Case Overview
1. This Upper Tribunal (Administrative Appeals Chamber) case, Liverpool City Council v (1) NM, (2) WD (HB), addresses the eligibility of “communal water charges” for Housing Benefit (HB) in sheltered or supported housing.
2. Liverpool City Council (the Appellant) had disallowed the Housing Benefit claims of two residents (NM and WD) in relation to these charges. The First-tier Tribunal allowed the residents’ appeals, but the Council appealed to the Upper Tribunal. The Upper Tribunal Judge Knowles QC found errors of law in the First-tier Tribunal decisions and remitted both cases for rehearing.
Key Themes and Important Ideas/Facts
Issue
3. The core issue is whether service charges related to the supply of water in communal areas of sheltered or supported housing (“communal water charges”) are eligible for Housing Benefit.
“The issue in these two appeals is whether service charges relating to the supply of water in the communal areas of either sheltered or supported housing [‘communal water charges’] are eligible for housing benefit [‘HB’].”
Context: The M and D Cases
4. M Case: M was a licensee in a supported housing scheme (“P”) for 16-25 year olds. His licence agreement included separate charges for water rates, with a portion listed as “eligible for Housing Benefit” (communal water charges) and another portion listed as “not eligible for Housing Benefit” (M’s personal use of water).
5. “P” included communal areas such as corridors, a laundry, communal kitchen, a lounge, IT suite, meeting rooms, offices, disabled communal toilet, and a garden.
“It includes a schedule of service charges at M79 which lists (a) ‘water rates’ of £2.24 a week as being ‘eligible for Housing Benefit’ and (b) ‘water rates’ of £4.06 a week as being ‘not eligible for Housing Benefit’. The sum of £2.24 relates to communal water charges and the sum of £4.06 relates to M’s personal use of water in room 11A.”
6. D Case: D was an assured tenant in a sheltered housing scheme (“ASC”) for those over 55 and for younger persons with disabilities. His tenancy agreement similarly separated water charges into eligible (communal) and ineligible (personal) categories.
7. ASC included communal areas including corridors, a laundry, communal kitchen, three lounges, disabled communal bathroom, and garden.
“It includes a schedule of service charges at D72 which lists (a) ‘water rates’ of £5.95 a week as being ‘eligible for Housing Benefit’ and (b) ‘water rates’ of £3.20 a week as being ‘not eligible for Housing Benefit’. The sum of £5.95 relates to communal water charges in ASC and the sum of £3.20 relates to D’s personal use of water in his flat.”
Appellant’s Argument
8. The local authority argued that all water charges, including communal water charges, were ineligible for Housing Benefit, based on their interpretation of Regulation 12B(5) of the Housing Benefit Regulations 2006. They contrasted this with fuel charges, where a specific exemption exists for communal areas. They initially argued M’s accommodation was more akin to “ordinary” accommodation.
“The Appellant’s case before both the tribunals was founded on its belief that all water charges, including communal water charges, were ineligible for Housing Benefit regardless of whether the property was self-contained… and there is no similar provision for water charges which are therefore ineligible.”
Preliminary Issue: Sheltered vs. Supported Accommodation
9. The Appellant tried to distinguish between D (sheltered accommodation) and M (supported housing). They argued M’s licence agreement, instead of a tenancy, made it akin to ordinary accommodation. The Judge rejected this distinction, finding both M and D resided in “sheltered accommodation” according to the regulations, therefore water use in halls, passageways, and rooms of common use should be considered.
“Thus I reject the Appellants’ argument on this preliminary issue. I accept the Respondent’s submission that the accommodation occupied by both D and M fell within the term ‘sheltered accommodation’ as found in the Regulations and specifically in sub-paragraph 8 of Schedule 1.”
Regulation 12B(5) and Personal Water Use
10. The Upper Tribunal Judge determined that Regulation 12B(5) concerns the apportionment of water charges for personal use, not communal water charges, when the claimant isn’t separately billed. This regulation was misapplied by the First-tier Tribunal. The judge found it doubtful that either P or RGL had correctly calculated M and D’s charges for personal water use and remitted this for rehearing.
“I have decided in accordance with the Respondents’ submission that Regulation 12B(5) concerns the apportionment of water charges for personal use when the claimant is not separately billed. This regulation has no application to communal water charges.”
Schedule 1 and Ineligible Service Charges
11. The Judge determined that communal water charges are not “day to day living expenses” under Schedule 1. Additionally, they are connected to the provision of adequate accommodation, as water is essential for cleaning, hygiene, and maintenance of communal areas.
“In my judgment, communal water charges are not ‘day to day living expenses’ within the meaning of sub-paragraph 1(a) of Schedule 1… Applying that authority, I find that communal water charges are charges related to the provision of adequate accommodation.”
Laundry Exception
12. The Tribunal erred by not determining the proportion of communal water charges attributable to laundry use, which is ineligible for HB (except for cleaning the laundry area and equipment).
“Second, as the Respondents conceded, the tribunal did not determine the proportion of the communal water charges attributable to laundry use which were ineligible for HB.”
Outcome
13. The Upper Tribunal allowed the appeal to a limited extent, setting aside the First-tier Tribunal decisions and remitting both cases for re-determination. The new tribunal must determine (a) how the charges for personal water use were calculated and (b) the proportion of communal water charges attributable to laundry use.
“I have found in favour of the Appellant to the limited extent identified in this appeal and allow the appeal in both cases. I remit both cases for re-determination by a differently constituted tribunal in accordance with the principles set out in this decision.”
Implications
14. This case clarifies the interpretation of the Housing Benefit Regulations regarding communal water charges in sheltered and supported housing. It confirms that communal water charges are generally eligible for Housing Benefit, but it also highlights the importance of correctly calculating personal water use charges and excluding laundry-related water charges.
15. The case also confirms the term “sheltered accommodation” to also include “supported accommodation” which may offer licences instead of tenancies.