Bedroom tax loophole - hadn’t thought of this one before
I have just been told by an LA appeals officer that she has been directed by the Tribunal in several bedroom tax cases to state whether the claimant has been receiving HB continuously since 1/1/1996. This highlights a loophole that had not occurred to me.
HB Reg 2 defines “eligible rent” and the definition takes you away from the main HB Regs to the preserved pre-1996 version in any case to which para 4 of Schedule 3 to the HB&CTB; Consequential Provisions Reg 2006 applies. That paragraph applies mainly to “exempt accommodation”, but it also applies to any HB case (absolutely any case without exception, including rebates and HA general needs) where the claimant has been getting HB since 1/1/96. There are some exceptions to the continuous entitlement requirement as well (eg “welfare-to-work” where someone who is long term sick tries out work and then goes sick again).
This could be excellent news for a significant number of bedroom tax cases: typically people in their 50s with chronic illness or disability who have not been able to work for some time and whose grown up children have flown the nest
Potentially this could help a lot of people so I hope it is right but I have some misgivings about it. The terms of the definition in reg 2 are a bit weird. This is the wording:
“eligible rent” means, as the case may require, an eligible rent determined in accordance with–
(a) regulations 12B (eligible rent), _312BA (eligible rent and maximum rent(social sector), 12C (eligible rent and maximum rent) or 12D (eligiblerent and maximum rent (LHA)); or
(b) regulations 12 (rent) and 13 (restrictions on unreasonable payments) as set out in paragraph 5 of Schedule 3 to the Consequential Provisions Regulations in a case to which paragraph 4 of that Schedule applies;
I don’t like that phrase “as the case may require” sounds a bit vague to me but it seems that “in a case to which paragraph 4 of that Schedule applies” means that sub para (b) is what the case may require in cases falling within the terms of para 4, sch 3 Consequential Provs. Regs and sub para (a) is what is the case requires if it doesn’t fit in there.
Playing Devil’s advocate could it be argued that
- a max rent social sector must be determined in these cases because of the terms of reg A13 mean it must be done
- because reg A13 demands that determination reg 12BA applies (see 12BA(1)) and by virtue of 12BA(2) the eligible rent is the max rent (social sector)
- Since reg 12BA says the eligible rent is the max rent (social sector) then the definition in reg 2 has to be interpreted in that light and what “the case may require” is the bedroom taxed eligible rent
I agree it is not as clear-cut as it should be: that’s because there is something missing from Reg A13(2). That subpara should contain something like Reg 13C(5)(b) which disapplies the LHA for exempt accommodation. There is no equivalent express statement to the effect that the bedroom tax does not apply in exempt accommodation but no-one has seriously suggested that it does. The only reason why the bedroom tax doesn;t apply in exempt acc is presumably because Reg 2 heads you off at the pass - if limb (b) of the eligible rent applies you just don’t get as far as Regs 12B to 12D in the principal Regs.
So as I understand it this drafting quirk for bedroom tax cases means either:
- the bedroom tax applies to both exempt acc and pre-1996 cases, since there is nothing to say it doesn’t. Reg A13 “trumps” Reg 2 (I don’t think that’s right). Or
- bedroom tax does not apply to exempt acc because Reg 2 prevents it from doing so. I think this is right and it is certainly what everyone seems to believe, including DWP. But if so, then pre-1996 cases are exempt for the same reason. This seems to be the way the Judge is thinking in the cases I was told about.
I think “as the case may require” in Reg 2 means something like “whichever one of these five alternatives is correct in any particular case”.
If you start with the primary legislation at s130 & 130A of the Conts & Bens Act, you are told that “appropriate max HB” is to be determined in accordance with regulations. AMHB is defined in HB Reg 70, which in turn refers you to “eligible rent”. The first reference to “eligible rent” is in Reg 2 and I would say it diverts you away from Regs 12B to 12D if limb (b) applies - Reg 2 is your first port of call, Regs 12B to 12D are only engaged at all if Reg 2 takes you down that branch.
I’ll ask the appeals officer whether she is happy for me to say where she works.[ Edited: 2 Dec 2013 at 05:07 pm by HB Anorak ]
would this apply to pre 89 Housing association tenancies as well?
I believe it would do yes: as long as the tenant has continuous HB entitlement since 1/1/96 (or is covered by one of the exceptions to that requirement). The treatment of pre-89 tenancies is all contained in Reg A13 - the FtT Judge seems to be saying that we don’t reach Reg A13 in the first place in these cases and I think she is right.
I think the judge is right as well - excellent find. However, note the additional restriction in (3) that the property occupied must be the same as well (with the exceptions of certain moves due to disasters).
trying with difficulty to follow this argument but can anyone tell me is this summary roughly covers the argument…pre 96 tenancies actually have the claimants maximum eligible rent for HB purposes decided by a different regulation than those tenancies which came after and the under occupancy changes only refer to the newer maximum eligible rent regs?
am I following this argument correctly?
Yes, that’s exactly it. Different reg in a different place.
If this is correct, any bets on how long it will take DWP to “correct” the regs.?
I think it is in the amended regulations and supports Anorak’s interpretation. Paragraph 5 of the amendments says:
(4) In regulation 12B(4) (eligfible rent) fro paragarph (1) substitute -
(1) The amount of a person’s eligible rent shall be determined in accordance with teh provisions of this rgulation except where any of the following provisions applies-
(a) regulation 12 BA…
(d) paragraph 4 of Schedule 3 to the Consequential Provisions Regulations
So this is where the amendments do exclude with exempt housing, but equally they exclude anyone who falls within paragraph 4 Schedule 3
Am I reading this correctly?
Someone has pointed out para 4(2)(b) of the Schedule which says the pre-1996 protection does not apply to “any subsequent determination of his eligible rent”. I don’t think this is a problem though. Subpara (2) is concerned with cases that migrate to LHA and head (b) is essentially a lobster pot.
It works like this:
- Subpara (2)(a) forces migration to LHA if there is any break in entitlement at all, thereby overriding the linking rules in subparas (3) and (4): that is because the new claim is an LHA “trigger” under Reg 13C of the principal Regs
- Each time the case is then touched again for any other reason in the future, subpara (2)(b) means that the linking in subparas (3) and (4) is still overridden and the case does not re-emerge from LHA to return to the pre-1996 protection.
The history of subpara (2) bears this out: it was first inserted when the LHA pathfinders started and amended when LHA went national in 2008. It is purely an LHA measure. That has to be right: otherwise, if subpara (2)(b) had a more general application, all pre-1996 cases would have been phased out by virtue of subpara (2)(b) within a year and nearly all of para 4 would be redundant.
Has anyone had any experience of decisions by local authorities or at First Tier Tribunal on this issue ?
Andrew W Cobalt
SPeye has put up a template letter for those in receipt of HB continuously from 1 January 1996 to request a revision of decision to cut their benefit following the introduction of the bedroom tax
I have another question re this argument.
its just occurred to me so short on detail with dates etc but hopefully I can get my point across to people.
in Glasgow we previously had a significant level of local authority housing but this was transferred to a social landlord the GHA at some point after 1996 (I think).
would this transfer have any impact on claimants using this argument?
Makes no difference, conditions are continuous HB and occupy same dwelling.
from the morning star -
‘Tory Iain Duncan Smith’s bedroom tax stands on the brink of collapse today after experts exposed a loophole which could trigger an avalanche of expensive appeals.
Thousands of tenants who have claimed housing benefit continously since 1996 are exempt under little-known regulations passed by the last Labour government.
And experts believe all 660,000 households hit by the Con-Dems cruel tax could use the legislation to lodge an appeal ..’
DWP have said -
A DWP spokesman admitted the discovery could affect one of the government’s most unpopular policy.
“We are aware of a potential regulatory issue in relation to pre-1996 social sector housing benefit tenants and the removal of the spare room subsidy,” he said.
“We are looking at this carefully and will take any necessary action to clarify our position as soon as possible.”’