Trinity College Dublin, Ireland From the SelectedWorks of Mel Cousins 2007 The 'Right to Reside' and Social Security Entitlements Mel Cousins, Glasgow Caledonian University Available at: https://works.bepress.com/mel_cousins/35/
This article was downloaded by:[cousins, Mel] On: 27 August 2007 Access Details: [subscription number 781282143] Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Journal of Social Welfare and Family Law Publication details, including instructions for authors and subscription information: http://www.informaworld.com/smpp/title~content=t713705036 The 'Right to Reside' and Social Security Entitlements Online Publication Date: 01 March 2007 To cite this Article: Cousins, Mel (2007) 'The 'Right to Reside' and Social Security Entitlements', Journal of Social Welfare and Family Law, 29:1, 67-75 To link to this article: DOI: 10.1080/09649060701423206 URL: http://dx.doi.org/10.1080/09649060701423206 PLEASE SCROLL DOWN FOR ARTICLE Full terms and conditions of use: http://www.informaworld.com/terms-and-conditions-of-access.pdf This article maybe used for research, teaching and private study purposes. Any substantial or systematic reproduction, re-distribution, re-selling, loan or sub-licensing, systematic supply or distribution in any form to anyone is expressly forbidden. The publisher does not give any warranty express or implied or make any representation that the contents will be complete or accurate or up to date. The accuracy of any instructions, formulae and drug doses should be independently verified with primary sources. The publisher shall not be liable for any loss, actions, claims, proceedings, demand or costs or damages whatsoever or howsoever caused arising directly or indirectly in connection with or arising out of the use of this material. Taylor and Francis 2007
Journal of Social Welfare & Family Law Vol. 29, No. 1, March 2007, pp. 67 75 Cases Edited by Emma Hitchings The Right to Reside and Social Security Entitlements Income-related benefits right to reside interpretation of the term whether compatible with EU law Decision of a Tribunal of Social Security Commissioners CIS/3573/2005 Since 1994, social security law in the United Kingdom has required that a person be habitually resident in the UK in order to qualify for a range of social security benefits (Adler 1995). On the accession of 10 new Member States to the EU in May 2004, the UK was one of the few countries not to impose any restriction on free movement of workers from the new Member States (although it did introduce registration requirements). However, reflecting its concern about the potential impact of such free movement on the social security system, the government strengthened the habitual residence test by adding a requirement that the person have a right to reside within the UK (Toner 2004; White 2005a). Such provisions now apply in relation to income support, jobseeker s allowance, housing benefit, council tax benefit, state pension credit, child benefit and child tax credit. The interpretation and the legality of this provision has recently been considered by a Tribunal of Social Security Commissioners which gave separate decisions in relation to five cases concerning income support, pension credit and housing benefit. The lead case was CIS/3573/ 2005. Facts of the Case The appeal involved a Swedish national who arrived in the UK from Sweden on 1 March 2004. In May 2004, and again in August 2004, she claimed income support in respect of herself and her three children. These claims were rejected on the basis that she did not have the right to reside in the UK. Her appeal was accepted by the appeal tribunal, which held that she did have a right to reside in the UK. The issue was then appealed to the Social Security Commissioners by the Secretary of State and, given the importance of the issue, was heard by a Tribunal of Commissioners. ISSN 0964-9069 print/1469-9621 online # 2007 Taylor & Francis DOI: 10.1080/09649060701423206
68 Cases The Relevant Law Section 124(1) (b) of the Social Security Contributions and Benefits Act 1992 provides that a person in Great Britain is entitled to income support (IS) if he has no income or his income does not exceed the applicable amount. Regulation 21(1) and para 17 of Sched 7 of the Income Support (General) Regulations 1987 ( the regulations ) provide that the applicable amount of IS for a claimant who is a person from abroad is nil. Thus the Tribunal had to consider whether or not the claimant was a person from abroad which was defined in reg 21(3) of the regulations. This provided that, subject to paras (3F) and (3G) in Sched 7, person from abroad meant a claimant who is not habitually resident in the UK, the Channel Islands, the Isle of Man or the Republic of Ireland. However, the regulations went on to provide that no claimant shall be treated as not habitually resident in the United Kingdom who is (a) a worker for the purposes of Council Regulations 1612/68 or 1251/70 or a person with a right to reside in the United Kingdom under Directive 68/ 360/EEC or 73/148/EEC or a person who is an accession State worker (who is treated as a worker under the Immigration (European Economic Area) Regulations 2000); or (b) a refugee; or (c) a person who has been granted exceptional leave to enter the United Kingdom or to remain in the United Kingdom; or (d) a person who is not a person subject to immigration control within the meaning of s 115(9) of the Immigration and Asylum Act and who is in the United Kingdom as a result of his deportation, expulsion or other removal by compulsion of law from another country to the United Kingdom. As can be seen, the definition of person from abroad was specifically subject to para (3G). This provision took effect from 1 May 2004 and introduced the right to reside restriction. Regulation 21(3G) provided that: In paragraph (3), for the purposes of the definition of a person from abroad no person shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland if he does not have a right to reside in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland. Thus the somewhat convoluted legislation provides that a claimant who is a person from abroad is entitled to nil income support. A person from abroad is a person who is not habitually resident in the United Kingdom (subject to the provisos in reg 21(3)(a) (d)). However, as a result of the 2004 amendment, a person is not to be treated as habitually resident unless he or she has a right to reside in the United Kingdom. Accordingly, in order to decide if the claimant was a person from abroad the Tribunal had to consider whether the claimant was habitually resident and had a right to reside in the United Kingdom. The case raised three main issues. Two concerned the interpretation of the regulations and are now of somewhat historical interest as those regulations at issue in this case have been replaced by amended regulations (discussed below) which address the issues raised. The third issue was the more substantive one of whether a right to reside test is compatible with EU law.
The Scope of the Right to Reside Provisions Journal of Social Welfare and Family Law 69 It was accepted by both sides that the claimant, leaving aside the question of the right to reside, was actually habitually resident in the UK. The first question to be decided was whether the 2004 amendment applied generally to reg 21(3), ie to all persons who were or were to be treated as habitually resident, or only to those persons treated as habitually resident under reg 21(3)(a) (d). Given the specific wording of regulation 21(3G), ie no person shall be treated as habitually resident (my emphasis), the Tribunal accepted that this argument was potentially persuasive as it would mean that the words shall be treated would be interpreted in exactly the same way in both the Regs 21(3) and 21(3G). However, the Tribunal rejected such an interpretation on the basis that it would render the right to reside test entirely otiose as all the persons deemed to be habitually resident in paras (a) (d) already had a right to reside in the UK (at para 16). Lawful Presence The second argument for the claimant was that, as a European Union citizen, she was lawfully present in the UK and that this must equal a right to reside. However, the Tribunal did not accept that de facto presence is the same as a right to residence (para 35). It took the view that a statutory scheme which has permitted people to be lawfully in the UK without having a right to reside is perfectly understandable and justified in the circumstances (para 36). Did the Claimant Have a Right to Reside? The Tribunal considered the issue as to whether the claimant had a right to reside in the UK under either European or national law. The term right to reside was not defined in the regulations (as they then stood). The Tribunal referred to the relevant provisions of the EC Treaty. Article 17(1) provides that: Citizenship of the Union is hereby established. Every person holding the nationality of a Member State shall be a citizen of the Union. Article 18(1) of the Treaty states that: Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect. The Tribunal took the view that the relevant limitations and conditions have been laid down by Council Directive 90/364. The preamble of this directive provides that:... beneficiaries of the right of residence must not become an unreasonable burden on the public finances of the host Member State. Accordingly, Art 1 of the directive provides that: Member States shall grant the right of residence to nationals of Member States who do not enjoy this right under other provisions of Community Law and to members
70 Cases of their families provided that they themselves and the members of their families are covered by sickness insurance in respect of all risks in the host Member State and have sufficient resources to avoid becoming a burden on the social assistance system of the host Member State during their period of residence. The United Kingdom implemented this directive by way of the Immigration (European Economic Area) Regulations 2000. Regulation 14(1) of these regulations provides that: A qualified person is entitled to reside in the United Kingdom for as long as he remains a qualified person. It was accepted that the claimant, who was not economically active, did not fall within the definition of qualified person under the immigration regulations. The Tribunal held that the right of residence only applied to qualified persons and that, as she was not a qualified person, she did not have a right to reside in the UK. Was There Discrimination Under EU Law? The Tribunal then considered whether the right to reside provisions were contrary to Art 12 of the EC Treaty which prohibits any discrimination on the grounds of nationality within the scope of application of the Treaty. Counsel for the Secretary of State accepted that the right to reside provisions were indirectly discriminatory because they were more easily satisfied by the UK nationals that by non-nationals. Accordingly the Tribunal had to establish whether there was an objective justification for the provisions. The Secretary of State argued that there was such a justification, relying in particular on a statement explaining the policy reasons for the right to reside provisions (Command Paper Cm 6181). This stated, inter alia, that: 4. The underlying purpose of the Regulations is to safeguard the UK s social security system from exploitation by people who wish to come to the UK not to work but to live off benefits. At the same time, the Regulations will allow those who come here genuinely to work to have access to income-related benefits. 5. The Regulations are also intended to support the Government s policy of opening the United Kingdom s labour market immediately to workers from the ten countries which will accede to the European Union on 1 May 2004. The Government recognises that any resulting influx of people from abroad might lead to additional and inappropriate demands on the UK s social security system. That is why we are laying the Regulations to come into effect from 1 May. Counsel for the Secretary of State also referred to a judgment of Sedley LJ (Westminster City Council v Morris [2005] EWCA Civ 1184 at para 47) in which he said: The problem is in all significant respects a problem of foreign nationals either coming to this country (benefit tourism) or outstaying their leave to be here (irregular status) in order to take advantage of the priority housing status accorded to homeless families. Measures directed at this, I accept, require no explicit
justification, whether because they are an aspect of immigration control or because they are an obviously legitimate response to a manifest problem. On this basis, the Secretary of State argued that there need not be explicit justification for the right to reside provision. The Tribunal, with no further consideration, found that the policy as stated in the statement justifies the indirect discrimination (at para 28). The Tribunal took the view that the policy outlined is one which was well within the margin of discretion that a national government is entitled to include in its regulations and consistent with the scope within which a Member State is allowed to operate in light of the specific terms of the Treaty of Rome and directive 90/364 (at paras 28 and 32). Even if the Tribunal had not considered the statement relevant, it suggested that no explicit justification was required as the right to reside provisions were an obvious legitimate response to a manifest problem (at para 28). Discussion Journal of Social Welfare and Family Law 71 This case raised three main issues concerning the right to reside provisions; two of which were primarily matters of interpretation. The first concerned whether the amendments contained in reg 21(3G) achieved its objective. Even if this argument was successful, it was, of course, the open to the Secretary of State to amend the wording (as has now been done). However, there does seem to be some considerable merit in the argument that the wording of the regulation did not achieve its objective. Given that the regulation purported to restrict the rights of EU citizens, it could be argued that the legislation should be interpreted in a restrictive matter (rather than the purposive manner adopted by the Tribunal purposive, that is, in terms of furthering the government s policy intention). In relation to the argument as to the difference between lawful presence and a right to reside, however, the Tribunal does appear to be correct to distinguish between the two concepts. While it might be difficult for an individual to distinguish, in practice, between these two states given that many persons who do not have a right to reside are both legally present and habitually resident in the UK it does seem necessary that a particular meaning be given to the term right to reside. Finally, we come to the more substantive issue of whether or not a right to reside provision is consistent with EU law. Here we can definitely say that, whether or not the decision of the Tribunal is correct as to the result, the Tribunal s approach to the issue of indirect discrimination under EU law is fundamentally incorrect. As the Tribunal properly identified, the impact of the right to reside provision gives rise to disproportionate impact on non-nationals and must, accordingly, be objectively justified if it is not to be in breach of EU law (indeed, this appears to have been conceded by the Secretary of State). However, the Tribunal appears to have fundamentally misunderstood the approach to be adopted in relation to objective justification. The European Court of Justice s approach to objective justification necessitates that the requirement in question be justified on the basis of objective
72 Cases considerations that are independent of the nationality of the persons concerned and proportionate to the legitimate aim of the national provisions (see, for example, Case C-138/02, Collins [2004] ECR I-2703 at para 73.). In this case, even assuming that that the right to reside requirements could be considered to be independent of the nationality of the persons concerned and that the national provisions involved a legitimate aim, the Tribunal made no effort whatsoever to assess whether the provisions were proportionate. Rather, the approach adopted by the Tribunal was more akin to the rational basis review applied in relation to the United States Constitution when suspect or quasi-suspect categories (which, incidentally, include race and national origin) are not in question. In practice, such rational basis review involves a very loose level of scrutiny whereby legislation is upheld if the state can show any reasonable rational basis for its existence. For example, the US Circuit Courts of Appeal have upheld the exclusion of disabilities arising from alcohol or drug addiction from US disability benefits on the basis that there was a rational basis for this exclusion, ie that Congress wished to discourage alcohol and drug abuse and that the exclusion was rationally related to this objective in that it withheld benefits from persons likely to use the funds to purchase drugs and alcohol (Mitchell v Commissioner SSA 182 F3d 272, cert. denied 528 US 944; Grigsby v Barnhardt 294 F3d 1215). EU law has always required a somewhat more rigorous approach and this is particularly true given the developing case law on EU citizenship (on which see Hailbronner 2005; White 2005b). The European Court of Justice has, of course, upheld the proportionate application of the habitual residence test in the case of jobseekers (in the Collins case). However, one would expect that the right to reside test would have a particularly disadvantageous impact on non-uk nationals and, therefore, be more difficult to justify under EU law. Unfortunately the actual impact of the test does not appear to have been considered in depth by the Tribunal of Commissioners, which makes it difficult to assess how proportional it might be. (One might also note that the Westminster case relied on by the Secretary of State did not concern EU law, but rather the European Convention on Human Rights and the statement referred to was clearly obiter as the judge went on to point out that justification was required in relation to the British citizen involved in that case.) New Regulations and Further Case Law The regulations considered in this decision have now been superseded by new regulations which came into force on 30 April 2006 (the Social Security (Persons from Abroad) Amendment Regulations, 2006) which define the term right to reside and remove the textual lack of clarity raised in this decision. These regulations amend a range of income-related social security regulations and are made arising from Council Directive 2004/38/EC (which is implemented by the Immigration (European Economic Area) Regulations 2006). The regulations (a) restate more clearly the definition of person from abroad including when a right to reside exists for the purposes of the regulations; (b) set out the categories of persons who are excluded
Journal of Social Welfare and Family Law 73 from that definition so as to reflect EU law (including Directive 2000/38); and (c) modify the right to reside requirement in the habitual residence test to take account of Art 24(2) of Directive 2000/38. Article 24(2) provides that Member States are not obliged by the Directive to confer entitlement to social assistance during the first three months of residence (or in the case of a jobseeker for any longer period for which that person is entitled to remain in the Member State under Art 14(4)(b)). The Regulations seek to implement Art 24(2) so as to prevent economically inactive EU nationals, who have a right to reside under Directive 2004/38/EC for the first three months of their stay in the another Member State, from being entitled to benefits. EU nationals who are jobseekers also have a right to reside and, under the regulations, once they are habitually resident will be entitled to claim income-based jobseeker s allowance, housing benefit and council tax benefit, but will not be able to claim income support or state pension credit. In effect, the regulations provide that, where a person s right of residence is not based on economic activity, they are not to be treated as habitually resident for the purpose of entitlement to various benefits. Unfortunately, the structure of the right to reside test has added little to the clarity of the English language (as with the government s attempt in Szoma [2005] UKHL 64 to argue that a person who was lawfully present in the U.K. was not lawfully present ). The starting point remains the definition of person from abroad who has nil entitlement. In order not to be a person from abroad you must be habitually resident. In order to be habitually resident you must have a right to reside (even if you are in fact (otherwise) habitually resident). Even if you have a right to reside under EU law, this may not be considered to be a right to reside for present purposes. So one now can have a legal right to reside in the UK, be habitually resident here (in line with the EU or UK case law) and yet not satisfy either requirement for the purposes of the new regulations. For future cases, the new Regulations would appear to have addressed the two textual issues raised in the Tribunal s decision. They could not, of course, address the more fundamental issue of whether a right to reside is allowed under EU law and indeed they raise further issues. In defining the right to reside, the regulations specifically exclude some EU persons who do have a right to reside on the basis of EU law unless such persons are economically active. Thus persons who are not economically active and, for certain benefits, jobseekers are deemed not to have a right to reside for the purposes of the qualifying for benefits. This does reflect the wording of Reg 2000/38 concerning entitlement to benefits. However, there is a major question as to how the European Court of Justice will interpret this Directive in the context of its developing case law on the rights of EU citizens (eg Case C-184/99, Grzelczyk [2001] ECR I-6193; Case C-456/02 Trojani [2004] ECR I-8027; Case C-209/ 03 Bidar [2005] ECR I-2119.). Academic views have ranged from the opinion that the directive effectively reverses the Court s case law (Oosterom-Staples 2005: 223) to the perhaps more likely view that the Court will apply the same principles of proportionality in the interpretation of the terms of the new Directive as it has to the existing residence directives (Golynker 2005). This would mean that the Court would have to examine whether Art 24(2) of the Directive and national legislation
74 Cases purporting to implement it was a proportional application of the principles of EU citizenship. In a situation where an EU citizen had a right to reside under EU law, the Court would have to consider whether national legislation deeming this not to be a right to reside for the purposes of access to social security law was in line with EU law. The right to reside provisions have been considered in a number of recent Commissioner s decisions (CIS/3890/2005; CIS/3182/2005; CIS/3875/2005) in which Commissioner Rowland has considered the status and impact of the regulations (including the personal scope of the exclusions from the application of the right to reside test) and ( without a great deal of enthusiasm as to the result) followed the approach of the Tribunal (as he was bound to). Interestingly, however, he has suggested that: It is one thing to apply a right to reside test to put pressure on people to leave the United Kingdom when they have never been economically active here and have not been here for very long but it may be less clear that the blanket application of the test represents a proportionate response to the problem that concerns the Government if it results in pressure to leave the United Kingdom being placed on people who have been economically active in the past or have been established here for many years but for some reason or other have not acquired a permanent right of residence. (CIS/3182/2005 at para 15) The negative impact of the right to reside provisions is apparent in at least one of these cases whereby a French national with mental health problems was denied entitlement to benefits and, in the words of the Commissioner, left to roam the streets of London relying on charity to keep body and soul together when he might otherwise be making good progress in a hostel (CIS/3875/2005 at para 24). In a separate development, a Northern Ireland Commissioner (C6/05-06(IS)) has rejected an argument that restrictions on A8 nationals (ie those from the eight Central European accession countries) in relation to work registration and access to benefits were in breach of the Treaty of Accession, but has given permission for an appeal to the Court of Appeal (Zalewska v Department for Social Development). It would appear that the right to reside test(s) have raised a number of important legal issues, in particular the compatibility of the test with EU law (both pre- and post-directive 200/38). Commissioner Rowland s suggestion concerning the proportionality of the right to reside test seems important. Thus the test may be a proportional response (under EU law) in some situations, but not in others. An adequate consideration of whether or not the right to reside provisions can be objectively justified will have to await further decision of the courts. 1 MEL COUSINS Oxford Brookes University Acknowledgements I would like to thank the referee who commented on an earlier version of this article for very helpful comments.
Notes [1] The decision of the Tribunal of Commissioners in CIS/3573/2005 (and related decisions) is currently under appeal sub nom. Abdirahman & Ullusow v Secretary of State for Work and Pensions. The Northern Ireland Court of Appeal has recently (9 May 2007) rejected the appeal against the commissioner s decision in Zalewska. References Journal of Social Welfare and Family Law 75 Adler, M. (1995) The habitual residence test: A critical analysis, Journal of Social Security Law, vol. 2, pp. 179. Golynker, O. (2005) Jobseekers rights in the European Union: Challenges of changing the paradigm of social security, European Law Review, vol. 30, pp. 111. Hailbronner, K. (2005) Union citizenship and access to social benefits, Common Market Law Review, vol. 42, pp. 1245. Oosterom-Staples, H. (2005) Annotation of Case C-138/02 Collins, Common Market Law Review, vol. 42, pp. 205. Toner, H. (2004) New UK regulations on habitual residence and on workers from New European Union Member States, Journal of Social Welfare and Family Law, vol. 26, no. 4, pp. 431. White, R. (2005a) Residence, benefit entitlement and Community law, Journal of Social Security Law, vol. 10, pp. 10. White, R. (2005b) Free movement, equal treatment, and citizenship of the Union, International Comparative Law Quarterly, vol. 54, pp. 885.