Tax Credit Discrimination Unfair - But Justified

A father has lost his legal fight with HMRC to pay him the child tax credit (CTC) his wife received for their two children, despite the Supreme Court stating that the rule indirectly discriminates against men.

The case revolved around the father – responsible for looking after his children for three days a week – who was dependent on subsistence level benefits: incapacity benefit, income support and his disability living allowance.

The children spent most weekends and half of all school holidays with him. His complaint was that the scheme left him with nothing to provide for the needs of his children when they stayed with him.

He applied for CTC, but HMRC determined that the mother had the main responsibility for the children and the application was rejected. The CTC was paid solely to the mother.

The father then appealed the refusal of CTC arguing that the legislative scheme indirectly discriminates against men because, on the whole, fathers are more likely than mothers to have secondary, but nonetheless significant, responsibility for the care of their children.

While the mother could choose to share the CTC, neither HMRC nor the courts could compel her to do so. HMRC pointed out that the aim of the scheme is to reduce child poverty. Splitting the CTC between two carers of modest means could result in neither of them being able to provide for the child’s needs and increase and administrative costs.

Finally, the appellant was asking for an exception to be made to an otherwise justifiable rule.

HMRC accepted that the scheme indirectly discriminates against men, but the key issue was whether it was objectively justified. The appeal tribunal held that it was not and to deny CTC to the father was a breach of article 14 of the European Court of Human Rights. The Upper Tribunal held that the discrimination was justified and that decision was upheld by the Court of Appeal.

However, the Supreme Court unanimously dismissed the appeal, concluding that it was unfortunate that the courts no longer had the power to make consequential orders about benefit sharing. But, the no-splitting rule was a reasonable rule for the state to adopt and the indirect discrimination in this case was justified.