October 2011 European Commission Rules UK Benefit Rules Discriminatory

03/10/2011
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Many of you will have seen or heard the latest news reports about Europe making decisions about the UK’s benefit rules.  Depending on what news you listen to, this is portrayed as yet more proof of Europe’s interference in UK domestic legislation, evidence that Europe wishes to enlarge it’s sphere of influence over individual states and/or further evidence of the need to quit the European Community as soon as possible.  But what is the case actually about?

Well, the European Commission has said that the UK right to reside test contravenes EU law and should be disapplied.
In a statement on the test - that governs entitlement to benefits such as income support,

income-based JSA, income-related ESA, pension credit, housing benefit, child benefit and child tax credit - the Commission says -
'EU nationals who habitually reside in the UK are subject to the so-called 'right to reside' test to qualify for certain social security benefits. As this test indirectly discriminates non-UK nationals coming from other EU Member States it contravenes EU law. This is why the European Commission has requested the United Kingdom to stop its application. The request takes the form of a "reasoned opinion" under EU infringement procedure. The UK has two months to inform the Commission of measures it has taken to bring its legislation into line with EU law. Otherwise, the Commission may decide to refer the UK to the EU's Court of Justice.'
 
Now EU rules on the social security coordination (EC Regulation EC 883/2004) allow the UK to grant social benefits only to those persons who habitually reside in the UK, however Article 4 of this Regulation prohibits indirect discrimination through the requirement for non-UK citizens to pass an additional right to reside test.  Any discrimination in providing social security benefits (including non-contributory cash benefits) also constitutes an obstacle to free movement guaranteed by Article 21 of the Treaty.
While UK nationals have the right to reside solely based on their UK citizenship, other EU nationals have to fulfil additional conditions in order to pass a so-called 'right to reside' test.  This means the UK indirectly discriminates against nationals from other Member States.
 
In response, the DWP has today issued an Urgent Bulletin to its decision makers that advises -
'You may have seen a statement issued by the European Commission declaring that the right to reside test breaches EU law. DWP will be responding to the Commission on the points raised in their statement. You should continue to make right to reside decisions as normal.'
 
As expected, Euro sceptics have been quick to argue that this will encourage ‘benefit tourism.  Iain Duncan Smith is quoted as saying 'The UK has no problem playing its part in supporting the free movement of labour in the EU. However, what the EU is now trying to do is get us to provide benefits for those who come to this country with no intention to work and no other means of supporting themselves, with the sole purpose of accessing a more generous benefit system’.
 
But it has to be remembered that the right to benefit is also contingent upon satisfying the habitual residence test.  The concept of habitual residence has been defined at EU level as the place where the habitual centre of interests of the person is located.  The Commission considers that the criteria for assessing habitual residence are strict and thus ensure that only those persons who have actually moved their centre of interest to a Member State are considered habitually resident there.  This is a powerful tool for the Member States to make sure that these social security benefits are only granted to those genuinely residing habitually within their territory.
 

EU rules on the social security coordination (EC Regulation EC 883/2004) allow the UK to grant social benefits only to those persons who habitually reside in the UK, however Article 4 of this Regulation prohibits indirect discrimination through the requirement for non-UK citizens to pass an additional right to reside test.  Any discrimination in providing social security benefits (including non-contributory cash benefits) also constitutes an obstacle to free movement guaranteed by Article 21 of the Treaty.While UK nationals have the right to reside solely based on their UK citizenship, other EU nationals have to fulfil additional conditions in order to pass a so-called 'right to reside' test.  This means the UK indirectly discriminates against nationals from other Member States. But it has to be remembered that the right to benefit is also contingent upon satisfying the habitual residence test.  The concept of habitual residence has been defined at EU level as the place where the habitual centre of interests of the person is located.  The Commission considers that the criteria for assessing habitual residence are strict and thus ensure that only those persons who have actually moved their centre of interest to a Member State are considered habitually resident there.  This is a powerful tool for the Member States to make sure that these social security benefits are only granted to those genuinely residing habitually within their territory  

Watch this space for further updates.

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