Following the death of the claimant’s mother, the claimant took on the tenancy of the property where his family lived and assumed legal responsibility for his brother and sister. To support the family he worked and claimed benefits including housing benefit. The claimant enrolled on a university degree course, which entitled him to take out student loans to cover his tuition fees and maintenance. However, he did not apply for either loan because both were repayable with interest and, as a devout Muslim, he conscientiously believed that his religion forbade him to pay interest. Although, as a general rule, full-time students were not entitled to housing benefit by virtue of regulation 56(1) of the Housing Benefit Regulations 2006, the claimant fell within the exception in regulation 56(2)(b) for “lone parents”, being treated for that purpose as the lone parent of his brother and sister. However, the local authority decided that the claimant did not satisfy the means test for entitlement to housing benefit because, for that purpose, his income was to be calculated as including the available student loan amount for his maintenance, regulation 64 requiring that a student loan be treated as income where, for a given academic year, the student could acquire a student loan in respect of that year “by taking reasonable steps to do so”. On that basis the authority initially concluded that the claimant was not entitled to housing benefit although, by a revised decision, it later decided that the claimant was entitled to housing benefit albeit at a reduced rate. Dismissing the claimant’s appeal, the First-tier Tribunal concluded that the test of “reasonable steps” was concerned with the mechanical steps that had to be taken to acquire the loan and was not concerned with other matters such as the motives and religious beliefs of the claimant.
On the claimant’s further appeal—
Held, appeal allowed. On the ordinary construction of the words used in regulation 64(3) of the Housing Benefit Regulations 2006, which in particular did not frame the test simply by reference to “entitlement” to a student loan, the judgment of whether a housing benefit claimant could have acquired a student loan by taking “reasonable steps” fell to be made having regard to all the personal circumstances of that claimant and all other relevant circumstances of the particular case. Deciding to apply was one of the “steps” that needed to be taken to acquire the student loan and, there being nothing mechanical about that decision, it followed that the phrase “reasonable steps” could not be confined to “the mechanics” of obtaining a loan. Consequently, before a student could be treated as possessing a loan that had not been made to them the decision-maker had to be satisfied that deciding to apply for the loan would have been a “reasonable” step for that particular student to have taken. That consideration was not confined to questions of a claimant’s capacity but included all the personal characteristics of the individual who was eligible to have applied for the student loan, including strong conscientious religious or other objections to the payment of interest. As part of deciding what steps would be reasonable, local authorities would have to decide whether a claimed objection to taking out a loan or paying interest was principled and held sincerely and conscientiously. The circumstances to be taken into account when considering what steps were reasonable also included the interests of the wider public as represented by the Secretary of State, including government policy that the costs of education were usually to be funded from the education budget, rather than from the social security budget, and that the provision of such funds was, in most cases, to take the form of repayable loans rather than non-repayable grants. It was therefore unlikely that an omission to acquire a loan for purely financial reasons, such as a disinclination to incur debt, would be accepted as reasonable. In the present case, however, taking into account all the claimant’s circumstances and, in particular, his sincere and strongly held religious conviction that it would be a major sin for him to pay interest, it would not have been reasonable for him to have violated those religious beliefs by taking the steps he would have needed to take in order to acquire a student loan. The claimant’s personal circumstances outweighed any loss to public funds, which was likely to be minor. It followed that regulation 64(3) of the 2006 Regulations did not treat the claimant as possessing the student loan to which he would have been entitled had he applied for it (paras 6–9, 12, 13, 83, 90, 91, 94, 95, 109, 114, 131, 140, 161, 185, 189–193).
The claimant in person.
Courtney Harvey, appeals officer, Gravesham Borough Council, for the local authority.
John Paul Waite (instructed by Treasury Solicitor) for the Secretary of State.