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What exactly did the Supreme Court say in Samuels v Birmingham?

13.06.2019

The Supreme Court has handed down judgment in the affordability case of Samuels v Birmingham City Council  [2019] UKSC 28. But the judgment is not especially clear. What exactly does this case mean for local housing authorities?

This regrettably long-running appeal process involved a challenge to the Birmingham City Council's decision to find Ms Samuels intentionally homeless because she had lost her previous accommodation due to her "deliberate act in failing to pay her rent". The reviewing officer had concluded that Ms Samuels could have made up the shortfall between her housing benefit and spending less on housekeeping.

Ms Samuels appealed, unsuccessfully, to both the County Court and the Court of Appeal.

On a further appeal to the Supreme Court, the issue between the parties appeared to be concerned with how to calculate Ms Samuels' income. Her argument was that the reviewing officer should have not have taken into account her income from benefits other than housing benefit, because these were subsistence benefits, which provide the bare minimum income required for essential living needs, and therefore could not be relied on to make up the shortfall of rent. The Council argued, in contrast, that both the legislation and the Code of Guidance required it to take into account all sources of income.

The Supreme Court allowed Ms Samuels' appeal – but did not accept her argument that subsistence benefits had to be ignored.

So what does this judgment mean for reviewing officers considering questions of affordability of the last settled accommodation where intentional homelessness is potentially in issue?

The main issues to take from Lord Carnwath's judgment are as follows (NB. the Code of Guidance has since been updated):

1. Article 2 of the Homelessness (Suitability of Accommodation) Order 1996, requires a local authority to consider whether the last settled accommodation was affordable in determining whether it would have been reasonable to continue to occupy it.

2. The Order requires the local authority to take into account all sources of income – including all social security benefits [34].

3. The applicant's income must then be compared with her "reasonable living expenses". This has to be assessed objectively and on the assumption that the last settled accommodation would have continued to be available for the applicant's occupation indefinitely [34].

4. It is necessary to consider the needs of the household as a whole – including any children [35].

5. A helpful "starting point" for assessing what an individual applicant's "reasonable living expenses" might be is the level of income support (now, under the new Code of Guidance, the standard allowance of Universal Credit). Where there are children in the household, the amount of child tax credit should be taken as a starting point for their expenses [35].

6. The correct approach to assessing affordability is to simply work out whether or not the applicant's income exceeded her (and her household's) reasonable living expenses [36].

In Ms Samuels' case the review decision was quashed because, simply, her income had been less than her reasonable living expenses while living in her last settled accommodation. In the light of that basic finding of fact, the reviewing officer had been wrong to ask whether there was sufficient "flexibility" in Ms Samuels' budget to make up a shortfall of around £150 per month. The expenditure figures she had provided were a little under the amount that would have been regarded as appropriate in welfare benefits and were therefore clearly "reasonable".

Finally, Lord Carnwath expressed the hope that the MHCLG would provide more detailed guidance on what is meant by "reasonable living expenses". This was a reference to the lack of "reliable objective guidance on reasonable levels of living expenditure" and evidence provided by Shelter of an unfortunate lack of consistency between different local authorities when "undertaking this very difficult task".

Andy Lane and Matt Lewin are members of Cornerstone Barristers' Housing Team.