other way round ... that a liability created to take advantage of HB could be interpreted as a liability contrived to secure/increase UC.  The act of contrivance/creation took place in pre-UC times, but for HB read UC in accordance with s17(2).

I agree that all depends whether the radical restructuring of benefits in UC stretches to a re-enactment with modifications rather than a completely new scheme.  The changes brought about by UC go further than, say, the re-enactment of the 1986 Act in the twin 1992 Acts for example which fell squarely within s17(2).

Either way, proving it is a tough ask for the decision maker.  Commerciality is not such a high threshold, but still higher than DWP seem to think.

Thanks for clarifying Anorak.  I wasn’t sure which way round you meant it to be honest.  But I was trying to make the point that it didn’t really matter for, in my view, even if UC does re-enact HB, 17(2) is unlikely to apply due to the omission of any reference to the previous HB decisions in the re-enacted UC primary and subordinate legislation.  That would equally affect HB determinations that did and did not find contrivance prior to migration.  Eg, a HB claimant found to have created a liability to take advantage of HB would still not, it seems, fall foul of the equivalent provision (para 10 of Sch 2) in UC as they could rely on R(IS)14/93 as a complete defence. 

I’d agree that if section 17(2) did apply to UC and allowed HB determinations to be conclusive for UC then that would obviously defeat R(IS)14/93.  But I don’t think it does apply for the reason above.  The DWP attempted to argue in R(IS)14/93 that Income Support and Supplementary Benefit were so similar that they could in effect be treated as interchangeable so as to allow a finding of deprivation for the purpose of obtaining the latter to be conclusive for the former.  But the Commissioner rejected this as, whilst the two benefits had similar characteristics, IS was found to be a “wholly new scheme” (para 18).  I think UC is similarly sufficiently different to HB so as to deny the DWP a similar argument, ie that the contrivance whenever made was in respect of a means tested benefit that paid housing costs generally.  If that’s right then it seems Elliot’s client could have completely avoided having his liability investigated under para 10 of Sch2 if only it had been arranged before UC was introduced into his postcode.

Edit: another way of putting it is that the omission of any reference to HB in UC indicates a contrary intention for the purpose of section 17(2).