The extent to which an individual's financial standing can impact upon whether a homeless applicant is "intentionally homeless" is an issue which often causes uncertainty. However, the Court of Appeal has recently given guidance which can offer help to those involved with homeless assessments.

The facts of the decision in Samuels v Birmingham City Council [2015] EWCA Civ 1051 are relatively straightforward and not particularly unusual. Ms Samuels was a tenant of private rented accommodation which she occupied with four children. Her rent was £700 a month towards which she received housing benefit of £548.51 a month. Her monthly income was made up of tax credits, income support and child benefit - totalling £1349.33. There was a weekly shortfall of £151.49 between the amount of housing benefit she received and her contractual rent.

Ms Samuels fell into rent arrears and was given notice by her landlord in July 2011. She duly applied to Birmingham City Council for assistance as a homeless person. Two applications were actually submitted. In the first application, made in June 2012, Ms Samuels provided a detailed income and expenditure sheet. The authority concluded that she was intentionally homeless on the basis that the accommodation had been affordable as she had an excess of income over expenditure and so she could and should have been able to pay the shortfall in rent. A second application was then made in July 2013, based upon the previously submitted income and expenditure form.

Ms Samuels' solicitor sought to challenge the decision, arguing that the income and expenditure figures were incorrect. They submitted revised figures, stating that Ms Samuels could not remember precise details, but they were confident that the figures were reasonably accurate. The revised figures were higher and included new items - in particular, expenditure on food/ household items was increased from £150 to £750 per month.

The reviewing officer concluded that the property had been affordable. It was found that the rent shortfall could have been covered with more careful household budgeting and so the review was dismissed. 

Ms Samuels appealed to the County Court. The County Court upheld the local authority's review decision and so the matter went to the Court of Appeal.

There were various procedural issues raised in the appeal. However, it is the substantive issue re the assessment of affordability that is of interest. Ms Samuels tried to argue (in effect) that (aside from housing benefit) benefit payments (e.g. child benefit or child tax credits) should effectively be ring-fenced and used to cover the day to day living expenses  (e.g. bringing up children) and should not be used to pay rent. This argument was not well received. The Court of Appeal considered the legislation and Code of Guidance for Local Authorities 2006, which advises that income as a whole needs to be considered - not that benefits income is to have any special status or treatment.

There was then an attempt by Ms Samuels to argue that the Code of Guidance provisions re affordability (which provide that a property would be unaffordable if residual income is less than the level of income support or jobseekers allowance based on their family size) should be considered. The Court of Appeal felt that although this was not specifically expressed to have been considered, there was enough to show that affordability had been considered. Ms Samuels' appeal was therefore dismissed.

In a world of rising private sector rents and welfare cuts, the decision provides useful guidance in respect of how benefit payments are to treated in the context of assessing the affordability of accommodation.