Residence) Amendment Regulations 2013 No See pp1559 of the Welfare Benefits and Tax Credits Handbook

Transcription

1 The past presence, the future: changes to residence and presence rules Since April 2013, the Government has introduced a host of regulations amending the residence requirements for many social security benefits, particularly targeting EEA nationals exercising their rights to freedom of movement. This has been accompanied by new guidance to both Department of Work and Pensions (DWP) and HM Revenue and Customs decision makers. In several cases, these amendments are as likely to negatively impact on returning UK nationals as EU/EEA nationals. Living in the Common Travel Area for income-based JSA Amending regulations, in force from 1 January 2014, introduced an additional condition to be satisfied as part of the habitual residence test (HRT) for incomebased JSA. As well as needing a right to reside and to be habitually resident in fact, the claimant now needs to have been living in the Common Travel Area 1 for the past three months. 2 This additional requirement only applies to income-based JSA claims made on or after 1 January The new requirement does not only affect EEA nationals coming from Europe it applies to all new claimants (including UK nationals). However, importantly, it does not apply to anyone who is exempt from the HRT, such as people who have acquired and retain EEA worker status. 3 Living in is not defined but DWP guidance 4 suggests that it should be given its ordinary meaning, is not necessarily negated by temporary absences and need not be continuous presence throughout the three months. EEA nationals may be able to rely on the EU Social Security Co-ordination rules to aggregate period of residence in other EEA states to meet this new requirement. 5 This does not help claimants who have been living outside the EEA. The claimant still also needs to be accepted as habitually resident in fact, and for many claimants this will require completing an appreciable period of actual residence. However, the length of this period, if any, depends on all of the claimant s circumstances, and again the co-ordination rules can assist. 6 Remember that if the claimant is covered by the co-ordination rules and had been working in another EEA state, s/he may be able to claim contribution-based JSA if s/he had paid sufficient contributions in the other EEA state. Alternatively, if s/he was receiving an unemployment benefit immediately before moving to the UK, s/he may be able to continue this claim for a limited period. 7 It should also be remembered that receiving JSA is not the same as having jobseeker status as an EEA national. 1 The Common Travel Area is the UK, Ireland, the Channel Islands and the Isle of Man 2 Reg 85A(2) JSA Regulations 1996 No. 207, as amended by the Jobseeker s Allowance (Habitual Residence) Amendment Regulations 2013 No Reg85A(4) JSA Regs, and p1523 of the Welfare Benefits and Tax Credits Handbook 4 Memo DMG 28/13 5 Art 6, Regulation (EC) No 883/2004 and p1598 of the Welfare Benefits and Tax Credits Handbook 6 See pp of the Welfare Benefits and Tax Credits Handbook 7 See pp1559 of the Welfare Benefits and Tax Credits Handbook

2 child benefit and child tax credit As all EU nationals had a right of residence in the first 3 months of residency in UK, the construct of legislation allowed claimants to receive these benefits. However: New regulations have been published in relation to the introduction of a three month residence requirement for tax credits and child benefit. In force from 1 July 2014, the Child Benefit (General) and the Tax Credits (Residence) (Amendment) Regulations 2014 (SI.No.1511/2014) amend the Child Benefit (General) Regulations 2006 and the Tax Credits (Residence) Regulations 2003 so that a claimant must have been living in the United Kingdom for three months before becoming entitled to child benefit or tax credits. The regulations also provide that the new residence requirement shall not apply where a person - 1. most recently entered the United Kingdom before 1 July 2014; 2. is a worker or a self-employed person in the United Kingdom for the purposes of Council Directive 2004/38/EC; 3. retains the status of a worker or self-employed person in the United Kingdom pursuant to Article 7(3) of Council Directive 2004/38/EC; 4. is treated as a worker in the United Kingdom pursuant to regulation 5 of the Accession of Croatia (Immigration and Worker Authorisation) Regulations 2013 (right of residence of a Croatian who is an 'accession State national subject to worker authorisation); 5. is a family member of a person referred to in paragraphs 2,3,4 or 9; 6. is temporarily absent from Northern Ireland and who returns to Northern Ireland within 52 weeks starting from the first day of the temporary absence; 7. returns to the United Kingdom after a period abroad of less than 52 weeks where immediately before departing from the United Kingdom that person had been ordinarily resident in the United Kingdom for a continuous period of 3 months; 8. returns to Northern Ireland otherwise than as a worker or self-employed person after a period abroad and where, otherwise than for a period of up to 3 months ending on the day of returning, that person has paid either Class 1 or Class 2 contributions by virtue of regulation 114, 118, 146 or 147 of the Social Security (Contributions) Regulations 2001 or pursuant to an Order in Council having effect under section 179 of the Social Security Administration Act 1992; 9. is not a national of an EEA State and would be a worker or self-employed person in the United Kingdom for the purposes of Council Directive 2004/38/EC if that person were a national of an EEA State; 10. is a refugee as defined in Article 1 of the 1951 Convention relating to the Status of Refugees, as extended by Article 1(2) of the 1967 Protocol relating to the Status of Refugees; 11. has been granted leave, or is deemed to have been granted leave, outside the rules made under section 3(2) of the Immigration Act 1971

3 where that leave is (i) granted by the Secretary of State with recourse to public funds, or (ii) deemed to have been granted by virtue of regulation 3 of the Displaced Persons (Temporary Protection) Regulations 2005; 12. has been granted leave to remain in the United Kingdom by the Secretary of State pending an application for indefinite leave to remain as a victim of domestic violence; or 13. has been granted humanitarian protection by the Secretary of State under Rule 339C of Part 11 of the rules made under section 3(2) of the Immigration Act Amendments to the EEA Regulations Regulations in force from 1 January amend the Immigration (European Economic Area) Regulations 2006 (EEA Regulations), the most significant consequence of which is to change of the definitions of jobseeker and those retaining worker status for the purposes of being a qualifying person. Jobseeker status and retained worker status while involuntarily unemployed for those who have worked in the UK for at least a year is now restricted to six months, unless the claimant can provide compelling evidence that they are seeking work and have a genuine chance of being engaged. While the basic criteria are not new, the requirement to provide compelling evidence is, but is not defined in legislation, but recent guidance by the DWP provides some information on this 9. The DWP has promised guidance to its decision makers on interpreting this phrase but this has not appeared at the time of writing, although it should be available by July 2014 which is when this change is first likely to bite, given that periods before 1 January do not count towards the six month limit. Those who have worked for less than a year will only retain worker status while involuntarily unemployed for a maximum of six months. In these circumstances there is no extension even if the person continues to seek work and has a genuine chance of finding work. For those who lose their status as a consequence of these amendments, and family members who derive a status from them, this change will mean a potential loss of access to means-tested benefits, child tax credit and child benefit unless they can rely on another type of right to reside under the regulations. Note that the amendments do not affect retained worker status on the basis of being temporarily unable to work due to illness or accident. Example Aletta is a Spanish national who arrived in the UK in June She worked from July until 6 January She is then made redundant and claims JSA. On 10 July 2014 she fractures her collar bone and claims income-related employment and support allowance (ESA). She is not entitled because she lost her retained worker status after six months so she no longer has a right to reside under the EEA Regulations that entitled her to income-related ESA. Before the amendments Aletta would have retained worker status for more than six months and then continued to retain it on the basis she is temporarily unable to work as a result of her accident. 10 Now she can only continue to retain worker status on 8 The Immigration (European Economic Area) (Amendment) (No. 2) Regulations 2013 No DMG 14/15 10 Reg 6(2)(a) Immigration (European Economic Area) Regulations 2006 No. 1003

4 this basis under the EEA Regulations if either she has her accident before her six months is up or if she had already worked for at least a year before retaining worker status as involuntarily unemployed. Note: it may be arguable that Aletta continues to retain worker status beyond six months under a Directive 2004/ The other notable change to the EEA Regulations is the amended derived rights of British citizen s family members. British citizens are normally excluded from the definition of EEA national and so they cannot rely on rights derived from either the EEA Regulations or EC Directive 2004/38, unless they have exercised their right of free movement within the EEA. The amended regulations now only allow family members of British citizens to derive rights from them if the British citizen had exercised their rights as a worker or self-employed person in another EEA state and their centre of interest had transferred there; factors relevant in determining the latter being the period of such residence, whether it was their principle residence and their degree of integration there. If a spouse or civil partner wishes to derive such a right, they must also have lived together in the EEA state in question. However, the new narrower definition in the EEA Regulations does not conform to the European caselaw on the rights contained in the Directive. 12 The effect again will be potential loss of benefits which rely on a right to reside or reduced rights based on the family member s personal status. Amendments to the housing benefit regulations In addition to the restrictions on entitlement to jobseeker s allowance (JSA) described above, from 1 April 2014 income based JSA entitlement no longer exempts the claimant from the habitual residence test for housing benefit (HB), unless entitlement to JSA is based on a right to reside other than as a jobseeker (or other exempt right to reside in the Housing Benefit Regulations 2006). 13 Therefore, those whose only right to reside in the UK is as an EEA jobseeker will not be able to receive help with their rent through HB but those receiving income based JSA because they retain their EEA worker status will. Those with existing HB claims are not affected but a break in either HB or JSA entitlement will end any such protection. Revised guidance on EEA worker and self-employed persons While there has been no change to the legislation governing when an EEA national should be treated as a worker or self-employed person for residence purposes, the DWP and HMRC have issued new guidance to their decision makers about determining these statuses. 14 The guidance attempts to simplify decision making in relation to when someone is or has been engaged in genuine and effective activity by introducing a two stage approach. This first looks at whether someone has earned above a minimum earnings threshold set at the Primary Earnings Threshold for national insurance liability ( 153 gross pw in the current tax year) for the past 3 months. If not, then the second stage is a closer examination of their circumstances 11 Art 7(3)(c) Directive (EC) 2004/38; Antonissen C-292/89 [1991] ECR I See Metock, C-127/08 [2008] ECR I and Eind, C-291/05 [2007] ECR I The Housing Benefit (Habitual Residence) Amendment Regulations 2014 No Memo DMG 1/14, HB Circular A3/2014: Minimum Earnings Threshold and HMRC guidance - Child Benefit and Child Tax Credit right to reside test: workers and self-employed people. All available on the Gov.uk website.

5 to determine whether they in fact meet the established tests of being engaged in genuine and effective activity. Anyone who does meet the minimum earnings threshold for 3 months will automatically be treated as an EEA worker or selfemployed person. The area of concern here is that decision makers may use this as a short-hand for determining claims, so that anyone who does not meet the minimum earnings threshold is automatically treated as not having a right to reside and so has their claim for benefit or tax credit rejected. The guidance does make it clear that this should not happen and tribunals and courts have repeatedly refused to set minimum earnings or periods for what constitutes genuine and effective activity. 15 Note: a person may be a part time worker, not earning 153 a wk to pass the tier- 1 requirement. For example, works for 10 hrs a wk, and at min-wage receives p/wk. It is still possible that this claimant can be deemed a worker and so entitled to HB on that basis. It may also be ( rare cases) that some one in the above position is also signing on for ibjsa. What will JCP decided? If a worker, claimant is not a person from abroad and hence can access HB, if a jobseeker, no access to HB!! Does the CIS system or even ATLAS at the LA show the status of the claimant? Further amendment to IEEA regs 2006 In force from 1 July 2014, the Immigration (European Economic Area) (Amendment) Regulations 2014 (SI.No.1451/2014) redefine the six month period permitted by the European Court of Justice in Antonissen for jobseekers to look for work in the host Member State as the 'relevant period', in order to allow it to be split up over multiple periods of time. 'Relevant period' is thus defined - o o as 'a continuous period of six months' for retained workers who have become involuntarily unemployed following a period of more than 12 months in work; and for jobseekers, as '182 days minus the cumulative total of any days during which jobseeker status has been enjoyed previously'. Once the 'relevant period' has been exceeded it will only be possible to have jobseeker status if the person provides 'compelling evidence' that they are looking for work and have a genuine chance of being engaged. The regulations further provide that a person who has been absent from the UK for a period of more than 12 months will be entitled to a fresh period of residence as a jobseeker. However, in the case of absence from the UK of less than 12 months, the person who is seeking to again enjoy the status of a jobseeker in the UK will be 15 See for example Barry v LB Southwark [2008] EWCA Civ 1440; and CIS/4144/2007

6 required to provide, from the outset, compelling evidence that they have a genuine chance of being engaged. What s in the pipeline? EU migrants' entitlement to out-of-work benefits is to be 'cut off' after three months, the Prime Minister has said. Writing in the Telegraph, Mr Cameron says that to address the 'magnetic pull' of Britain's benefit system - '... we are announcing today that we are cutting the time people can claim these benefits for. It used to be that European arrivals could claim jobseeker s allowance or child benefit for a maximum of 6 months before their benefits would be cut off, unless they had very clear job prospects. I can tell Telegraph readers today that we will be reducing that cut-off point to 3 months, saying very clearly: you cannot expect to come to Britain and get something for nothing.' NB - it is expected that the new rules will be introduced from November In response to Mr Cameron's announcement, Shadow Home Secretary Yvette Cooper has said - 'We need less talk from the Prime Minister on immigration and more action. It s almost a year and a half since Labour called for benefit restrictions on new migrants. In that time we ve had reannouncement after reannouncement from the Tories but little in the way of firm action.' For more information see David Cameron: We re building an immigration system that puts Britain first

7 Residence and presence tests for disability and carers benefits From 8 April 2013, claimants of disability living allowance (DLA), attendance allowance (AA), personal independence payment (PIP) and carer s allowance (CA) must normally meet the following conditions: 16 be present in Great Britain; have been present in Great Britain for 104 of the past 156 weeks (the past presence test); and be habitually resident in the UK, the Republic of Ireland, the Isle of Man or the Channel Islands. Members of UK armed forces stationed and serving abroad and their family members are treated as present in the UK; can use time serving abroad to help satisfy the past presence test; and are treated as habitually resident. Special rules also treat defined groups of mariners, aircraft workers and continental shelf workers as present in Great Britain, so time working abroad in these roles for a UK employer counts towards satisfying the past presence test. Terminally ill claimants do not have to satisfy the past presence test. Under the UK Regulations, entitlement to PIP, DLA and AA continues for the first 13 weeks of an absence from the UK that is not expected to exceed one year in length. This is extended to 26 weeks where the claimant has gone abroad for specific medical treatment. Entitlement to CA continues for up to four weeks (as long as either the person the carer looks after is there or it is allowed as a break from caring). 17 Beyond this point, the carer must be abroad specifically to care for the disabled person. The test of habitual residence differs significantly from that for means-tested benefits in that it does not include any references to non-uk nationals having a right to reside in the UK. The test applies to all claimants who have spent time abroad (except members of the armed forces and their families as highlighted above). The impact of EU law is explained below. In the UK context, the claimant must have a settled intention to remain in the UK for the time being, and (unless resuming a previous habitual residence) have been in the UK for an appreciable period. Disability and carers benefits and the EU co-ordination rules To be entitled to the daily living component of PIP, the care component of DLA, AA or CA, the UK must be the competent state for payment of sickness benefits to the claimant under the EU co-ordination rules for social security. 18 This may cause problems for those EEA nationals who receive state pensions from other states, but 16 Reg 2 Social Security (Attendance Allowance) Regulations 1991 No ( AA Regs below); Reg 2 Social Security (Disability Living Allowance) Regulations 1991 No ( DLA Regs below); Reg 16 Social Security (Personal Independence Payment) Regulations 2013 No. 377 ( PIP Regs below); Reg 9 Social Security (Carer s Allowance) Regulations 1976 No. 409 ( CA Regs below) 17 See pp540-1 of the Welfare Benefits and Tax Credits Handbook 18 ss65(7), 70(4A), and 72(7B) Social Security Contributions and Benefits Act 1992; s84 Welfare Reform Act Note that terminally ill AA claimants may be able to argue that this does not apply, due to where the amendment was inserted in the Act.

8 have not undertaken any work in the UK. It may be possible to argue that, if the needs are likely to be long-term or permanent, the benefit should not be classified as a sickness benefit, which would offer a way round the exclusion. 19 An EEA national (or their family member) who: 20 is habitually resident in the UK; is covered by the EU co-ordination rules; and can show a genuine and sufficient link to the UK social security system automatically satisfies the past presence test. Factors to be taken into account include whether the claimant receives a UK contributory benefit or pension, periods of work and residence in the UK, and whether the claimant is a dependent of someone else with such a link. Other claimants may be able to use periods of residence in another EEA state to help satisfy the past presence test, due to the principle of aggregation of periods of residence in different states. 21 Similarly, a claimant who is habitually resident in another EEA state can continue to receive a benefit if the UK is still the competent state for the payment of sickness benefits. Again, there must still be a genuine and sufficient link to the UK social security system. 22 Miscellaneous amendments It is worth noting that in addition to the headline changes described above, some other more minor amendments have been made which affect claimant s entitlement based on their residence or presence in the UK. From October 2013, amendments 23 were made to the regulations covering habitual residence for the means-tested benefits to update some of the terminology used in relation to immigration status and to include those covered by the Home Office s Domestic Violence Concession as a group exempt from the habitual residence test. However, these amendments also removed the 42 day rule for those whose funds from abroad are disrupted which had allowed them to claim means-tested benefits for this period despite their public funds restriction. The same has now been done for tax credits from 6 April Reform of EU migrant benefit rules needed, says government Benefit rules governing EU migrants' entitlement to social security benefits need reform, the government has said today In a new report, produced as part of a government review of the EU s competences designed to - 19 Stewart v SSWP, C-503/09 [2011] ECR I esp paras Reg 2A AA Regs; Reg 2A DLA Regs; Reg 22 PIP Regs; Reg 9A CA Regs 21 Art 6 Regulation (EC) 883/ Reg 2B AA Regs; Reg 2B DLA Regs; Reg 23 PIP Regs; Reg 9B CA Regs 23 The Social Security (Miscellaneous Amendments) (No. 3) Regulations 2013 No The Tax Credits (Miscellaneous Amendments) Regulations 2014 No. 658

9 '... provide an analysis of what the UK s membership of the EU means for the UK national interest, and deepen public and Parliamentary understanding of our relationship with the EU...' - the government says that whilst it does not wish to predetermine or prejudge proposals that either Coalition party may make in the future for changes to the EU, it nevertheless considers that now is an appropriate time to review the rules with a view to modernisation and ensuring they are fit for purpose - 'The rules have evolved beyond the original scope as the EU has evolved and the interaction between rules on residence and social security coordination becoming increasingly complex. This complexity has led to an increasing number of challenges through the ECJ, creating uncertainty and, in the majority of cases, weakening the ability of Member States to determine how their systems operate. These problems are magnified by the fact that the EU of today is very different to when the rules were created. There are many more Member States and much greater diversity in how their social security systems operate. Migration patterns have also changed significantly, with much more migration than in the past, including more migration of non-working people including jobseekers. Without reform, legitimate public concern about how EU migrants access social security in other Member States is likely to significantly undermine support for the principle of free movement.' For more information see Review of the Balance of Competences between the United Kingdom and the European Union Single Market: Free Movement of Persons. Further reading Those advisers who have completely forgotten about the accession of Croatia to the EU on 1 July 2013 can re-visit the restrictions placed on Croatians access to the UK labour market by re-reading Henri Krishna s article in Welfare Rights Bulletin Part 12 of the Welfare Benefits and Tax Credits Handbook remains a key resource for advisers, who should also be aware of the forthcoming publication of the sixth edition of CPAG s Benefits for Migrants Handbook, expected in Autumn This publication has the space to delve into migrants rights to benefits and tax credits in more detail than the main Handbook