Upper Tribunal (Administrative Appeals Chamber)

 

 

IN THE UPPER TRIBUNAL                                                           File nos: CDLA/496/2006

ADMINISTRATIVE APPEALS CHAMBER                                              CDLA/2002/2006

                                                                                                                         CDLA/2106/2006

 

 

 

                                               ARTICLE 267 OF THE TREATY

                           ON THE FUNCTIONING OF THE EUROPEAN UNION

 

          REFERENCE BY THE UPPER TRIBUNAL TO THE COURT OF JUSTICE

                    OF THE EUROPEAN UNION FOR A PRELIMINARY RULING

                                                            JUDGE MESHER

 

               IN THE MATTER OF DECISIONS REMOVING ENTITLEMENT TO

              DISABILITY LIVING ALLOWANCE ON TAKING UP RESIDENCE IN

                                                 ANOTHER MEMBER STATE

 

 

APPELLANTS: RALPH JAMES BARTLETT

NATALIO GONZALEZ RAMOS

JASON MICHAEL TAYLOR

 

RESPONDENT: SECRETARY OF STATE FOR WORK AND PENSIONS

 

 

 

1.         This request for a preliminary ruling is made in the course of proceedings begun before a Social Security Commissioner and transferred, by virtue of section 30 of the Tribunals, Courts and Enforcement Act 2007, article 3(2) and Table 2 of Schedule 1 and paragraph 2 of Schedule 4 to the Transfer of Functions Order 2008 and the First-tier Tribunal and Upper Tribunal (Chambers) Order 2008, to the Administrative Appeals Chamber of the Upper Tribunal. Mr Ralph Bartlett (CDLA/496/2006) appeals against the decision of the Swansea appeal tribunal dated 28 September 2005. Mr Natalio Gonzalez Ramos (CDLA/2002/2006) appeals against the decision of the Sutton appeal tribunal dated 21 May 2004. Mr Jason Taylor (CDLA/2102/2006) appeals against the decision of the Chesterfield appeal tribunal dated 27 March 2006. All the appeal tribunals had confirmed decisions superseding the decisions awarding the claimants disability living allowance (DLA), both care component and mobility component, so as to take away entitlement on their ceasing to be present or treated as present in and ordinarily resident in Great Britain on moving to another Member State on a permanent basis. On 2 July 2009 interim decisions were given by the Upper Tribunal in each appeal setting aside the appeal tribunal's decision as involving errors of law and substituting a decision as to the care component of DLA only, to the effect that the awarding decision did not fall to be superseded and that entitlement to the care component continued on the basis that it was a sickness benefit. That was an application of the agreed effect of the decision of the Court in Commission of the European Communities v European Parliament and Council of the European Union, Case C-299/05, [2007] ECR I-8695. The outstanding issues in the case are whether Council Regulation (EC) No 1408/71, as properly understood, requires that the mobility component of DLA is "exportable" as well as the care component and, if not, whether the Human Rights Act 1998 requires that result.

 

2.         Copies of the three interim decisions of 2 July 2009 are supplied to the Court with this direction, to give a fuller picture of the proceedings.

 

A. OUTLINE OF THE NATIONAL PROCEEDINGS AND FACTS

Bartlett

3.         Mr Bartlett was born on 3 September 1934. He was first awarded DLA (highest rate care component and higher rate mobility component) for two years from 1 July 1992, after suffering a cerebral vascular accident on 30 March 1992. That was a correct reflection of the rule requiring the medical conditions to have been satisfied for three months before entitlement could arise. On a second renewal claim, DLA at the same rates was awarded from and including 1 July 1995 on an indefinite basis. On 12 November 2004 he and his wife left Great Britain to live in Spain on a permanent basis. It is not disputed that at that date he was entitled to a state retirement pension by virtue of his contributions as an employed earner under British legislation and on 28 October 2004 he was issued with a form E121. On 13 May 2005 it was decided on supersession for relevant change of circumstances that Mr Bartlett was not entitled to DLA from and including 16 November 2004, as he did not satisfy the residence and presence conditions in the relevant legislation. It is now agreed between the parties and decided in the interim decision of 2 July 2009 that under the legislation on the effective dates of superseding decisions as in force in May 2005 the decision could not take effect before 13 May 2005. Mr Bartlett's appeal was disallowed by the appeal tribunal on 28 September 2005. The further appeal to a Social Security Commissioner was deferred to await the outcome of Case C-299/05. The interim decision of 2 July 2009 was that, as a result of applying the logic of the ruling in that case to Regulation No 1408/71 as it was immediately before 5 May 2005, the care component of DLA at least was to be regarded as a sickness benefit, not a special non-contributory benefit, and that the conditions for continued entitlement from the UK as the competent State were satisfied. Thus the decision awarding the claimant DLA was not to be superseded as far as the care component was concerned. The Upper Tribunal's decision as far as the mobility component was concerned was deferred to await the answers to the questions referred below.

 

Gonzalez Ramos

4.         Mr Gonzalez Ramos was born on 21 September 1932. He has Spanish nationality and did not come to Great Britain until 1968. He worked here for 18 years. He was awarded DLA (lowest rate care component and lower rate mobility component) from 17 June 1992, the date on which the claim was treated as made, apparently on an indefinite basis. He became entitled to a state retirement pension (at 64% of the maximum rate) by virtue of his contributions under British legislation from the first pay day after 21 September 1997. On 29 January 2002 he left Great Britain to live in Spain on a permanent basis. He was issued with a form E121 on an unknown date. On 28 February 2002 it was decided on supersession for relevant change of circumstances that he was not entitled to DLA from and including 30 January 2002, as he did not satisfy the residence and presence conditions in the relevant legislation. It is now agreed between the parties and decided in the interim decision of 2 July 2009 that under the legislation on the effective dates of superseding decisions as in force in February 2002 the decision could not take effect before 28 February 2002. Mr Gonzalez Ramos's appeal was disallowed by the appeal tribunal on 21 May 2004. The further appeal to a Social Security Commissioner was deferred to await the outcome of Case C-299/05. The interim decision of 2 July 2009 was that, as a result of applying the logic of the ruling in that case to Regulation No 1408/71 as it was immediately before 5 May 2005, the care component of DLA at least was to be regarded as a sickness benefit, not a special non-contributory benefit, and that the conditions for continued entitlement from the UK as the competent State were satisfied. Thus the decision awarding the claimant DLA was not to be superseded as far as the care component was concerned. The Upper Tribunal's decision as far as the mobility component was concerned was deferred to await the answers to the questions referred below.

 

Taylor

5.         Mr Taylor was born on 23 August 1968. He was awarded DLA (highest rate care component and lower rate mobility component) from and including 24 April 2005 on an indefinite basis, on a renewal claim. It is not known when DLA had first been awarded. Mr Taylor had been awarded long-term incapacity benefit from and including 3 February 1996, which means that he must have previously satisfied the contribution conditions for short-term incapacity benefit. He had a number of physical problems, including chronic pancreatitis and diabetes, and a major affective disorder requiring intensive support from his parents and community mental health services. He lived with his parents, separately from his teenage son, who lived with his (the son's) mother. On 7 May 2005, Mr Taylor's parents left Great Britain to live in France on a permanent basis and he went with them. A form E121 was issued to him on 20 July 2005. On 8 September 2005 it was decided on supersession for relevant change of circumstances that he was not entitled to DLA from and including 11 May 2005, as he did not satisfy the residence and presence conditions in the relevant legislation. It is now agreed between the parties and decided in the interim decision of 2 July 2009 that under the legislation on the effective dates of superseding decisions as in force in September 2005 the decision could not take effect before 8 September 2005. Mr Taylor's appeal was disallowed by the appeal tribunal on 27 March 2006. The further appeal to a Social Security Commissioner was deferred to await the outcome of Case C-299/05. In the interim decision of 2 July 2009 it was first decided on the facts that, because Mr Taylor's absence from Great Britain was for a temporary purpose until 3 August 2005, he did not cease to satisfy the British residence and presence conditions until that date. Further, as a result of the ruling in Case C-299/05, the care component of DLA at least was to be regarded as a sickness benefit, not a special non-contributory benefit, and the conditions for continued entitlement from the UK as the competent State were satisfied. Thus the decision awarding the claimant DLA was not to be superseded as far as the care component was concerned. The Upper Tribunal's decision as far as the mobility component was concerned was deferred to await the answers to the questions referred below.

 

6.         To give a final decision in the appeals it is necessary to resolve questions of Community law, to which in my judgment the answer is not clearly provided by Case C-299/95 in the light of the other jurisprudence of the Court. Accordingly, I have referred to the Court the questions set out at the end of this Order.

 

B. THE NATIONAL LEGISLATION

7.         The current provisions for DLA are in and under Part III of the Social Security Contributions and Benefits Act 1992, headed "Non-Contributory Benefits". Section 63 provides:

 

"63.--Non-contributory benefits under this Part of this Act are of the following descriptions, namely--

  (a) attendance allowance;

  (b) severe disablement allowance (with age related addition and increase for adult and child dependants);

  (c) carer's allowance (with increase for adult dependants);

  (d) disability living allowance;

 [(e)to (g) guardian's allowance, Category C and D retirement pensions and age addition]."

 

8.         Section 71, headed "Disability living allowance" provides:

 

"71.--(1) Disability living allowance shall consist of a care component and a mobility component.

  (2) A person's entitlement to a disability living allowance may be an entitlement to either component or both of them.

  (3) A person may be awarded either component for a fixed period or for an indefinite period, but if his award of disability living allowance consists of both components, he may not be awarded the components for different fixed periods.

  (4) The weekly rate of a person's disability living allowance for a week for which he has been awarded one component is the appropriate weekly rate for that component as determined in accordance with this Act or regulations under it.

  (5) The weekly rate of a person's disability living allowance for a week for which he has been awarded both components is the aggregate of the appropriate weekly rates for the two components as so determined.

  (6) A person shall not be entitled to a disability living allowance unless he satisfies prescribed conditions as to residence and presence in Great Britain."

 

9.         Section 72 deals with the conditions of entitlement to the care component, which is payable at three rates. Section 73 on the mobility component provides as follows, as far as relevant:

 

"73.--(1) Subject to the provisions of this Act, a person shall be entitled to the mobility component of a disability living allowance for any period in which he is over the relevant age and throughout which--

  (a) he is suffering from physical disablement such that he is either unable to walk or virtually unable to do so; or

  (b) he falls within subsection (2) below; or

  (c) he falls within subsection (3) below; or

  (d) he is able to walk but is so severely disabled physically or mentally that, disregarding any ability he may have to use routes which are familiar to him on his own, he cannot take advantage of the faculty out of doors without guidance or supervision from another person most of the time.

 (1A) In subsection (1) above `the relevant age' means--

  (a) in relation to the conditions mentioned in paragraph (a), (b) or (c) of that subsection, the age of 3;

(b) in relation to the conditions mentioned in paragraph (d) of that subsection, the age of 5.

  (2) A person falls within this subsection if--

  (a) he is both blind and deaf; and

  (b) he satisfies such other conditions as may be prescribed.

  (3) A person falls within this subsection if--

  (a) he is severely mentally impaired;

  (b) he displays severe behavioural problems; and

  (c) he satisfies both the conditions in section 72(1)(b) and (c) above [ie qualifies for highest rate care component].

[Subsections (4A) to (7) cover special rules for children under 16 and power for regulations to specify cases falling within various conditions]

  (8) A person shall not be entitled to the mobility component for a period unless during most of that period his condition will be such as permits him from time to time to benefit from enhanced facilities for locomotion.

  (9) A person shall not be entitled to the mobility component of a disability living allowance unless--

  (a) throughout--

 (i) the period of three months immediately preceding the date on which the award of that component would begin; or

(ii) such other period of three months as may be prescribed,

he has satisfied or is likely to satisfy one or other of the conditions mentioned in subsection (1)(a) to (d) above; and

  (b) he is likely to continue to satisfy one or other of those conditions throughout--

  (i) the period of six months beginning with that date; or

(ii) (if his death is expected within the period of six months beginning with that date) the period so beginning and ending with his death.

[(9A) further special rules for children under 16]

 (10) Two weekly rates of the mobility component shall be prescribed.

 (11) The weekly rate of the mobility component payable to a person for each week in the period for which he is awarded that component shall be--

 (a) the higher rate, if he falls within subsection (9) above by virtue of having satisfied or being likely to satisfy one or other of the conditions mentioned in subsection (1)(a), (b) and (c) above throughout both the period mentioned in paragraph (a) of subsection (9) above and that mentioned in paragraph (b) of that subsection; and

 (b) the lower rate in any other case.

[(12) to (14) contain special rules for the terminally ill, for invalid carriages and for the effect on means-tested benefits]."

 

10.       The Social Security (Disability Living Allowance) Regulations 1991 ("the DLA Regulations") contain further provisions, divided into "General" and those relating specifically either to care component or to mobility component. The conditions as to residence and presence in regulation 2, made under section 71(6), are in the general part and so apply to entitlement to DLA. The conditions include those of being, on any day of potential entitlement, ordinarily resident in Great Britain (regulation 2(1)(a)(i)) and present in Great Britain (regulation 2(1)(a)(ii)) and having been present in Great Britain for not less than 26 weeks out of the previous 52 weeks (regulation 2(1)(a)(iii)). There are various exceptions in regulation 2(2) under which a person is treated as present in Great Britain for the purposes of regulation 2(1)(a)(ii) and (iii) although not actually present. The general part, with section 75, also contains rules broadly allowing existing entitlements to DLA to continue beyond the age of 65, but not new claims over that age.

 

11.       Regulation 12 contains more specific provisions about the conditions of entitlement to mobility component. Regulation 12(1) lays down an exhaustive list of the circumstances in which a person can be taken to be unable or virtually unable to walk, by reference to specified factors. In relation to the most commonly applied test of inability or virtual inability to walk (regulation 12(1)(a)), consideration of circumstances peculiar to the person as to place of residence or nature and place of employment is specifically excluded. Regulation 12(2) defines blindness and deafness for the purposes of section 73(2)(a) and under regulation 12(3) the additional condition under section 73(2)(b) is that the combined effects of the person's blindness and deafness is an inability, without the assistance of another person, to walk to any intended or desired destination out of doors. Regulation 12(5) defines severe mental impairment for the purposes of section 73(3)(a) and regulation 12(6) defines severe behavioural problems for the purposes of section 73(3)(b) in terms that are independent of the use of the faculty of walking out of doors (see Commissioners' decisions R(DLA) 7/02 and R(DLA) 9/02). Regulation 12(7) and (8) imposes further conditions for the lower rate of the mobility component under section 73(1)(d) where the loss of ability to take advantage of the faculty of walking is due to fear or anxiety.

 

12.       Under the Motability Scheme a claimant with an award of the higher rate of the mobility component for a period of at least three years may in effect assign their entitlement to the provision of an adapted car on lease or hire-purchase. The current higher rate of the mobility component is £49.10 per week and lower rate is £18.85 per week.

 

13.       DLA came into existence on 6 April 1992, but before then a predecessor of mobility component had existed as a separate non-contributory benefit in the form of mobility allowance and a predecessor of the care component had existed as attendance allowance (also non-contributory). Attendance allowance remains in being as a benefit for those who first meet the conditions of entitlement (more restricted than those of the care component) after reaching the age of 65. Some of the history of the mobility component was set out in the decision of the Tribunal of Commissioners in R(DLA) 4/06, in particular in paragraphs 24 to 27 and 39 to 41. In brief, before 6 April 1992, the only qualification for mobility allowance (first introduced from 1 April 1976 to supplement and then replace the provision of invalid carriages and car allowances) was suffering from physical disablement such that the claimant was unable or virtually unable to walk, by reference to the same factors as now prescribed in regulation 12(1)(a) of the DLA Regulations. As now, the claimant's level of income or capital was irrelevant and there was no test in terms of inability to work or reduction of earning power. In public discussion in the 1970s and 1980s, pressure groups for the disabled had been arguing for an integrated or comprehensive disability income scheme, consisting of a disablement costs allowance and an income replacement benefit. Mobility allowance and attendance allowance were recognised as benefits to assist with the extra costs of disablement, regardless of other income (see the division between income replacement benefits and extra costs benefits in Section 4 (Present disability benefits) of the Social Security Advisory Committee's 1988 report, Benefits for Disabled People: a Strategy for Change). The government's proposal in The Way Ahead: Benefits for Disabled People (Cm 917, 1990) did not accept the SSAC's recommendation for a completely integrated benefit, but was, along with other changes and new benefits, for the creation of a new benefit merging attendance allowance and mobility allowance and extending their coverage to the less severely disabled, which it considered would be sufficient to cover disability-related expenditure.

 

14.       The main changes of substance in the creation of DLA were the addition of the lower rate of mobility component (designed to assist in particular the visually impaired and those with mental problems who were able physically to walk, but required assistance) and the lowest rate of care component, plus the new qualifications for higher rate mobility component for those with severe mental impairment and behavioural problems and for those both deaf and blind. By making DLA one benefit there was a small step towards the integrated benefit that campaigners were asking for, in that there now needed only to be one claim on one form, and one medical examination (if required). The opportunity was also taken to abandon the convoluted system of decision-making split between medical and statutory authorities, so that all decisions were made by a non-medically qualified decision-maker on the basis of medical and other evidence. The claim form was designed to allow claimants to set out their own problems, so that the appropriate level of either component could then be awarded, with a shift towards self-assessment and away from a medicalised system.

 

15.       The term "extra cost benefit" has remained standard. For instance, paragraph 7 of the statement of the Secretary of State for Social Security to Parliament on the SSAC's report on a proposal to make regulations removing the payability of mobility component from patients in a hospital or similar institution for more than four weeks (as had always been the rule for care component) (Cm 3233, 1996) was as follows:

 

"DLA is an extra costs benefit designed to help meet the extra costs arising from a person's disability. It forms part of a disabled person's income and they are free to spend it as they choose. Where a person is living independently this is not unreasonable. There are many costs that might be associated with disability and DLA often forms an integral part of other benefit provision. For example, the mobility component may be used directly (paying for a taxi) or indirectly (meeting increased heating bills or paying for someone to do the shopping). Where a person is receiving hospital treatment however the position becomes more questionable - here all basic needs are met free of charge by the NHS and mobility needs and the extra costs associated with them are not so obvious."

 

That language is carried through right down to the very recent Green Paper Shaping the Future of Care Together (14 July 2009).

 

 

C. THE ARGUMENTS OF THE PARTIES ON THE APPLICATION OF REGULATION NO 1408/71 IN OUTLINE

16.       The initial position of the Secretary of State for Work and Pensions was relatively straightforward. It was first that the question of whether the mobility component falls under the special non-contributory benefit regime under Regulation No 1408/71 (and so is not "exportable") has been authoritatively decided by the Court in Case C-299/05, both directly in relation to cases to which the form of the Regulation in effect from 5 May 2005 applies and by necessary implication in relation to cases to which the previous form applies. And second, if it was necessary to examine the matter, mobility component, in contrast to the care component, is not a sickness benefit and is properly to be treated as in substance a special non-contributory benefit subject to Articles 4(2a) and 10a despite being in form one component of the benefit of DLA.

 

17.       It was submitted on the first point that, although the Court was not being asked in Case C-299/05 expressly to rule on the status of the mobility component, a conclusion on that issue had inevitably to be made as part of the resolution of the legality of the listing of the care component in Annex IIa and was an essential part of the reasoning supporting point 2 of the operative part on the maintenance in effect of the listing of DLA as regards the mobility component. It was submitted on the second point that mobility component was within Article 4(2a)(a)(ii) as a benefit providing solely specific protection for the disabled so as to integrate them into the wider UK social environment. It had nothing to do with care from other people and had no elements making it analogous to the care allowances that had been accepted to be sickness benefits in earlier cases and in C-299/05 itself. If mobility component was not a special non-contributory benefit, neither were many other benefits listed in Annex IIa which had not been challenged in the Commission's application, and it should not lightly be concluded that the Commission had acted under some fundamental misapprehension.

 

18.       The submissions for the claimants were first that Case C-299/05 should not be regarded as having made any authoritative ruling on the status of the mobility component. The Court had not been provided with any information about its substantive nature or expressly decided its status, but had proceeded on the basis of concessions and agreements by the parties to the action and by the intervening Member States, without any input of any kind from any recipients of benefits or from any representative organisations. In addition, there was a related challenge to the course taken by the Court in point 2 of the operative part. It was submitted that since DLA was designated by the national legislation as a single benefit and was administered as such, since DLA was listed as such in Annex IIa and Article 4(2a) applies to benefits, not parts of benefits, and since the Commission's application for annulment referred to the whole of points (d), (e) and (f) in the entry for the UK in Annex IIa as substituted by the Regulation No 647/2005, either the whole entry relating to DLA had to be annulled or none of it, as had been recognised in the Opinion of the Advocate-General. However, the representatives of the claimants accepted that effect could only be given such an argument by a further reference to the Court to clarify its rulings in Case C-299/05. The representative of Mr Gonzalez Ramos submitted that the Court would have a wider jurisdiction on a reference for a preliminary ruling than in Case C-299/05, so that a ruling in his case in relation to DLA as a whole would not be inconsistent with the precise ruling in Case C-299/05.

 

 

19.       If the mobility component had to be considered separately, it was submitted that, both under the form of Article 4(2a) in effect before 5 May 2005 and under the form in effect from that date, it was necessary to look first at whether the benefit in question was a social security benefit within Article 4(1). If it was, it could not be a special non-contributory benefit, as the categories were mutually exclusive. It was submitted that mobility component as in operation from 1 June 1992 onwards was different from and much wider in scope than the preceding mobility allowance that had been considered by the Court in Newton v Chief Adjudication Officer (Case C-356/89) [1991] ECR I-3017. Having regard to all its alternative conditions, its purpose went beyond social integration, and could not be said, in the terms of Article 4(2a)(a)(ii), to be solely to provide specific protection for the disabled, closely linked to the person's social environment. Nor did it have the social assistance element made necessary by the opening paragraph of Article 4(2a), because it was granted without taking into account the financial needs of the claimant. Its purpose could not be differentiated in any significant way from that of the Swedish disability allowance as described in paragraph 60 of the judgment in Case C-299/05 (regardless of whether the use of the word "mobility" earlier in that paragraph was inaccurate):

 

"It is intended to finance the care of a third person or to allow the disabled person to bear the costs caused by his or her disability and to improve that person's state of health and quality of life, as a person reliant on care."

 

20.       The representative for Mr Gonzalez Ramos made a specific argument stemming from his case being confined by the national procedural rules to periods falling before 5 May 2005 (by virtue of the appeal tribunal of 21 May 2004 and the Upper Tribunal, if substituting a decision, being prohibited by section 12(8)(b) of the Social Security Act 1998 from taking into account circumstances not obtaining on the date of the decision under appeal: 28 February 2002). It was submitted first that the form of Article 4(2a) of and Annex IIa to Regulation 1408/71 prior to 5 May 2005 was not the subject to the process of annulment under Articles 230 and 231 of the EC Treaty or to the Court's provisional maintenance in force of the listing of DLA as regards the mobility part of that allowance (point 2 of the operative part of C-299/05). Consequently, the conclusion of substance in paragraph 68 of the judgment, that DLA had to be regarded as a sickness benefit even though it included a distinct part relating to mobility, had to be applied to DLA as a whole. As that was a single benefit under the national legislation and was listed as a single benefit in Annex IIa, there was no warrant (without the specific ruling on annulment) to treat the benefit in any other way than as in paragraph 68 of the judgment, if it were not more properly to be considered as an invalidity benefit rather than a sickness benefit.

 

21.       If mobility component had to be considered prior to 5 May 2005 as if it were in substance a separate benefit, the representative relied in particular on the overruling of Snares, Partridge and Swaddling on the conclusive effect of Annex IIa in Jauch v Pensionsversicherungsanstalt der Arbeiter (Case C-215/99) [2001] ECR I-1901, as confirmed in Leclere and Deaconescu v Caisse nationale des prestations familiales (Case C-43/99) [2001] ECR I-4265 and Hosse v Land Salzburg  (Case C-286/03) [2006] ECR I-1771, and approved implicitly but clearly in Case C-299/05 by the reference in paragraph 71 to "the post-Jauch legal context". He submitted that, as a result, the meaning of social security for the purposes of Article 4(1) had to be taken as the same as had been established prior to the introduction of the category of special non-contributory benefits. Thus, as the Court in Newton had accepted mobility allowance as an invalidity benefit, if mobility component had to be considered as a separate benefit, it could not be classified in any different way. Alternatively, the case-law had established that the first consideration was whether a benefit was a social security benefit within Article 4(1). Only if it was not, could Article 4(2a) come into play. He submitted that the mobility component fell within the time-honoured approach re-stated in paragraph 56 of the judgment in Case C-299/05:

 

"By contrast, a benefit is regarded as a social security benefit where it is granted, without any individual and discretionary assessment of personal needs, to recipients on the basis of a statutorily defined position and relates to one of the risks expressly listed in Article 4(1) of Regulation No 1408/71."

 

22.       The representative of the Secretary of State responded specifically to those arguments by submitting that the "post-Jauch legal context" did not entail denying a place for the "hybrid" benefits that were intended to be dealt with in the new category of special non-contributory benefits. The categorisation of benefits with dual functions had to be approached in the new context, with result that to some extent a bite had been taken out of Article 4(1) (relying in particular on Perez Naranjo v Caisse régionale d'assurance maladie (CRAM) Nord-Picardie (Case C-265/05) [2007] ECR I-347). On the general effect of the ruling in Case C-299/05 on the position before 5 May 2005, he submitted that it was not acceptable to take advantage of one part of the ruling in applying the approach to the care component while denying the effect of the recognition of the two components as separate benefits in substance. Throughout, the mobility component was fundamentally concerned with external mobility, the promotion of independence and the integration of the person into society, putting it firmly into Article 4(2a)(a)(ii), and having social assistance characteristics through its purpose of meeting the personal needs of the disabled.

 

D. THE VIEWS OF THE NATIONAL COURT

23.       The summary of the arguments in the preceding paragraphs has omitted much of the range of detailed argument and citation of authority. Preliminary views are put forward not even on all aspects of what has just been summarised, but so as to indicate the issues that I consider cannot be determined without further guidance from the Court.

 

24.       I find it helpful to start by considering how I would decide this case, if I had to, in the absence of the specific rulings of the Court in Case C-299/05 about the mobility component, and only after that to consider the interaction of those rulings with my conclusions. I also find it helpful to approach the relevant legislation chronologically.

 

The legislation as it was before 5 May 2005

25.       In this period, from 1 June 1992, Article 4(2a) of Regulation No 1408/71 was as follows:

 

"2a. This regulation shall also apply to special non-contributory benefits which are provided under legislation or schemes other than those referred to in paragraph 1 or excluded by virtue of paragraph 4, where such benefits are intended:

 (a) either to provide supplementary, substitute or ancillary cover against the risks covered by the branches of social security referred to in paragraph 1(a) to (h); or

  (b) solely as specific protection for the disabled."

 

Article 10a, setting out the rule that such benefits were to be granted by the institution of the person's place of residence, made that rule subject to the benefit in question being listed in Annex IIa.

 

26.       Thus it was built in to the definition of a special non-contributory benefit that it was provided under legislation other than that on social security benefits specified in Article 4(1). In Jauch, that was mentioned in paragraph 18 of the judgment before the Court went on to decide in paragraph 28 that the Austrian care allowance in issue there was a sickness benefit within Article 4(1)(a) in accordance with the standard definition (see paragraph 21 above) and with the decision on German care insurance in Molenaar v Allgemeine Ortskrankenkasse Baden-Württemburg (Case C-160/96) [1998] ECR I-843. The Court stated that the Austrian allowance "does not therefore come under Article 4(2a)" (my underlining). The point was put more explicitly in paragraph 35 of the judgment in Leclere and Deaconescu:

 

"35. It follows from the actual wording of Article 4(2a) of Regulation No 1408/71 that the only benefits to which that provision can be taken to refer are those not covered by general legislation relative to the schemes referred to in Article 4(1)."

 

Then, in paragraph 36 of the judgment in Hosse it was said that:

 

"36. The scheme of Regulation No 1408/71 shows that the concept of `social security benefit' within the meaning of Article 4(1) and the concept of `special non-contributory benefit' within the meaning of Article 4(2a) and (2b) of the regulation are mutually exclusive. A benefit which satisfies the conditions of a `social security benefit' therefore cannot be analysed as a `special non-contributory benefit'."

 

27.       It is true that in some cases, such as Skalka v Sozialversicherungsanstalt der gewerblichen Wirtschaft (Case C-160/02) [2004] ECR I-5613, Kersbergen-Lap and Dams-Schipper v Raad van Bestuur van het Uitvoeringsinstituut Werknemersverzekeringen (Case C-154/05) [2006] ECR I-6249 and, in particular, Perez Naranjo, the Court appears to have started directly with a consideration of the terms of Article 4(2a), without prior consideration of Article 4(1). That difference of approach raises a difficulty of interpretation, but in my provisional view the more general statements cited in the previous paragraph follow logically from the very words of Article 4(2a) and must be regarded as incorporated into the investigation of the "special" status of the benefits in question in the cases mentioned above.

 

28.       Applying the time-honoured test to the conditions of entitlement and purpose of mobility component (on the assumption that it has to be considered as a separate benefit) can be argued to produce the following result. It is granted on the basis of a legally defined position, without any individual and discretionary assessment of personal needs. It appears that "personal needs" here, and in the consideration of whether a potentially special non-contributory benefit has elements of social assistance, refers to financial needs (paragraph 69 of the Opinion of the Advocate General in Hosse and paragraph 32 of the judgment in Kersbergen-Lap). There is no means test for the mobility component, nor is the amount of benefit linked to any notion of guaranteeing a minimum subsistence income or even to the claimant's individual mobility-related expenses. Instead, satisfaction of the relevant conditions of entitlement qualifies a person for one of two standard-rate fixed allowances. The argument that was accepted in the circumstances of Kersbergen-Lap as showing sufficient elements of social assistance, that the majority of disabled young people (identified by the degree of incapacity and not having the insurance record for general incapacity benefit) would not otherwise have sufficient means of subsistence, does not work in relation to mobility component. And even if "personal needs" extends further to the additional costs that might be presumed to follow from the individual's need for assistance with mobility, the assessment of that need is not on a discretionary basis, but by reference to the statutory conditions and factors. Though some of the conditions leave issues of judgment to the decision-maker, the judgment is to be by reference to defined factors and does not involve any individual or discretionary assessment of the person's overall needs or merits. In the light of the Court's case-law, it could not be said that the benefit did not relate either to the risk of invalidity (as in Newton) or to that of sickness. My conclusion on this issue, if I had been free to reach it, would on balance have been that before May 2005 mobility component considered as a separate benefit was a social security benefit within Article 4(1) and therefore could not be a special non-contributory benefit.

 

29.       The effect of that conclusion would have been supported by the submission on behalf of Mr Gonzalez Ramos summarised in paragraph 20 above, which seems to me to have considerable force. On that basis, DLA as one benefit under national law could only be regarded as a social security benefit and therefore not a special non-contributory benefit. Both components would then be equally exportable under Regulation No 1408/71.

 

30.       I would have been left with some doubt whether the mobility component or DLA as a whole should properly be categorised as a sickness benefit or as an invalidity benefit. Is a link to the risk of invalidity, rather than sickness, related to a longer-term rather than a shorter-term reduction in the claimant's normal capabilities, which might be constituted by the mobility component conditions of a three-month qualifying period and a likelihood of satisfying the medical conditions for six months? Or is the link to the risk of invalidity essentially related to a condition of a reduction in or loss of fitness for work? Clarification would be welcomed.

 

The legislation as it has been from 5 May 2005 onwards

31.       The new form of Article 4(2a) of Regulation No 1408/71 inserted by Regulation No 647/2005 no longer contains an express condition that a special non-contributory benefit is provided under legislation or schemes other than those listed in Article 4(1). Instead it refers to benefits provided under legislation that has characteristics both of social security legislation referred to in Article 4(1) and of social assistance. The submission on behalf of the Secretary of State that Article 4(2a) has taken a bite out of Article 4(1) is therefore that much stronger in relation to the new form. The approach set out in paragraphs 26 to 28 above might then not apply in the same way, although I find it very significant that the Court in Case C-299/05, having confirmed that a benefit could not be classified simultaneously as a social security benefit and a special benefit, proceeded to reason that, because the benefits in issue before it were social security benefits in accordance with the time-honoured test, they could not validly be listed as special non-contributory benefits in the new form of Annex IIa.

 

32.       In addition, the condition that the benefit has characteristics of social assistance has been made explicit and applies to both limbs of Article 4(2a)(a). That particular test was not discussed in the judgment in C-299/05, although there was a reference to a social assistance component in relation to the acceptance of the Commission's view that mobility component if regarded as a separate benefit was a special non-contributory benefit (paragraphs 67 and 69 of the judgment). The Advocate General had gone into more detail. In paragraph 66 of her Opinion she said:

 

"66. In addition, those benefits [special non-contributory benefits] must also display features of social assistance. If it were enough for there to be a link to a branch of social security, benefits for the special protection of the disabled would always constitute special benefits within the meaning of point (ii), and under Article 10a of Regulation No 1408/71 would generally be excluded from the principle according to which social security benefits are exportable. Apart from the fact that the wording of the introductory sentence of Article 4(2a) is against it, such an approach would considerably disadvantage the disabled, because similar benefits for persons who are not disabled, care allowances for the old, for example, are exportable."

 

Paragraph 68 was as follows (with a footnote omitted):

 

"68. If it is established that the contested benefits do not fall within Article 4(1), but merely exhibit features of a social security benefit, the hybrid nature of benefits within the meaning of Article 4(2a) requires that those benefits also display social assistance features. That is the case if they are granted without reference to particular periods of employment or contribution in accordance with personal need, determined on the basis of objective criteria provided by law."

 

Further, in relation to the Finnish childcare allowance, the Advocate General said this in paragraph 85 (with footnotes omitted):

 

"85. Contrary to the view taken by the Council and the United Kingdom Government, the Commission correctly observes that a benefit - irrespective of the scope of discretion involved - only displays social assistance features if its grant depends on financial need. Otherwise, social assistance cannot be distinguished from other social security benefits. Typically, the latter provide cover for specific needs arising by way of other personal circumstances without taking claimants' income into account."

 

33.       That approach seems to me cogent. In particular, I would be prepared to proceed on the basis that a benefit displays a feature of social assistance when financial need is a condition of entitlement, although the assessment is not of the discretionary and individualised kind characteristic of "classic" social assistance (although contrast paragraph 95 of the Advocate General's Opinion). Without at this point considering what was said specifically about the mobility component in Case C-299/05, that approach leads to the conclusion that the mobility component does not display sufficient features of social assistance to come within Article 4(2a). For the reasons given in paragraph 28 above, and as accepted by the Advocate General in relation to the care component in paragraphs 112 to 115 of her Opinion, its grant does not depend on financial need.

 

 

34.       In addition, it is a matter of agreement that the mobility component if regarded as a separate benefit does not fall within point (i) of Article 4(2a)(a). It does not guarantee a minimum subsistence income. The Secretary of State's submission is that it falls within point (ii). There is at the least an arguable case that, in the light of the difference in the nature of the conditions of entitlement to the lower rate and the higher rate of the mobility component and the variety of the alternative conditions for the latter, mobility component is not intended to provide solely specific protection for the disabled. The Court said this about that test in relation to the various care allowances in paragraph 54 of its judgment in Case C-299/05:

 

"54. In the present case, the benefits in issue do not have that sole function. In fact, although they unquestionably promote the independence of the persons who receive them and protect the disabled in their national social context, they are also intended to ensure the necessary care and the supervision of those persons, where it is essential, in their family or a specialised institution. They cannot therefore be classified as special benefits in the light of Article 4(2a)(a)(ii) of Regulation No 1408/71 as amended."

 

That was said in the particular context of the care allowances in question in that case, but different additional purposes could also take different sorts of benefits out of point (ii). Mobility component is not a care allowance as such, but it has some similar features. For instance, qualification for the lower rate depends on whether the claimant usually needs assistance from another person to make use of their ability to walk. Overall the purpose could be argued to be analogous to that of allowing the disabled person to bear the costs of disability and to improve their health and quality of life, as for the Swedish disability allowance.

 

35.       For those reasons, and primarily on the ground that the mobility component does not have the essential characteristic of social assistance, I would have decided that it is not a special non-contributory benefit under the form of Regulation No 1408/71 in effect from 5 May 2005 onwards.

 

The effect of the rulings on mobility component in Case C-299/05

36.       The Advocate General had accepted in paragraph 119 of her Opinion, without express discussion, that mobility component satisfied the substantive conditions for a special non-contributory benefit, but was of the view that the whole entry for DLA in Annex IIa had to be annulled. The Court took a different view and therefore provisionally maintained in force the listing of DLA as regards the mobility component. In paragraph 74 of the judgment it said that:

 

"the fact that that part of the DLA is in the nature of a non-contributory benefit cannot be disputed and it could lawfully be included in that list [in Annex IIa] as a non-exportable benefit."

 

In paragraph 69 it had been said that the mobility component might be ("pourrait être" in the French text) regarded as a special non-contributory benefit that could be included in the list if a separate benefit. Although that language is slightly less positive, the Court must be taken as having accepted, for a purpose that was necessary to its rulings in the operative part, that mobility component was a special non-contributory benefit.

 

 

37.       In the face of that, the Upper Tribunal cannot possibly decide that mobility component has any different status in relation to cases to which the form of Regulation No 1408/71 in force from 5 May 2005 applies. Nor, despite the points made in paragraphs 20 and 29 above, do I consider that the Upper Tribunal could decide that mobility component has a different status in cases to which the preceding form of Regulation No 1408/71 applied. However, for reasons summarised below, Case C-299/05 cannot in my judgment be regarded as the last word on those points. That is why questions have to be referred to the Court.

 

38.       There are essentially three reasons why I cannot accept C-299/05 as the last word on the subject. The first is that there is considerable force and justice in the point made for the claimants that it is unsatisfactory for an apparently authoritative decision to have been made on the status of mobility component on the basis of concessions and assumptions by the Commission and Member States, without any submissions on behalf of individual claimants or of groups representing the interests of claimants or the disabled and without any reasoned consideration of evidence as to its nature, purpose and conditions of entitlement.

 

39.       The second reason is that there appear to be internal inconsistencies or at least gaps in the reasoning of the Advocate General and of the Court in C-299/05. The Advocate General's Opinion did not explain why her conclusion, with its supporting reasoning, that the care component of DLA lacked social assistance elements did not apply equally to the mobility component, thus precluding its treatment as a special non-contributory benefit even if it would otherwise have fallen within Article 4(2a)(a)(ii) as in force from 5 May 2005. The Court did not consider that gap in the Advocate General's reasoning in its judgment. In addition, it gave the appearance in its statement of the issues in relation to DLA in paragraph 65 (in conjunction with paragraphs 67 and 61) of making the crucial question in relation to mobility component whether it was or was not a care allowance. The answer to that question was probably rightly "no", although the need for assistance from others is relevant to the mobility component. But it is arguable that that was the wrong question, being too limited. The right question, in the context of whether mobility component was a social security benefit within Article 4(1), was to ask directly whether there was a sufficient link to one of risks listed there, which could be the case for benefits other than care allowances.

 

40.       The third reason is that my provisional analysis of the nature, purposes and conditions of entitlement of the mobility component if it were to be regarded as a separate benefit was, as explained above, that both before and after 5 May 2005 it is not a special non-contributory benefit.

 

E. THE REFERENCE OF QUESTIONS TO THE COURT

41.       For those reasons, the Upper Tribunal considers it necessary to refer the questions set out below for preliminary ruling, recognising that that entails reconsideration and/or clarification of the judgment and ruling in Case C-299/05. The questions are in terms of the specific benefits concerned, rather than in terms of benefits of a similar nature, because of the specific provisions in Annex IIa to Regulation No 1408/71 and the terms of the ruling in Case C-299/05. The third question is included in view of the possibility that the provisional analysis of EC law by the Upper Tribunal is flawed or that one of the parties brings forward some new argument. It is currently assumed that if questions 1(d) and 2(d) fall to be answered, it follows from Case C-299/05 that DLA considered as a whole is a sickness benefit, but the questions is included for completeness.

 

 

                         QUESTIONS REFERRED FOR PRELIMINARY RULING

 

1. (a) In relation to periods to which the form of Council Regulation (EEC) No 1408/71 of 14 June 1971 in force immediately before 5 May 2005 applies, is the mobility component of disability living allowance under sections 71 to 76 of the Social Security Contributions and Benefits Act 1992 capable of being categorised separately from disability living allowance as a whole as either a social security benefit within Article 4(1) of the Regulation or a special non-contributory benefit within Article 4(2a) or otherwise?

(b) If the answer to (a) is yes, what is the proper category?

  (c) If the answer to (a) is no, what is the proper category for disability living allowance?

  (d) If the answer to (b) or (c) is categorisation as a social security benefit, is the benefit in question an sickness benefit within Article 4(1)(a) or an invalidity benefit within Article 4(1)(b)?

(e) Are the answers to any of the above questions affected by the temporal limitation in point 2 of the Court's ruling in Commission of the European Communities v European Parliament and Council of the European Union, Case C-299/05, [2007] ECR I-8695?

 

2. (a) In relation to periods to which the form of Council Regulation (EEC) No 1408/71 of 14 June 1971 in force from 5 May 2005 by virtue of Council Regulation (EC) No 647/2005 of 13 April 2005 applies, is the mobility component of disability living allowance under sections 71 to 76 of the Social Security Contributions and Benefits Act 1992 capable of being categorised separately from disability living allowance as a whole as either a social security benefit within Article 4(1) of the Regulation or a special non-contributory benefit within Article 4(2a) or otherwise?

(b) If the answer to (a) is yes, what is the proper category?

(c) If the answer to (a) is no, what is the proper category for disability living allowance?

(d) If the answer to (b) or (c) is categorisation as a social security benefit, is the benefit in question an sickness benefit within Article 4(1)(a) or an invalidity benefit within Article 4(1)(b)?

 

3. If the answers to the previous questions produce the outcome that mobility component is properly to be categorised as a special non-contributory benefit, is any other rule or principle of EC law relevant to the question of whether the United Kingdom is entitled to rely on any of the residence and presence conditions in regulation 2(1)(a) of the Social Security (Disability Living Allowance) Regulations 1991 in circumstances like those of the present cases?

 

 

 

 

                                                                                                     (Signed)                    J Mesher

                                                                                                      Judge of the Upper Tribunal

 

                                                                                                      Date:        15 December 2009