This article will look at the recent judgment given in Samuels v Birmingham City Council  UKSC 28(“Samuels”) and the legislation regarding homelessness and intentionally homeless decisions.
The Appellant, in the case of Samuels, was an assured shorthold tenant of a property where she lived with her 4 children. Due to rent arrears, in July 2011, she was served notice to leave. The Appellant later applied to the Respondent Council as homeless but was deemed intentionally homeless as her accommodation was found by the Council to have been affordable and reasonable for her to continue to occupy; therefore, it was her deliberate act in failing to pay the rent that caused the accommodation to be lost.
The appeal to the Supreme Court, which is the decision this article will focus on, looked at whether the Council adopted the correct approach in determining whether the accommodation was affordable.
Part VII of the Housing Act 1996 places a duty on a local authority to secure accommodation for a person found homeless if certain conditions are satisfied, one being that the person is not intentionally homeless. Being found intentionally homeless depends on whether the person deliberately did or failed to do anything, in consequence of which they ceased to occupy accommodation which was available for their occupation and which would have been reasonable for them to continue to occupy (Section 191(1)).
The Homelessness (Suitability of Accommodation) Order 1996 (SI 1996/3204) provides at Section 2 that in determining whether it is reasonable for a person to continue to occupy accommodation, the affordability of the accommodation for that person should be taken into account and in particular:
The Homelessness Code of Guidance for Local Authorities at paragraph 17.39 adds comments to the above particularisation of the 1996 Order; adding that salary includes remuneration from such sources as “investments, grants, pensions, tax credits, etc” and benefits includes “housing benefit, income support, income-based job seekers allowance or council tax benefit, etc”.
The Guidance at Paragraph 17.40 states that in considering the person’s residual income after meeting the costs of accommodation, the Secretary of State recommends that authorities regard accommodation as not being affordable “if the applicant would be left with residual income which would be less than the level of income support or income-based jobseekers allowance that is applicable in respect of the applicant”.
Ms Samuels’ Case
At the time of leaving her accommodation, Ms Samuels had a monthly income amounting to £1,897.84 which was made up of £548.51 of housing benefit, £290.33 of income support, £819.00 of child tax credits and £240.00 of child benefit. Therefore, excluding housing benefit the total available for other living expenses was £1,349.33 monthly.
Ms Samuels’ expenses per month amounted to £1,234.99 – this is the sum of food/household items at £750, £80 for electricity, £100 for gas, £50 for clothing, £43.33 for her TV licence, £43.33 for her children’s school meals, £108.33 for travel, £20 for telephone costs and £40 for her daughter’s gymnastics. Ms Samuels’ rent was £700 per month which left a shortfall of £151.49 compared to her housing benefit.
Overall, when taking into account all income including housing benefit and all expenses including rent, Ms Samuels’ monthly income would amount to £1,897.84 whilst her expenses amount to £1,934.99, leaving a shortfall of roughly £37 per month.
In looking at affordability, the Council noted the shortfall between housing benefit and rent but found the housekeeping budget of £750 per month to be excessive and failed to see that there was not sufficient “flexibility” within the income to meet the weekly shortfall of £34 in rent (when comparing the expense with housing benefit). Due to this, the Council concluded the accommodation was affordable.
Supreme Court Hearing
At the Supreme Court, benefits for subsistence and those for housing needs were differentiated, referencing Burnip v Birmingham City Council  EWCA Civ 629;  PTSR 117 at paragraph 45 where Henderson J stated that it would be wrong to regard subsistence benefits as being notionally available to the applicant to put towards meeting the shortfall between housing related benefits and the rent payable
The Supreme Court judgment, given by Lord Carnwath (with whom Lady Hale, Lady Black, Lord Lloyd-Jones and Lord Kitchin agreed) started by looking at the 1996 Order which requires the authority to take into account all sources of income, including all benefits but also requires a comparison with the person’s reasonable living expenses. “Reasonable” requires objective assessment and has to be judged on the basis that the accommodation is to be available indefinitely. Further, guidance recommends authorities look at the level of income support and whether the residual income would be less than that level as a basis for regarding whether accommodation is affordable; which was seen by the Supreme Court as “at least a good starting point for assessing reasonable living expenses” [para 35].
The reviewing officer of the Council did not deal with Ms Samuels’ case in this way and instead looked at whether there was sufficient “flexibility” in her budget to enable her to cope with the shortfall in rent. The Court found the question should not have been whether she could bridge the gap but rather, what was the amount of her reasonable living expenses. The living expenses provided by Ms Samuels were within the amount regarded as appropriate by way of her benefits (£1,234.99 expenses compared to £1,349.33 benefits) and so the Court found it would be difficult to see by what standard those expenses would be deemed unreasonable.
On that basis, it was concluded that the appeal should be allowed and the review decision quashed with the hope that the Council would reconsider Ms Samuels and accept full responsibility for her and her family.
In conclusion, the decision carried out by the Council in the case of Samuels was quashed as the incorrect starting point was used. Decisions should not begin by looking at whether there are sufficient funds available to bridge the gap but rather whether the expenses alleged are reasonable and then when compared with income, whether the accommodation would have been affordable. In Ms Samuels case, her expenses were reasonable as she had sufficient funds to pay them from her non-housing related benefits but these didn’t stretch to also being able to cover the shortfall in rent between her housing benefit and rent payments meaning the accommodation would be unaffordable.
This case shows the importance of guidance being used alongside legislation and the need to provide information requested to allow decisions such as these to be made; had Ms Samuels not provided her monthly expenses to the Council or the Court, her case may not have been decided in the same way. Only when being able to compare expenses and income in line with the guidance, legislation and case law can decisions such as these be made.
Specialist advice on housing related cases can be obtained from members of Becket Chambers – speak to the clerks for further information.
Cara Radford is a Pupil barrister in Becket Chambers, presently undertaking her second six pupillage.