EU co-ordination of social security
Sarah Clarke provides an update on some European Union co-ordination issues.
This article is about what happens when European nationals, including UK nationals, and their family members move from one country to another within the European Union (EU), and explains more about when they can take their benefits with them.
This updates articles in Bulletins 204, 210 and 217 on exporting attendance allowance (AA), disability living allowance (DLA), and carer’s allowance (CA) within the EU, and on the EU co-ordination rules. Advisers should refer to those articles for detailed background. Advisers may find it helpful to refer claimants who are considering moving within the EU to The EU Provisions on Social Security, which is available on the European Council’s website.
The story so far
Since 1 May 2010, the co-ordination of social security within the EU has been governed by Regulation 883/04. Regulation 987/2009 sets out the provisions implementing the coordination rule. The equivalent provisions before 1 May 2010 were Regulation 1408/71 and Regulation 574/72.
Regulation 1408/71 still applies to those who claimed benefit before 1 May 2010 whose circumstances have not changed, or to nationals of, or people who move to, Norway, Iceland, Liechtenstein or Switzerland. Those who would fall under Regulation 1408/71, but would prefer Regulation 883/04 to apply, can ask to have that rule applied instead, but only for the period from 1 May 2010 onwards.
Regulation 883/04 is more generous, in that anyone who is covered by the social security legislation of a member state is covered (probably anyone with a national insurance (NI) number), whereas only those who have worked and paid NI contributions come within the personal scope of Regulation 1408/71.
Exporting AA, CA and DLA care
The UK listed AA, CA and DLA as special noncontributory benefits (SNCBs); the importance of this is that SNCBs cannot be exported within the EU. In Commission of the European Communities v the European Parliament and the Council of the European Union (C-299/05, 18 October 2007) the European Court of Justice (ECJ) held that AA, CA and the care component of DLA were sickness benefits and not SNCBs. The Court held that the mobility component was severable from the care component, so could still be listed as an SNCB. Sickness benefits were exportable in some circumstances under Regulation 1408/71.
This was a difficult decision to apply because AA, CA and DLA all have the characteristics of invalidity benefits rather than sickness benefits, since they all protect against the risk of long-term disability, rather than short-term illness. The importance of the distinction is that sickness benefits were exportable in much more limited circumstances than invalidity benefits (like long-term incapacity benefit (IB)) under Regulation 1408/71. In Stewart C-503/09 which is discussed in more detail below, the Advocate General said that:
37.... a sickness benefit, within the meaning of Article 4(1)(a) of Regulation 1408/71, covers the risk connected to a morbid condition involving temporary suspension of the concerned person’s activities.
38.By contrast, an invalidity benefit, within the meaning of Article 4(1)(b) of the Regulation, is intended, as a general rule, to cover the risk of disability of a prescribed degree, where it is probable that such disability will be permanent or long term.
However, under Regulation 883/04, sickness benefits are generally exportable in a similar way to invalidity benefits, so the importance of the distinction has now largely disappeared.
In Bartlett, Gonzalez Ramos and Taylor C-537/09 (5 May 2011), the ECJ held that the mobility component of DLA was still an SNCB, and so not exportable at all, even though it has not been severed from the care component. It is difficult to reconcile the Court’s reasoning in this case, with its reasoning in relation to the Swedish disability allowance that was also considered in C-299/05. Unusually, there was no Advocate General’s opinion. Bartlett is unlikely to be the final word on the issue and CPAG understands it is possible a further reference will be made.
The past presence test
In Stewart C-503/09, the Court considered the case of a claimant with Down’s syndrome. She had moved to France with her parents and claimed IB in youth for the first time from France. IB in youth is subject to a similar past presence test to the one that applies to DLA. At the time of claim, the claimant must be present in Great Britain and have resided here for the past 26 weeks.
The Court held that IB in youth is an invalidity benefit. It rejected the argument that the benefit could only be claimed for the first time from the UK. The purpose of Article 10(1) was to protect people from adverse consequences of moving from one member state to another, so it was it was not lawful to refuse entitlement on the sole ground that the claimant did not reside in the UK. It held that the past presence test was only lawful insofar as it was necessary to establish a link with the UK’s social security system. Other factors could show such a link; in this case, the claimant was entitled to DLA and NI credits, her parents received the state retirement pension, and she had passed a significant part of her life in the UK.
Similar principles would apply to someone claiming AA, DLA care component or CA for the first time from elsewhere in the EU. As far as we are aware, no guidance has yet been produced by the DWP following this case, and we understand that claims made on similar facts are being stockpiled. Advisers should be aware that someone who has returned from another EU state, and who claims one of these benefits in the UK on her/his return, can rely on the provisions of Article 6 of Regulation 883/04 to aggregate periods of residence to satisfy the past presence test in any event.
Who is covered by Regulation 1408/71
In Revenue and Customs v Ruas  EWCA Civ 291 (23 October 2010 – see Bulletin 216, p14), the Court rejected HM Revenue and Customs’ argument that a person who was only receiving NI credits for incapacity was no longer covered by Regulation 1408/71, or that there should be a link between the benefit claimed and the previous employment, and held that the claimant was entitled to child benefit for his children living in Portugal.
When does the UK’s legislation cease to apply
In CDLA/735/2009, the Upper Tribunal will consider whether there comes a point when the UK no longer has to pay DLA to a UK national who has moved to reside in another member state, because the UK's legislation no longer applies to them, and if so, at what point that happens. This case may be referred to the Court of Justice of the European Union (CJEU).
From what date should decisions be revised following C-299/05
Following the ECJ’s decision in C-299/05, an issue has arisen about from what date decisions terminating awards of AA/CA/DLA care component to claimants in other EU states should be revised for official error. The DWP has argued that it could not have known that these benefits were not SNCBs until C-299/05 was decided on 17 October 2007, and it is revising its decisions from that date.
However, it is arguable that is incorrect, given that there were a number of ECJ decisions prior to that date which should have alerted the DWP to the fact that the listing as an SNCB was incorrect, starting with Jausch C215/99 on 8 March 2001. The commentary on Article 70 of Regulation 883/2004 in Social Security Legislation Volume III suggests that C299/05 is effective from the date that Regulation 1408/71 was amended – ie, 5 May 2005.
EU nationals – child benefit and tax credit delays
Citizens Advice produced an evidence report in January 2010, Child Benefit Delays: the impact on CAB clients, showing that there were systemic delays in processing claims for child benefit.
One of the affected groups is EU nationals making new claims. The Revenue has tried to justify these delays by saying that it is making enquiries from the claimant’s member state of origin to check that the claimant is not receiving an equivalent benefit in that country.
Advisers should note that by Article 7 of Regulation 987/2009 regarding interim payments, where ‘the competent institution does not have all the information concerning the situation in another Member State which is necessary to calculate definitively the amount of that benefit or contribution, that institution shall, on request of the person concerned, award this benefit or calculate this contribution on a provisional basis, if such a calculation is possible on the basis of the information at the disposal of that institution.’ It goes on to provide for a recalculation when the necessary evidence is available.
Clearly, interim payments should be made in these cases, but it is our understanding this is not happening in practice. CPAG would be interested in a test case on this issue. If you have such a case please contact Sarah Clarke.
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