IN THE UPPER TRIBUNAL                              Case No  CIB/3552/2008

ADMINISTRATIVE APPEALS CHAMBER

 

Before UPPER TRIBUNAL JUDGE WARD

 

Attendances:           

 

For the Appellant:       Mr Martin Charnley, Solicitor

 

For the Respondent:   Ms Charlotte O’Brien, Citizens Advice Bureau

 

Decision:  The decision of the appeal tribunal sitting at York on 3 June 2008 under reference 009/08/00200 involved the making of an error of law and is set aside. Acting under section 12(2)(b) of the Tribunals, Courts and Enforcement Act 2007, I re-make the decision in terms that the claimant's claim for short-term incapacity benefit made on 1 February 2007 falls to be determined otherwise than under UK law and is thus refused. 

 

REASONS FOR DECISION

 

1.  This is an appeal by the Secretary of State, made with permission of a full-time chairman of appeal tribunals.  It primarily concerns the conflict of laws provisions of Council Regulation (EEC) No 1408/71 (“the Regulation”).

 

2.  I am grateful to both representatives for their oral and written submissions.

 

Facts

 

3.  The claimant had lived in Spain from 5 December 1992 to 20 December 2006.  She worked on a self-employed basis, paying insurance contributions under the relevant Spanish legislation.

 

4.  In around February 2006 the claimant had become incapable of work owing to arthritis in her neck and was awarded a form of sickness benefit.  In September 2006 she underwent a medical examination, following which the Spanish authorities concluded she was fit for light work and her benefit was stopped. The claimant, then 58 years of age, concluded that her age, nationality and medical condition would make it difficult to find suitable work in Spain and so returned to the United Kingdom with her husband on 20 December 2006.

 

5.  At an unknown date in January 2007 the claimant and her husband made a joint claim for income-based jobseeker’s allowance, a benefit not requiring contribution conditions to be fulfilled.  Later that month, her husband found work and she was advised to continue signing on in order to preserve her credit position (as to which see below).

 

6.  On 1 February 2007, her medical condition having worsened, she was advised by her doctor to refrain from work and she was advised to claim incapacity benefit, which she did.  Short-term incapacity benefit being a contributory benefit, she was only entitled if she met the contribution conditions. As regards the first contribution condition, the relevant years were 2003/2004, 2004/2005 and 2005/2006.  She was unable to satisfy the condition in respect of any of them, as she had not paid any UK national insurance contributions during this time, when she had been in Spain.  On 27 February 2007 her claim was refused, correctly if one looks only at UK domestic legislation.

 

7.  The claimant secured the assistance of the local Citizens Advice Bureau.  She was fortunate to do so, as in a very specialist and difficult area, her representatives have been resourceful and thorough in taking points on her behalf.  The Secretary of State made enquiries of the Spanish authorities (the INSS).  By a Form E118 dated 6 September 2007, the INSS advised that benefit was refused on the grounds that the claimant had “arranged insurance cover for temporary incapacity with a friendly society for accidents at work and occupational illnesses”.  There is no suggestion that the claimant's condition was caused by either an accident at work or occupational illness.  It may be that the decision meant that the claimant was considered to have paid contributions to a different office and for a different benefit (and so was not entitled to sickness benefit in Spain), but it sits uncomfortably with the fact that the claimant had successfully claimed it for 7 months in 2006, only losing entitlement because of lack of incapacity.  Subsequently it appears that the Secretary of State told the claimant that the INSS had advised that she was not entitled to sickness benefit in Spain “because her funding had run out”.  No documentary basis for this has been seen other than the Form E118 mentioned above.

 

Entitlement to National Insurance Credits

 

8.  It was an integral part of the claimant's argument before the appeal tribunal and the Upper Tribunal that insurance in the UK would as a matter of EU law mean that UK rather than Spanish social security law applied and that she could rely on credits associated with her joint claim for income-based jobseeker’s allowance for a few weeks in January 2007 as constituting sufficient insurance for this purpose in relation to her incapacity benefit claim made in February 2007.  As a preliminary point, I am not satisfied that the claimant was at the material time in receipt of a national insurance credits and indeed, I do not consider that as a matter of law, she could have been. 

 

9.  Under regulation 8A (1) of the Social Security (Credits) Regulations 1975 (SI 1975/556):

 

“For the purposes of entitlement to any benefit by virtue of a person's earnings or contributions, he shall be entitled to be credited with earnings equal to the lower earnings limit then in force, in respect of each week to which this regulation applies.”

         

The regulation applies to (amongst others) a week in which a person is paid a jobseeker’s allowance.

 

10. However, that is not the end of the matter.  By regulation 3 (the emphasis is mine):

 

“(1) Any contributions or earnings credited in accordance with these Regulations shall be only for the purpose of enabling the person concerned to satisfy—

(a) in relation to short-term incapacity benefit, widowed mother's allowance, widowed parent's allowance, bereavement allowance, widow's pension or Category A or Category B retirement pension, the second contribution condition specified in relation to that benefit in Schedule 3 to the Contributions and Benefits Act; or

(b) in relation to contribution-based jobseekers allowance, the condition specified in section 2(1)(b) of the Jobseekers Act 1995,

and accordingly, where under any of the provisions of these Regulations a person would, but for this paragraph, be entitled to be credited with any contributions or earnings for a year, or in respect of any week in a year, he shall be so entitled for the purposes of any benefit only if and to no greater extent than that by which his relevant earnings factor for that year falls short of the level required to make that year a reckonable year.

(2) Where under these regulations a person is entitled for the purposes of any benefit to—

(a) be credited with earnings for a year, he is to be credited with such amount of earnings as may be required to bring his relevant earnings factor to the level required to make that year a reckonable year;

(b) [repealed]

(3) [not material].”

 

It follows that regulation 3 has to be applied in each case along with the relevant other regulation (in this case regulation 8A) and further, from the wording emphasised, that credited earnings can only be applied where the individual has not paid enough actual contributions for the tax year.  This can only be decided after the end of the tax year: see the decisions of Mr Commissioner Williams in CIB/1602/2006 and Mr Commissioner Rowland in CIB/3327/2004.  Accordingly, no entitlement to a credit could lawfully have crystallised before the end of the tax year (5 April 2007) and I have seen no evidence suggesting that a credit purported -albeit wrongly - to have been awarded by 1 February 2007 (the date of the claimant's claim for incapacity benefit).

 

11.  The appeal tribunal held that “after her return to the UK in 2007, she was in receipt of National Insurance Credits.”  This must by necessary implication be taken as referring to the time of the claim for incapacity benefit.  I find that a tribunal properly applying the provisions of the Social Security (Credits) Regulations 1975 could not have so concluded and so the tribunal was in error of law.  At most the claimant had a prospective entitlement to a credit in the event that she were not to make the year a “reckonable year” by other means before the end of the financial year, but as at the date of her incapacity benefit claim, she was not entitled.

 

Regulation 1408/71: which provision determines conflict of laws issues?

 

12.  I go on to consider the consequences if the claimant could rely on what was at most a prospective entitlement to a credit.  It is said that that meant she was “last insured” in the UK and so the UK became the competent member State for the purposes of the Regulation.  (I interpolate that it is not in dispute that the claimant and incapacity benefit respectively fall within the scope ratione personae and ratione materiae – to use the European terminology - of the Regulation).

 

13.  The point turns on the interaction between the problematic definitions of “competent institution” and “competent State” in paragraphs (o) and (q) respectively of Article 1 and the provisions of Article 13.

 

14.  Article 1, so far as relevant, provides:

 

(o) “competent institution means:

(i)              the institution with which the person concerned is insured at the time of the application for benefit; or

(ii)             the institution from which the person concerned is entitled or would be entitled to benefits if he or a member or members of his family were resident in the territory of the Member State in which the institution is situated; or

(iii)            the institution designated by the competent authority of the Member State concerned; or

(iv)           in the case of a scheme relating to an employer’s liability in respect of the benefits set out in Article 4(1), either the employer or the insurer involved or, in default thereof, a body or authority designated by the competent authority of the Member State concerned.”

 

(q)    “competent State means the Member State in whose twerritory the competent institution is situated;”

 

15.  Article 13, omitting provisions which are immaterial, is in the following terms:

 

“1. Subject to Articles 14c and 14f, persons to whom this Regulation applies shall be subject to the legislation of a single Member State only. That legislation shall be determined in accordance with the provisions of this Title.

 

 2. Subject to Articles 14 to 17:

 

(a) a person employed in the territory of one Member State shall be subject to the legislation of that State even if he resides in the territory of another Member State or if the registered office or place of business of the undertaking or individual employing him is situated in the territory of another Member State;

 

(b) a person who is self-employed in the territory of one Member State shall be subjected to the legislation of that State even if he resides in the territory of another Member State;

 

[(c), (d), (e) not material];

 

(f) a person to whom the legislation of a Member State ceases to be applicable, without the legislation of another Member State becoming applicable to him in accordance with one of the rules laid down in the aforegoing subparagraphs or in accordance with one of the exceptions or special provisions laid down in Articles 14 to 17 shall be subject to the legislation of the Member State in whose territory he resides in accordance with the provisions of that legislation alone.”

 

Articles 14 to 17 are immaterial for present purposes.

 

16.  It is submitted on behalf of the claimant that because paragraph (o) provides that “competent institution” means (among other things) “the institution with which the person concerned is insured at the time of the application for benefit” (as, by virtue of her claimed entitlement to a credit, the claimant was said to be) and because by paragraph (q) “competent State” means “the Member State in whose territory the competent institution is situated”, it follows that the UK is the competent State and UK social security law should be applied..

 

17.  In my judgment, this is not a sustainable position.  It is contrary to caselaw authority.  The purpose of Article 13 and indeed its limitations, were more expressed in C-275/96 Kuusijärvi  [1998] ECR I-3419 :

 

“28 In that connection it should be pointed out that the provisions of Title II of Regulation No 1408/71, of which Article 13 forms part, constitute a complete and uniform system of conflict rules. Those provisions are intended not only to prevent the concurrent application of a number of national legislative systems and the complications which might ensue, but also to ensure that persons covered by Regulation No 1408/71 are not left without social security cover because there is no legislation which is applicable to them (see, in particular, Kits van Heijningen, cited above, paragraph 12).

 

29 It should next be emphasised that the sole purpose of Article 13(2) of Regulation No 1408/71 is to determine the national legislation applicable to persons who are in one of the situations referred to in subparagraphs (a) to (f) of that provision. As such, the provision is not intended to lay down the conditions creating the right or the obligation to become affiliated to a social security scheme or to a particular branch of such a scheme. As the Court has pointed out on several occasions, it is for the legislature of each Member State to lay down those conditions (see, to that effect, Kits van Heijningen, cited above, paragraph 19, and Case C-245/88 Daalmeijer [1991] ECR I-555, paragraph 15).”

 

18.  That it is Article 13 rather than Article 1 which provides the general rule is further confirmed by C-150/82 Coppola v Insurance Officer [1983] ECR 43 at [10], for the definition in Article 1(o):

 

“must be applied within the framework of Article 18(1), in the light of the general rule contained in Article 13 of Regulation 1408/71, with regard to determination of the applicable legislation”.

 

19.  Secondly, the wording of paragraph (o) itself makes clear that it is not intended to be used as a vehicle for resolving conflict of laws problems.  

It can be seen that sub-paragraphs (iii) and (iv) set out in paragraph 14 above presuppose that the “Member State concerned” has already been identified, thus are useless in terms of their ability to identify the “competent State” by flowing into the definition in paragraph (q): the application of the definitions would be circular if such were their purpose.

 

20.  I proceed therefore on the footing that questions of jurisdiction and applicable law in relation to the claimant's incapacity benefit claim fall to be determined by the application of Article 13 rather than by the application of Article 1.  In accepting an argument that elevated the “last insured” principle above Article 13 (or in failing to consider Article 13 at all) as a means of making such a determination, the appeal tribunal was in error of law.

 

Interpretation of Article 13

 

21.  On behalf of the claimant it is further argued that Article 13(2)(a) applied to her once she had claimed income-based jobseeker’s allowance, with, contrary to my view, a concomitant entitlement to a national insurance credit, and so governed the situation at the time of her incapacity benefit claim.  The argument is derived from, in particular, two cases, Martinez Sala v Freistaat Bayern (C-85/96) [1998] ECR I-2691 and Dodl and Oberhollenzer v Tiroler Gebietskrankenkasse (C-543/03) [2005] ECR I-5049.

 

22.  In Martinez Sala, the issue was whether Ms Martinez, a Spanish national who had lived in Germany since the age of 12 and who had worked there for extended periods, was entitled to rely on the Regulation to assist her in asserting a right to child benefits in Germany.  To do that, she had to bring herself within Article 2 of the Regulation, which in turn brought into play the definition of “employed person” in Article 1(a).  The Court observed at [35] –[36]:

 

” Article 2 of Regulation No 1408/71 provides that it is to apply to employed or self-employed persons who are or have been subject to the legislation of one or more Member States and who are nationals of one of the Member States as well as to the members of their families.

 

So a person has the status of employed person within the meaning of Regulation No 1408/71 where he is covered, even if only in respect of a single risk, compulsorily or on an optional basis, by a general or special social security scheme mentioned in Article 1(a) of Regulation No 1408/71, irrespective of the existence of an employment relationship (see, on this point, Case 182/78 Pierik II [1979] ECR 1977, paragraphs 4 and 7, and Joined Cases 82/86 and 103/86 Laborero and Sabato [1987] ECR 3401, paragraph 17).“

23.  In Pierik II, cited above, the Court observed in relation to the definition, which at that time referred to a ”worker” rather than an “employed person”, that as it was expressed to be “laid down ‘for the purpose of this regulation’, such a definition has a general scope.”

24.  In Dodl and Oberhollenzer, the underlying issue was about whether Germany or Austria, or possibly both, were to pay childcare allowance to the claimants via the provisions of Articles 73 and 76.  The claimants in that case had both worked and indeed remained in employment, albeit the obligations of their respective employment relationships, including those to carry out work, pay remuneration and to make social security contributions, were suspended while they were on parental leave. 

25.  The European Court of Justice dealt with the matter in the following terms (the emphasis is my own):

“Substance

          The first question

24      By its first question, the national court is essentially asking whether the claimants in the main proceedings have lost the status of ‘employed persons’ within the meaning of Regulation No 1408/71 as a result of the suspension of their employment relationship during which, under Austrian law, they were not required to pay social security contributions. More particularly, the national court queries the effects of such a suspension on the application of Article 13(2)(a) of Regulation No 1408/71 and, consequently, of Article 73 of the same regulation.

25      It seems that the national court’s main concern underlying the first question is the risk that the claimants in the main proceedings could escape all social protection, so far as the award of family benefits is concerned, if their employment relationship does not qualify as employment on account of its suspension.

26      All the parties which submitted written observations are agreed that in spite of the temporary suspension of their employment relationship, the claimants are ‘employed persons’ within the meaning of Article 1(a) of Regulation No 1408/71.

27      In that connection, it must be pointed out that there is no single definition of worker/employed or self-employed person in Community law; it varies according to the area in which the definition is to be applied (Case C-85/96 Martínez Sala [1998] ECR I‑2691, paragraph 31). It is therefore necessary to consider the meaning of the term ‘employed person’ that is envisaged in the context of Regulation No 1408/71.

28      Article 2(1) of Regulation No 1408/71 states that the regulation is to apply to employed or self-employed persons who are or have been subject to the legislation of one or more Member States as well as to the members of their families.

29      The terms ‘employed person’ and ‘self-employed person’ are defined by Article 1(a) of Regulation No 1408/71. They designate any person insured under one of the social security schemes mentioned in the aforementioned Article 1(a) for the contingencies and under the conditions mentioned in that provision (Case C-2/89 Kits van Heijningen [1990] ECR I-1755, paragraph 9, and Case C-275/96 Kuusijärvi [1998] ECR I-3419, paragraph 20).

30      Accordingly a person has the status of an ‘employed person’ within the meaning of Regulation No 1408/71 where he is covered, even if only in respect of a single risk, on a compulsory or optional basis, by a general or special social security scheme mentioned in Article 1(a) of that regulation, irrespective of the existence of an employment relationship (Martínez Sala, cited above, paragraph 36, and Kuusijärvi, cited above, paragraph 21).

31      Thus, as the Advocate General pointed out in paragraph 12 of his Opinion, in the light of the case-law of the Court, it is therefore not the status of the employment relationship which determines whether or not a person continues to fall within the scope ratione personae of Regulation No 1408/71, but the fact that he or she is covered against risks under a social security scheme mentioned in Article 1(a) of that regulation. It follows from this that the mere suspension of the main obligations of an employment relationship for a given period of time cannot deprive the employee of his or her status as an ‘employed person’ within the meaning of Article 73 of that regulation.

32      It is apparent from the decision to refer that, under Austrian law, the claimants in the main proceedings were not, during the period of their parental leave, covered by full compulsory insurance (including health, accident and retirement insurance) as persons employed full-time are. According to the information provided by the national court, once compulsory insurance ceases the claimants are entitled to benefits only under the health insurance scheme – subject to certain conditions. The national court assumes that, in certain circumstances, the claimants in the main proceedings could therefore fall back on sickness benefits.

33      In any event, it is for the national court to make the necessary enquiries to determine whether the claimants in the main proceedings belonged to a branch of the Austrian social security system during the periods in respect of which the allowances in issue were applied for and, accordingly, whether they were ‘employed persons’ within the meaning of Article 1(a) of Regulation No 1408/71.

34       The answer to the first question must therefore be that a person has the status of an ‘employed person’ within the meaning of Regulation No 1408/71 where he is covered, even if only in respect of a single risk, on a compulsory or optional basis, by a general or special social security scheme mentioned in Article 1(a) of that regulation, irrespective of the existence of an employment relationship. It is for the national court to make the necessary enquiries to determine whether the claimants in the main proceedings belonged to a branch of the Austrian social security system during the periods in respect of which the allowances in issue were applied for and, accordingly, whether they were ‘employed persons’ within the meaning of Article 1(a).”

26.  It does seem to me that Dodl and Oberhollenzer can be understood in more than one way.  Paragraph 31, in particular, can be understood as saying that if the claimants in that case had the status of “employed persons” for the purposes of Article 73 (which it appears that as a matter of fact they did), then this was not undermined on the ground that they fell outside the scope ratione personae of the Regulation altogether, because the definition in Article 1(a) –rather than the fact of their employment - ensured that this did not happen. On the other hand, it might be suggested that it is not the fact of employment, but the fact of insurance against a relevant risk which brought the claimants within Article 73.  The interplay between Articles 1 and 73 is understood to be due to be considered by the Court of Appeal in HM Commissioners of Revenue and Customs v Ruas on appeal from the decision of Judge Mesher in [2009] UKUT 18 (AAC); CG/2266/2007.  However, I am satisfied that though the interplay between Articles 1 and 73  may be germane  to understanding Dodl and Oberhollenzer on a general level, it will not be determinative of what I have to decide, namely – whether the Article 1(a) test applies for the purposes of Article 13.

 

27.  Firstly, although the defined expression in Article 1(a) is “employed person”. In Article 13 the question is about “a person employed in the territory of one Member State.”  There is nothing in Article 1(a) which expressly requires one to construe other, different, expressions involving the words “employed” and “person” in the Regulation congruently with the defined phrase, nor do I read the observations in Pierik II as so requiring.

 

28.  Secondly and more significantly, there is no conceptual reason why it is necessary or even desirable to read Articles 1 and 2 on the one hand, and Article 13 on the other, as creating an identical test.  The purpose of the provisions is different – Articles 1 and 2 are concerned with the applicability of the Regulation as a whole and, in the interests of promoting Treaty aims of freedom of movement of persons, could be expected to be widely interpreted to avoid people slipping through gaps in its coverage, as indeed was the apparent concern in Dodl and Oberhollenzer.  Article 13 on the other hand is concerned with conflict of laws issues and there is no reason to construe any sub-paragraph of Article 13(2) particularly widely, especially given the existence now of the residence-based category in Article 13(2)(f).

 

29.  Indeed, I regard the history of decisions in relation to Article 13 as pointing firmly in the opposite direction.  Prior to the enactment of what is now Article 13(2)(f), it was established that the expression “a person employed in the territory of a member state” for the purposes of Article 13(2)(a)  fell to be read as applying to a person who had been so employed, but had ceased to be, and who had not taken up employment in another state, In C-302/84 Ten Holder [1986] ECR 1821, the European Court of Justice was able to reach this view, filling a perceived lacuna, without in its decision placing any reliance on, or even referring to, the definition of “employed person” in Article 1(a) , but relying on other arguments altogether.  Similarly, in Coppola, the proposition that it was the state of last employment that was determinative for Article 13(2)(a) as it then stood was reached without reliance on Article 1(a).  Both these cases were some time after Pierik II, in which the breadth of the scope of the Article 1(a) definition had been noted, yet the Court did not seek to apply it in the Article 13 context.

 

30.  The whole point of Article 13 is to ensure that “a worker to whom this regulation applies shall be subject to the legislation of a single member state only”.  Against that background, the aims of these conflict provisions would be frustrated rather than promoted by applying the Article 1(a) test to Article 13.  I agree with the Secretary of State that it would mean that where a person has paid contributions, been credited with contributions or been insured in several States, they would be subject to the legislation of all of them.  Pensioners would always remain “persons employed” for the purposes of Article 13(2)(a), having been insured for one of the risks set out in Article 4, once again possibly in several states. 

 

31.  It is for these reasons that I do not consider that the proposition articulated in Martinez Sala in relation to Article 1(a) can be applied to Article 13.  Martinez Sala itself was concerned not with Article 13, but with a discrimination claim.  In relation to Dodl and Oberhollenzer, I accept that in a number of paragraphs the Court did make reference to Article 13.  For instance, in paragraph 49, the decision refers to “the entitlement which the claimants in the main proceedings derive, in their capacity as “employed persons” from Article 13 and Article 73...” which could be read as suggesting that the European Court of Justice was attempting to say that the same principles should apply to Article 13.  However, this was not reflected in the operative part of their decision. Moreover, the case was in substance about the operation of Articles 73 and 76, there being little dispute about the remaining issues referred by the national Court.  There does not appear to have been any suggestion that, if the claimants fell within the scope of the regulation ratione personae at all, they were not subject under Article 13 to the law of Austria as their place of employment; and on the facts, the claimants remained employed in Austria, even though the obligations of that employment were suspended while they were on parental leave.  As a result, the Court did not need to look in any depth at the Article 13 issue and I do not regard the decision as authority for a proposition that the Article 1(a) test must be applied to Article 13, in the face of previous decisions suggesting otherwise which the Court did not address and when to do so would fly in the face of the stated purpose of Article 13. Nor can I find any indication in the subsequent decisions of the Court where reference has been made to Dodl and Oberhollenzer that reliance was ever placed on it for the purposes for which the claimant contends.

 

32.  I would therefore conclude that even if the claimant’s prospective entitlement to national insurance credits were to constitute sufficient insurance for the purposes of Article 1(a), that does not help her in bringing herself within Article 13(2)(a), and since she had not actually been employed in the UK following her return from Spain, she fell outside the scope of that provision.

 

Concluding observations

 

33.  I record that the Secretary of State urges me to conclude that a credit could not of itself ever be insurance for this purpose, in that a credit can never establish entitlement to benefit unless there has been a number of actual national insurance contributions paid.   I would prefer to leave the matter for a case in which the point has to be decided. Because of the view I take on other issues, the claimant cannot in my view bring herself within Article 13(2)(a) in relation to the United Kingdom in any event.

 

34.  It was Article 13(2)(a) on which the claimant came to rely during the proceedings and she no longer pursued an alternative argument based on Article 13(2)(f).  She was correct not to pursue the alternative point, as Article 89 of the Regulation brings into play Annex VI, paragraph 18 of which provides that:

 

“A period of subjection to United Kingdom legislation in accordance with Article 13(2)(f) of the Regulation may not:

(a)  be taken into account under that provision as a period of subjection to United Kingdom legislation for the purposes of Title III of the Regulation, nor

(b)  make the United Kingdom the competent State for the provision of the benefits provided for in Article 18, 38 or 39(1) of the Regulation.”

 

Short-term incapacity benefit falls within Title III and it would be the claimant's case that the UK would have to apply Article 18.  Both are excluded by the provision cited. 

 

35.  What is now known, but was not known to the tribunal, is that according to the Spanish authorities, the claimant was subject to the Spanish social security system until as late as 31 March 2007. She was liable to pay contributions between April 2006 and March 2007, but had failed to do so and insolvency proceedings were subsequently undertaken in Spain in respect of such liability, but the claimant had no assets there. Her participation in the Spanish social security system came to an end on 31 March 2007, when she was automatically de-registered because of non-payment of contributions. She had paid contributions in Spain between 1 April 2000 and April 2006 and indeed, in respect of part-time work, prior to 1 April 2000 also. A variety of grounds have been put forward in documentation received from the Spanish authorities as to why such a claim would have failed, some of which it might perhaps have been possible to dispute, but irrespective of them, a claim under the Spanish system would fail for non-payment of contributions.  However, on the facts as now known, the claimant did not cease to be subject to the Spanish social security system until 31 March 2007, so an essential condition for Article 13(2)(f) to apply at the date of claim was in any event not met.

 

36.  Taking a step back from the conclusions reached, I do not consider that they are anything other than in accord with Treaty principles relating to promoting freedom of movement.  As the Secretary of State pointed out, freedom of movement is encouraged not only by the establishment of mechanisms for the crediting of contributions between one country and another, but also by mechanisms for the export of benefit from one country to another.  On the Secretary of State's argument, if the claimant had had any entitlement to benefit under Spanish law, she would have been entitled to have had it paid to her in the United Kingdom, relying on Article 19 of the Regulation.  If she did not have entitlement to benefit under Spanish law despite being within the Spanish system, that is irrelevant – the Regulation is concerned with the co-ordination, not the harmonisation, of social security systems.  The conditions of affiliation to a social security scheme are for the legislature of each Member State: see (among other cases) Kuusijärvi [29], quoted in paragraph 17 above.

 

37.  The Secretary of State’s appeal thus succeeds.

 

 

C.G.Ward

Judge of the Upper Tribunal

9 November 2009