Social security case law

R (on the application of SC, CB and 8 children) v. Secretary of State for Work and Pensions and others [2021] UKSC 26

On 9 July 2021, the Supreme Court delivered a unanimous judgment in the case of R(on the application of SC, CB and 8 children v. Secretary of State for Work and Pensions [2021] UKSC 26.

Background

The case concerns limits to the payment of Child Tax Credits introduced by section 9(3A) and (3B) Tax Credits Act 2002, as amended by section 13(4) of the Welfare Reform and Work Act 2016. The effect of the 2002 and 2016 Acts is that when calculating a person’s entitlement to the individual element of Child Tax Credit, no account is taken of third or subsequent children born on or after 6 April 2017, unless one of the prescribed exceptions apply.[1] This is known as the ‘two child limit’.

The appellants, who were two single mothers and their children, argued that the ‘two child limit’ is incompatible with their rights under Article 8 (right to a private life), Article 12 (right to found a family) and Article 14 (prohibition against discrimination) when read with Article 8 and Article 1, Protocol 1 (protection of property) of the European Convention on Human Rights (ECHR).

Legal issue

While the appellants argued that the two child limit breached their rights under Articles 8, 12 and 14 ECHR, as you will read below, the Court’s focus was on the application of Article 14 ECHR.

Article 14 ECHR provides that the rights and freedoms that people are entitled to under the ECHR should be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status. Discrimination can be direct or indirect. Discrimination is ‘direct’ if a person receives less favourable treatment than another person in similar circumstances because they have a particular characteristic which that other person does not. Discrimination is ‘indirect’ if a policy applies in the same way to everyone, but disadvantages a person because they have a particular characteristic.

Article 14 ECHR does not provide a stand-alone right. It must be ‘read with’ or considered in conjunction with another ECHR right. In the appellants’ case, they argued that their right not to be discriminated against should be read with Article 8 (right to a private life) and, in the case of the adult appellants, Article 1, Protocol 1 (protection of property).

In order to establish whether there has been a breach of Article 14 ECHR, the Court undertakes the following assessment:

• First, only differences in treatment based on an identifiable characteristic amount to discrimination under Article 14. This could be on the basis of one of the grounds mentioned in Article 14, i.e. sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth, or on the basis of some other status. The Court will often draw on case law of the European Court of Human Rights to determine if the category of ‘other status’ applies.
• Secondly, there must be a difference in treatment between the appellant and a person in an analogous or relatively similar situation. For example, in the appellants’ case they argued that children in large households are treated differently when compared to children in small households.
• Thirdly, even if there is a difference in treatment between identifiable groups who are in relatively similar situations, it will not amount to discrimination under Article 14 ECHR if it is justified. Difference in treatment will be justified if it pursues a legitimate aim and it does so in a way that is proportionate, i.e. it doesn’t use a sledge hammer to crack a nut.
• Finally, states have a ‘margin of appreciation’ in deciding whether differences in treatment are justified. The extent of a state’s margin of appreciation depends on the circumstances, the subject matter and the background. Generally, the margin allowed in cases of difference in treatment based on sex or gender is narrow. While a wide margin of appreciation is allowed for measures of economic or social strategy.

The Supreme Court’s reasoning

Lord Reed, delivering the judgment of the Court, rejected the appellants’ grounds of appeal.

The Court decided that the two child limit does not breach Article 8 ECHR. The Court decided that the two child limit is not intended to discourage women in receipt of Child Tax Credit from having more than two children and it does not have a damaging effect on the integration of third and subsequent children into their families.

The Court also decided that Article 12 ECHR does not apply. Article 12 protects the right to marry and to found a family within marriage. Article 12 does not impose a positive obligation on the state to provide financial support to enable a person to found a family.

On the application of Article 14, the Court’s reasoning is complex. First, the Court rejected the argument that the two child limit gives rise to any discrimination between children and adults. Children have no entitlement to Child Tax Credit. It is not, therefore, discriminatory for Child Tax Credit to be subject to the two child limit, while benefits to support adults, such as Job Seekers Allowance, are not.

Secondly, it is not discriminatory that households affected by the two child limit contain more children than adults. Child Tax Credit is not paid to adults for their own benefit, but to meet the needs of children. Children and adults are not therefore affected by the two child limit in comparable ways.

However, the Court considered that Article 14 does apply to the two child limit in the following ways:

1. As more women than men are responsible for bringing up children, the two child limit has a greater impact on women than men. The two child limit is arguably indirectly discriminatory against women, contrary to Article 14 when read with Article 8 and Article 1, Protocol 1 ECHR.
2. The two child limit arguably discriminates against children living in households containing more than two children, compared with children living in households containing one or two children, contrary to Article 14 when read with Article 8 ECHR.

Decision

Having decided that the two child limit engages Article 14 in the two ways outlined above, the Court went on to decide if it is, nonetheless, justified.

Indirect discrimination against women

Lord Reed recognised that there is a presumption of gender discrimination because the two child limit affects more women than men. However, this will only be a breach of Article 14 ECHR if it cannot be justified. The two child limit is justified if it pursues a legitimate aim and does so by proportionate means.

Referring to previous decisions of the European Court of Human Rights, Lord Reed stated that ‘very weighty reasons have to be put forward before a difference in treatment on the ground of gender can be regarded as compatible with the [ECHR], whether the alleged discrimination is direct or indirect (Di Trizio v. Switzerland (Application No 7186/09))’.

Lord Reed identified Parliament’s justifications for the introduction of the two child limit:

1. First, the excessively high level of public spending on welfare benefits, resulting in a large fiscal deficit, and the significant savings the two child limit would introduce.
2. Secondly, the unfairness to persons supporting themselves through work and taxpayers that persons in receipt of child tax credits were guaranteed a rise in income for every additional child they chose to have, without limit.

At paragraph 192, Lord Reed stated that by achieving savings in public spending and reducing the fiscal deficit, the two child limit pursues the legitimate aim of ‘protecting the economic well-being of the country’.

On the matter of proportionality, Lord Reed acknowledged that the measure has a disproportionate impact on women. However, Parliament has decided that the disproportionate impact on women is outweighed by the importance of achieving the aim of the two child limit. At paragraph 199, Lord Reed stated:

‘Once it is understood that the legitimate aims of the measure could not be achieved without a disproportionate impact on women, arising from the demographic fact that they form the majority of parents bringing up children, the only remaining question which can be asked, in relation to proportionality, is whether the inevitable impact on women outweighed the importance of achieving the aims pursued. Parliament decided that the importance of the objectives pursued by the measure justified its enactment, notwithstanding its greater impact on women. I see no basis on which this court could properly take a different view.’

Discrimination against children living in households containing more than two children

The Court decided that the greater impact of the two child limit on households containing more than two children also pursues the legitimate aim of ‘protecting the economic well-being of the country’.

On the issue of proportionality, the Court recognised that assessing proportionality requires a balance between respecting Parliament’s assessment of the two child limit and considering the best interests of children.

At paragraph 208, the Lord Reed stated:

‘The assessment of proportionality, therefore, ultimately resolves itself into the question as to whether Parliament made the right judgment. That was at the time, and remains, a question of intense political controversy. It cannot be answered by any process of legal reasoning. There are no legal standards by which a court can decide where the balance should be struck between the interests of children and their parents in receiving support from the state, on the one hand, and the interests of the community as a whole in placing responsibility for the care of children upon their parents, on the other. The answer to such a question can only be determined, in a Parliamentary democracy, through a political process which can take account of the values and views of all sections of society. Democratically elected institutions are in a far better position than the courts to reflect a collective sense of what is fair and affordable, or where the balance of fairness lies.’

Lord Reed concluded:

‘There is no basis, consistent with the separation of powers under our constitution, on which the courts could properly overturn Parliament’s judgment that the measure was an appropriate means of achieving its aims.’

Conclusion

The Supreme Court decided that although the two child limit engages Article 14 ECHR because it has a greater impact on women than men and on households with more than two children, it does not breach Article 14. The two child limit pursues a legitimate aim and Parliament has decided it is an appropriate means of achieving that aim. The Court dismissed the appeal.

The Child Poverty Action Group, which represented the appellants before the Supreme Court, is considering appealing the Supreme Court’s decision to the European Court of Human Rights. Law Centre NI will continue to update social security advisers as the case progresses.

[1] The prescribed exceptions are outlined at Regulation 9-14 Child Tax Credit Regulations 2002, as inserted by Regulation 5 Child Tax Credit (Amendment) Regulations 2017.