The Government unlawfully discriminated against a Croydon carer by failing to exempt her from the benefits cap, a High Court judge has ruled.

Ashley Hurley, 26, a single mother who looks after her severely disabled grandmother Mary Jarrett, 72, was evicted from her home after the Department for Work and Pensions (DWP) docked £88.80 a week from her housing benefit.

She and her four children now live in "intolerable" conditions in a single room in her grandmother's house.

Ms Hurley receives £62-a-week allowance for providing around-the-clock care for her frail grandmother, who is recovering from lung cancer and has low mobility.

But under reforms introduced by welfare secretary Iain Duncan Smith in April 2013, the allowance can be included in the £500 weekly benefits limit.  

Ms Hurley, Ms Jarrett and a third claimant, Lee Palmer, challenged the policy at the High Court, where a senior judge on Thursday ruled they were victims of "objectively unjustifiable indirect discrimination". 

Mr Justice Collins said the Government should consider exempting "at least individual family carers such as these claimants since these are very few and the cost to public funds if the cap is to be maintained is likely to outweigh to a significant extent the cost of granting the exemption".

During a two-day hearing at the Royal Courts of Justice in October, the court heard how Ms Hurley had paid £207.69 a week to live in rented accommodation in Croydon with her four children.

Following the introduction of the cap she fell into rent arrears and was evicted in October last year. 
Croydon Council offered to rehome the family in a house in Birmingham, which Mr Justice Collins said was "plainly impossible if she was to continue to care for her grandmother."

Instead Ms Hurley and her children moved into her grandmother's house in Peckham, where they sleep in a single room in condition the judge described as "intolerable".

Ms Hurley, whose husband is serving a long prison sentence and is no longer part of her life, said: "Because of the cap I can't afford my own place. Me and the kids all sleep in a bed in one room. It is a nightmare."

Her lawyer Caoilfhionn Gallagher told the court it was "unreasonable to apply a cap aimed at workless families to persons" caring full-time for severely disabled family members.

She said: "To qualify for a carer's allowance, the benefit claimant has to be providing full-time unpaid care - upwards of 35 hours a week - to a severely disabled person who receives disability living allowance.

"This means that anyone receiving carer's allowance is not available to work sufficient hours to avoid the cap whilst they receive it, because they must be providing unpaid care on a full-time basis."

Mr Justice Collins said there was evidence the benefits cap had "forced a number of carers to give up caring" and "is not achieving the saving of public funds".

He added: "In my judgment the failure to exempt at least individual family carers is not lawful because it amounts to indirect discrimination which is not objectively justifiable."

He declared all three claimants were victims of unlawful discrimination by the Government, contrary to Article 14 of the European Convention on Human Rights.

Speaking after the judgment, Ms Hurley said: "I feel so great. It means I should still be able to care for my nan and be able to have my own place at the same time."

A DWP spokeswoman said: "The Government values the important role of carers in society - and 98 per cent are unaffected by the cap. We are considering the judgment and will respond in due course."