[2023] UKUT 193 (AAC)

This is an appeal by the claimant against the above decision of the First-tier Tribunal ("the Tribunal"), which confirmed a decision by Gravesham Borough Council (Gravesham”) that the claimant, a full-time student, was not entitled to housing benefit.

As a general rule, full-time students are not entitled to housing benefit. But there are exceptions to that rule and the claimant falls within one of them.

The claimant would have been eligible for a student loan for his tuition fees and maintenance while studying. However, the claimant, who is a devout Muslim, did not take out the loan that would have been available to him. To have done so would have made him liable to pay interest and he conscientiously believes that charging and paying interest are both forbidden by his religion.

Gravesham nevertheless treated the claimant as having an income based on the student loan he could have taken out if he had applied for one. As a result, it is said, he did not satisfy the housing benefit means test.

For reasons that will become apparent, the appeal to the Upper Tribunal turns on whether the claimant could have acquired the loan by taking “reasonable steps” to do so. He says that, given his beliefs, it would not have been reasonable to take steps to acquire the loan.

In CH/4429/2006, however, Mr Commissioner Powell (as he then was) decided that the word “reasonable” in the phrase “reasonable steps” qualified 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.

That decision was, of course, binding on the Tribunal.

It is not, however, binding on the Upper Tribunal and, for the reasons set out below, I have declined to follow it and have decided instead that a judgment as to what is reasonable falls to be made having regard to all the personal circumstances of a claimant and, of course, all the other relevant circumstances.

Therefore one has to ask what steps it would have been reasonable for this particular claimant to have taken in this particular case. I have decided that the answer to that question is that—even though he undoubtedly had capacity to take the steps needed to acquire the loan—it would not have been reasonable for him to have violated his strongly-held and conscientious religious beliefs by doing so.

I would like to stress the fact-sensitive and personal nature of that judgment. The decision does not discriminate in favour of Muslims or against anyone else.

I have not decided that all Muslim students who do not take out a student loan are entitled to housing benefit without having the notional loan included as their income. Neither have I decided that students of other religions, or none, must always have the notional loan taken into account when their housing benefit is calculated.

Rather, the effect of my decision is that all full-time students—irrespective of their religious belief, or lack of it—who fall within the limited exceptions set out in para 47 below but who have not who have not taken out student loans for which they would have been eligible, may argue that their omission to do so was reasonable.

Against that, the government’s policy is that the costs of education are usually to be funded from the education budget, rather than from the social security budget. Further the provision of such funds is, in most cases, to take the form of repayable loans, rather than non-repayable grants. That is a circumstance that falls to be taken into account in the assessment of whether a claimant’s actions or omissions are “reasonable”. It is therefore unlikely that an omission to acquire a loan for purely financial reasons, such as a disinclination to incur debt, will be accepted as reasonable.

Finally, I do not accept that my decision makes the system unworkable, and I discount the prospect of a flood of opportunistic housing benefit claims from students.