Humphreys v HM Revenue and Customs

This appeal concerns entitlement to child tax credit (“CTC”) where parents are separated but share the care of the children. The appellant, Mr Humphreys, was in receipt of income support, a subsistence benefit equivalent to income-based jobseeker’s allowance (“JSA”) and subject to materially similar rules. He had the care of his children for approximately three days a week in the period January 2004 to December 2005. He claimed CTC in respect of the children. The Commissioners for Her Majesty’s Revenue and Customs (“the Commissioners”) refused the claim because, as a minority carer, he was not “responsible” for the children within the terms of the legislation. He appealed successfully to an appeal tribunal, which held that the relevant provisions gave rise to unjustified indirect discrimination against men, contrary to article 14 ECHR. There was then an appeal by the Commissioners, originally to the Social Security Commissioners but subsequently transferred to the Administrative Appeals Chamber of the Upper Tribunal. That appeal was determined in the Commissioners’ favour by Upper Tribunal Judge Edward Jacobs on 4 February 2009. In view of the importance of the case, the judge granted Mr Humphreys permission to appeal to this court.

In Hockenjos v Secretary of State for Social Security [2004] EWCA Civ 1749, [2005] EuLR 385, the Court of Appeal held that certain provisions of the then existing scheme relating to JSA constituted unlawful discrimination, contrary to the equal treatment provisions of Council Directive 79/7/EEC, in that entitlement to an additional amount in respect of a child (“child premium”) was dependent on whether the applicant was “responsible” for the child, and the rules for determining responsibility discriminated unjustifiably against minority carers. The legislation in issue in the present appeal supersedes in all material respects that which was considered in Hockenjos, but much of the argument has revolved around the judgments in Hockenjos and the extent to which the reasoning in them applies to the present case notwithstanding the differences between the schemes themselves and the legal context (it being common ground that the CTC provisions are not governed by EU law but fall to be considered by reference to the ECHR).

CTC, along with working tax credit, was introduced by the Tax Credits Act 2002 (“the 2002 Act”). Tax credits are state benefits paid by the Commissioners directly to claimants. We are told that they represent a new approach to benefits, modelled on state support for children as delivered in Canada and Australia. According to a government document, The Child and Working Tax Credits, published in April 2002 to explain the proposals in the then Bill, the new credits “will separate support for adults in a family from support for the children, and for the first time integrate all income-related support for children”, to provide a clearer focus, in the case of CTC, on the aim of supporting families and tackling poverty (para 2.2); and CTC “will create a single, seamless system of support for families with children, payable irrespective of the work status of the adults in the household” (para 2.3). The document describes the tax credits as central to the government’s strategy for achieving its long-term goal of halving child poverty by 2010 and abolishing it within a generation (para 3.7). It states that the CTC will create a single credit payable to those in and out of work at the same rate (para 3.8). The amount of CTC actually payable depends on the claimant’s income: in the 2004/2005 tax year some CTC was payable to those with an annual income of up to £50,000.

Section 1 of the 2002 Act makes provision for CTC and abolishes the former child premium elements of income-based JSA (and income support). Section 7 makes provision for an income test. Section 8 governs entitlement to CTC and provides in material part:

The relevant regulations are the Child Tax Credit Regulations 2002 (“the 2002 Regulations”). The key provisions are contained in regulation 3, which sets out the rules for determining whether a person is “responsible” for a child or qualifying young person. It reads, so far as material:

When the Tax Credits Bill was before Parliament, the government had made clear in a draft of the 2002 Regulations that CTC would be payable to the family (or person) having main responsibility for the child in question. The Financial Secretary to the Treasury, Mrs Dawn Primarolo, explained the thinking as follows (Hansard, 26 June 2002):

She also explained that it was possible that, in the light of changing patterns of care, the government might want to revisit the single payment rule in the future. Specific amendments were proposed to the Bill to enable that to occur:

The power of apportionment referred to in Mrs Primarolo’s statement is to be found in section 9(7) of the 2002 Act, which we have already quoted.

Rule 2 of regulation 3 of the 2002 Regulations applied in this case, because the children normally lived for part of the week with their mother in one household and for part of the week with the appellant in a different household. The children were therefore to be treated as the responsibility of whichever parent had the “main responsibility” for them. By rule 3, in the absence of agreement between the parents, it was for the Commissioners to determine which of them satisfied the main responsibility test. The limited evidence before us indicates that the appellant’s claim was disallowed because the children stayed with him for only three days a week, and the case has proceeded on the basis that the mother satisfied the main responsibility test because she was the majority carer. It was therefore the appellant’s status as minority carer which meant that he had no entitlement to CTC.

The appellant’s case is that the provisions for a single payment of CTC based on main responsibility are indirectly discriminatory on grounds of sex, contrary to article 14 ECHR read with article 1 of the First Protocol to the ECHR (the right to peaceful enjoyment of possessions).

The Commissioners accept, following the ruling of the House of Lords in R (RJM) v Secretary of State for Work and Pensions [2008] UKHL 63, [2009] 1 AC 311, that the discrimination of which the appellant complains falls within the ambit of article 1 of the First Protocol. They now also accept, although they contested the point below, that the relevant provisions are liable to have an indirectly discriminatory effect on male CTC claimants.

The remaining issue, and the focus of this appeal, is whether the discriminatory provisions are objectively justified, on the approach to be applied under article 14 ECHR.

It is necessary to consider the judgments in Hockenjos in some detail. Although the members of the court all agreed on the result, they gave separate judgments and there were differences of reasoning and emphasis between them.

Mr Hockenjos was separated from his wife. There was a joint residence order dividing the care of their two children roughly equally between them. Mr Hockenjos applied for JSA including child premium. His entitlement to child premium depended on whether he was “responsible” for the children, which in turn depended on regulation 77 of the Jobseeker’s Allowance Regulations 1996. Regulation 77 provided inter alia that (i) a person was to be treated as responsible for a child for whom he was receiving child benefit (regulation 77(1)), (ii) in the case of a child in respect of whom no person was receiving child benefit, the person to be treated as responsible for the child was the person with whom the child usually lived (regulation 77(3)(a)), and (iii) a child was in general to be treated as the responsibility of only one person in any benefit week, with the result that payment of benefit could not be split (regulation 77(5)). It was accepted by the Secretary of State that the provisions gave rise to indirect discrimination on the ground of sex, contrary to Council Directive 79/7/EEC (which, for reasons it is unnecessary to go into, applied to JSA but does not apply to CTC). The Court of Appeal held that the Secretary of State had failed to establish objective justification, both as regards the linkage of child premium to child benefit and as regards the impact, on a substantial minority carer in receipt of JSA, of the provisions treating only one parent as “responsible” for the child and preventing a split payment of the child premium.

Scott Baker LJ, giving the first judgment, observed in relation to the arrangements for shared care of the children that there was an increasing awareness of the father’s role in the care of children and “[t]here is in my view no longer on the face of it any reason, if there ever was, why fathers who are parties to such arrangements should be placed at a financial disadvantage by the social security legislation” (para 4). Dealing with the issue of justification, he referred first to the Secretary of State’s evidence seeking to justify the system on grounds of administrative convenience, cost effectiveness and the promotion of consistency in decision-making. He then examined a number of authorities on the issue of justification under Community law, in particular as to the broad margin of discretion afforded to Member States in matters of social policy: Case C-317/93, Nolte v Landesversicherungsanstalt Hannover [1995] ECR I-4625; Case C-167/97, R v Secretary of State for Employment, ex parte Seymour-Smith and Perez [1999] ECR I-623; and Case C-226/98, Jørgensen v Foreningen af Speciallaeger and another [2000] ECR 1-2447. Having considered submissions by Mr Drabble QC for the appellant and Mr Paines QC for the Secretary of State, he said this:

He considered that the aim could accurately be expressed as one of establishing a fair and efficient distribution of the public funds available to maintain children within the confines of a subsistence benefit such as JSA. There was no evidence that the Secretary of State or anyone on his behalf had ever applied his mind to the need to identify the aim and then balance it against the requirements of the directive. Where the Secretary of State had failed to explore alternatives, Scott Baker LJ could not accept that the burden of establishing justification had been discharged (para 47).

He then referred to what had been said recently in Parliament by the Financial Secretary to the Treasury concerning the proposed CTC arrangements (see paras 6-7 above). He said (at para 51) that her observations made clear that there were alternatives that could have been considered; at the very least, someone who was a substantial minority carer on an ongoing basis might have been better provided for than by the link to child benefit under regulation 77.

At paras 52-54 he observed that when looking at the aim that had been defined, both fairness and the efficient distribution of public funds were key elements, and the court had to focus on whether the particular form of regulation 77 was an appropriate way of achieving the aim. The regulation scored highly on the efficiency criterion but did not meet the fairness criterion. There was considerable force in Mr Drabble’s submission that the unfairness, and in particular the “no splitting” provision in regulation 77(5), was “not just a marginal unfairness that operates in occasional hard cases” but was much more than that, in that a minority carer looking after two children say 40 per cent of the time received a sum by way of JSA falling very far below an appropriate subsistence level (para 53).

After considering further submissions of counsel, he pulled things together in this way:

In a later section (at paras 68-71) on the extent to which regulation 77 was discriminatory and unjustified, Scott Baker LJ indicated that the unjustified discrimination did not stop at the basic provision in regulation 77(1). The underlying discriminatory complaint was the linking of child benefit to JSA: JSA was a subsistence benefit, child benefit was not. Regulation 77(5) lay at the heart of the problem because it prevented appropriate subsistence being paid to one parent (usually the father) in shared cases. It was part of a bundle of provisions whose aim was to provide entitlement. The Secretary of State had to justify that only one parent could receive the benefit when both were in need of it. Regulation 77(3)(a), which applied when no-one was receiving child benefit for the child, did not address the position of the substantial minority carer in relation to a subsistence benefit: the whole purpose of a subsistence benefit like JSA was to prevent a claimant’s income falling below subsistence level during a, possibly short, period of unemployment.

Arden LJ agreed that the link between JSA child premium and child benefit was not capable of objective justification. The child benefit link was an artificial means of assessing responsibility for a child, “and the argument that it is not possible to devise a better system is not consistent with the basis adopted in the new child tax credit regulations, which is to succeed income-based JSA” (para 97): those regulations awarded assistance on the basis of main responsibility for a child, not on the basis of the artificial child benefit link.

The second issue was whether what Arden LJ described as “the single payment/single claimant rule” was also discriminatory and, if so, was capable of justification. She found that it was discriminatory since the father would not be entitled to child premium unless he was the primary carer, and there were likely to be more women than men who were primary carers. On the question of justification, she said that the state was entitled to a wide margin of discretion in the field of social policy and that “[t]he test to be applied is whether the Secretary of State can show that the single payment rule reflects the necessary aim of social policy and is suitable and necessary for achieving that aim” (para 102). Once the Secretary of State showed that the single payment rule was a suitable means of distributing the benefit and that some rule of that nature had to be imposed, it was not open to the court to reject it on the grounds that some other rule would in its judgment have been fairer.

She said that the Secretary of State had produced some persuasive reasons for choosing the method of distribution in regulation 77. Referring to the evidence, in the form of the statement to Parliament by the Financial Secretary to the Treasury, that the government had considered benefit-splitting in relation to the successor system of CTC, and to the reasons given for not making an immediate change (see paras 6-7 above) she observed: “I think one can take it that, if that was the Government’s conclusion on the new child tax credit system, it is hardly likely that the Government would come to any different conclusion on the JSA system” (para 105).

On the authorities, Arden LJ took the view that the question for the court was “could it reasonably be considered (on the evidence) that the policy achieves its social policy aim?” (para 107). In the light of the statement by the Financial Secretary to the Treasury, she did not consider that the decision not to have an apportionment scheme could in general be said to be irrational. That statement also met the alternative means of challenge, that the government should have considered whether there were other ways of achieving the social policy aim. For those and other reasons, Arden LJ concluded as follows:

Ward LJ considered that the discrimination lay in regulation 77(1) and (5) but that regulation 77(3)(a) was irrelevant, since it applied only in the case of a child in respect of whom no person was receiving child benefit (whereas in Hockenjos child benefit was being received in respect of the children).

As to objective justification, he gave the following “synthesis of principle” to be derived from relevant authorities (para 156): (1) The burden is on the Secretary of State to establish that the measure can be objectively justified by reasons unrelated to discrimination on grounds of sex. (2) The Secretary of State must show that the measure reflects some necessary/legitimate aim of the government’s social policy. (3) The burden is also on him to show that he could reasonably consider that the means chosen were suitable/requisite/necessary for achieving that aim. (4) In exercising its competence, the national legislature has a broad margin of discretion. (5) The broad margin of discretion available to the government cannot have the effect of frustrating the implementation of a fundamental principle of Community law such as the equal treatment of men and women. (6) Ultimately the question is whether the national legislature was reasonably entitled to consider that the means were suitable for attaining the aim.

He accepted that the aim was as set out in the judgment of Scott Baker LJ, namely to establish a fair and efficient distribution of public funds available to maintain a child within the confines of a subsistence benefit such as JSA. The dispute turned on whether the Secretary of State was reasonably entitled to consider that the chosen means were suitable for attaining the end.

In so far as the regulation made responsibility dependent upon receipt of child benefit, Ward LJ rejected the Secretary of State’s case as to objective justification for a number of reasons, culminating in this passage:

Similar considerations ran through his examination of the justification for the provisions whereby only one person was treated as responsible for a child even in a shared care arrangement:

Ward LJ then considered the justification for the single payment rule (or non-apportionment rule, as he described it). In his view it should not be an administratively insuperable task to reach a decision as to the degree of sharing on a broad time basis; and if as a further refinement one had to calculate how much of the allowance was for board and lodging and general keep, apportionment of that amount was mathematically simple. If it was thought necessary, then by all means let the mother keep the “capital” element for purchases of clothing etc., but the father should be given something on which to live. The system did not have to be perfect but did have to be fair. The statement of the Financial Secretary to the Treasury went a long way to acknowledging both the defects in and the remedies practicably available for improving the system. In Ward LJ’s judgment and allowing for the broad margin of discretion, the Secretary of State was not reasonably justified in maintaining a bar on splitting the benefits between parents who shared care (para 176).

He was also of the view, however, that no question of apportionment of JSA arose at all on the facts of the case, because only Mr Hockenjos (and not his wife) was seeking JSA and Mr Hockenjos did not have to share the allowances with anyone. If both father and mother had had to apply for JSA and were contending for the same benefit the arguments might take on a different complexion (para 180).

There was evidence before the tribunals below in the form of a witness statement by Mr Adrian Dixon on behalf of the Commissioners concerning a review of the relevant CTC provisions following the decision in Hockenjos:

The competing policy considerations were set out by Mr Dixon, without further elaboration, in a table which is reproduced below (save for the omission of a column relating to the option of “extra payment”):

In finding that the provisions were justified, the Upper Tribunal judge referred to the above table and expressed the view that the Commissioners’ analysis was structured around relevant factors and was rational. He said that the Commissioners were entitled to conclude that the balance was in favour of maintaining the rule of one credit for one particular child. In coming to that conclusion he had given little significance to considerations of administrative convenience. The factor that had particularly influenced his decision was the nature and context of CTC. Under the 2002 Act the focus of CTC was directly on the child and children were treated separately. He continued:

For the appellant, Mr Drabble submitted that the discriminatory effect in this case is just as stark as it was in Hockenjos and is no more justifiable than it was there. He relied on three themes emerging from the judgments in Hockenjos. First, he pointed to what was said about the increasing prevalence of shared care and the importance attached to it (see in particular per Scott Baker LJ at para 4, per Arden LJ at para 113 and per Ward LJ at paras 174-175).

Secondly, he underlined passages referring to the harsh effects of the discriminatory provisions upon a substantial minority carer living at subsistence level (see for example per Scott Baker LJ at paras 53 and 61-63, and per Ward LJ at para 173). He submitted that the present appellant is in materially the same position, as a minority carer in receipt of a subsistence benefit who is denied, by virtue of the provisions under challenge, the additional funds he needs to look after the children during the three days a week when they are in his care. Mr Drabble made clear that this was the specific focus of the challenge. He submitted that splitting of CTC is needed in such cases in order to prevent minority carers being placed in an intolerable position: a scheme which denies any CTC to a carer in receipt of a single person’s JSA who has to look after children for a substantial part of the week is unjustifiable. He accepted, however, that there would be many other situations where splitting of CTC was not necessary.

The third theme was the approach taken in Hockenjos towards the issue of objective justification under EU law, for example the passage in the judgment of Scott Baker LJ culminating in the summary at para 45. It was submitted that article 14 ECHR does not require a radically different approach and should not produce a materially different practical result: there still comes a point where the discriminatory impact is so great as to be unacceptable.

Mr Drabble submitted that, whilst officials had considered the problem discussed in Hockenjos, they had not faced up to the logic in that case, as to the position of a minority carer in receipt of a subsistence benefit based only on his own needs when he has to look after children for three nights a week. He asked rhetorically, “how are the children to be fed?”, and said that Mr Dixon’s witness statement referred to various policy considerations but did not answer that question or explain the basis on which the effect of the relevant provisions was judged to be acceptable. The fact that CTC forms part of a different system from the JSA regime in issue in Hockenjos makes no difference to the underlying problem: in substance, CTC plays exactly the same role as child premium did in Hockenjos and the discriminatory effect is equally unjustifiable.

In Mr Drabble’s submission, supported by the judgments in Hockenjos (see for example per Scott Baker LJ at para 61), it is not for the appellant to come up with an alternative scheme. His position was that the statute empowers the Commissioners to modify the scheme so as to allow CTC to be split between carers and to remove the discriminatory effect of which complaint is made, but it is for the Commissioners to decide precisely how to do this.

For the Commissioners, Mr Coppel submitted that the approach to objective justification for indirect discrimination under article 14 ECHR is less strict than the approach applied in the context of EU law in Hockenjos. The correct approach is that set out in Stec v United Kingdom (2006) 43 EHRR 47: in the context of social policy the Strasbourg court applies a wide margin of appreciation and will generally respect the legislature’s policy choice unless it is manifestly without reasonable foundation. Further, cost and administrative convenience cannot be relied on in the EU context (see per Scott Baker LJ in Hockenjos at para 39, and Cross v British Airways plc [2006] ICR 1239, para 72) but can be relied on under article 14. The “least restrictive alternative test” also plays a part in the analysis in the EU context (see per Scott Baker LJ in Hockenjos at paras 51 and 61-62) but is not a feature of the analysis under article 14.

In this case the rules, though contained in secondary legislation, were endorsed by Parliament only 18 months or so before the appellant’s claim (in that Parliament had before it the draft regulations and, in the light of the statement by the Financial Secretary to the Treasury, approved amendments to the Tax Credits Bill which confirmed the present position whilst making it possible for the rules to be amended to allow for split payment in the future). Accordingly, submitted Mr Coppel, the issue of justification is whether Parliament took a view which was manifestly without reasonable foundation, that is to say irrational, in considering there to be sufficient justification for not splitting CTC in the case of competing claims by carers who shared the care of a child.

In addition to referring to the table of policy considerations annexed to Mr Dixon’s witness statement, Mr Coppel made a number of points by way of submission in elaboration of the justification put forward for the rules in their present form. First, the focus of CTC is on meeting the needs of particular children (whereas previous benefit regimes sought to meet the needs of particular adults who had care of children) and the system is consistent with that focus. The “main responsibility” test serves to direct support for the child to the person who bears more or of the everyday responsibilities in relation to the child and who is most likely to be meeting the child’s day to day costs. The consequence of splitting the benefit would be to reduce the support paid to the majority carer in relation to the child, which is undesirable in the typical case where the majority carer is less well placed to earn income because of child-care responsibilities and is more in need of the support which CTC offers. A split award could be calculated in different ways, but each would have potentially undesirable results: for example, (i) the total award could be based on the majority carer’s income, which would mean that CTC was paid to minority carers without any test of their means (and which in turn might be seen to advantage children of separated parents); (ii) the total award could be based on the minority carer’s income, which would result in a reduction in the total support for a child if, as may be expected in the typical case, the minority carer was a higher earner than the majority carer; (iii) the total award could be based on both carers’ income, which would result in a reduction in support for a child where the minority carer received any assessable income at all; or (iv) there could be a pro rata award to each carer based on that carer’s own income, which would be likely to result in a significant drop in the support delivered through the majority carer and, in the typical case, in the total support for a child. Further, the splitting of CTC might provoke greater conflict in care negotiations and make primary carers less willing to share care because of a concern that it would result in a reduction in the support they received for the child.

Mr Coppel also relied on considerations of cost and administrative complexity. He submitted that in order to allow for CTC to be split, there would be a requirement for extensive redevelopment of IT and business systems; verification and decision-making would be more complicated; there would be problems in determining how exactly CTC should be apportioned (e.g. whether there should be an exact percentage split or a broad brush approach; whether it should be by reference simply to time spent with the respective carers or account should also be taken of responsibility for categories of expenditure, and how to take account of changes from week to week). Increased administrative costs would be likely to result in less money being available for payments to support children. There would also be important implications for the operation of working tax credit and other benefits.

As to the particular circumstances of the appellant, Mr Coppel submitted that the single payment rule is par excellence a bright line rule giving effect to legitimate policy considerations and having considerable administrative benefits; it can be justified as such even if it results in hard cases. Further, the present system permits separated parents to agree between themselves who is to have the CTC; and CTC is only one aspect of the overall package to be taken into account when the parties agree, or the court orders, financial arrangements on divorce. In addition to the possibility of agreement with his former partner, the appellant had support available to him elsewhere in the social security system, and there is no evidence as to how difficult he found the situation in practice. Whilst it would be possible for CTC to be split only in those cases where a minority carer was on subsistence benefits, such a course would involve a fundamental change to the character of tax credits (which are not restricted to people on subsistence benefits), would make the amount received by the majority carer unfairly dependent on the personal circumstances of the minority carer and would create discrimination in favour of the children of separated parents.

In short, the Commissioners’ position is that the present system, with its provision for a single payment of CTC based on the main responsibility test, is not irrational or manifestly without reasonable foundation as an approach to delivering support for children.

Mr Coppel submitted that the reasoning in Hockenjos cannot be read across to the present case. Hockenjos was decided under an EU directive giving effect to a fundamental principle of EU law; and the test of justification was different from, and stricter than, the approach under article 14 ECHR. The rules of entitlement at issue in Hockenjos were different, and the principal issue was the link with child benefit. The nature and context of CTC differs from that of JSA: the focus of CTC is on support of the child, in order to reduce child poverty, whereas the focus of JSA is on the needs of the adult. A significant factor in the reasoning in Hockenjos was the absence of consideration by the Secretary of State of alternative arrangements, whereas there has been such consideration here. Another significant factor in Hockenjos was the absence of competition between claimants for the benefit to which Mr Hockenjos was claiming entitlement (since he alone was on JSA), whereas in the present case both the appellant and his wife applied for CTC in respect of their children, and claimants for CTC in a shared care situation will always be competing for a share of the same benefit.

Article 14 provides:

The provisions at issue fall within the area of social policy, where a wide margin of appreciation is allowed in relation to the assessment of whether and to what extent differences in treatment are justified. In Stec v United Kingdom the court stated (at para 52, with the omission of footnotes):

The same approach is applied by the national court, mutatis mutandis, towards decisions of the legislature or executive: see, for example, R (Carson) v Secretary of State for Work and Pensions [2005] UKHL, [2006] 1 AC 173, paras 86 and 91; R (RJM) v Secretary of State for Work and Pensions, para 56; and R (SRM Global Master Fund LP) v Commissioners of Her Majesty’s Treasury [2009] EWCA Civ 788, paras 74-75.

In general, a more intensive scrutiny will be applied in a case of discrimination on “core” or “primary” grounds, such as sex or race, than in a case of discrimination on other grounds: see R (Carson) v Secretary of State for Work and Pensions, per Lord Hoffmann at paras 15-17; AL (Serbia) v Secretary of State for the Home Department [2008] UKHL 42, [2008] 1 WLR 1434, per Baroness Hale at paras 29-31; R (RJM) v Secretary of State for Work and Pensions, per Lord Mance at para 14. But Stec v United Kingdom was itself a case of discrimination on the ground of sex (payment of the relevant benefit was tied to pensionable age, which differed as between men and women); and the “general rule” that very weighty reasons would have to be put forward to justify a difference of treatment based exclusively on sex was contrasted with the wide margin usually allowed in relation to general measures of economic or social strategy and the “manifestly without reasonable foundation” test generally applied in that context. That was also the line followed in Runkee v United Kingdom [2007] 2 FCR 178, a later case of sex discrimination before the Strasbourg court. In the context of a general measure of social policy, therefore, the fact that the discrimination is on the ground of sex does not appear of itself to require the court to apply a more intensive scrutiny. That must be true a fortiori where, as here, the discrimination is indirect rather than direct, that is to say where it arises out of the differential impact of provisions that apply in their terms equally to men and to women.

It is clear that considerations of cost and administrative convenience can be relied on by way of justification: see, for example, AL (Serbia) v Secretary of State for the Home Department at paras 2-3, 6 and 37. It is also well established that a workable system may depend on the adoption of clear, easily applicable “bright line” rules rather than attempting to cater for the individual situation of every claimant: see, for example, R (Carson) v Secretary of State for Work and Pensions, paras 41, 86 and 91; and R (Wilson) v Wychavon District Council [2007] EWCA Civ 52, [2007] QB 801, paras 57-62 (where the point is also made that the “less restrictive alternative” test is not an integral part of the analysis of proportionality under article 14).

Some of the above principles are drawn together in this passage from the opinion of Lord Neuberger in R (RJM) v Secretary of State for Work and Pensions, a case which concerned the withholding of a disability premium in income support on the ground of homelessness (not one of the core or primary grounds):

There are some differences between that approach and the approach to objective justification of discrimination on the ground of sex under EU law as applied in Hockenjos (see the passages referred to at paras 15, 22 and 26 above), but they are not of great significance and we think it unhelpful to engage in a detailed analysis of them. In the generality of cases we would not expect the differences to lead to materially different outcomes. In Hockenjos the members of the court expressed such strong views about the effect of the rules in issue that we have little doubt that they would have reached the same conclusion in the context of article 14 ECHR: in their judgment the point had plainly come, in the words of Lord Neuberger in R (RJM) v Secretary of State for Work and Pensions, where the justification for the policy was so weak, or the line had been drawn in such an arbitrary position, that, even with the broad margin of appreciation accorded to the state, the court would conclude that the policy was unjustifiable. The question for us is whether that point has also been reached on the facts of the present case.

Apart from the difference in legal context, there are a number of other and potentially more important differences between this case and Hockenjos.

A factor that weighed with Scott Baker LJ and Ward LJ in Hockenjos was that the Secretary of State had not given consideration to alternatives to the relevant JSA provisions (see the passages referred to at paras 16]-17, 28 and 30 above). In the case of CTC, by contrast, the issue of a single payment in a situation of shared care was expressly considered before the 2002 Regulations were made, as is apparent from the Parliamentary statement by the Financial Secretary to the Treasury, and was considered again in the review carried out following the Hockenjos judgment. Indeed, the content of the Parliamentary statement was relied on by the court in Hockenjos as highlighting the lack of consideration given to the issue by the Secretary of State in Hockenjos itself; and in the light of that statement the CTC regime was evidently regarded by Arden LJ, at least, as a better system than the JSA regime under challenge and as bolstering the justification for the JSA regime (see paras 21 and 23-24 above).

It is also material that there was a measure of Parliamentary endorsement of the position under the CTC regime, in that members knew the content of the minister’s statement and had the draft regulations before them when they approved the amendments to the Bill to enable the splitting of benefit in the future. They proceeded on the basis that under the system as introduced there would be a single payment of CTC, to the carer with main responsibility.

Thus the provisions in issue represent the considered position of the executive and, to some extent, of the legislature. Not only is that a point of distinction from Hockenjos; it also underlines the need for caution on the part of the court in the assessment of objective justification.

It is fair to say that relatively little information has been given to the court about the details of the reasoning process that led to the making and retention of the rules in issue. The ministerial statement to Parliament does refer to some of the reasons for the approach adopted and mentions the consultation exercise that had been carried out, but we have seen none of the underlying material. As regards the subsequent review, Mr Dixon’s witness statement and the table annexed to it go no further than to indicate in summary the policy options considered, the factors considered in relation to each and the conclusions reached. Since the review followed the judgment in Hockenjos, it must be assumed that the concerns expressed by the court in that case were taken into account and that the adverse consequences of the single payment rule for substantial minority carers in receipt of subsistence benefits were considered to be outweighed by the policy factors favouring retention of the existing provisions. Nonetheless it would have been helpful to be given a fuller explanation of the reasoning in support of that conclusion. We did have the benefit of the additional points put forward by Mr Coppel by way of submission, a course to which no objection was taken by Mr Drabble. In the circumstances, although counsel’s submissions are a less satisfactory way of dealing with such matters than hard evidence, we take the view that weight can properly be placed on the additional points put forward by counsel.

A further point of distinction between this case and Hockenjos is that there is no equivalent here to the linkage with child benefit which was the primary objectionable feature of the JSA regime under consideration in that case. It is not, however, as important a point of distinction as might appear at first sight, since the court in Hockenjos also focused more generally on the consequences of denying child premium to a substantial minority carer in receipt of a subsistence benefit. That aspect of the court’s reasoning remains relevant to this case.

Another consideration is that we are concerned in this case with benefit of a different kind from that in issue in Hockenjos. It is true that both cases involve an appellant in receipt of a subsistence benefit for himself; but in Hockenjos the appellant was claiming the child premium as an additional element of his own JSA, whereas in the present case the appellant is claiming an altogether separate benefit, CTC, in respect of his children. As appears from para 3 above and was emphasised in the submissions of Mr Coppel, CTC forms part of a new system of tax credits, its focus is on the child rather than the adult, and it is not in itself a subsistence benefit. There is no reason to suppose that the mechanism of single payment to the carer with main responsibility fails to deliver the intended amount of support to the children for whose benefit the CTC is paid, and in that sense the provisions would appear to meet their aim. But that does not avoid the problem that caused the court such concern in Hockenjos. The consequence of the single payment rule is that, in the absence of agreement between carers, a minority carer in receipt of JSA has to look after the children without any additional funding for that purpose: either he must go short or they must go short. Whether one focuses on the adult who lacks the funds to meet the needs of the children in his care, or on the children whose carer lacks the funds to meet their needs, the point of substance is the same. Thus, although there are important differences between JSA and CTC, they are not sufficient in themselves to take the case outside the scope of the reasoning in Hockenjos.

We have very little concrete information, however, about the scale of the problem. There is no direct evidence before the court as to the number of persons in a position similar to the appellant. The finding of discrimination in Hockenjos was based on a statistical report by an economic consultant which showed, according to para 14 of the judgment of Scott Baker LJ, that 92 per cent of men who shared the care of their children for at least 104 nights a year (that is, an average of 2 nights a week) could not obtain child additions to income-based JSA because they were not in receipt of child benefit. It appears from the report that the actual number of men in the relevant pool was in excess of 40,000. But, as also appears from the report, the pool was not restricted to those claiming or entitled to claim subsistence benefits. The number of persons making or entitled to make such claims was unquantified but can be taken to have been a substantially lower figure: we see no reason to doubt the validity of Mr Coppel’s point that in the typical case a minority carer, having more time to work without care responsibilities, is less likely to be on subsistence benefits. The court in Hockenjos was evidently of the view that the numbers involved were sufficiently large to be of concern, and it is no part of the Commissioners’ case before us that the numbers are insignificant. It is, however, important that the problem concerning minority carers on subsistence benefits is kept in perspective when assessing the reasonableness of rules adopted for the CTC system as a whole.

We have borne in mind the strictures directed by Ward LJ in Hockenjos towards any rule that treats only one parent as responsible at all for the children when the parents share the care of the children (see para 174 of his judgment, quoted at para 29 above). The point has less force, however, in relation to the CTC provisions, which are less stark in their approach to the question of responsibility: they are based on the concept of “main responsibility” and they allow the parents to agree, in respect of each child, which of them has main responsibility and is therefore entitled to the CTC.

In Hockenjos Ward LJ also attached significance to the fact that only the appellant, and not his wife, was in receipt of JSA and there was no question of sharing the child premium. He thought that the arguments might take on a different complexion if they were both contending for the same benefit (see para 31 above). The present case does concern the principle of splitting a single benefit, but despite Ward LJ’s reservations we do not think that this has a material bearing on the analysis or provides a satisfactory basis for distinguishing the reasoning of the court in Hockenjos.

The matters relied on by the Commissioners by way of justification of the CTC provisions have to be considered independently of the justification advanced in support of the JSA regime at issue in Hockenjos. There are common features, but the reasons we have to consider are directed specifically at the CTC regime and have to be assessed accordingly. In our judgment, the matters relied on have substantial weight to them. In determining whether the single payment rule is appropriate a number of different interests have to be balanced, including those of majority carers (who would be adversely affected by a change to split payment of CTC) as well as those of minority carers and, most importantly, of the children for whose benefit the CTC is paid; and as to the children, we have already observed that there is no reason to suppose that the mechanism of single payment to the carer with main responsibility fails to deliver the intended amount of support to them. Account must also be taken of the implications of any change for working tax credit and other benefits where a single payment rule is applied. We accept that to change the CTC regulations so as to allow for the splitting of benefit would in itself be a difficult exercise, with the need to formulate new rules for apportionment and for the calculation of benefit upon apportionment, to develop systems to give effect to the new rules, and to administer them thereafter. To change the regulations so as to allow for the splitting of benefit only in those cases involving a minority carer on subsistence benefits, if that were the chosen course, might involve even greater difficulty. The costs and administrative complexity of change are likely to be very substantial. Thus, whilst the Commissioners do not dispute that a change to split payment would be possible (and the legislation makes specific provision for the possibility), there are, in our judgment, cogent reasons for the maintenance of the single payment rule.

Against that must be set the adverse consequences of the rule for minority carers in the position of the appellant. It is here that the reasoning in Hockenjos really bites. The situation of such persons is a matter of real concern and is a matter to which we have given anxious consideration. At the same time we have borne in mind that bright line rules may give rise to hard cases without ceasing to be justifiable, and that, as shown by R (RJM) v Secretary of State for Work and Pensions, even a rule leading to the denial of a subsistence benefit may be capable of justification in appropriate circumstances. We have to decide whether the appellant’s situation has to be accepted as a hard case resulting from the operation of a justified rule or is so serious as to undermine the justification for the rule itself.

We have not found this an easy matter to decide. But taking into account everything we have said about the similarities and differences between this case and Hockenjos, and allowing for the broad margin of appreciation, we have come to the conclusion that the Commissioners have established a sufficient justification for drawing the line where they have and adhering to a system of single payment of CTC. There may well be a better or fairer way of distributing CTC, but a particular policy choice has been made and it cannot in our judgment be characterised as unreasonable or as being manifestly without reasonable foundation.

It follows that the appeal must be dismissed.