A single mother of four today won a Supreme Court fight against the way Haringey Council brought in new tax benefit rules.

Five judges held unanimously that the new rules had been adopted following a council-led consultation that was both “unfair and unlawful.”

Michelle Moseley, who is unable to work for health reasons, took the council to court after losing her full council tax benefit last April. 

Since then, she has been asked to pay around 20 per cent of the council tax bill.

Ms Moseley said she was "relieved" to have won.

She, said: “Taking legal action was a last resort because the council just weren’t listening to us and so many people have struggled with their bills in the past year.

"Hopefully now they will reconsider their position and make changes to the way they use the council tax rebate system.”

In April, the Government announced it would cut funding for council tax benefit by ten per cent, ordering councils to find the extra money by coming up with their own council tax reduction scheme.

It also ordered local authorities to consult everyone receiving council tax benefit on possible tax reduction schemes.

Haringey Council carried out its consultation in August 2012. It proposed that the government cuts could be met by cutting council tax benefit by 20 per cent to anyone who was not either a pensioner or disabled.

The consultation did not offer any other ways to deal with the government cuts, such as raising council tax, cutting money to other council services, or using capital funds. 

Ms Moseley said: “We are relieved to have won this court battle and prove that the consultation was unfair, but it is such a shame that it has had to come to this as the council should have been looking out for people like me who are struggling and are in a vulnerable position.

"We didn’t know there were potential alternatives to the system they wanted to use, it was just presented as if we had no choice.

The Reverend Paul Nicolson, of campaign group Taxpayers Against Poverty, said the ruling was a "powerful win" for campaigners against the taxation of benefits.

He said: "The council is taxing the lowest benefits that are needed for food, domestic fuel and shelter.  The judgement leaves the council free to reconsult all us residents about whether council tax should be increased by an average of 86 pence a week to restore the 100 per cent council tax benefit for the poorest residents."

Giving his judement, Lord Wilson said: “In this case, fairness demanded that the consultation document should briefly refer to alternative methods of absorbing the shortfall in government funding and to the reasons why the Respondent (Haringey) had concluded that they were unacceptable.”

Alex Rook, Ms Moseley's solicitor, said: "This judgment will make a real difference in future to the way in which ordinary people in England and Wales are involved in decisions which affect their lives.

"Last year we warned that the council tax changes were going to hurt vulnerable residents who simply could not afford to pay under the new rules.

“Now today’s ruling will send a very clear message to all local authorities that they need to ensure that their consultations present the options in an accurate way and truly involve local people in the decision making process.

“Following today’s judgment local authorities and other public bodies should be in no doubt that they cannot hide away from the true reasoning behind their decisions, and will be required to give the public more information about the possible options and the reason why they favour their proposal.

"The case is a good example of where judicial review and legal aid have been used positively to hold local councils to account."

A Haringey Council spokesman said: “We accept the court’s judgment and will now consider its findings.”