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Cite as: [1991] UKSSCSC CM_108_1986

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Newton v. Chief Adjudication Officer [1991] UKSSCSC CM_108_1986 (20 June 1991)

R(M) 1/92
(Newton v. Chief Adjudication Officer)

ECJ (G. F. Mancini, President of the Chamber, CM/108/1986
T. F. O'Higgins, C. N. Kakouris,
F. A. Schockweiler, P. J. G. Kapteyn, judges;
and Advocate General: M. Darmon)
20.6.91

Residence condition - claimant who was formerly self-employed moving permanently to France - whether entitled to export mobility allowance under Council Regulation (EEC) 1408/71

The claimant, a United Kingdom national, was working in France as a self-employed person when he was injured, as a result becoming a tetraplegic. He returned to the United Kingdom and was awarded a mobility allowance. Subsequently, he went to live permanently in France. The adjudication officer determined that his entitlement to mobility allowance had ended because he no longer met the conditions as to residence and presence in Great Britain laid down in section 37A(1) of the Social Security Act 1975 and regulation 2(1) of the Mobility Allowance Regulations 1975. The claimant appealed to a tribunal, who dismissed his appeal, and then to a Commissioner, claiming that the mobility allowance was an invalidity benefit within Article 4(1)(b) of Council Regulation (EEC) 1408/71 and that under Article 10 of that Regulation entitlement to that benefit could not be withdrawn on the ground that he lived in a Member State other than the United Kingdom. The Commissioner referred two questions to the European Court of Justice.

Held, that:

mobility allowance granted to an employed or self-employed person under the legislation of a Member State must be treated as an invalidity benefit within the meaning of Article 4(1)(b) and was not excluded as social assistance under Article 4(4);

where an allowance was an invalidity benefit within Article 4(1)(b), Article 10 precluded its withdrawal on the sole ground that the recipient resided in the territory of a Member State other than the one paying the allowance.

DECISION OF THE EUROPEAN COURT OF JUSTICE

Mr. M. Rowland, Barrister, instructed by Mr. V. Chapman, solicitor for Mr. Newton.

Mr. R. Delizee, State Secretary for Public Health and the Disabled, agent for the Belgian Government.

Mr. D. Pannick, Barrister, instructed by Mr. R. M. Caudwell, of the Treasury Solicitor's Department, agent for the United Kingdom.

Mr. K. Banks, of its Legal Service, agents for the Commission of the European Communities.

The Opinion of the Advocate General was delivered on 5 March 1991 and is reported at [1991] ECR I-3027.

JUDGMENT

By a decision of 23 October 1989 which was received at the Court Registry on 27 November 1989, the social security Commissioner referred to the court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Articles 4 and 10 of Council Regulation (EEC) No. 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, as amended and updated by Council Regulation (EEC) No. 2001/83 of 2 June 1983 (Official journal 1983 L 230, p. 6).

Those questions were raised in proceedings between Roger Stanton Newton and the Chief Adjudication Officer which arose out of the latter's refusal to continue to grant Mr. Newton mobility allowance, a benefit for the disabled provided for under the United Kingdom legislation.

Mr. Newton, a United Kingdom national, was working in France as a self-employed person when on 12 December 1980 he was the victim of a car accident. As a result of that accident Mr. Newton suffers from complete tetraplegia.

Mr. Newton returned to the United Kingdom and on 4 March 1981 applied for mobility allowance.

Under section 37A(1) of the Social Security Act 1975 and regulation 2(1) of the Mobility Allowance Regulations 1975 a mobility allowance is to be granted to any person suffering from physical disablement such that he is either unable to walk or virtually unable to do so, provided that such person has been present in Great Britain for a certain period, is still present and is ordinarily resident there. Mobility allowance is a flat-rate weekly cash benefit and is not means-tested.

Mr. Newton was awarded a mobility allowance. On 4 April 1984 he went to live permanently in France. Subsequently, the adjudication officer informed Mr. Newton that he was no longer entitled to mobility allowance on the ground that he no longer met the conditions as to residence and presence in Great Britain on laid down in United Kingdom legislation.

Mr. Newton appealed against that decision. Before the social security Commissioner he claimed in particular that mobility allowance was an invalidity benefit covered by Article 4(1)(b) of Regulation No. 1408/71 and that under Article 10(1) of that regulation entitlement to that benefit could not be withdrawn from him on the ground that he had transferred his place of residence to France.

In those circumstances, the social security Commissioner decided to stay the proceedings until the Court of Justice had given a preliminary ruling on the following questions:

"In the case of an employed or self-employed person who has acquired under United Kingdom legislation alone a right to a mobility allowance under section 37A of the Social Security Act 1975 but who is not entitled to any other benefit under United Kingdom legislation:

(a) is mobility allowance a benefit within the scope of Article 4(1)(b) of Council Regulation (EEC) No. 1408/71 without being excluded under Article 4(4); and

(b) if so, may that person continue to receive mobility allowance by virtue of Article 10 of Council Regulation (EEC) No. 1408/71 while residing in another Member State?"

Reference is made to the report for the hearing for a more detailed account of the facts of the main proceedings, the national legislation, the course of the procedure and the written observations submitted to the court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the court.

The first question

It should first be recalled that the court has no jurisdiction under Article 177 of the EEC Treaty to apply the rules of community law to a specific case or, consequently, to judge a provision of national law by reference to those rules. However, on the basis of the material before it, it can provide the national court with an interpretation of community law which may be useful to it in assessing the effects of that provision.

Pursuant to Article 4(1)(b) of Regulation No. 1408/71 that regulation is applicable to all legislation concerning the branches of social security which cover invalidity benefits, including those intended for the maintenance or improvement of earning capacity. Article 4(4) of Regulation No. 1408/71, however, provides that the regulation is not applicable to social and medical assistance.

The court has held on several occasions that, whilst it may seem desirable from the point of view of applying community regulations on social security to establish a clear distinction between legislative schemes that fall respectively within social security and assistance, the possibility cannot be excluded that by reason of the persons covered, its objectives and its methods of application, national legislation may, at one and the same time, have links to both those categories (see in particular the judgment of 24 February 1987 in joined Cases 379 to 381 /85 and 93/86 CRAM Rhone-Alpes v. Giletti [1987] ECR 955, at para. 9).

Although by virtue of certain of its characteristics legislation of the kind in issue in of the main proceedings has much in common with social assistance, particularly since the grant of the benefit provided for is not dependent on the completion of periods of employment, insurance or contribution, nevertheless in certain circumstances it is more similar to social security.

Having regard to the broad definition of the persons entitled to the benefit in issue, such legislation in fact has a two-fold function. On the one hand it seeks to ensure a minimum level of income for handicapped persons who are entirely outside the social security system. On the other hand it provides supplementary income for recipients of social security benefits who suffer from physical disablement affecting their mobility.

Consequently, in the case of an employed or self-employed person who by reason of his previous occupational activity is already covered by the social security system of the state whose legislation is invoked, that legislation must be deemed to fall within the field of social security within the meaning of Article 51 of the Treaty and the legislation adopted in implementation of that provision, although in the case of other categories of beneficiaries it may be deemed not to.

In particular, legislative provisions of a Member State of the kind in issue in the main proceedings cannot be regarded as falling within the field of social security within the meaning of Article 51 of the Treaty and Regulation No. 1408/71 in the case of persons who have been subject as employed or self-employed persons exclusively to the legislation of other Member States.

If such legislative provisions were to be regarded, in the case of such persons, as falling within the field of social security within the meaning of Article 51 of the Treaty and Regulation No. 1408/71 the stability of the system instituted by national legislation whereby Member States manifest their concern for the handicapped persons residing in their territory could be seriously affected.

Regulation No. 1408/71 does not establish a common system of social security but lays down rules co-ordinating the different national social security schemes with a view to ensuring freedom of movement for workers. Consequently, although the provisions of that regulation must be construed in such a manner as to secure the attainment of that objective, they cannot be interpreted in such a way as to upset the system instituted by national legislation of the kind in issue in the main proceedings.

The reply to the first question asked by the social security Commissioner must therefore be 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 provided for under the legislation of that Member State which is granted on the basis of objective criteria to persons suffering from physical disablement affecting their mobility and to grant of which the persons concerned have a legally protected right must be treated as an invalidity benefit within the meaning of Article (1)(b) of Regulation No. 1408/71.

The second question

The first sub-paragraph of Article 10(1) of Regulation No. 1408/71 provides:

"Save as otherwise provided in this Regulation, invalidity … cash benefits … acquired under the legislation of one or more Member States shall not be subject to any reduction, modification, suspension, withdrawal or confiscation by reason of the fact that the recipient resides in the territory of a Member State other than that in which the institution responsible for payment is situated. "

Regulation No. 1408/71 contains no provision under which invalidity cash benefits may be discontinued on the ground that the recipient resides in the territory of a Member State other than that in which the institution responsible for payment is situated

The United Kingdom argued that the residence conditions to which payment of the allowance in question is made subject by national legislation are criteria for the acquisition of entitlement to that the allowance which must be satisfied on each day in respect of which the allowance is claimed. The waiver of residence requirements provided for in the first sub-paragraph of Article 10(1) of Regulation No. 1408/71 is not concerned, in it's view, with residence requirements imposed as criteria for the acquisition of entitlement to a benefit

As the Court held in its judgment of 24 February 1987 in the Giletti case, cited above, under Article 10 of Regulation No. 1408/71 neither the acquisition nor the retention of entitlement to the benefits covered by that provision may be denied on the sole ground that the person concerned does not reside in the territory of the Member State in which the institution responsible for payment is situated.

Consequently, the reply to the second question asked by the social security Commissioner must be that where an allowance for handicapped persons constitutes an invalidity benefit within the meaning of Article 4(1)(b) of Regulation No. 1408/71, Article 10 of that regulation precludes the withdrawal of that benefit on the sole ground that the recipient resides in the territory of a Member State other than that in which the institution responsible for payment is situated.

Costs

The costs incurred by the United Kingdom, Belgium and the Commission of the European Communities, which submitted observations to the court, are not recoverable. Since these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the social security Commissioner, by decision of 23 October 1989, hereby rules:

(1) 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 provided for under the legislation of that Member State which is 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 Council Regulation (EEC) No. 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, as amended and updated by Council Regulation (EEC) No. 2001/83 of 2 June 1983;

(2) Where an allowance for handicapped persons constitutes an invalidity benefit within the meaning of Article 4(1)(b) of Regulation No. 1408/71, Article 10 of that regulation precludes the withdrawal of that benefit on the sole ground that the recipient resides in the territory of a Member State other than that in which the institution responsible for payment is situated.