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E-Flash Samuels v Birmingham City Council

Samuels v Birmingham City Council

Supreme Court

Lady Hale, President, Lord Carnwath, Lady Black,

Lord Lloyd-Jones, Lord Kitchin

[2019] UKSC 28

12 June 2019


The Supreme Court has held that when assessing the affordability of accommodation under Part 7, Housing Act 1996 and the Homelessness (Suitability of Accommodation) Order 1996 (SI 1996/3204) (the “1996 Order”), a local authority should consider all sources of income, including benefits, and consider whether the household expenses are reasonable by comparison with benefits payable in respect of all household members and not merely the applicant.

Jonathan Manning of 4-5 Gray’s Inn Square led for the local authority.

S was an assured shorthold tenant of a private rented property where she lived with four children. Her housing benefit did not cover the whole of her contractual rent: there was a shortfall of around £34 per week. Her other income derived from welfare benefits, namely income support, child tax credits and child benefit. In July 2011, she was given notice to leave, as she was in arrears with her rent.

She applied to the local authority as homeless under Part 7, Housing Act 1996. The authority concluded that her private tenancy was her last settled accommodation and that she was intentionally homeless from it, on the ground that she had lost it through failing to pay the rent which had been affordable because she could have paid the shortfall between her housing benefit and rent from her other benefit income.

The decision was confirmed on review. The reviewing officer concluded that the expenditure figures provided by S for food and household items excluding utilities and travel expenses seemed excessive. As a matter of normal household budgeting, S should manage her household finances in such a way to ensure that she was able to meet her rental obligation. There was sufficient flexibility in S’s overall weekly household income, excluding housing benefit of more than £311 per week to meet a weekly shortfall in rent of £34.

S appealed to the county court unsuccessfully, and her appeal to the Court of Appeal was also unsuccessful. She appealed to the Supreme Court.


By art.2(1), 1996 Order, in determining whether it would be, or would have been, reasonable for a person to continue to occupy accommodation, account but be taken of whether or not the accommodation is affordable for that person and, in particular, the following matters:

“(a)     the financial resources available to that person, including, but not limited to, -

(i)        salary, fees and other remuneration;

(ii)       social security benefits;

“(b)     the costs in respect of the accommodation, including, but not limited to, -

(i)        payments of, or by way of, rent;

“(d)     that person’s other reasonable living expenses.”

The Secretary of State’s Homelessness Code of Guidance, 2006, stated, at para.17.40:

“In considering an applicant’s residual income after meeting the costs of the accommodation, the Secretary of State recommends that housing authorities regard accommodation as not being affordable if the applicant would be left with a 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, or would be applicable if he or she was entitled to claim such benefit. This amount will vary from case to case, according to the circumstances and composition of the applicant’s household. A current tariff of applicable amounts in respect of such benefits should be available within the authority’s housing benefit section. Housing authorities will need to consider whether the applicant can afford the housing costs without being deprived of basic essentials such as food, clothing, heating, transport and other essentials …”

S argued that welfare benefit income indeed income up to the level of such benefits from any source (i.e. including earnings) should be immune from consideration in the affordability exercise on the basis that as a matter of national social security policy, such income was not intended to be used to meet housing costs, as it was set at a “subsistence” level. She also argued that the reference to income support at para.17.40 of the Code had to be interpreted as referring to income support including the premia for children and families which had been removed on the commencement of the Child Tax Credit regime in 2004.


Allowing her appeal, the Supreme Court held that the 1996 Order requires the authority to take into account all sources of income, including all social security benefits. There is nothing in the Order which requires or justifies the exclusion of non-housing benefits of any kind. On the other side, it requires a comparison with the applicant’s “reasonable living expenses”. Assessment of what is reasonable requires an objective assessment and has to be judged on the basis that the accommodation is available indefinitely.

The Secretary of State recommended authorities to regard accommodation as unaffordable if the applicant’s residual income would be less than the level of income support. Even if that recommendation does not extend to benefits for children, the lack of a specific reference does not make the level of those benefits irrelevant. Benefit levels are not generally designed to provide a surplus above subsistence needs for the family. If comparison with the relevant benefit levels is material to the assessment of the applicant, it is difficult to see why it should be any less material in assessing what is reasonable by way of living expenses in relation to other members of the household. The duty s.11 Children Act 2004 (to promote and safeguard the welfare of children) is also relevant.

The reference in the Guidance to current tariffs for benefits (plural) suggests that the tariff may be looked at in respect of benefits other than income support, and is at least a good starting point for assessing reasonable living expenses.

That was not how the review officer dealt with S’s case. He asked whether there was sufficient “flexibility” to enable her to cope with the shortfall between rent and housing benefit. However, the question was not whether, faced with that shortfall, she could somehow manage her finances to bridge the gap; but what were her reasonable living expenses (other than rent), having regard to both her needs and those of the children, including the promotion of their welfare. The level of monthly expenditure that she had given (£1,234.99) was well within the amount regarded as appropriate by way of welfare benefits (£1,349.33). In the absence of any other source of objective guidance on that issue, it was difficult to see by what standard that level of expenses could be regarded as other than reasonable.


This is, in one sense, a very narrow decision to the effect that the reviewing officer asked the wrong question in reaching his decision. He should not have asked whether there was sufficient flexibility in her income to meet the shortfall, but rather whether her claimed living expenses were reasonable and whether, given those expenses, she could afford to do so.

There is, however, a potential sting in the tail. There must be an objective source for deciding whether or not expenses are reasonable, rather than just an officer’s assessment. In the absence of any other objective source of information, the level of current benefits was treated by the Court as a level that the authority was not entitled to dispute.

This decision does not seem to prevent an authority from either finding another reasonable objective source of reasonable living expenses, nor of challenging expenditure on specific items that are not living expenses.

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