The supreme court has ordered a council to reconsider its decision to declare a single mother of four to be “intentionally homeless” because she was unable to afford the rent.

The unanimous ruling by five justices sets a significant precedent that will expand the housing responsibilities of underfunded local authorities.

The case of Terryann Samuels, whose children are all under the age of 16, also highlights the way in which the Legal Aid Agency (LAA) repeatedly refused to support her appeal even though she was in immediate danger of being turned out on to the street.

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Ministers have consistently said that legal aid remains available to those in danger of losing their homes ever since the 2012 Legal Aid, Sentencing and Punishment of Offenders Act introduced swingeing cuts to funding.

The supreme court judges specifically criticised the “very substantial delay in bringing the case to court” caused by the LAA’s refusal and belated change of mind.

Samuels applied to Birmingham city council as homeless after she had been evicted from her previous, private accommodation because of rent arrears. There was a shortfall in her housing benefit of around £150 a month and she could not afford to bridge the gap by using her other benefits payments.

Delivering judgment, Lord Carnwath said the council officer who reviewed her case had not considered her needs other than housing. “He asked whether there was sufficient ‘flexibility’ to enable her to cope with the shortfall of £151.49 between her rent and her housing benefit,” he said.

“However, the question was not whether, faced with that shortfall, she could somehow manage her finances to bridge the gap; but what were her reasonable living expenses [other than rent], that being determined having regard to both her needs and those of the children, including the promotion of their welfare.”

Her other expenses could not be regarded “as other than reasonable”, he said, given that benefit levels “are not generally designed to provide a surplus above subsistence needs for a family”.

Samuels, who was provided with temporary accommodation pending the outcome of the proceedings, said: “I am delighted with the decision of the court. I have been fighting for so long for this, and have been suffering from the uncertainty of not knowing what will happen to me and the children.”

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Mike McIlvaney, her solicitor at the Community Law Partnership in Birmingham, said: “This important case would never have reached the supreme court if the Legal Aid Agency had had its way. Decisions such as these are churned out across the country on a daily basis, finding individuals to be intentionally homeless in circumstances where they can’t meet the rent.”

Quick guide Rough sleeping and homelessness in the UK Show Hide Is rough sleeping getting worse? The government claims rough sleeping in England fell for the first time in eight years in 2018, from 4,751 in 2017 to 4,677. But the body that oversees the quality of official statistics in the UK has said the number should not be trusted after 10% of councils changed their counting methods. Rough sleeping in London has hit a record high, with an 18% rise in 2018-19. The numbers of people sleeping rough across Scotland have also risen, with 2,682 people reported as having slept rough on at least one occasion. Shelter, whose figures include rough sleepers and people in temporary accommodation, estimate that overall around 320,000 people are homeless in Britain. What’s being done about rough sleeping? The government’s Homelessness Reduction Act 2017, which places new duties on state institutions to intervene earlier to prevent homelessness has been in force for more than a year, but two thirds of councils have warned they cannot afford to comply with it. In 2018, James Brokenshire, the housing secretary, announced a one-off £30m funding pot for immediate support for councils to tackle rough sleeping. How does the law treat rough sleepers? Rough sleeping and begging are illegal in ENgland and Wales under the Vagrancy Act 1824, which makes ‘wandering abroad and lodging in any barn or outhouse, or in any deserted or unoccupied building, or in the open air, or under a tent, or in any cart or wagon, and not giving a good account of himself or herself’ liable to a £1,000 fine. Leading homelessness charities, police and politicians have called on the government to scrap the law. Since 2014, councils have increasingly used public space protection orders to issue £100 fines. The number of homeless camps forcibly removed by councils across the UK has more than trebled in five years, figures show, prompting campaigners to warn that the rough sleeping crisis is out of control and has become an entrenched part of life in the country. Is austerity a factor in homelessness? A Labour party analysis has claimed that local government funding cuts are disproportionately hitting areas that have the highest numbers of deaths among homeless people. Nine of the 10 councils with the highest numbers of homeless deaths in England and Wales between 2013 and 2017 have had cuts of more than three times the national average of £254 for every household. What are the health impacts of rough sleeping? A study of more than 900 homeless patients at a specialist healthcare centre in the West Midlands found that they were 60 times more likely to visit A&E in a year than the general population in England. Homeless people were more likely to have a range of medical conditions than the general population. While only 0.9% of the general population are on the register for severe mental health problems, the proportion was more than seven times higher for homeless people, at 6.5%.

Just over 13% of homeless men have a substance dependence, compared with 4.3% of men in the general population. For women the figures were 16.5% and 1.9% respectively. In addition, more than a fifth of homeless people have an alcohol dependence, compared with 1.4% of the general population. Hepatitis C was also more prevalent among homeless people.

Sarah Marsh, Rajeev Syal and Patrick Greenfield

The chief executive of Shelter, Polly Neate, said: “We’re very pleased to see the court recognise that it’s not lawful to expect families to rely on money they need for their basic living expenses to pay their rent when their housing benefit can’t cover it. This is an important judgment for the future of the welfare system.

“When someone is forced to choose between rent and keeping their children fed, they cannot be viewed as ‘intentionally’ homeless when they choose the latter. Housing benefit cuts mean it has not kept pace with rents for years – it now doesn’t cover a modest rent in a shocking 97% of the country – and cases like this are the result.

“We are hearing from more and more families who are choosing between rent and absolute necessities like heating and food. We urge the government to lift the freeze and make sure benefits cover at least the lowest third of the rental market.”