1. In these proceedings the respondents, a mother and her sixteen-year-old son, who were in receipt while resident in Northern Ireland of attendance allowance, mobility allowance and invalid care allowance payable because of his disability, challenged the decision of the adjudication officer that payment should cease when the family moved in 1991 to the Republic of Ireland. They appealed to the Social Security Appeal Tribunal, which on 25 July 1994 affirmed the adjudication officer’s decision. They then appealed to the Social Security Commissioner, who eventually on 6 June 2000 allowed their appeal. The Department appealed, with leave, to this court by way of case stated which was signed by the Social Security Commissioner on 18 September 2000.

2. The facts of the case may be stated in very short compass. Niall Walsh, born on 30 May 1984, lived with his parents until 1991 in Londonderry, where his father held a teaching post. His mother had a work record in Northern Ireland in 1989 to 1990. On 11 April 1991 the family moved to a house in Muff, Co Donegal, a few miles from Londonderry, where they have resided ever since. Mr Walsh continued to hold his teaching job in Londonderry and Niall continued to attend school there. Mrs Walsh was not employed at the time of the move, but in 1992 she obtained employment in Londonderry.

3. The three benefits concerned are classed as non-contributory benefits, being paid on the basis of need and not of National Insurance contributions. An award of attendance allowance was made to Mrs Walsh in 1986 in respect of Niall. Mobility allowance was paid to Niall from 1989 and invalid care allowance was paid to Mrs Walsh from 1990 in respect of her care of Niall. All three allowances were withdrawn in April 1991 when the family moved to the Republic.

4. Entitlement under domestic law to the three benefits concerned depends on the usual thicket of entangled statutory provisions, but thanks to the industry and helpful paperwork of counsel in the case and their solicitors we have been guided through the complex legislation and can summarise the position relatively briefly.

5. Mobility allowance was paid directly to Niall under the terms of section 37A(1) of the Social Security (Northern Ireland) Act 1975 (the 1975 Act), and it was not in dispute that he was properly entitled to receive it, subject only to satisfying the prescribed conditions as to residence. When the family moved to the Republic, he ceased to satisfy those conditions, which are contained in Regulation 2(1) of the Social Security (Mobility Allowance) Regulations 1975. Under sections 71 to 76 of the Social Security and Contributions (Northern Ireland) Act 1992 (the 1992 Act) mobility allowance ceased as from 6 April 1992 to be payable as a separate benefit and became a component in disability living allowance. That benefit would have been payable directly to Niall, if he had satisfied the residence requirement.

6. Attendance allowance was payable under section 35 of the 1975 Act, and again the qualifying conditions were satisfied, subject to a residence requirement. As modified with effect from 8 April 1990 that section, read together with Regulation 10(4) of the Social Security (Attendance Allowance) Regulations (Northern Ireland) 1987, entitled Mrs Walsh to receive attendance allowance in respect of Niall while he was a child. The residence provisions required both mother and child to be resident in Northern Ireland in order to qualify, and when the family moved to the Republic they ceased to satisfy the requirements. Under the 1992 Act attendance allowance was for persons under the age of 65 years replaced by the care component of disability living allowance, which became payable to Niall directly and not to his mother. It is also subject to residence requirements, and it is common case that Niall has not satisfied them since the family’s move to the Republic.

7. Invalid care allowance was payable to Mrs Walsh under the terms of section 37(1) of the 1975 Act, which provided:

8. That provision was replaced by section 70(1) of the 1992 Act, the material terms of which are identical. Under section 37(4) of the 1975 Act and section 70(4) of the 1992 Act the recipient has to satisfy residence requirements, and again it is common case that Mrs Walsh ceased to qualify when the family moved to the Republic.

9. The effect of the provisions to which we have referred is that Mrs Walsh and Niall ceased to qualify under domestic law for the three benefits as from the time when they moved from Northern Ireland to the Republic in 1991. The case was advanced on their behalf, however, that by virtue of the material European legislation they were entitled, notwithstanding their change of residence, to “export” them and to continue to receive payment of each benefit from the relevant department of the Government of Northern Ireland, now the appellant Department of Social Development.

10. The object of Regulation 1408/71, which was passed to put into effect Article 51 of the Treaty of Rome, was to remove impediments to the mobility of labour throughout the Community. As is customary, the recitals in the preamble to the Regulation set out in some detail the objects which the Council sought to achieve in passing it, flowing from the overall objective of removing impediments to the mobility of labour throughout the Community. Three of these in particular are material for present purposes:

11. Article 2(1) defines persons to whom the Regulation applies:

12. Article 4 concerns the distinction between social security benefits and social assistance benefits. Paragraphs (1), (2) and (4) are material for present purposes:

13. Articles 3 and 10(1) contain the substantive provision for (a) allowing migrant workers and their families to receive the same benefits in a Member State as the nationals of that State (b) allowing them to “export” benefits granted by their own States on moving to work in another Member State. The former is provided for by Article 3(1):

14. Article 10(1) makes provision for the continued payment of a qualifying benefit if the recipient resides in another Member State:

15. The distinction between social security and social assistance benefits is accordingly fundamental, but the classification of different benefits of the several Member States proved difficult. In decisions of the European Court of Justice (ECJ) some benefits came to be classed as “hybrid”, ie partaking of characteristics both of social security and of social assistance: see, eg, CRAM Rhone-Alpes v Giletti [1987] ECR 955, at paragraph 9 of the judgment of the Court. This is reflected in the recitals in the preamble to Regulation 1247/92, two of which read:

16. That Regulation made a substantial alteration in the Community law relating to non-contributory benefits, providing in effect that they cannot be exported when a worker moves to another Member State. Article 4 inserted a new Article 10a into Regulation 1408/71, whereby certain listed non-contributory benefits are to be payable only in the country of residence. The list, contained in Annex IIa, included invalid care allowance, attendance allowance and disability living allowance in the United Kingdom. As the ECJ held in Case C-20/96, Snares v Adjudication Officer [1997] ECR I-6057, disability living allowance, as a special non-contributory benefit, is governed exclusively by the system of co-ordination established by Article 10a. It has accordingly not been possible since 1992 to export these benefits at all, but provision was made for the previous entitlement to continue to apply where benefits had been granted before Regulation 1247/92 came into effect on 1 June 1992. It is therefore necessary for us to determine and apply the pre-1992 Community law in order to decide whether the respondents continued to be entitled after 1992 to the benefits granted to them before they moved to the Republic.

17. Before the Social Security Appeal Tribunal the main issue argued on Community law was whether Niall could claim as a member of the family within Article 2(1) of Regulation 1408/71. The Tribunal held, founding itself on Case C40/76 Kermaschek v Bundesanstalt fuer Arbeit [1976] ECR 1669 and Case C310/91 Schmidt v Belgian State [1993] ECR I-4401 , that he could not be so regarded. It therefore did not go on to consider the effect of Case C-356/89 Newton v Chief Adjudication Officer [1991] ECR I-3017 , on which Mr Weatherup QC for the respondent department placed most reliance in his argument before us and to which we shall refer in more detail later . The Social Security Commissioner focused on the same issue, and after considerable discussion found in favour of the claimants because of the decision in Case C309/93 Bestuur van de Sociale Verzekerings Bank v Cabanis-Issarte [1996] ECR I-2097 . He did consider the effect of the Newton case, but held in paragraph 22 of his decision:

18. Having set out the ECJ’s answers to the questions posed in the Newton reference, the Commissioner stated:

19. He therefore allowed the appeals and reinstated the claimants’ entitlement to the benefits, subject to continued fulfilment of the requisite conditions for each benefit.

20. The ECJ made a number of attempts to limit the scope of the claims which could be made under Regulation 1408/71 before the limitation effected by Regulation 1247/92 came into operation. It adopted two approaches in following this course. In the first it drew a distinction, in classifying the rights of members of workers’ families, between derived rights and personal rights. This distinction has now in effect been abrogated by the decision in the Cabanis-Issarte case. The second approach, exemplified by the Newton case, was to draw a distinction between workers and others in respect of hybrid benefits. The limits of application of these principles require some consideration.

21. The ECJ reassessed the usefulness of the distinction between derived rights and personal rights when it came to consider the issue again in the Cabanis-Issarte case in 1996. The claimant was a French national, who was married to a French migrant worker. He worked in the Netherlands between 1948 and 1960, when they returned to France. They went back to the Netherlands in 1963, where her husband worked until his retirement in 1969, when they returned permanently to France. Her husband died in 1977. Mrs Cabanis-Issarte did not work at any stage. In 1974 she reached the age of 65, when she became entitled to a State pension. Between 1957, the date of introduction of the scheme, and 1960 and from 1963 to 1969 she was covered by the compulsory insurance scheme in the Netherlands as a resident in that country. Between 1960 and 1963 her husband paid voluntary contributions to the Netherlands scheme. The claimant wished after becoming entitled to a pension to pay extra voluntary contributions in the Netherlands for the period between 1969 and 1974. She contended that she was entitled under Regulation 1408/71 to take advantage of the lower contribution rate applicable to Belgian nationals, rather than the higher rate which was applied to nationals of another Member State. The issue therefore was whether the claimant, as the surviving spouse of a migrant worker, could rely upon Regulation 1408/71 to determine the rate of voluntary contributions which she wished to pay under the pension scheme of the Member State in which her husband had been employed.

22. The Court answered the first question posed in her favour. It distinguished the Kermashek case as being limited to unemployment benefits under Articles 67 to 71 of Regulation 1408/71, holding that the main purpose of those provision is –

23. The Court went on to reject the distinction between derived rights and personal rights drawn in the Kermaschek case and accepted in subsequent cases. It stated at paragraphs 30 to 34 of its judgment:

24. Because of the substantial effect which this decision would have on the payment of benefits by Member States, the Court limited its temporal effect by providing that it could not be relied on in support of claims concerning benefits relating to periods prior to the date of delivery of the judgment, except by persons who had prior to that date initiated proceedings or raised an equivalent claim.

25. Mr Weatherup QC for the appellant Department submitted that this conclusion of the ECJ did not determine the present appeal in the respondents’ favour, because it was governed by its determination of the other issue, that relating to hybrid benefits. He cited the decision of the Court in Newton v Chief Adjudication Officer, which he submitted was conclusive in the appellant’s favour. Mr Newton, a United Kingdom national, was working in France as a self-employed person when he was the victim of a car accident, in consequence he suffered from complete tetraplegia. He returned to the United Kingdom, where he applied for and was awarded a mobility allowance. He subsequently returned to live in France, whereupon the question arose whether he was still entitled to be paid the mobility allowance by the United Kingdom authorities. He claimed that the allowance was an invalidity benefit covered by Article 4(1)(b) of Regulation 1408/71 and that by virtue of Article 10(1) it could not be withdrawn when he moved to reside in another Member State.

26. The ECJ on a reference by the Social Security Commissioner ruled in the claimant’s favour. In its judgment it referred to the dichotomy between social security benefits and social assistance benefits and to the hybrid nature of some. It went on to say at paragraphs 13 to 15:

27. It therefore held that in the case of persons who are or have been subject as employed or self-employed persons to the legislation of a Member State, an allowance granted on the basis of objective criteria to persons suffering from physical disablement affecting their mobility and to the grant of which the persons concerned have a legally protected right must be treated as an invalidity benefit within the meaning of Article 4(1)(b) of Regulation 1408/71. The answers which it gave to the two questions asked in the reference were as follows:

28. The first answer was confined to accepting the validity of the claim of the migrant worker Mr Newton, as the Social Security Commissioner remarked in his decision, and to that extent the judgment is strictly authority only for that. It seems to us to follow very clearly, however, from the reasoning of the portions of the judgment of the Court which we have quoted, that hybrid benefits which partake of the nature of social assistance by reason of the fact that they are not payable to a qualifying person may not be exported.

29. It is clear that the benefits concerned in the present appeal, mobility benefit, attendance allowance and invalid care allowance, are hybrid benefits of the kind with which the ECJ was concerned in the Newton case. Niall Walsh has at no stage been employed or self-employed, therefore he does not come within that category so as to make the benefits payable to him come within the field of social security. The benefits payable to him are to be classed as social assistance and so excluded by Article 4(4) from the operation of Regulation 1408/71. It follows that he was not entitled to continued payment of these benefits from the Department once the family went to reside in the Republic of Ireland.

30. An argument might be advanced that as he is a member of the family of a migrant worker he is entitled to export the benefit in that capacity. It seems to us, however, that this proposition cannot be sustained. Article 2(1) of Regulation 1408/71 provides that the Regulation shall apply to employed or self-employed persons (“workers”), as well as to the members of their families and their survivors. If in the case of some other categories of beneficiaries the hybrid benefits are deemed to fall within the category of social assistance, as the ECJ said in paragraph 15 of its judgment in the Newton case, that can only refer to the members of the workers’ families, for no one else is covered by Regulation 1408/71.

31. The effect of the conclusion which we have reached is that mobility allowance, which was always payable to Niall direct, is classed as a social assistance benefit and cannot be claimed after 11 April 1991. From the time of operation of the 1992 Act it became a component of disability living allowance, which would also be payable to him, and so could not be claimed. Similarly, attendance allowance became the care component in disability living allowance, and could not be claimed by Niall.

32. That leaves attendance allowance, up to the time when it became part of disability living allowance, and invalid care allowance (up to the time when Mrs Walsh became re-employed in 1992). Both of these allowances were payable to Mrs Walsh, the former on behalf of Niall. It might be suggested that as she was a worker in Northern Ireland, to stop these allowances tended to impede her mobility as a worker and so supported the proposition that they should continue to be payable after her move to the Republic. We do not consider that this argument would be valid. Article 10(1) refers to the “recipient” of the benefits in question, and in the case of attendance allowance it seems to us that Niall was the recipient, the payment to his mother “in respect of” Niall being made on his behalf. Invalid care allowance is payable to the carer, but it is only payable if the invalid is entitled to receive attendance allowance. If Niall is not entitled to payment of that benefit, as we have held, then Mrs Walsh cannot receive invalid care allowance. It would in any event be a bizarre interpretation of the provisions if it were held that she could export that benefit in order to prevent impeding her mobility as a “worker”, when it is only payable to carers who are not in gainful employment.

33. We therefore consider that the Social Security Commissioner was in error in his conclusions. We answer in the negative each of the questions posed in the case stated and allow the appeal.