Upper Tribunal (Administrative Appeals Chamber)

Decision of the Upper Tribunal
(Administrative Appeals Chamber)

As the decision of the First-tier Tribunal (made on 9 October 2013 at Lincoln under reference SC064/13/00286) involved the making of an error in point of law, it is SET ASIDE under section 12(2)(a) and (b)(ii) of the Tribunals, Courts and Enforcement Act 2007 and the decision is RE-MADE.

The decision is: the United Kingdom is provisionally liable for the payment of the claimant’s attendance allowance (a sickness benefit), subject to any possible reimbursement from Sweden.

Reasons for Decision

A.        What this case is about

1.         This case deals with the correct approach when there is a difference of view between States of the EU as to which is the competent State for the purposes of paying a sickness benefit, in this case attendance allowance. On my analysis of the relevant EU legislation, the Secretary of State, the First-tier Tribunal and the Upper Tribunal have all been dealing with these cases wrongly by failing to take account of the implementation provisions that apply as part of EU law. This decision explains the approach that should be taken.

B.        The claim for an attendance allowance

2.         Mrs R was born in 1919 and is Swedish. She receives a Swedish old age pension. She came to this country and submitted a claim for an attendance allowance, which was treated as made on 11 April 2012. After making enquiries of Mrs R, the Secretary of State refused her claim on 18 July 2012, on the ground that the United Kingdom was not the competent State to pay sickness benefits.

C.        The appeal to the First-tier Tribunal

3.         Mrs R exercised her right of appeal to the First-tier Tribunal, arguing that she was being discriminated against because the social security systems of Sweden and the United Kingdom were not compatible and that the later, as her place of residence, should be the competent State. Her representative, Tŷ Arian Solicitors, submitted more technical grounds, arguing that the United Kingdom was the competent State as her place of residence by virtue of Article 11(3)(e) of Regulation (EC) 883/2004. The case presented was that Mrs R now resided permanently in the United Kingdom with her daughter, so that this was her State of residence.

4.         Having received the appeal, the Secretary of State reconsidered the decision, but maintained that it was correct. The decision-maker recorded that the United Kingdom was not responsible for sickness benefits such as attendance allowance, because Mrs R was receiving a pension from another EU State. Although the Secretary of State’s submission to the First-tier Tribunal set out a number of propositions based on the Regulation, the only Article referred to by number was Article 11.

5.         The first hearing of the appeal was adjourned because Mrs R needed an interpreter. Before the hearing was resumed, the Secretary of State’s Exportability Team made the first helpful submission, indicating the reasoning behind the decision:

… There is no dispute that Mrs R was resident in the UK when she made her claim to an Attendance Allowance … The issue in question for the Tribunal to consider is whether the UK is the competent state to pay sickness benefits. She is in receipt of a Swedish State Pension and has not worked in the UK and is not insured to receive any contributions based benefits in the UK, the UK is not the competent state to pay sickness benefits under European Law.’

Tŷ Arian also submitted a document, dated 3 April 2012, from the Swedish authorities. The translation provided, which may not be perfect, reads:

Insurance Inhesion

Decision

The Swedish Social Insurance Agency (Forsakringskassan) had decided to deregister you from being subject to the Swedish social insurance from the 2^nd of April 2012.

Case background

You submitted the form “Information when moving or working in another country” to The Social Service Agency. You state there that you were travelling to Great Britain on the 1^st of April 2012 with the purpose of relocating. You do not plan to return to Sweden within one year.

The Swedish Social Insurance Agency’s motivation

You are not covered by Swedish social insurance since you live in Great Britain and do not work in Sweden.

Regulations that this decision is based on

This decision is based on the following regulations:

·                Article 11 in Regulation (EEA) 883/2004 relating to the coordination of the social security systems.

·                Social security law (Swedish) chapter 5 par 2-3

D.       The First-tier Tribunal’s decision

6.         The tribunal allowed the appeal, deciding that the United Kingdom was the competent State to pay attendance allowance. The judge’s reasons dealt exclusively with Article 11 of Regulation 883/2004. This is a convenient point to set out the relevant paragraphs of that Article:

Title II

Determination of the Legislation Applicable

Article 11

General rules

1. Persons to whom this Regulation applies shall be subject to the legislation of a single Member State only. Such legislation shall be determined in accordance with this Title.

2. For the purposes of this Title, persons receiving cash benefits because or as a consequence of their activity as an employed or self-employed person shall be considered to be pursuing the said activity. This shall not apply to invalidity, old-age or survivors' pensions or to pensions in respect of accidents at work or occupational diseases or to sickness benefits in cash covering treatment for an unlimited period.

3. Subject to Articles 12 to 16:

(a) a person pursuing an activity as an employed or self-employed person in a Member State shall be subject to the legislation of that Member State;

(b) a civil servant shall be subject to the legislation of the Member State to which the administration employing him is subject;

(c) a person receiving unemployment benefits in accordance with Article 65 under the legislation of the Member State of residence shall be subject to the legislation of that Member State;

(d) a person called up or recalled for service in the armed forces or for civilian service in a Member State shall be subject to the legislation of that Member State;

(e) any other person to whom subparagraphs (a) to (d) do not apply shall be subject to the legislation of the Member State of residence, without prejudice to other provisions of this Regulation guaranteeing him benefits under the legislation of one or more other Member States.

7.         In summary, the judge’s reasoning was this:

·                Article 11(2) was irrelevant, because Mrs R was receiving an old age pension.

·                Article 11(3)(a)-(d) did not apply.

·                That left Article 11(3)(e), which made the State of residence the competent State.

·                There was no dispute that Mrs R was resident in the United Kingdom, so this was the competent State.

E.        The Secretary of State’s argument on appeal to the Upper Tribunal

8.         The Secretary of State applied for permission to appeal to the Upper Tribunal, which was given by the First-tier Tribunal. In the application, the Secretary of State’s representative identified for the first time the specific Articles under which Mrs R’s claim had been refused. That is really not good enough. Regulation 883/2004 is a long and complicated piece of legislation. Claimants, their representatives and the First-tier Tribunal should not be left to flounder around trying to identify the particular provisions under which a decision has been made. These provisions should have been identified at the latest in the Secretary of State’s initial submission to the First-tier Tribunal.

9.         In summary, the representative relied on the closing, qualifying words of Article 11(3)(e) – ‘without prejudice to other provisions of this Regulation guaranteeing him benefits under the legislation of one or more other Member States’ – and Articles 24, 25 and 29, all of which are in Title III, not in Title II, which contains Article 11. Those Articles provide:

Article 24

No right to benefits in kind under the legislation of the Member State of residence

1. A person who receives a pension or pensions under the legislation of one or more Member States and who is not entitled to benefits in kind under the legislation of the Member State of residence shall nevertheless receive such benefits for himself and the members of his family, insofar as he would be entitled thereto under the legislation of the Member State or of at least one of the Member States competent in respect of his pensions, if he resided in that Member State. The benefits in kind shall be provided at the expense of the institution referred to in paragraph 2 by the institution of the place of residence, as though the person concerned were entitled to a pension and benefits in kind under the legislation of that Member State.

2. In the cases covered by paragraph 1, the cost of benefits in kind shall be borne by the institution as determined in accordance with the following rules:

(a) where the pensioner is entitled to benefits in kind under the legislation of a single Member State, the cost shall be borne by the competent institution of that Member State;

(b) where the pensioner is entitled to benefits in kind under the legislation of two or more Member States, the cost thereof shall be borne by the competent institution of the Member State to whose legislation the person has been subject for the longest period of time; should the application of this rule result in several institutions being responsible for the cost of benefits, the cost shall be borne by the institution applying the legislation to which the pensioner was last subject.

Article 25

Pensions under the legislation of one or more Member States other than the Member State of residence, where there is a right to benefits in kind in the latter Member State

Where the person receiving a pension or pensions under the legislation of one or more Member States resides in a Member State under whose legislation the right to receive benefits in kind is not subject to conditions of insurance, or of activity as an employed or self-employed person, and no pension is received from that Member State, the cost of benefits in kind provided to him and to members of his family shall be borne by the institution of one of the Member States competent in respect of his pensions determined in accordance with Article 24(2), to the extent that the pensioner and the members of his family would be entitled to such benefits if they resided in that Member State.

Article 29

Cash benefits for pensioners

1. Cash benefits shall be paid to a person receiving a pension or pensions under the legislation of one or more Member States by the competent institution of the Member State in which is situated the competent institution responsible for the cost of benefits in kind provided to the pensioner in his Member State of residence. Article 21 shall apply mutatis mutandis.

2. Paragraph 1 shall also apply to the members of a pensioner's family.

10.      Finally, the representative argued that: ‘It is also a case where it would be contrary to demonstrating a genuine and sufficient link. The claimant has spent her life in Sweden and receives a Swedish Pension.’ In view of subsequent developments, this argument is now irrelevant. Had it still been relevant, I would have rejected it. The Exportability Team expressly stated that the identity of the competent State was what the First-tier Tribunal had to decide. It was entitled to take that as limiting the scope of the appeal under section 12(8)(a) of the Social Security Act 1998.

F.        Regulation (EC) 987/2009

The problem

11.      I have been troubled recently that the correct approach was not being taken to disputes about the competent State. Take this example, which raises the issue in the starkest terms. There are only two possible competent States, A and B. The claimant makes a claim in State A, which refuses the claim on the ground that State B is the competent State. The claimant makes a claim in State B, which refuses the claim on the ground that State A is the competent State. One of the States must be the competent State, but each denies that it is and neither will accept the decision of the other. How can this issue be resolved in a way that is binding on both States? The answer lies in Regulation 987/2009, which makes provision for implementing Regulation 883/2004.

12.      I put my provisional views to the Secretary of State’s representative and am grateful for her helpful and detailed reply. In view of what she says, I did not consider it necessary to invite Tŷ Arian to reply.

The legislation

13.      The relevant provisions of Regulation 987/2009 are Articles 2 and 6:

Chapter II

Provisions Concerning Cooperation and Exchanges of Data

Article 2

Scope and rules for exchanges between institutions

1. For the purposes of the implementing Regulation, exchanges between Member States’ authorities and institutions and persons covered by the basic Regulation shall be based on the principles of public service, efficiency, active assistance, rapid delivery and accessibility, including e-accessibility, in particular for the disabled and the elderly.

2. The institutions shall without delay provide or exchange all data necessary for establishing and determining the rights and obligations of persons to whom the basic Regulation applies. Such data shall be transferred between Member States directly by the institutions themselves or indirectly via the liaison bodies.

3. Where a person has mistakenly submitted information, documents or claims to an institution in the territory of a Member State other than that in which the institution designated in accordance with the implementing Regulation is situated, the information, documents or claims shall be resubmitted without delay by the former institution to the institution designated in accordance with the implementing Regulation, indicating the date on which they were initially submitted. That date shall be binding on the latter institution. Member State institutions shall not, however, be held liable, or be deemed to have taken a decision by virtue of their failure to act as a result of the late transmission of information, documents or claims by other Member States’ institutions.

4. Where data are transferred indirectly via the liaison body of the Member State of destination, time limits for responding to claims shall start from the date when that liaison body received the claim, as if it had been received by the institution in that Member State.

Article 6

Provisional application of legislation and provisional granting of benefits

1. Unless otherwise provided for in the implementing Regulation, where there is a difference of views between the institutions or authorities of two or more Member States concerning the determination of the applicable legislation, the person concerned shall be made provisionally subject to the legislation of one of those Member States, the order of priority being determined as follows:

(a) the legislation of the Member State where the person actually pursues his employment or self-employment, if the employment or self-employment is pursued in only one Member State;

(b) the legislation of the Member State of residence if the person concerned pursues employment or self-employment in two or more Member States and performs part of his/her activity or activities in the Member State of residence, or if the person concerned is neither employed nor self-employed;

(c) in all other cases, the legislation of the Member State, the application of which was first requested if the person pursues an activity, or activities, in two or more Member States.

2. Where there is a difference of views between the institutions or authorities of two or more Member States about which institution should provide the benefits in cash or in kind, the person concerned who could claim benefits if there was no dispute shall be entitled, on a provisional basis, to the benefits provided for by the legislation applied by the institution of his place of residence or, if that person does not reside on the territory of one of the Member States concerned, to the benefits provided for by the legislation applied by the institution to which the request was first submitted.

3. Where no agreement is reached between the institutions or authorities concerned, the matter may be brought before the Administrative Commission by the competent authorities no earlier than one month after the date on which the difference of views, as referred to in paragraph 1 or 2 arose. The Administrative Commission shall seek to reconcile the points of view within six months of the date on which the matter was brought before it.

4. Where it is established either that the applicable legislation is not that of the Member State of provisional membership, or the institution which granted the benefits on a provisional basis was not the competent institution, the institution identified as being competent shall be deemed retroactively to have been so, as if that difference of views had not existed, at the latest from either the date of provisional membership or of the first provisional granting of the benefits concerned.

5. If necessary, the institution identified as being competent and the institution which provisionally paid the cash benefits or provisionally received contributions shall settle the financial situation of the person concerned as regards contributions and cash benefits paid provisionally, where appropriate, in accordance with Title IV, Chapter III, of the implementing Regulation.

Benefits in kind granted provisionally by an institution in accordance with paragraph 2 shall be reimbursed by the competent institution in accordance with Title IV of the implementing Regulation.

14.      Article 81 of Regulation 883/2004 is also relevant:

Article 81

Claims, declarations or appeals

Any claim, declaration or appeal which should have been submitted, in application of the legislation of one Member State, within a specified period to an authority, institution or tribunal of that Member State shall be admissible if it is submitted within the same period to a corresponding authority, institution or tribunal of another Member State. In such a case the authority, institution or tribunal receiving the claim, declaration or appeal shall forward it without delay to the competent authority, institution or tribunal of the former Member State either directly or through the competent authorities of the Member States concerned. The date on which such claims, declarations or appeals were submitted to the authority, institution or tribunal of the second Member State shall be considered as the date of their submission to the competent authority, institution or tribunal.

Analysis and application in this case

15.      In the context of this case, the effect of Article 6 of Regulation 987/2009 is this. If there is a difference of view between Sweden and the United Kingdom as to their competence to pay Mrs R’s sickness benefit, it must be paid provisionally by the United Kingdom as the State of residence, pending a resolution of the difference of view. If that cannot be secured by agreement, the matter must be referred to the Administrative Commission.

16.      The Article presupposes a difference of view. That raises at least three questions. When does a difference of view arise? Is it necessary for the States to have discussed the matter first? What evidence is required?

17.      As to the first question, the Secretary of State’s representative argues that the difference of view did not arise until Mrs R provided the document from the Swedish Social Insurance Agency. I reject that argument. The difference of view existed, whether or not one of the States was aware of it. It is an objective fact, not a matter of what a particular State knows at a particular time. I will come back later to how decision-makers and tribunals should proceed if there is no evidence that the other possible competent State takes a different view.

18.      As to the second question, what Article 6 requires is a difference of view. This is a word that is more general than disagreement or dispute, both of which may presuppose a discussion or argument on the matter in issue. I see no basis on the language for requiring some prior discussion or argument. Nor would this be realistic in the circumstances in which the legislation has to apply. Given that the claimants involved are, by definition, (i) in need of financial assistance and (ii) disabled or incapacitated and often elderly, it is unlikely that the Article is designed to allow States to undertake lengthy discussions before a difference of view can arise. Indeed, the general principles set out in Article 2 indicate that matters should proceed speedily. A difference of view is all that is required, not a disagreement following discussion or argument.

19.      As to the third question, the Secretary of State’s representative accepts that the United Kingdom has expressed a view by its decision on Mrs R’s claim. I put it to the representative that in this case there was documentary evidence that Sweden took a different view. The document I have set out from the Swedish Social Insurance Agency makes clear that Sweden will not take responsibility for Mrs R so long as she lives in the United Kingdom and does not work in Sweden. That is what it says in terms and it cites Article 11 of Regulation 883/2004 in support. The representative accepts that as sufficient in this case. However, she argues that there must always be some form of documentary evidence. That will certainly put the matter beyond doubt, but it may be setting too demanding a standard. Claimants often enquire of the Department for Work and Pensions whether they may be entitled to a particular benefit and act on the information given. That information is not necessarily, or even usually, put into writing. No doubt, the same thing happens abroad. I suspect that in practice decision-makers will always insist on documentary proof, but tribunals, especially after an oral hearing, may be more confident to accept oral evidence. I will come back later to how decision-makers and tribunals should proceed if the claimant’s evidence is not accepted.

20.      I am pleased to say that the Secretary of State has now accepted that the United Kingdom is responsible as the State of residence and paid Mrs R the benefit to which she was provisionally entitled for the inclusive period from the date of her claim (11 April 2012) to the date when she returned permanently to Sweden (18 August 2014).

21.      The Secretary of State’s representative has submitted that I should still decide whether the United Kingdom was the competent State. In particular, I should decide whether Article 11(3)(e) applies or Articles 24, 25 and 29. I do not consider it appropriate to do so. First, that issue arises in other cases currently before me. Second, this is of no practical benefit to Mrs R. Third, the Secretary of State is already operating the procedures of EU law to seek reimbursement.

22.      That is sufficient to dispose of this case, but it may be helpful if I set out my provisional thoughts on other issues that may arise under these provisions as I have had the benefit of the Secretary of State’s argument and the issues are relevant to other cases before the First-tier Tribunal and the Upper Tribunal.

Analysis of other issues

23.      Article 6(3) deals with the possibility that the competing States cannot reach agreement and allows for a reference to the Commission once one month has passed since the difference of view arose. Apart from this initial month, there is no limit to the time within which the reference may be made. This appears to allow for potentially endless argument without the matter being resolved, but this is not a matter that a tribunal can resolve. I merely note that Article 2 provides some general principles that should reduce the chances of endless argument, including that there should be ‘rapid delivery’ (Article 2(1)) and that transfers between States should take place ‘without delay’ (Article 2(2)).

24.      Moreover, Article 6 is designed to ensure that the time taken to identify the responsible State does not disadvantage anyone. The claimant is protected by the provisional application of the law of the place of residence. And the paying State is only required to pay if the claimant satisfies the conditions of entitlement under domestic law and, if so, is then protected by the right to reimbursement if the other State is eventually held responsible. The Secretary of State is now pursuing recovery from Sweden in this case.

25.      The Secretary of State’s representative has submitted that the application of Article 6 is a separate and subsidiary issue to determining the competent State. In a sense, that is right. But it is important to appreciate the point at which Article 6 applies. I will try to approach this systematically by considering three different cases. Assume in each case that the Secretary of State has received a claim from a claimant who is resident in the United Kingdom. What happens next?

26.      First case If the Secretary of State decides that the United Kingdom is the competent State, the only remaining issues are ones of domestic entitlement. If the claimant appeals, there will be no EU element.

27.      Second case If the Secretary of State decides that the United Kingdom is not the competent State and another State has already expressed a different view, there will be a difference of opinion and Article 6 applies. The Secretary of State must decide whether the claimant satisfies the domestic conditions of entitlement and, if so, the United Kingdom becomes immediately but provisionally liable to make payments under Article 6. As the United Kingdom is making provisional payments pending eventual resolution by agreement or by the Administrative Commission, the claimant may not consider it necessary to appeal. The Secretary of State is certainly not entitled to delay applying Article 6 pending any appeal to the First-tier Tribunal or the Upper Tribunal or the resolution of an appeal. The duty to pay is triggered by the difference of opinion. Moreover, delay would be inconsistent with the speed of action that is required by Article 2, which expressly recognises the needs of ‘the disabled and the elderly’. The First-tier Tribunal would have to decide how to deal with any appeal that was made. It might consider it appropriate to stay the case to await the outcome of what is intended to be the decisive determination of the issue under EU law and procedures. 

28.      Third case If the Secretary of State decides that the United Kingdom is not the competent State and there is no (acceptable evidence of a) difference of view with the other EU State, the Secretary of State should refuse the claim but submit it to the other State under Article 81 of Regulation 883/2004. This may generate a difference of view, to which Article 6 will apply and the United Kingdom may become provisionally liable. This creates difficulties.

29.      One difference concerns the date of claim. There seems to be a conflict between Article 2(3), which provides for the date of claim to be the date on which the claim was submitted in the first State, and Article 81, which provides for the date of claim to be the date on which it was submitted to the second State. Either provision may override the way that the date of claim provisions in domestic law have to be applied.

30.      Another difference concerns the effective date from which payment can be made. The difference of view would be a change of circumstances not obtaining at the time of the decision for the purposes of sections 8(2)(b) and 12(8)(b) of the Social Security Act 1998. Apart from that, it might not be possible to commence that payment from the date of claim under the Social Security and Child Support (Decisions and Appeals) Regulations 1999 without an amendment to regulation 3.

31.      The answer to both these sets of difficulties may be that, as the duties arise under provisions of Regulations in EU law, they override domestic law by virtue of section 2 of the European Communities Act 1972 and must be applied regardless of what domestic law says.

G.       Disposal

32.      In this case, the First-tier Tribunal’s decision was in error of law for overlooking the provisions of Regulation 987/2009, which is not surprising as they were never drawn to its attention by the Secretary of State. As the Secretary of State has now accepted provisional liability, I have re-made the decision recording that.

 

 

Signed on original on 18 December 2014

Edward Jacobs Upper Tribunal Judge