Shaping one of the most significant welfare reforms in 70 years

The Court of Appeal has rejected appeals against the dismissal of claims for a judicial review of the so-called benefit cap (R (on the application of SG & Ors) v The Secretary of State for Work and Pensions and (1) Child Poverty Action Group (2) Shelter Children’s Legal Services (Interveners) [2014] EWCA Civ 156).Its judgment affirms the lawfulness of one of the government’s most controversial welfare reforms. The cap, now operating nationally, limits a claimant’s benefits entitlement to an amount equivalent to the average net weekly earnings of a working household in Britain, presently £26,000 annually. It is fixed accordingly at £350 per week for single, childless claimants and £500 per week for others.

Last November, the High Court dismissed claims for a judicial review of the cap, ruling that it was not “manifestly without reasonable foundation” and that its adverse impact on various groups, women in particular,
was justified.

Four of the original six claimants appealed arguing that the cap:

• discriminated unlawfully against women generally, or women who were the victims of domestic violence, in breach of article 14 and article 1 of the first protocol (A1P1) to the European Convention on Human Rights (ECHR);
• infringed article 3(1) of the United Nations Convention on the Rights of the Child (UNCRC);
• discriminated unlawfully against families, in breach of articles 14 and 8 ECHR; and
• was unlawful on grounds of irrationality.

The court rejected these appeals. It was common ground that the cap engaged A1P1 and had a disproportionately adverse impact on women. The court also accepted that it was capable of engaging article 8 ECHR and that the cap’s impact was not justified.

Legitimate aims

The cap served three aims in particular: to introduce greater fairness in the welfare system between benefit claimants and taxpayers in employment; to make financial savings and, more broadly, make the system more affordable by reducing long-term benefit dependency; and to increase incentives to work. These were legitimate and while the aim of saving money was, alone, incapable of justifying the cap’s impact on particular groups, it was capable of doing so when taken with the government’s other aims.