UK Social Security and Child Support Commissioners' Decisions

[2008] UKSSCSC CPC_3764_2007 (03 July 2008)

 
DECISION OF THE SOCIAL SECURITY COMMISSIONER
1. My decision is given under section 14(8)(a)(i) of the Social Security Act 1998:

I SET ASIDE the decision of the Bexleyheath appeal tribunal, held on 30 July 2007 under reference 168/06/00980, because it is erroneous in point of law.

I give the decision that the appeal tribunal should have given, without making fresh or further findings of fact.

My DECISION is that the claimant is not entitled to state pension credit on his claim that was made on 3 August 2005 and refused on 27 June 2006.

REASONS
2. The key issue in this case is the operation of the concept of proportionality in the context of the right to reside of an EU citizen.

The claimant's background and arrival in the United Kingdom

3. The claimant was born in 1944. He is of Roma descent and has Slovakian nationality. He first came to the United Kingdom on 25 or 26 September 1997 (both dates appear in the papers). Amongst others, the claimant was accompanied on his arrival by his son, who is currently compulsorily detained under the Mental Health Act 1983. I have decided the appeal relating to his son in CIS/1230/2008.
4. Slovakia acceded to the EU on 1 May 2004. Since that date, the claimant has been a citizen of the EU.

The asylum and human rights claims

5. The claimant claimed asylum at the port of entry, but this was refused in 1998 and appeals were unsuccessful. He was ineligible for leave to remain under the family indefinite leave exercise. A human rights application was still outstanding on 30 April 2007.

The state pension credit claims

6. The claimant first claimed a state pension credit in May 2004, but this was unsuccessful as he did not provide the details requested. He next claimed state pension credit on 3 August 2005 and this was refused on 27 June 2006 on the ground that he did not have a right to reside. I now explain why that barred the claimant's entitlement to state pension credit.
7. The State Pension Credit Act 2002 established state pension credit. Section 1(2) provides:

'(2) A claimant is entitled to state pension credit if-

(a) he is in Great Britain'.

8. Just reading that, any claimant who was present in Great Britain would be entitled to state pension credit. However, section 1(5) allows regulations to be made:

'(5) Regulations may make provision for the purposes of this Act-

(a) as to circumstances in which a person is to be treated as being or not being in Great Britain'.

9. Regulation 2 of the State Pension Credit Regulations 2002 is made under the authority of section 1(5). Both the versions in force before and from 30 April 2006 have the effect that a claimant who does not have a right to reside is treated as not being in the Great Britain. The effect of that is that the claimant does not satisfy the condition of entitlement in section 1(2), as qualified by regulations under section 1(5).

The appeal to the appeal tribunal

10. The claimant exercised his right of appeal to an appeal tribunal with the assistance of a representative from his local County Council. The representative put two arguments to the tribunal. First, he argued that there was discrimination under both Regulation 1408/71 and Article 12 of the EC Treaty. Second, he argued that it would be disproportionate to deny the claimant a right to reside.
11. The tribunal allowed the appeal. It rejected the first argument and did not refer to the second. Instead, it decided that the claimant had had a permanent right to reside from 25 September 2002 under Article 16 of Directive 2004/38/EC. Article 16 provides:

'1. Union citizens who have resided legally for a continuous period of five years in the host Member State shall have the right of permanent residence there. …

2. Paragraph 1 shall apply also to family members who are not nationals of a Member State and have legally resided with the Union citizen in the host Member State for a continuous period of five years.

3. Continuity of residence shall not be affected by temporary absences not exceeding a total of six months a year, or by absence of a longer duration for compulsory military service, or by one absence of a maximum of twelve consecutive months for important reasons such as pregnancy and childbirth, serious illness, study or vocational training, or a posting to another Member State or a third country.

4. Once acquired, the right of permanent residence shall be lost only through absence from the host Member State for a period exceeding two consecutive years.'

The appeal to the Commissioner

12. The Secretary of State applied for leave to appeal, arguing that residence before the date of accession could not count towards the right of permanent residence under the Directive. The claimant's representative opposed the application, saying that the tribunal's decision was based on a finding of fact. However, the district chairman who made the decision gave the Secretary of State leave to appeal, saying that 'Article 16 of Citizenship Directive needs to be clarified in this case.'
13. A legal officer drew attention to the decision of Mr Commissioner Rowland in CIS/1794/2007, to be reported as R(IS) 3/08, which decided that residence before accession could not count towards permanent residence.
14. The claimant's representative admitted that that decision 'mitigates substantially against the decision of the tribunal under Article 16'. However, he pursued two arguments. One was that there is a lacuna in the right to reside provisions and that it should be filled by reliance on Article 18 of the EC Treaty, which confers a right to move and reside on all EU citizens. The other was that it would be disproportionate to deny the claimant a right to reside. The representative relied on these facts: (i) the claimant is now in his mid-60s; (ii) he is not in good health; (iii) he has been in the United Kingdom since 1997; (iv) he cannot realistically return to Slovakia as his accommodation there has been demolished; (v) he must retain contact with his son who has paranoid schizophrenia and cannot leave the country; (vi) if his son is released into the community, the claimant will need to be on hand to care for him.
15. In substance, both arguments come to the same thing – the terms of the law should not be applied to the claimant's circumstances, because it would be disproportionate to do so.
16. The Secretary of State's representative has opposed both those arguments.

The discrimination argument

17. This argument was not pursued before me, so I need mention it only briefly. The tribunal was right to reject it. It was bound, as I am, in respect of Article 12 by the decision of the Court of Appeal in Abdirahman v the Secretary of State for Work and Pensions, reported as R(IS) 8/07. I can see no way to distinguish that case. As to Regulation 1408/71, Mr Commissioner Rowland had decided in CIS/3182/2005 that it could not be relied on and he has since come to the same conclusion in CPC/1072/2006. I respectfully agree with those decisions on Regulation 1408/71.

The permanent residence argument

18. I accept the Secretary of State's argument on permanent residence, which the claimant's representative has more or less conceded. The tribunal took account of the period of the claimant's residence in the United Kingdom before his country acceded to the EU on 1 May 2004. For that reason alone, the tribunal went wrong in law, even if the claimant had been lawfully resident in the United Kingdom as an asylum seeker: see Mr Commissioner Rowland's decision in CIS/1794/2007, to be reported as R(IS) 3/08.
19. As the tribunal misdirected itself in law and made a decision on an invalid basis. I must set that decision aside. Before considering the disposal of the appeal, I must decide if there is any merit in the arguments pursued by the claimant's representative.

The proportionality argument

20. I consider this issue in the context of the Directive 2004/38/EC. Strictly, that Directive is only relevant from 30 April 2006. However, it consolidated and codified earlier EC law and my analysis would, in essence, be the same.
21. Proportionality is a general principle of law recognised by the European Court of Justice. It was derived from the administrative law systems of the Continent. The term was not used in United Kingdom law before accession to the EEC.
22. Proportionality recognises that rules exist for one or more purposes and that they should only be interpreted or applied in ways that are reasonably necessary to further those purposes. In short, it requires a connection between means and ends. Proportionality does not provide a basis for creating a right to reside just because that would be fair or just in the circumstances of a particular case. Still less does it justify rewriting EC law as one would wish it to be.
23. The concept operates differently in different contexts; and the extent to which it allows a court to intervene varies according to the context. In this case, the context is Article 18 of the EC Treaty:

'1. Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect.'

24. As a Union citizen, the claimant's right to reside derives from the Treaty: see recital (11) in the preamble to the Directive. The subordinate legislation imposes limitations or conditions. In this case, proportionality applies to control the interpretation and operation of those limitations and conditions.
25. From the introduction of what is now Article 18, the European Court of Justice has regularly emphasised its importance. The statement of the Court in Grzelczyk v Centre public d'aide sociale d'Ottignies-Louvain-la-Neuve (Case C-184/99) [2001] ECR I-6193 is typical:

'31. Union citizenship is destined to be the fundamental status of nationals of the Member States, enabling those who find themselves in the same situation to enjoy the same treatment in law irrespective of their nationality, subject to such exceptions as are expressly provided for.'

26. It is appropriate to use proportionality to ensure that the limitations and conditions on that fundamental right are no broader than necessary to secure their objectives. These objectives may be discovered from the recitals to the Directive and from its terms. My analysis will focus on the social assistance system of a Member State. Social assistance includes state pension credit and income support, which are the benefits involved in the case of the claimant and his son.
27. The relevant recitals are (10), (16) and (21) to (23). Recital (10) sets out the basic principle that access to social assistance should not impose an unreasonable burden on the right to reside:

'(10) Persons exercising their right of residence should not, however, become an unreasonable burden on the social assistance system of the host Member State during an initial period of residence. Therefore, the right of residence for Union citizens and their family members for periods in excess of three months should be subject to conditions.'

(The words 'an initial period of residence' do not refer to, and must not be confused with, the 'initial right of residence' under regulation 13 of the Immigration (European Economic Area) Regulations 2006. The 'initial right of residence' is the right of residence for up to three months under Article 6 of the Directive. However, the Directive does not use that expression. In its context, 'an initial period of residence' must mean any residence that is not sufficient to establish permanent residence.)

28. The basic principle is qualified in respect of the first three months of residence:

'(21) However, it should be left to the host Member State to decide whether it will grant social assistance during the first three months of residence, or for a longer period in the case of jobseekers, to Union citizens other than those who are workers or self-employed persons or who retain that status or their family members, or maintenance assistance for studies, including vocational training, prior to acquisition of the right of permanent residence, to these same persons.'

29. Provision is also made for expulsion of EU citizens:

'(16) As long as the beneficiaries of the right of residence do not become an unreasonable burden on the social assistance system of the host Member State they should not be expelled. Therefore, an expulsion measure should not be the automatic consequence of recourse to the social assistance system. The host Member State should examine whether it is a case of temporary difficulties and take into account the duration of residence, the personal circumstances and the amount of aid granted in order to consider whether the beneficiary has become an unreasonable burden on its social assistance system and to proceed to his expulsion. In no case should an expulsion measure be adopted against workers, self-employed persons or job-seekers as defined by the Court of Justice save on grounds of public policy or public security.

…

'(22) The Treaty allows restrictions to be placed on the right of free movement and residence on grounds of public policy, public security or public health. In order to ensure a tighter definition of the circumstances and procedural safeguards subject to which Union citizens and their family members may be denied leave to enter or may be expelled, this Directive should replace Council Directive 64/221/EEC of 25 February 1964 on the coordination of special measures concerning the movement and residence of foreign nationals, which are justified on grounds of public policy, public security or public health (1).

'(23) Expulsion of Union citizens and their family members on grounds of public policy or public security is a measure that can seriously harm persons who, having availed themselves of the rights and freedoms conferred on them by the Treaty, have become genuinely integrated into the host Member State. The scope for such measures should therefore be limited in accordance with the principle of proportionality to take account of the degree of integration of the persons concerned, the length of their residence in the host Member State, their age, state of health, family and economic situation and the links with their country of origin.'

30. The expulsion provisions are concerned with removal of EU citizens from a member State. They do not determine whether a person retains a right to reside until expelled. There are, therefore, three categories: (i) those who have a right to reside; (ii) those who do not have a right to reside; and (iii) those who are liable to be expelled. Category (iii) overlaps with both (i) and (ii). It is, therefore, possible that a claimant may lose the right to reside without being liable to be expelled.
31. These recitals are reflected in the terms of the Directive. It distinguishes between short term residence, long term residence and permanent residence. Only the last of these terms is actually used in the Directive.
32. Short term residence is residence for up to three months and attracts only limited rights to social assistance. Article 6(1) recognises that Union citizens have 'the right of residence … for a period of up to three months without any conditions'. And Article 14(1) provides that 'Union citizens … shall have the right of residence provided for in Article 6, as long as they do not become an unreasonable burden on the social assistance system of the host Member State.' However, Article 24(2) provides that 'the host Member State shall not be obliged to confer entitlement to social assistance during the first three months of residence'. British domestic legislation has taken advantage of that derogation, subject to the limits identified in recital (21): see regulation 21AA of the Income Support (General) Regulations 1987 and regulation 2 of the State Pension Credit Regulations 2002.
33. Permanent residence is for those who have had a right to reside for five years and is subject to no control over access to social assistance. Article 16(1) provides:

'(1) Union citizens who have resided legally for a continuous period of five years in the host Member State shall have the right of permanent residence there. This right shall not be subject to the conditions provided for in Chapter III.'

34. Long term residence is residence for longer than three months that is not sufficient to establish a right of permanent residence. If the claimant is to succeed, he must come within this category. Article 7 recognises for a right of residence for different categories of Union citizens: workers, self-employed persons, self-sufficient persons, self-sufficient students, and family members. They are linked by the fact that they should have no need to resort to social assistance. In the case of workers and self-employed persons, but no one else, the right to reside is preserved while the person is unable to work or unemployed but seeking work. It is only to this limited extent that Article 7 recognises a right to reside for those who are not able to support themselves financially without resort to social assistance.
35. In so far as it is relevant to the claimant and his son, Article 7 provides:

'(1) All Union citizens shall have the right of residence on the territory of another Member State for a period of longer than three months if they:

…

(b) have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State'.

That right is implemented by regulations 4(1)(c), 6(1)(d) and 14(1) of the Immigration (European Economic Area) Regulations 2006.

36. The claimant has been resident in the United Kingdom for more than three months since 1 May 2004 and does not have a right of permanent residence. He is, therefore, subject to the 'sufficient resources' conditions in Article 7(1)(b). He does not satisfy those conditions. He has some resources, but he has applied for state pension credit and there is nothing to indicate that he will secure funds from other sources in the future. There is no evidence that he has the necessary insurance and I note that he is not in good health. It is, therefore, reasonable to expect that he will seek to take advantage of the NHS.
37. The issue is whether it is proportionate to enforce the 'sufficient resources' conditions in the circumstances of this case. As the recitals and the structure of the Directive show, its purpose is to control and limit access to social assistance for those who do not have a right of permanent residence. It thereby reconciles the right to move and reside freely with the desire of States to limit the impact on their national finances. If the proportionality argument is to succeed, it must show that the circumstances of the claimant's case are such that denying a right to reside is not reasonably necessary in order to maintain the balance struck in the Directive.
38. The case law of the European Court of Justice shows that a right to reside and access to social assistance can be compatible. This arose in Rudy Grzelczyk v Centre public d'aide sociale d'Ottignies-Louvain-la-Neuve Case C-184/99 [2001] ECR I-6193, in the context of the 'sufficient resources' conditions for students The claimant was a French student studying in Belgium. He worked in order to support his studies, but the requirements of the final year of the course prevented this and he claimed benefit. This was awarded, but then withdrawn. The Court first interpreted Directive 93/96. It then said:

'42. That interpretation does not, however, prevent a Member State from taking the view that a student who has recourse to social assistance no longer fulfils the conditions of his right of residence or from taking measures, within the limits imposed by Community law, either to withdraw his residence permit or not to renew it.

'43. Nevertheless, in no case may such measures be the automatic consequence of a student who is a national of another Member State having recourse to the host Member State's social assistance system.

'44. While Article 4 of Directive 93/96 does indeed provide that the right of residence is to exist for as long as beneficiaries of that right fulfil the conditions laid down in Article 1, the sixth recital in the directive's preamble envisages that beneficiaries of the right of residence must not become an "unreasonable" burden on the public finances of the host Member State. Directive 93/96, like Directives 90/364 and 90/365, thus accepts a certain degree of financial solidarity between nationals of a host Member State and nationals of other Member States, particularly if the difficulties which a beneficiary of the right of residence encounters are temporary.'

Accordingly, the Court decided that Belgium was not entitled to apply an absolute bar on entitlement to social assistance for students from other Member States. The Court did not have to define what would amount to temporary difficulties or to say whether the claimant's difficulties in that case were temporary.

39. It is not entirely clear whether the Court considered that the claimant's right to reside in that case survived. In paragraph 42, it referred to the right of residence and to measures designed to ensure removal. In paragraph 43, it referred only to the latter. But in paragraph 44, it links beneficiaries of the right to reside with a burden on public finances. I will assume (in the claimant's favour in this case) that the Court anticipated that the right of residence would survive.
40. However, the circumstances of the claimant and his son in this case are not temporary. Indeed, the proportionality argument put by the claimant's representative envisages that they may change for the worse in the future if the son moves to live in the community. That takes this case outside the scope of Grzelczyk.
41. The case law of the European Court of Justice also shows that it may be sufficient if the conditions are satisfied in substance rather than in form. This arose in Baumbast and R v Secretary of State for the Home Department (Case C-413/99) [2002] ECR I-7091, in the context of 'sufficient resources' conditions for a self-sufficient person. That case is usually cited on Mrs Baumbast's right of residence as the primary carer of the child of a Union citizen who had entered education. However, it also concerned Mr Baumbast's right of residence. He had been a worker in the United Kingdom and then run his own company here. When that company failed, he found work abroad. He could only claim a right of residence under what is now Article 7(1)(b) of Directive 2004/38. It was accepted that he had sufficient resources, as he was employed abroad and neither he nor his family had claimed social assistance in the United Kingdom. He did not have comprehensive sickness insurance, but the Court held that it would be disproportionate for this to deny him a right to reside. It listed the factors taken into account: (i) he had sufficient resources; (ii) he had worked and resided lawfully in the United Kingdom for several years; (iii) his family resided with him and remained after he left; (iv) no member of the family claimed social assistance in the United Kingdom; and (v) he and his family had comprehensive sickness insurance in Germany. In other words, Mr Baumbast had considerable, lawful connection with the United Kingdom, both personally and through his family, and all the conditions for a right of residence were satisfied with the single exception of sickness insurance, which was satisfied in respect of Germany. In those circumstances, to use the wording of Grzelczyk, 'a certain degree of financial solidarity' was not required.
42. However, the circumstances of the claimant and his son in this case are very different. They have been in the United Kingdom since 1997 and they have been lawfully present. However, they have not had a right to reside, except for a period of three months following 1 May 2004. Their cases lack the degree of connection that was present in Baumbast. That takes this case outside the scope of that decision.
43. Grzelczyk and Baumbast are not exhaustive of the operation of proportionality in the context of the right to reside. They do, though, indicate the way that it applies. I have considered the factors identified by the claimant's representative (paragraph 14 above) individually and collectively in the context of their cases as a whole. I have concluded that it is not disproportionate to decide that neither of them has a right to reside in the United Kingdom. There is no reason to afford them 'a certain degree of financial solidarity'.
44. The issue is whether the claimant has a right to what I have called long term residence. That right is expressly subject to provisions designed to control and limit access to social assistance. Proportionality requires me to ask whether excluding the claimant from a right to reside is reasonably necessary to protect the social assistance system. One relevant factor in that analysis is whether the claimant would become an unreasonable burden on the system.
45. The starting point is that the circumstances of the claimant and his son fall outside the conditions set for those who wish to have access to the social assistance system. They are certainly not, and never have been, benefit tourists. They have now been in the United Kingdom for more than a decade, but they have only been resident here for three months following accession. They have both claimed social assistance. Their reliance on social assistance, if granted, is likely to be for the remainder of their lives. In the claimant's case, this is because of his age and deteriorating health. In the son's case, this is because of his mental health. I accept that: (i) it would be difficult, if not impossible, for them to return to Slovakia; (ii) it is appropriate for the claimant to maintain contact with his son; and (iii) it is appropriate that he should support his son if he is released into the community. However, I am concerned with entitlement to social assistance, not with expulsion from the United Kingdom. The claimant and his son have managed to survive here without resort to social assistance and, as far as I know, will be allowed to remain.
46. Proportionality is a concept that, by its nature, only applies in exceptional cases. The claimant's representative has recognised this, saying 'it would be rightly rare for a case to succeed on the grounds of proportionality'. The circumstances of these cases are not sufficiently exceptional to justify ignoring the terms of the legislation governing the right to reside. I cannot distinguish those circumstances from many others in which, for an infinite variety of reasons, the claimant is able to present a meritorious case why he should be allowed a right to reside. If I were to accept the representative's argument, I would not be preventing a rule being enforced in a way that was not reasonably necessary to further its purpose. Rather, I would be undermining that purpose by rewriting the scope of the right to reside and the controls on access to a social assistance system.
47. As far as I know, Mr Rowland is the only Commissioner to have decided that it would be disproportionate to apply the legislation. That was in CIS/0408/2006. The Secretary of State did not pursue an appeal to the Court of Appeal in that case and regularly submits that: (a) Mr Rowland did not apply a proportionality analysis; and (b) it is possible that the outcome of that case was justified on other grounds. I will limit myself to saying that the circumstances of that case were very different from those of the claimant and his son. That case, even if correctly decided, does not support their representative's argument in this case.

Disposal

48. I must set aside the tribunal's decision. I do not need to direct a rehearing, as I am able to substitute the decision that the tribunal should have given. As I have rejected all arguments put on behalf the claimant, that decision is that the claimant is not entitled to state pension credit.

Signed on original on 03 July 2008

Edward Jacobs Commissioner