Mark Gallagher & Frances Wilson
(represented by the Equality Authority)
Donegal County Council
Equal Status Act 2000 - Direct discrimination, section 3(1)(a) - Disability, section 3(2)(g) - Reasonable accommodation, section 4 - Supply of goods and services, section 5(1) - Application under Local Authority's Shared Ownership Scheme
Delegation under the Equal Status Acts
This complaint was referred to the Director of Equality Investigations under the Equal Status Act 2000. In accordance with her powers under section 75 of the Employment Equality Act 1998 and under the Equal Status Act 2000, the Director has delegated the complaint to myself, Brian O'Byrne, an Equality Officer, for investigation, hearing and decision and for the exercise of other relevant functions of the Director under Part III of the Act.
This dispute concerns a complaint by Mark Gallagher & Frances Wilson that they were discriminated against on the grounds of their disabilities when they sought approval from Donegal County Council to purchase a house under the provisions of the Shared Ownership Scheme. The Shared Ownership Scheme is a facility which allows applicants to purchase a share (50% normally) of their house while renting the remaining share from the Council over a set period of time (normally 20 or 25 years).
The complainants submitted an application under the Shared Ownership Scheme to Donegal County Council in January 2002 to purchase a house valued in the region of €102,000. In support of their application, they submitted evidence of the pay that each was receiving at that time under Community Employment Schemes together with details of the reduced Disability Allowance payments they were also receiving at the time from the Department of Social and Family Affairs.
On 13 June 2002, the couple received a letter from the Council stating that "Based on the income details submitted on file and the fact that you are not in full-time permanent employment you do not qualify for assistance under this Scheme at this time. I enclose herewith Housing Assistance Application Form, for your information. Please quote the above mentioned reference number on your application form in order that any relevant information on your Shared Ownership file can be attached to your Housing Application file, for future reference.
Should you have any further queries in relation to this matter, please do not hesitate to contact the undersigned." SThe letter provided no information as to what income calculations were used in reaching a decision nor were the couple contacted at any time by the Council during the period to discuss options that might be available to them to enable them to meet the requirements of the scheme.
When the complainants received the letter of 13 June 2002, they chose not to contact the Council directly but instead asked the Equality Authority to take the matter up on their behalf. Correspondence ensued between the Council and the Authority over the remainder of the year resulting in the Council agreeing to reconsider their application in December 2002.
When reconsidering the application, it was found that the couple were now eligible for assistance under the Shared Ownership Scheme based on their current income at the time. As a result, the couple were given approval in January 2003 to proceed with the purchase of a house and they chose a house valued at €126,000.
The complainants maintain that the delay in approving their application resulted in them having to pay an extra 25% for their house because of inflation in house prices over the course of 2002. They also state that they lost out on the €3,700 first time buyers grant that was discontinued from 2003.
At the Hearing on 20 June 2006, the respondents explained that there were a number of factors involved in the assessment of Shared Ownership Scheme applications. These included:
Whether the applicants initially acquired a 40%, 50% or 60% share in their house
Whether the mortgage repayments were spread over 20 or 25 years
Whether the applicants fulfilled the "stress test" requirement that mortgage repayments would not exceed 35% of a household's net income
The respondents explained at the Hearing that the applicants' initial application was calculated on the basis of a 50/50 split between mortgage and rent with repayments being made over a 20 year period. The respondents stated that these were the standard rules applied to Shared Ownership Scheme applications at the time.
In deciding whether the applicants fulfilled the 35% "stress test", the complainants were asked to supply details of their current earnings. In response, the complainants supplied confirmation that, at the time, they were both on Disability Allowance (from which they were receiving a combined weekly income of €199) and were also working on Community Employment Schemes (from which they were receiving a combined weekly income of €250 approx). However, the documentation showed that both employment placings were temporary and were due to end in the ensuing months.
At the Hearing, the respondents were asked to describe in detail how the complainants' application was assessed in 2002. The respondents explained that, on noting that both CES placings were only temporary, it was decided that earnings from this source should not be used to assess the applicants' ability to pay off a long-term mortgage. Accordingly, the Council disregarded the CES income from the calculations and only utilised the remaining element of the applicants' income (the Disability Allowance payments of €199 per week) in assessing their ability to repay a mortgage. The respondents explained that they then applied the 35% "stress test" to the applicants' case as follows: The €199 was multiplied by 4 to give a monthly figure of €796 . The Council then calculated 35% of this figure at €278.60 and concluded, in accordance with their "stress test" provisions, that this was the maximum mortgage repayments that the couple could afford to pay per month.
The Council then proceeded to calculate the repayments that would be required under the Shared Ownership Scheme on a house valued at €102,000 on a 50/50 split over 20 years. They concluded that monthly payments of €319 would be required to pay off the mortgage and rental elements of the loan. Because of the differential between the €319 and the €278.60 "stress test" figure, the Council rejected the complainants' application. This was the basis of the decision communicated to the complainants in the Council's letter of 13 June 2002.
At the Hearing, the respondents pointed out that assessment practices have been revised by the Council since 2002 and that nowadays all financial options are explored with SOS applicants before a final decision is made on individual applications.
Conclusions of the Equality Officer
In considering the manner in which the complainants' application for a Shared Ownership Scheme mortgage was considered, I have noted the following:
(1) The Council simply applied the standard rules (50/50 split and 20 year term) to the applicants case when making their assessment.
(2) No consideration was given as to whether a more favourable outcome could have been achieved if a 40/60 mortgage/rent split or a 25 year loan had been applied to their case. Indeed, it was only at the Hearing itself that it was established that, if the applicants had been offered a 40/60 split that the repayments would have actually worked out at precisely €278 per month.
(3) Details as to how the calculations were made were not disclosed to the applicants prior to the rejection of their application
(4) The applicants were not told that their income from the Community Employment Schemes had been disregarded. If they had been consulted, the complainants would have been in a position to inform the Council that a system was in place whereby the complainants would automatically have received increased Disability Allowances on the cessation of their CES employment. This would have meant that the complainants' Disability Allowance would have increased to a combined income of over €300 per week from the reduced rate of €199 they were receiving while on the CES work schemes. A combined income of €300 per week would have easily satisfied the Council's "stress test" conditions at that time
In relation to points (1), (2) and (3) above it is likely that the same practices were applied to all applicants under the Shared Ownership Scheme in 2002. Accordingly, I consider that it is likely that other applicants, not covered by a discriminatory ground, may also have suffered the same treatment as the complainants as a result of the Council's failure to explore other repayment structures with them at the time their applications were being considered. For this reason, it could be argued that it was more a failing on the Council's part, rather than a conscious act of discrimination, that led to the complainants' application (and probably other applications) being rejected in 2002 without full consideration.
Point (4) above is, however, a different matter as it highlights the fact that the complainants were not standard applicants who were in normal employment or on unemployment benefit. On receipt of their application, it would have been immediately clear to the Council that both applicants were disabled from the fact that both were in receipt of Disability Allowance.
What I find particularly striking about this case is that the rejection of the complainants application arose primarily from the Council's lack of knowledge and awareness of the link between Social Welfare schemes and Community Employment Schemes. If the Council had been aware at the time that there was a link between Disability Allowance payments and CES payments, it is likely that the application would have been approved in early 2002. It appears, however, that no effort was made at the time to establish from the applicants or the relevant Department whether there was such a link.
In addition to the above, it is also noted that, despite the fact that it would have been obvious that the applicants suffered from disabilities, no additional consideration was given to their case in an effort to establish if they could be accommodated under the SOS. No effort was made by the Council to contact the applicants to inform them of the position or to discuss their options with regard to accepting a reduced mortgage/rent split or a longer repayment term.
Section 4 of the Equal Status Act states that "for the purposes of this Act discrimination includes a refusal or failure by the provider of a service to do all that is reasonable to accommodate the needs of a person with a disability by providing special treatment or facilities, if without such special treatment or facilities it would be impossible or unduly difficult for the person to avail himself or herself of the service."
Having considered the evidence before me, I consider that the Council should have recognised the applicants as people with disabilities on receipt of their Shared Ownership Scheme application and, as such, that they were entitled to be afforded special treatment under the provision of the Equal Status Acts.
In considering this case, I have taken cognisance of how the "reasonable accomodation" provision was approached in other circumstances. In particular, I have noted the Labour Court finding in A Health and Fitness Club and a Worker (ED/02/59 Determination No 037) where an employee was dismissed from her employment for medical reasons without the employer first seeking appropriate medical advice in relation to her condition. Although that case was taken under employment law, there are noticeable similarities between the cases. In the Health Club case, the Labour Court found that the employer had failed to conduct enquiries about the full factual position before dismissing the employee, stating "At a minimum an employer should ensure that he or she is in full possession of all the material facts concerning the employee's condition and that the employee is given fair notice that the question of his or her dismissal for incapacity is being considered.The employee must also be allowed an opportunity to influence the employer's decision." The Labour Court's decision was subsequently upheld on appeal to the Circuit Court.
It is my opinion that Donegal County Council acted in a similar fashion to the respondent in the above case. By not fully familiarising themselves with the operation of the Disability Allowance Scheme and by not checking whether there was a link between it and the Community Employment Scheme, I consider that Donegal County Council did not ensure that they were "in full possession of all the material facts" concerning the applicants' circumstances. Accordingly, I consider that the Council failed in their duties to the complainants under the reasonable accommodation provisions of the Equal Status Acts.
I find that the complainants have established a prima facie case of discrimination in terms of sections 3(1), 3(2)(g) and 4(1) of the Equal Status Acts and that the respondents have failed to rebut the allegation.
In their submission, the complainants claim that they suffered financially because of the rise in house prices between their first and second Shared Ownership Scheme applications. They maintain that the house they eventually bought in 2003 cost €24,000 more than the original house they chose and that they also lost out on the €3,700 new house grant which was abolished from 2003.
Section 27 of the Equal ,Status Acts provides that the Equality Officer can order compensation for the effects of discrimination. In considering the level of redress to award in this case, however, I find it difficult to accept that Donegal County Council should be held responsible for the ongoing rise in house prices. Instead, I consider that the equivalent of the new house grant (€3,700) is a more appropriate figure to award each complainant in this case. Accordingly, I order that the respondents pay the complainants the sum of €7,400 in respect of the discrimination suffered.
18 August 2006