Supreme Court considers affordability in the context of intentional homelessness

The Supreme Court has today handed down judgment in the case of Samuels v Birmingham City Council. Lord Carnwath delivered the unanimous judgment of the Court finding the council’s decision to be unlawful. Ms Samuels, with her four children, had applied to the council as homeless but was found to be ‘intentionally homeless’ because she was evicted from her private tenancy for rent arrears.

Summary

Ms Samuels lived with her 4 children in a private sector tenancy. She was reliant on state benefits but her housing benefit entitlement did not cover the full rent. After she was evicted she applied to the council as homeless. The council decided Ms Samuel’s previous tenancy was affordable and reasonable for her to continue to occupy because she could have elected to meet the shortfall between her housing benefit and her weekly rent from her other subsistence benefits. The council’s review officer stated that there was sufficient flexibility to enable her to cope with the rent had she budgeted to do so. This meant that she had caused her homelessness by failing to pay her rent, and therefore was ‘intentionally homeless’. This decision was upheld by the County Court and the Court of Appeal.

Decision

The Supreme Court disagreed with the earlier courts and with the council and found the decision to be unlawful.

Lord Carnwath confirms, in the context of an affordability exercise:

On the one side it [the requires the authority to take into account all sources of income, including all social security benefits. I agree with Mr Manning that 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; it cannot depend simply on the subjective view of the case officer. Furthermore, as Mr Stark submits, affordability has to be judged on the basis that the accommodation is to be available “indefinitely” [34].

The council’s review officer did not approach the affordability assessment in this way, instead asking whether there was sufficient “flexibility” within her budget to cope with the shortfall between rent and housing benefit: “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), that being determined having regard to both her needs and those of the children, including the promotion of their welfare” [36].

The council’s decision was accordingly quashed and remitted to the decision-maker for a new decision. In conclusion, Lord Carnwath confirmed:

I would however add that, in the light of the law as I have endeavoured to explain it, and on the information available to us, I find it hard to see on what basis the finding of intentional homelessness could be properly upheld. I therefore express the hope that, five years on, the process can be short-circuited, and the council will on reconsideration be able to accept full responsibility under Part VII for Ms Samuels and her family. [37].

Affordability assessments

Whilst the case addresses issues relevant to Ms Samuels’ specific circumstances, the judgment offers broader commentary on how affordability assessments ought to be undertaken in light of statutory guidance, particularly for families who are reliant on state benefits to meet their housing and other daily living expenses. This will require a careful objective analysis of a household’s reasonable living expenses.

Samuels v Birmingham City Council