Social Housing Speed Read – Samuels v Birmingham City Council

Background

The claimant, Terryann Samuels, was a lone mother-of-four, whose children were all under the age of 16. Ms Samuels rented a property in West Bromwich on an assured shorthold tenancy. She fell into arrears due to a shortfall between her housing benefit and her rent of £151.49 per month, and was served with an eviction notice in July 2011; following this she applied to Birmingham City Council (“Birmingham”) to be treated as homeless under Part VII of the Housing Act 1996 (“the Act”).

Where such an application is made to a local authority, the authority is under a duty to provide accommodation to the applicant if they are found to be homeless, provided certain conditions are satisfied. One of these conditions is that the local authority is not satisfied that the applicant “became homeless intentionally”;  where it is deemed that the applicant did something, or failed to do something which caused them to leave their accommodation which it would have been reasonable to have continued occupying.

In determining whether it would have been reasonable for Ms Samuels to have continued to occupy her property, Birmingham had to consider whether her accommodation was affordable. This included an assessment of the financial resources available to Ms Samuels, comprising her social security benefits and other reasonable living expenses, as per Article 2 of the Homelessness (Suitability of Accommodation) Order 1996 (“the Order”).

Additionally, Birmingham were required to consider guidance from the Secretary of State which, at the time of Birmingham’s decision, was the Homelessness Code of Guidance for Local Authorities, issued in 2006. This recommended that housing authorities should regard accommodation as unaffordable if the tenant’s residual income, after housing costs, was less than the level of income support or income-based jobseekers allowance available to the tenant.

The case

Following Ms Samuels’ application to be treated as homeless, Birmingham decided that Ms Samuels was intentionally homeless and so was not entitled to assistance; it concluded that her accommodation in West Bromwich was affordable and that her eviction was due to her deliberate act in failing to pay the rent, when she could have afforded the rent with greater flexibility in her household budgeting. Birmingham’s conclusion was that had Ms Samuels not deliberately failed to divert sums from her other benefits to meet the shortfall between her housing benefit and her contractual rent then it would have been reasonable for her to continue to occupy the property.

Ms Samuels appealed Birmingham’s decision, arguing that the expenses of her and her children were reasonable and that the shortfall in rent could not have been made up simply by better managing her finances, as the rent was not ‘affordable’ for the purposes of the Act. Her initial appeal to the County Court was dismissed, as was her further appeal to the Court of Appeal, following which she was granted leave to appeal to the Supreme Court.

The Supreme Court’s decision

The Supreme Court (“SC”) overturned the Court of Appeal’s decision, allowing Ms Samuels’ appeal. In deciding that Ms Samuels was intentionally homeless, Birmingham had relied on the subjective view of the case officer who handled her application, rather than an objective assessment of what constituted ‘reasonable living expenses’ in her situation.

The case officer had concluded that greater flexibility in household budgeting would have enabled Ms Samuels to make up the shortfall between housing benefit and rent, but according to the SC the question ought to have been what her reasonable living expenses were (other than rent), to be determined having regard to both her needs and those of the children, the duty to promote and safeguard the welfare of whom is contained in the Children Act 1989.

The SC accepted that, as a starting point, a tenant’s living expenses will be reasonable under the Order where they are less than or equal to the amount the tenant can claim in benefits. In this case, Ms Samuels’ reasonable living expenses for her and her four children were shown in a schedule to be £1,234.99 per month, which was well within the amount regarded as appropriate by way of welfare benefits (£1,349.33). The SC found it difficult to see how the expenses could be regarded as unreasonable.

As a result, the SC unanimously agreed with Ms Samuels’ appeal and quashed Birmingham’s review decision, adding that it was hoped that on reconsideration Birmingham would be able to accept full responsibility under Part VII of the 1996 Act for Ms Samuels and her family.

Comment

This case provides clear guidance to local authorities, and confirms that when deciding whether an applicant has made themselves intentionally homeless a local authority must assess the reasonableness of their living expenses in an objective manner, and that the starting point in the assessment of affordability of accommodation will be that living expenses that are no higher than subsistence benefit levels are reasonable.

Local authorities should therefore ensure that when assessing an applicant’s circumstances they should not attempt to make a value judgement as to how the applicant might have better managed their finances. This is particularly relevant where applicants are parents with responsibility for their children as it will be more pressing that funds are spent on the child’s welfare.

If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.