Landmark ruling by European Court of Justice undermines UK’s Habitual Residence Test for Benefits
23.03.04

The Full Court of the European Court of Justice (ECJ) has today made a decisive ruling against the use by the UK Government of an habitual residence test as a means of restricting access to means-tested social security benefits

In the case of Collins -v- Secretary of State for Work and Pensions the ECJ has ruled that the UK’s habitual residence rule cannot be used to restrict EU nationals access to the jobseeker’s allowance benefit unless the Government can show that a period residence of itself is necessary to show that the person is genuinely active in the labour market. The case was heard by the Full Court given the importance of the issue. The Court ruled that the “habitual residence” test discriminates on the grounds of nationality against non-UK nationals of the European Community who come to the UK looking for work, and is thus contrary to the freedom of movement principle enshrined in the EC Treaty unless the UK Government can show that a period of residence is fundamentally important to establishing entitlement to jobseeker’s allowance.

The case has been referred back to the relevant UK Court (a social security commissioner) for him to decide the case in line with the principles of law laid down by the ECJ.

The claimant’s case before the ECJ was backed by the Child Poverty Action Group as a test-case.

Commenting on the decision, Stewart Wright, CPAG’s Legal Officer, said:

'Although the case has still to be decided by the commissioner, given that a person can only get jobseeker’s allowance if they are available for and actively seeking work, it is strongly arguable that a period of residence adds nothing in showing whether that person is genuinely connected to the job market, and if that is right then the ruling in Collins will mean that the habitual residence test cannot apply to EU nationals claiming jobseeker’s allowance. This is therefore a very significant step forward in attempts to rid the UK social security system of the habitual residence test; which CPAG has always viewed as being entirely inappropriate in a system which is meant to provide a basic safety net benefit to those in need.'

Notes for editors

1. The habitual residence test was introduced in 1996 in the belief that so-called “benefit tourists” were coming to the United Kingdom for the sole purpose of claiming benefits. Mr Collins was refused income-based jobseeker’s allowance shortly after he arrived in the UK in the summer of 1998 because he was said to have failed to habitual residence test. He had, however, come to the United Kingdom seeking work.

2. The reference for the Collins case before the ECJ is C-138/02. The website of the ECJ can be found at http://www.curia.eu.int/

3. In the proceedings before the ECJ, Mr Collins was represented by Richard Drabble QC – instructed by the Child Poverty Action Group – and Paul Eden, a law lecturer at Sussex University.

For further information

Stewart Wright, Legal Officer
020 7812 5215 or swright@cpag.org.uk

Ashley Riley, Press Officer
020 7812 5216 or 07811324339 or ariley@cpag.org.uk

Paul Eden can be contacted on 020-8681 6916 or 07986 840098.