Factual and Procedural Background
The applicants, a woman referred to as Plaintiff and her young daughter, sought permission to appeal a decision dismissing their judicial review claim. The claim concerned the differential treatment between two types of maternity-related payments—Maternity Allowance (MA) and Statutory Maternity Payment (SMP)—in the calculation of Universal Credit (UC). MA was treated as unearned income and deducted in full from UC, whereas SMP was treated as earned income and subject to a tapered deduction with a work allowance. The applicants contended that these two payment types were not sufficiently distinguishable to justify this differential treatment.
The initial hearing took place in June 2020 before Judge Swift, who granted permission but dismissed the claims of unlawful discrimination under article 14 ECHR combined with article 8 or article 1 of the First Protocol, irrationality, and refused permission on the Public Sector Equality Duty (PSED) claim as out of time. The applicants sought permission to appeal on all issues, arguing that the judge erred in law by failing to properly consider justification for the difference in treatment and incorrectly ruling on the PSED time limit.
The respondent contended, and the judge accepted, that MA and SMP differ in origin, entitlement criteria, structure, and administration. SMP, paid by employers through payroll and taxable, is reasonably treated as earned income. MA, paid directly by the state and non-taxable, is treated as unearned income. The UC scheme’s distinction between earned and unearned income reflects social policy objectives, including incentivising work. The judge made detailed factual findings and concluded that the difference in treatment was justified and not irrational. The judge also held that the PSED claim was out of time as the relevant decision was the adoption of the impugned regulations, not their application to individuals.
The applicants renewed their application for permission to appeal, which was adjourned to an oral hearing. After considering submissions, the court concluded the appeal had no real prospect of success and no compelling reason to be heard.
Legal Issues Presented
- Whether the differential treatment of Maternity Allowance and Statutory Maternity Payment in the calculation of Universal Credit constitutes unlawful discrimination under article 14 ECHR taken with article 8 or article 1 of the First Protocol.
- Whether the differential treatment is irrational and therefore unlawful under common law principles.
- Whether the Public Sector Equality Duty claim was made within the appropriate time limit.
Arguments of the Parties
Appellant's Arguments
- The judge failed to properly assess whether the difference in treatment between MA and SMP was justified or proportionate, focusing only on the reason for treating SMP as earned income without addressing the impact on recipients of MA.
- The judge erred in his approach to the concept of "status" under article 14, wrongly equating the claim to a direct discrimination claim and failing to properly consider the weight of the applicants’ status related to pregnancy and maternity.
- The PSED claim was wrongly refused as out of time because the claim first arose when the applicant was personally affected by the application of the impugned regulations, not when the regulations were first enacted.
- The judge erred in his treatment of the UN Convention on the Rights of the Child (UNCRC), failing to give primary consideration to children’s best interests in the context of UC and maternity payments.
- The distinctions relied upon to justify the difference in treatment between SMP and MA were either trivial or inaccurate, and the difference in treatment was irrational and unjustified.
Respondent's Arguments
- MA and SMP have different origins, entitlement criteria, and administration methods, justifying their different treatment under UC.
- SMP is paid by employers through payroll and reported via the Real Time Information system, making it reasonable to treat as earned income, whereas MA is paid directly by the state and treated as unearned income.
- The UC scheme’s distinction between earned and unearned income furthers social policy objectives, including incentivising work, and is within the state’s margin of discretion.
- The PSED claim was out of time as it challenges the decision-making process leading to the regulations, not their individual application, and must be brought promptly within three months of the decision.
- The judge’s findings on justification, proportionality, and the UNCRC were correct and supported by evidence and legal authority.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| R (on the application of DA) v Secretary of State for Work and Pensions [2019] UKSC 21 |
Established the "manifestly without reasonable foundation" standard for justification in discrimination claims concerning welfare benefits. |
The court applied this standard to assess whether the differential treatment between MA and SMP was justified. |
| AL (Serbia) [2008] UKHL 42 |
Clarified that justification must address the difference in treatment between groups, not merely the measure itself. |
Supported the argument that the court must scrutinise the justification for differential treatment between MA and SMP cohorts. |
| R (TP and Ors) v Secretary of State for Work and Pensions [2020] EWCA Civ 37 |
Confirmed the evidential requirement to explain why a group is treated differently from a comparator group in discrimination claims. |
Referenced in assessing whether the justification adequately addressed the difference in treatment. |
| R (MA v SSWP) [2016] PTSR 1422 |
Emphasised close scrutiny of justification in discrimination claims, especially concerning social and economic impacts. |
Invoked to argue for rigorous examination of the respondent’s justification for differential treatment. |
| Brewster, Re application for judicial review (Northern Ireland) [2017] UKSC 8 |
Discussed the reduced imperative for judicial reticence when government departments have not addressed social or economic impacts. |
Used to argue that the respondent failed to consider the impact of differential treatment on MA recipients. |
| R (Drexler) v Leicestershire County Council [2020] EWCA Civ 502 |
Clarified application of proportionality and "manifestly without reasonable foundation" tests in resource allocation and discrimination contexts. |
Supported the court’s approach to justification and proportionality respecting executive discretion in welfare policy. |
| R (Badmus and Ors) v Secretary of State for the Home Department [2020] EWCA Civ 657 |
Addressed the timing of claims in "person specific" judicial review cases and when time begins to run. |
Distinguished by the court as inapplicable to PSED challenges against decision-making processes rather than individual applications. |
| Thlimmenos v Greece (2001) 31 EHRR 15 |
Illustrated the principle that discrimination may arise from failure to treat similarly situated persons equally, especially in contexts of historical disadvantage. |
Referenced by the applicants to argue that differential treatment within maternity cohorts constituted discrimination. |
Court's Reasoning and Analysis
The court undertook a detailed examination of the legislative framework, factual findings, and legal principles. It acknowledged the significant practical consequences of treating MA and SMP differently in UC calculations. The court accepted that SMP and MA differ in origin, entitlement criteria, method of payment, and tax treatment, justifying different treatment under UC. The court found that SMP’s payment through employers’ payroll and reporting via the Real Time Information system aligned it with earned income, while MA’s direct state payment justified its treatment as unearned income.
The court rejected the appellants’ contention that the judge failed to properly assess justification for the differential treatment, concluding the judge had indeed considered the impact and the reasons for the distinction in treatment. The court endorsed the application of the "manifestly without reasonable foundation" test, emphasizing that in the context of welfare benefits and finite public resources, the executive’s policy choices warrant respect and deference.
Regarding the concept of status under article 14, the court agreed that the relevant status was the difference between women receiving MA and those receiving SMP, both subgroups within the broader protected status of pregnancy and maternity. The court found no error in the judge’s approach to status or in his proportionality analysis, noting that the discrimination alleged was not on the grounds of sex or pregnancy per se, but between two subgroups of women.
The court also upheld the judge’s conclusion that the PSED claim was out of time, distinguishing the present case from precedent on "person specific" claims and affirming that PSED challenges to decision-making processes must be brought promptly within three months of the decision.
Finally, the court found no error in the judge’s treatment of the UNCRC, concluding that payment of UC sufficiently discharged the UK’s obligations under the treaty, and that differential treatment of MA and SMP did not violate these obligations.
Holding and Implications
The court REFUSED PERMISSION TO APPEAL on all grounds.
The direct effect of this decision is that the differential treatment of Maternity Allowance and Statutory Maternity Payment in the calculation of Universal Credit remains lawful and justified. The Public Sector Equality Duty claim was also held to be out of time and thus not permissible. The court’s ruling affirms the executive’s discretion in structuring welfare benefits and underlines the high threshold for overturning such policy decisions on grounds of discrimination or irrationality. No new legal precedent was established beyond the application of existing principles to the facts of this case.