Upper Tribunal (Administrative Appeals Chamber)

Decision of the Upper Tribunal
(Administrative Appeals Chamber)

As the decision of the First-tier Tribunal (made on 6 June 2014 at Liverpool under reference SC064/14/00236) 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 claimant is not entitled to an attendance allowance on the claim made on 15 November 2013, because the allowance is a sickness benefit for which the United Kingdom is not the competent State.

The Secretary of State must pass the claimant’s claim to the Greek authorities.

Reasons for Decision

A.        What this case is about

1.         This case deals with a number of issues relating to the application of Regulation (EC) 883/2004 and Regulation (EC) 987/2009.

2.         First, it rejects an argument that attendance allowance is an invalidity benefit rather than a sickness benefit for the purposes of Regulation 883/2004. This is dealt with in paragraphs 9 to 10.

3.         Second, it rejects as irrelevant an argument that the claimant has permanent residence in the United Kingdom. This is dealt with in paragraphs 11 to 12.

4.         Third, it rejects an argument that, by virtue of section 66(2)(b) of the Social Security Contributions and Benefits Act 1992, a terminally ill claimant is entitled to an attendance allowance whether or not the United Kingdom in the competent State for the purposes of Regulation 883/2004. This is dealt with in paragraphs 13 to 20.

5.         Fourth, it resolves a conflict between the approaches taken to identifying the competent State by myself and Judge White in the latter’s favour. This is dealt with in paragraphs 21 to 27.

6.         Fifth, this case complements my decision in Secretary of State for Work and Pensions v HR [2014] UKUT 571 (AAC). I there dealt 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. This case deals with the correct approach before a difference of view has arisen. This is dealt with in paragraphs 28 to 32.

B.        The claim for an attendance allowance

7.         Mr K is Greek and was born in 1938. The evidence does not show the precise date when he came to the United Kingdom, but it seems to have been around 2006. He has never worked or been self-employed in the United Kingdom; he has never paid national insurance here. He receives a Greek pension, but not a United Kingdom pension. His claim for an attendance allowance was treated as made on 15 November 2013 and was dealt with under the special rules, as he has lung cancer. The Secretary of State refused his claim on 24 December 2013 on the ground that the United Kingdom was not the competent State to pay sickness benefits.

8.         On appeal by Mr K, the First-tier Tribunal decided that the United Kingdom was the competent State for the payment of sickness benefits and that Mr K’s claim should be decided on that basis. However, the tribunal gave the Secretary of State permission to appeal to the Upper Tribunal.

C.        The sickness benefit argument

9.         The claimant’s representative has argued that attendance allowance is a sickness benefit for the purposes of Regulation 883/2004. She accepts that it was held to be a sickness benefit for the purposes of Regulation (EEC) 1408/71 by the Court of Justice of the European Union in Commission of the European Communities v European Parliament and Council of the European Union (Case C-299/05) [2007] ECR I-8695, but argues that this is no longer correct in view of the decision of the same Court in Stewart (social security for migrant workers) [2011] EUECJ C-503/09. I accept the Secretary of State’s argument that this reasoning is not correct.

10.      There is no material difference between Regulation 1408/71 and Regulation 883/2004 that would justify the argument put for the claimant. It rests on the Stewart case, which is distinguishable. That case concerned incapacity benefit in youth, which is awarded to young people who may be able to undertake some form of work, but who will probably never be able to function independently or productively in the labour market. An attendance allowance is different. It is awarded only to those over pensionable age and may be awarded only for short periods, such as while the claimant waits for and recovers from a hip replacement. It may be awarded for life, but that is not inherent in the nature of the allowance.

D.       The permanent residence argument

11.      The claimant’s representative has argued that the claimant has permanent residence and that refusing him an attendance allowance would be disproportionate and discriminatory. I accept the Secretary of State’s argument that this is not correct.

12.      Permanent residence was introduced by Directive 2004/38/EC. That Directive is currently implemented by the Immigration (European Economic Area) Regulations 2006. It is concerned with the right to move and reside. Nothing in this case affects the claimant’s right to move to or reside in the United Kingdom. The issue in this case is the different one of responsibility for meeting the cost of his care. That is covered by Regulation 883/2004, which governs the coordination of the social security systems within the EU. The Court of Justice of the European Union explained the difference between the Directive and the Regulation in Pensionsversicherungsanstalt v Peter Brey [2013] EUECJ C-140/12:

51. In that regard, it should be borne in mind that Regulation No 883/2004 seeks to achieve the objective set out in Article 48 TFEU by preventing the possible negative effects that the exercise of the freedom of movement for workers could have on the enjoyment, by workers and their families, of social security benefits (see, to that effect, Chuck, paragraph 32).

…

53. By contrast, although the aim of Directive 2004/38 is to facilitate and strengthen the exercise of the primary and individual right – conferred directly on all Union citizens by the Treaty – to move and reside freely within the territory of the Member States (see Case C‑127/08 Metock and Others [2008] ECR I‑6241, paragraphs 82 and 59; Case C‑162/09 Lassal [2010] ECR I‑9217, paragraph 30; and Case C‑434/09 McCarthy [2011] ECR I‑3375, paragraph 28), it is also intended, as is apparent from Article 1(a) thereof, to set out the conditions governing the exercise of that right (see, to that effect, McCarthy, paragraph 33, and Joined Cases C‑424/10 and C‑425/10 Ziolkowski and Szeja [2011] ECR I‑0000, paragraphs 36 and 40), which include, where residence is desired for a period of longer than three months, the condition laid down in Article 7(1)(b) of the directive that Union citizens who do not or no longer have worker status must have sufficient resources.

E.        The section 66(2)(b) argument

13.      Entitlement to attendance allowance is governed by the 1992 Act. Broadly, section 64 deals with the disability conditions that must be satisfied, section 65 deals with the period and rate of the award, and section 66 deals with claims for the terminally ill.

14.      The relevant provisions of section 64 read:

64 Entitlement

(1) A person shall be entitled to an attendance allowance if he has attained pensionable age, he is not entitled to an allowance within subsection (1A) [a personal independence payment or the care component of a disability living allowance] and he satisfies either—

(a) the condition specified in subsection (2) below (‘the day attendance condition’), or

(b) the condition specified in subsection (3) below (‘the night attendance condition’),

and prescribed conditions as to residence and presence in Great Britain.

…

(2) A person satisfies the day attendance condition if he is so severely disabled physically or mentally that, by day, he requires from another person either—

(a) frequent attention throughout the day in connection with his bodily functions, or

(b) continual supervision throughout the day in order to avoid substantial danger to himself or others.

(3) A person satisfies the night attendance condition if he is so severely disabled physically or mentally that, at night,—

(a) he requires from another person prolonged or repeated attention in connection with his bodily functions, or

(b) in order to avoid substantial danger to himself or others he requires another person to be awake for a prolonged period or at frequent intervals for the purpose of watching over him.

15.      The relevant provisions of section 65 read:

65 Period and rate of allowance

(1) Subject to the following provisions of this Act, the period for which a person is entitled to an attendance allowance shall be—

(a) a period throughout which he has satisfied or is likely to satisfy the day or the night attendance condition or both; and

(b) a period preceded immediately, or within such period as may be prescribed, by one of not less than 6 months throughout which he satisfied, or is likely to satisfy, one or both of those conditions.

…

(7) A person to whom either Regulation (EC) No 1408/71 or Regulation (EC) No 883/2004 applies shall not be entitled to an attendance allowance for a period unless during that period the United Kingdom is competent for payment of sickness benefits in cash to the person for the purposes of Chapter 1 of Title III of the Regulation in question.

Section 65(7) was inserted by regulation 5(3) of the Social Security (Disability Living Allowance, Attendance Allowance and Carer’s Allowance) Regulations 2011 (SI No 2426) to take account of the effect of the decision of the Court of Justice of the European Union in Commission of the European Communities v European Parliament and Council of the European Union (Case C-299/05) [2007] ECR I-8695. It also prevents the attendance allowance provisions being interpreted to allow an award to be made even if the United Kingdom was not the competent State, a possibility recognised by the Court of Justice of the European Union in Bosmann (social security for migrant workers) [2008] EUECJ C-352/06 and Hudziński (social security) [2012] EUECJ C-611/10.

16.      Section 66, as amended with effect from 12 January 2000 by section 66(2) of the Welfare Reform and Pensions Act 1999, reads (amendments in italics):

66 Attendance allowance for the terminally ill

(1) If a terminally ill person makes a claim expressly on the ground that he is such a person, then—

(a) he shall be taken—

(i) to satisfy, or to be likely to satisfy, both the day attendance condition and the night attendance condition for so much of the period for which he is terminally ill as does not fall before the date of the claim; and

(ii) to have satisfied those conditions for the period of 6 months immediately preceding the date of the claim or, if later, the first date on which he is terminally ill (so however that no allowance shall be payable by virtue of this sub-paragraph for any period preceding that date); and

(b) the period for which he is entitled to attendance allowance shall be so much of the period for which he is terminally ill as does not fall before the date of the claim.

(2) For the purposes of subsection (1) above—

(a) a person is ‘terminally ill’ at any time if at that time he suffers from a progressive disease and his death in consequence of that disease can reasonably be expected within 6 months; and

(b) where a person purports to make a claim for an attendance allowance by virtue of that subsection on behalf of another, that other shall be regarded as making the claim, notwithstanding that it is made without his knowledge or authority.

The purpose of the amendments was to change the period of the claimant’s entitlement under this section. Originally, a person who was found to be terminally ill was awarded an attendance allowance for life. The amendments cater for the possibility that that finding turns out, fortunately for the claimant, to be mistaken.

17.      The claimant’s representative has argued that section 66(1)(b) overrides or has priority over section 65(7). I reject that argument.

18.      A person who is not terminally ill must satisfy one of the conditions set out in section 64 for the periods set out in section 65(1). Taken together, those provisions determine the period of entitlement so far as the disablement conditions are concerned.

19.      As amended, section 66 limits the period of an award to the period when the claimant is considered on the evidence to be terminally ill. It sets both the period and the outside limit of an award. Once the evidence shows that the claimant is not terminally ill, entitlement depends on satisfying the disability conditions in section 64. Section 66 operates by overriding the effect that those provisions would otherwise have for someone who is terminally ill. In other words, it removes the need for the claimant to show: (i) that the day or night attendance conditions are satisfied (section 64(1)); (ii) for the past six months (section 65(1)(b)); and (iii) they are likely to be satisfied for a further period (section 65(1)(a)). In yet other words, its function is concerned with the existence and period of the disablement.

20.      Section 65(7) operates differently. Like section 66, it overrides the effect that sections 64 and 65(1) would otherwise have. But unlike section 66, its subject matter is not disablement. It is concerned with the allocation of responsibility for particular classes of benefit within the EU. Section 66 does not override section 65(7), because the latter is dealing with a different aspect of entitlement or, perhaps better, with the whole of entitlement. Rather, when section 65(7) applies, it overrides section 66. A claimant who is terminally ill is entitled to the benefit conferred by section 66 in respect of showing disablement, but is subject to the effect of section 65(7) in so far as State responsibility is concerned.

F.        The competent State

21.      Article 11(3)(e) of Regulation 883/2004 provides:

General rules

…

(3) Subject to Articles 12 to 16:

…

(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 of more other Member States.

22.      The difference between myself and Judge White was this. In CG/4143/2012, I treated Article 11(3)(e) as qualified only by the remaining Articles (12 to 16) of Title II, which provides for the ‘determination of the legislation applicable’. I said that ‘the first sentence of Article 29(1) only determines who is to pay a cash benefit. It does not deal with the right to the benefit.’ In contrast in SL v Secretary of State for Work and Pensions [2014] UKUT 0108 (AAC), Judge White treated Article 11(3)(e) as qualified not just by the other Articles in Title II, but also by the Articles in Title III, which makes ‘special provisions concerning the various categories of benefit’. In particular, in that case he took account of Articles 21, 23 and 29.

23.      On reflection, I placed too much reliance on the opening words of Article 11(3) and treated them as exhaustive. I also accept that I did not pay sufficient regard to the significance of the word responsible in the first sentence of Article 29(1). I accept the Secretary of State’s argument that Article 11(3)(e) is subject not only to Articles 12 to 16, but also to the subsequent Articles to which I now refer in applying the Regulation to the facts of this case.

24.      As the claimant does not satisfy any provision in Article 11(3)(a)-(d), the starting point is Article 11(3)(e). This makes his State of residence the competent State. This is subject to Articles 12 to 16, but they are not relevant. But other Articles are relevant. Article 29 is in Chapter 1 of Title III and applies to sickness benefits. The Article makes special provision for cash benefits for pensioners:

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.

This identifies the competent State for payment of cash benefits as the State responsible for the cost of benefits in kind. This essentially means health care. The claimant receives his care, as far as I know, under the National Health Service, but that does not mean that this country is ‘responsible for the costs of benefits in kind’. That depends on Article 25.

25.      Article 25 provides:

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.

That is not readily digestible. I will break it down into its constituent parts by relating them to the facts of this case:

·                The claimant is receiving a pension from Greece.

·                He resides in the United Kingdom.

·                Under UK law, benefits in kind (health care) do not depend on the claimant paying national insurance or being employed or self-employed.

·                He is not receiving a pension from the United Kingdom.

·                This means that the cost of his health care has to be borne by Greece, as the State that pays his pension.

And linking that with Article 29(1) means that Greece is also responsible for his cash benefits.

26.      So to summarise, as Greece is paying the claimant a pension, Greece is the competent State ultimately responsible for the costs of the claimant’s benefits in kind and, therefore under Article 29, for case benefits, including attendance allowance.

27.      The same result is obtained under Article 21. As modified in accordance with the second sentence of Article 29(1), it provides:

1. An insured person pensioner and members of his family residing or staying in a Member State other than the competent Member State shall be entitled to cash benefits provided by the competent institution in accordance with the legislation it applies. By agreement between the competent institution and the institution of the place of residence or stay, such benefits may, however, be provided by the institution of the place of residence or stay at the expense of the competent institution in accordance with the legislation of the competent Member State.

G.       How the Secretary of State should have dealt with the claim once refused

28.      On the basis that the United Kingdom was not the competent State for the claimant’s attendance allowance, the Secretary of State was entitled, indeed obliged, to refuse the claim. But that was not all. Article 81 of Regulation 883/2004 provides for what should happen when the Secretary of State considers that another Sate is the competent State:

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.

29.      Applying that provision requires this approach. In order for Article 81 to apply, two conditions must be satisfied. First, the Secretary of State or the tribunal must decide that the United Kingdom is not the competent State for the benefit claimed. Second, there must be no evidence that is sufficient to show a difference of view between the competing member States. If, and only if, both of those conditions are satisfied, the Secretary of State must submit the claim to the other potentially competent State under the Article.

30.      If the other State subsequently decides that it is not the competent State, there will be a difference of view. The case must then be dealt with in accordance with Secretary of State for Work and Pensions v HR. In that decision, I identified potential arguments that might then arise on the date of claim and effective date. For convenience, I repeat them here.

31.      One issue concerns the date of claim. Article 2(3) of Regulation 987/2009 provides for the date of claim to be the date on which the claim was submitted in the first State:

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 81, in contrast, 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.

32.      The other issue 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. The answer to both these potential problems may be that the provisions of Regulations in EU law override domestic law by virtue of section 2 of the European Communities Act 1972 and must be applied regardless of what domestic law says.

H.       Disposal

33.      It follows that the First-tier Tribunal went wrong in law, misled by my reasoning in CG/4143/2012, and must (with apologies to the judge) be set aside as wrong in law. The facts of the case are not in dispute and it is straightforward to apply the relevant provisions of Regulation 883/2004 to them. That allows me to re-make the tribunal’s decision by restoring the Secretary of State’s decision, subject only to the qualification that the Secretary of State must now pass the claim to the Greek authorities.

 

 

Signed on original on 4 March 2015

Edward Jacobs Upper Tribunal Judge