A8 nationals and the right to reside

Beth Lakhani describes the rules relating to nationals of the A8 'Accession States' and the 'right to reside' condition applying to the entitlement rules of some benefits and tax credits.

Which are the A8 countries?
What benefits and tax credits are affected by the right to reside test?
When is the right to reside test satisfied?
Additional points

Which are the A8 countries?
The A8 states are:

• Czech Republic;
• Estonia;
• Hungary;
• Latvia;
• Lithuania;
• Poland;
• Slovakia;
• Slovenia.

What benefits and tax credits are affected by the right to reside test?

• Income support (IS), income-based jobseeker's allowance (JSA), pension credit (PC), housing benefit (HB), council tax benefit (means-tested benefits all subject to the habitual residence test, of which the right to reside test is one part).
• Child tax credit and child benefit -these are both subject to a separate right to reside test.
  

When is the right to reside test satisfied?
If the claimant comes within any of the following categories s/he has a right to reside, is treated as having a right to reside or the test is not applied.

Had leave to enter or remain in the UK before 1 May 2004 under domestic immigration law and leave was not subject to any conditions relating to taking up employment
As they have leave under domestic law they can continue to be treated as having a right to reside. They are not subject to the special rules relating to A8 nationals and the requirement to take authorised work.

However, some A8 nationals from central/Eastern European states who were here with limited leave subject to a condition that they did not have recourse to public funds may have worked illegally. They will need to satisfy the special rules relating to A8 nationals by taking on authorised work for 52 weeks, see below.

Had leave to be in the UK and was legally working without interruption for 52 weeks prior to 1 May 2005
This will cover some claimants who, for example, were present in the UK legally and were working on a work permit or were legally in permit free employment. They will not have to obtain registered work and will be counted as having a right to reside from 1 May 2005. Note that in the past nationals from Slovenia were subject to special rules allowing them to work in the EU so some of these nationals will qualify more easily.

Protected by transitional benefit rules relating to means-tested benefits
A person is protected if they were entitled to one or more of these benefits for a period including 30 April 2004 and they remain entitled to one or more means tested benefits until they cease to satisfy the conditions. The protection allows the person to claim means-tested benefits without the right to reside test being applied. The transitional rules only cover means tested benefits.

Before 1 May 2004, nationals from central/eastern European states may have had rights to claim means tested benefits as nationals of states that had ratified the European Social Charter (Turin 1961) or as nationals of ECSMA states. They will have qualified under special benefit rules (Social Security (Asylum and Immigration) Consequential Amendments Regulations 2000) made following the Immigration and Asylum Act 1999 in which certain claimants were excluded from claiming most benefits as 'persons subject to immigration control'. However claimants with limited leave subject to a condition that they had no recourse to public funds may well have hesitated to claim benefit under this provision or been wrongly advised by the DWP that they were not entitled. In some cases claimants may have made a backdated claim for HB (if they could show good cause) or PC to bring their entitlement back to 30 April 2004. A claimant on HB from 30 April 2004 would then be entitled to claim IS or income-based JSA at a later date when a period of work ceased or they were otherwise unable to work. Without the protection of the transitional regulations they would not have qualified.

A family member of an EEA national where that EEA national is economically active (including an A8 national who now has a right to reside)
Note the extended definition of a family member under EC Regulation 1612/68. The EEA national who is economically active confers a right of residence on the other members of the family regardless of their nationality. The economically active EU national can include a returned British national who has exercised treaty rights by working within the EU, an A8 national who has acquired a right to reside or an EU national from the long-standing members of the EU or a citizen of Cyprus or Malta (new members but not subject to the special rules relating to A8 nationals).

The spouse of a refugee
Spouses of refugees who have entered the UK under family reunion arrangements will have a right to claim benefits as they are treated as having a right to reside/having a leave to remain.

Resident here for the last two years
The habitual residence test including the right to reside test is only applied if the person has been here for two years or less. This only protects rights to means-tested benefits. It may be a matter of dispute whether or not a period during which a person was here without leave was a period that can be counted as a period of residence. The two-year test is not law but policy.

Protected because they are exempt from the habitual residence test
The right to reside test is part of the habitual residence test for means-tested benefits. A person who is exempt from the habitual residence test is therefore exempt from the right to reside test. This applies to those who are 'workers' under EC Regulation 1612/68 (equal access to social and tax advantages under Art 7(2)), EC Regulation 1251/70 (equal access to benefits for retired or those who have become permanently incapable of work) or Directive 73/148 (those who are self employed, providing or receiving commercial services). The same rights are accorded to the spouses and dependants of those who come within the above categories. (Directive 68/360 deals with those who have residence permits. The possession of a residence permit does not of itself confer a right of residence; this stems from the regulations and articles of the EC Treaty.)

For A8 nationals, there are additional problems about using these rights. A8 nationals who are self-employed have the same rights as other EEA nationals and have a right to reside. They thus have access to child benefit, child tax credit (CTC) and means-tested benefits. It is argued by the DWP that the right to be treated as a worker under Regulation 1612/68 does not apply in the same way to A8 nationals unless they have completed 52 weeks authorised work (see below). CPAG believes that it is arguable that an A8 national should have equal access to benefits as any other EU national because the government has only derogated from articles 1-6 of the Regulation. The right to equal access is under article 7. The rights that accrue to those who are sick or retired under EC Regulation 1251/70 are not likely to be relevant unless the A8 national is married to a British citizen.

Working in authorised work or has completed 52 weeks authorised work
An A8 national is required to work in accordance with the requirements of the workers registration scheme. A person who works as an employee must within one month of starting work apply for a registration certificate which allows that person to work for that employer. An A8 national is exempt from this provision if he was working legally before 1 May and continues to complete a 52-week period working for the same employer. Any period of 52 weeks can be broken by a period of no more than 30 days out of work. Once the person has completed the 52 weeks with or without the 30-day break the person is treated as having a right to reside and is classed as a worker in the normal way. A person is also entitled to claim appropriate benefits while he is working but before he has completed the 52 weeks - e.g., child benefit, CTC, HB.

Comes within EC Regulation 1408/71 (liability to pay contributions in one or more EC states) and counts as habitually resident applying the Di Paolo test of residence
Many A8 nationals may be able to argue they come within this Regulation which co-ordinates benefits between member states. An A8 national who has worked in the UK and been liable to pay national insurance contributions comes within this regulation. More difficult to satisfy is the DI Paolo test of residence. This case (DI Paolo v Office National de l'Emploi (C76/76) ECR 315) has made it easier for EU nationals to satisfy the habitual residence test. Broadly it allows a person who has their primary centre of interest in the UK to count as resident from the day of entry to the UK. It will be most easily applied to those who are returning to the UK to settle and to work. The existence of family in another state may make it more difficult to show that the UK is the person's centre of interest.

All the benefits subject to the right to reside test, the means-tested benefits and family benefits (child benefit and CTC) are benefits covered by Article 4 of Regulation 1408/71.

Article 3 of this regulation states that 'persons resident in . . . one of the Member States…shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the nationals of the State'. (Residence in community law means habitual residence.)

No state is allowed to derogate from the provisions of the regulation. Thus it is arguable that the right to reside test as interpreted under domestic law and applied to a person who comes within EC Regulation 1408/71 and who is resident in the UK is incompatible with EC law. It would thus be wrong to deny such a person any of the above benefits as a result of this EC Regulation purely on the basis of the domestic right to reside test.

Thus a person, who has worked in the UK or in another EC state, may come within Regulation 1408/71 and be able to argue that it would be discriminatory not to pay benefit; that Article 3 of this Regulation should protect anyone who satisfies the DI Paolo test of residence. No EC state can derogate from EC Regulation 1408/71 which coordinates benefit rights between states.

Additional points

Working tax credit
This is subject to a presence and ordinary residence test but not the right to reside test. It is however unclear whether a person who has a child could claim working tax credit (WTC) but not claim CTC which is subject to the right to reside test simply because there is one claim form and the computer is not programmed (we understand) to process only the WTC claim if there are children.

Child benefit and CTC
The right to reside amendment to the presence test is due to end 1 May 2006 but the government could choose to extend it.

Welfare Rights Bulletin 186 June 2005