R.R. v Secretary of State for Work and Pensions

This case is remitted to the First-tier Tribunal for reconsideration at an oral hearing.

The new First-tier Tribunal (FTT) should not involve the tribunal judges who considered the appeals on 3 May 2023 and 29 August 2023.

If the Appellant has any further written evidence to put before the new FTT, this should be sent to the HMCTS regional tribunal office in Leeds within one month of the issue of this decision.

The new First-tier Tribunal is not bound in any way by the decisions of the previous tribunals. Depending on the findings of fact it makes, the new tribunal may reach the same or a different outcome to the previous tribunals.

This appeal is about the proper legal test for determining whether a “person normally lives in the accommodation with the renter” (and so counts as a non-dependent) under the Universal Credit scheme.

The particular context of this case concerns a young person whose parent claims the housing costs element of Universal Credit. What happens when the young person goes away to university (or a similar institution), returning to the family home from time to time, e.g. during vacations?

Whether a person is a non-dependant is important for the purposes of assessing a claimant’s entitlement to the housing costs element of Universal Credit.

In very broad terms, there are four component parts to any Universal Credit housing costs element calculation. The first part is the claimant’s monthly eligible rent. The second concerns the composition of their ‘extended benefit unit’, a concept which includes any persons who are classified as ‘non-dependants’ (subject to certain exceptions). The third is the number of bedrooms the claimant’s extended benefit unit is allowed under the rules (often referred to as the ‘size criteria’). The fourth is whether any deduction must be made for any non-dependant living with the claimant.

A claimant’s partner together with any child or qualifying young person form the basis of their extended benefit unit, along with any non-dependants. The definition of a non-dependant – a “person [who] normally lives in the accommodation with the renter” – is to be found in paragraph 9(2) of Schedule 4 to the Universal Credit Regulations 2013 (SI 2013/376). It has long been accepted that for the purpose of entitlement to social security benefits a person can only “normally” live or reside in one place (see JP v Bournemouth BC (HB) [2018] UKUT 75 (AAC); [2018] AACR 30).

A common example of a non-dependant is an adult child still living at home with their parent or parents. But what happens when the offspring in question lives elsewhere for part of the time, e.g. during University term-time, but comes home every vacation (and quite possibly at other times)? Are they a person who “normally lives” with their parent(s)? Or are they a person who “normally lives” at their University term-time address?

The present appeal is a case in point. The Appellant, a single parent, lives in Huddersfield. She has two daughters, the elder of whom (‘A’) has been following a three-year undergraduate degree course in Manchester.

On 23 October 2022 the DWP decision-maker decided that the Appellant did not meet the conditions to be entitled to the additional bedroom allowance for A within her Universal Credit housing costs element.

On 17 November 2022 that decision was upheld on mandatory reconsideration. The explanation given was that “you do not qualify any of the above conditions set out, to allow an extra bedroom. Your daughter [A] spends 13 to 14 weeks at home during holidays and summer breaks. This meant that she spends more time at the University, than at home. Therefore, because she spends most of her time at university, you are disallowed for having an extra bedroom for her.”

It will be apparent that the decision-maker regarded the test for whether a person “normally lives” in one place as being determined by a (relatively crude) test of time spent at each location – in other words, the place where the person spent more time was the place where they normally lived.

On 5 December 2022, and as a result of this decision on entitlement, another DWP decision-maker decided that there had been an overpayment of Universal Credit. This was accordingly set off against an underpayment of the Universal Credit child element that was agreed to be due to the Appellant.

The Appellant then appealed to the First-tier Tribunal (‘FTT’) against both the entitlement and the overpayment decisions.

On 3 May 2023 the FTT dismissed the Appellant’s appeal against the entitlement decision. The material part of the FTT’s decision notice for the entitlement appeal was crisply stated:

In its subsequent statement of reasons, the FTT found the following facts:

The FTT further reasoned as follows:

On 29 August 2023 a different FTT dismissed the Appellant’s appeal against the overpayment decision. This FTT’s decision notice recorded that “There has been an overpayment of the Housing Cost Element of Universal Credit for a spare bedroom. This was confirmed by a tribunal decision of 3 May 2023 … This resulted in an overpayment of £105.60 for the assessment period 23.07.22 to 22.09.22. Whilst the appellant has objected to this amount being set off against the underpayment of the child element of £290, the respondent is within his right to do so and only pay the balance of £184.40 to her.”

The second FTT’s statement of reasons correctly explained that any overpayment of Universal Credit was recoverable from a claimant, regardless of fault (see section 71ZB of the Social Security Administration Act 1992). It added that there was no right of appeal against the DWP’s decision to recover an overpayment, but only with respect to the amount of the overpayment. To that extent the FTT’s decision on the appeal against the overpayment decision stood or fell with the outcome of the appeal against the entitlement decision.

The Appellant appealed to the Upper Tribunal against both of the FTT decisions. Her appeal against the FTT’s entitlement decision was expressed in the following terms:

The Secretary of State’s representative does not support the appeal to the Upper Tribunal. The Secretary of State takes the same approach as the DWP decision-maker at first instance and the FTT: “In this case the daughter spent three times as much time at the Manchester address as at her mother’s address. Consequently I submit that she normally lived at the Manchester address” (Secretary of State’s submission at paragraph 13). The Secretary of State’s representative also adds that “students who rent a house on a joint tenancy are liable for Council Tax. However, they pay no Council Tax as a consequence of the exemptions. They will however receive a Council Tax notice for zero. As these joint tenancies are not restricted to term time occupation only if for a year, this is why those in Halls might be considered to reside normally with their parents still and be just temporarily absent, while those who take tenancies might not be considered to reside with their parents as they have a main home elsewhere on which they are liable for Council Tax” (paragraph 15).

I simply observe at this juncture that the FTT appears not to have explored or made any findings of fact as to the nature of the daughter’s occupancy in Manchester. It is entirely unclear from the statement of reasons as to the basis of A’s residence in Manchester. The Secretary of State’s representative appears to assume that the Appellant’s daughter had her own (sole or shared) tenancy in the private rented sector in Manchester. In that context it may well be significant that – as the Appellant states in her reply to the Secretary of State’s response to her appeal – “[A] was in halls and even they closed during holidays … Temporary tenancies such a student halls do not require students to pay council tax and are referred to as temporarily absent from their main address with family.”

Paragraph 9 of Schedule 4 provides as follows:

Paragraph 10 then provides:

Finally, and so far as is material, paragraph 11 provides as follows:

I now turn to consider the relevant case law.

Although the Universal Credit scheme has now been on the statute book for more than a decade, there appears to be no Upper Tribunal case law directly in point on the proper interpretation of paragraph 9(2) of Schedule 4 and in particular on the test to be applied for determining if a “person normally lives in the accommodation with the renter”. There is a simple but good reason for this. The notion of a non-dependant has been part of the legislative architecture of various means-tested benefit schemes for a much longer period. Although the precise wording may have changed from time to time, the underlying concept remains the same – the test turns in part on whether a person “normally lives” or “normally resides” with the claimant.

For example, in the housing benefit scheme a non-dependant is defined as “any person … who normally resides with a claimant or with whom a claimant normally resides” (originally regulation 3(1) of the Housing Benefit (General) Regulations 1987 (SI 1987/1971)). In CH/4004/2004 Commissioner Levenson held that “the extra word (‘normally’) must mean something [and] … is a question of fact and degree” (at paragraph 13). On the facts of that case – in which the claimant’s cousin had been ‘sofa-surfing’ with the claimant, as he was temporarily homeless – the Commissioner ruled that no reasonable tribunal could have found that the cousin was “normally” residing with the claimant. There is certainly no suggestion that the period of time involved was decisive. Rather, a holistic assessment as what was “normally” the position was required.

A relevant authority rather closer on its underlying facts is Stroud DC v JG(HB) [2009] UKUT 67 (AAC), reported as R(H) 8/09. The claimant was the tenant of a three-roomed dwelling and was in receipt of housing benefit. She notified the local authority that her son had become a full-time student in another town. The council took the view that she was entitled to benefit only on the basis that she occupied her home on her own and that she was therefore entitled only to accommodation with two rooms. It referred the case to the rent officer, who determined her maximum rent on that basis. The FTT decided on the facts that the son was normally resident with the claimant and was a non-dependant, but that under regulations 3(1) and 74(7) of the Housing Benefit Regulations 2006 (SI 2006/213) no non-dependant deduction was to be made in respect of him, as he was a full-time student. The claimant herself was therefore entitled to housing benefit based on accommodation containing three rooms. The council appealed to the Upper Tribunal, where Judge Williams allowed the appeal but substituted a decision to the same effect.

The FTT had erred in law in that case as it had failed to consider regulation 7 of the Housing Benefit Regulations 2006, which was intended to answer the question of which home a person occupies as a dwelling for the purposes of housing benefit (see R v Swale Borough Council HBRB [2000] 1 FLR 246). Further, on a correct analysis of regulation 7, a full-time student was to be treated as occupying the dwelling he normally occupied as his home during any period of absence not exceeding 52 weeks. On the facts found by the FTT, the claimant’s son normally occupied as his home the claimant’s dwelling and as a non-dependant. However, as a full-time student, no non-dependant deduction was applicable, and the reference to the rent officer and resulting decisions were accordingly set aside.

Notably, for present purposes, the FTT in Stroud DC v JG (HB) [2009] UKUT 67 (AAC) had directed itself as follows as to the proper test to be applied: “In deciding the question whether L [the claimant’s son] is normally resident with the Appellant, and therefore a non-dependant, the tribunal has to take account of all the material circumstances. It is a matter of fact and degree. It is not merely a mathematical exercise as to where he spends most time.” That approach, of course, was entirely consistent with that taken in CH/4004/2004. Moreover, Upper Tribunal Judge Williams confirmed that was the correct approach (at paragraph 26) and indeed adopted the FTT’s findings of fact, having applied that test (at paragraph 29).

A similar question arose in SK v South Hams DC (HB) [2010] UKUT 129 (AAC), [2010] AACR 40. Upper Tribunal Judge Mesher helpfully posed the question (and summarised the answer) as follows in the opening paragraph of his decision:

Most of Judge Mesher’s careful and extended analysis concerns the proper application of statutory provisions in the housing benefit scheme which are not directly relevant to the issues raised by the present Universal Credit appeal. He concluded that the FTT had erred in law “by failing to ask itself whether Jacob [the claimant’s son] was required to be treated as occupying the claimant’s dwelling as his home from 22 September 2008 under regulation 7(13) or (16) and (17), but instead asking itself which one dwelling he was normally occupying” (at paragraph 38). As to that latter question, Judge Mesher opined as follows:

This appeal can be dealt with relatively shortly. The test for determining whether a person is a non-dependant is not determined by a crude measure of the time spent living at any one address. Rather, decision-makers and tribunals must make a holistic assessment of all relevant factors in deciding whether the person in question “normally lives in the accommodation with the renter” (paragraph 9(2) of Schedule 4 to the Universal Credit Regulations 2013 (SI 2013/376).

How does this play out in the case of a young person who goes away to university? A good starting point is to identify the legal basis of their living arrangements at university. Do they have a tenancy or licence in the private rented sector where they are at college? Or do they have a tenancy or licence in a university hall of residence? If the latter, are they able to stay (and do they stay) in residence during some or all of the periods of university vacation? It is well known that many universities rely on using their halls of residence to facilitate their conference trade during the vacations and so exclude students for periods out of term time. There is then a further range of markers on which findings of fact will need to be made. Where is the young person registered to vote? Where are they registered with a GP surgery and dentist? If their bank or building society communicates with them by post, which address do they use? Which address is their mobile phone contract registered at? Do they have a part-time job and, if so, where is it? Where do they keep the bulk of their clothes and belongings? Do they have a pet and, if so, where is it kept? This list should not be regarded in any way as exhaustive. A holistic assessment requires consideration of all such relevant factors.

In the present case the FTT singularly failed to explore any of these indicators, focussing exclusively on the length of time spent at each address.

I therefore conclude that the FTT’s decisions on the Appellant’s appeals both involve an error of law. The decision of the first FTT on the entitlement appeal applied the wrong legal test, which in turn infected the outcome of the appeal on the overpayment case heard by the second FTT. The case therefore needs to be re-heard by a fresh FTT at a venue convenient to the Appellant. The new tribunal will have to make further and more detailed findings of fact about the living arrangements of the Appellant’s daughter A at the material time.

I might add that if the new FTT finds that A is a non-dependant normally living with the Appellant, it does not necessarily follow that a non-dependent deduction applies. There are various circumstances in which such a deduction should not be made. One of these is where the non-dependant is aged under 21, which A was at the material time (paragraph 16(2)(a) of Schedule 4).

Finally, it is noteworthy that the DWP’s own guidance to decision-makers (DM) is as follows (ADM Chapter F3: Housing Costs Element: Support for renters, para F3034):

Plainly the two examples given in the second and third paragraphs of that official guidance represent two cases that may be seen as sitting at opposite ends of a spectrum. In the real world more difficult value judgements may need to be made on cases in between those two extremes in deciding whether a person “normally lives” at one address or another, having balanced all relevant considerations. However, what the DWP guidance does make clear, consistently with the case law discussed above, is that a simplistic temporal test is not determinative for deciding whether a person is a non-dependant.

I therefore conclude that the decisions of the First-tier Tribunal involve an error of law. I allow the appeals and set aside the decisions of the tribunal (Tribunals, Courts and Enforcement Act 2007, section 12(2)(a)). The case must be remitted for re-hearing by a new tribunal subject to the directions above (section 12(2)(b)(i)). My decision is also as set out above.