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A citizen of the United Kingdom has a right to reside in the United Kingdom by virtue of his or her right of abode under section 2(1) of the Immigration Act 1971. Ratio |
An Irish citizen has, by virtue of his or her Irish nationality, a right to reside in the Republic of Ireland. Ratio |
In their case regulation 2 of the 2002 Regulations does not preclude entitlement to state pension credit. Ratio |
But nationals of other Member States do not qualify for the same treatment unless they have a right to reside here, which they do not have simply on the grounds of their nationality. Ratio |
The appellant was born in Latvia on 1 June 1938. FAC |
She came to the United Kingdom on 12 June 2000 before Latvia joined the European Union. FAC |
She claimed asylum on the ground that, as she is of Russian ethnic origin, she had a well founded fear of persecution if she were to return there. FAC |
Her claim to asylum was finally refused in January 2004, but no steps were taken to remove her from this country. FAC |
On 1 May 2004 Latvia joined the EU, so pursuant to derogations from article 39(3) of the EC Treaty the appellant became entitled to work here if she complied with the Workers Registration Scheme in the Accession (Immigration and Worker Registration) Regulations 2004: see Zalewska v Department for Social Development (Ch... |
She had worked in factories and as a kitchen assistant for about 40 years in Latvia. FAC |
She is in receipt of a retirement pension from the Latvian social security authorities which is worth between 50 and 170 a month, depending upon the rate of exchange for the time being. FAC |
But she has not worked at any time while she has been in this country, and she has no other income. FAC |
In August 2005 the appellant claimed state pension credit from the respondent, the Secretary of State for Work and Pensions. FAC |
Her claim was refused on 7 September 2005 on the ground that she lacked a right to reside in the United Kingdom. FAC |
She appealed against that refusal, asserting direct discrimination on grounds of her nationality contrary to article 3(1) of Regulation 1408/71. FAC |
Her case was that it was her Latvian nationality that precluded the entitlement to state pension credit which she would have had if she had been a United Kingdom national. FAC |
On 12 December 2005 the appeal tribunal allowed her appeal on the grounds of direct discrimination. RLC |
But on 11 June 2008 Commissioner Rowland allowed the respondents appeal against that decision. RLC |
He held that the imposition of the right to reside test was indirect discrimination, but that it was justified as a proportionate means of achieving the legitimate aim of protecting the public finances of the host member state. RLC |
There was, in his view, no obligation on the United Kingdom under Community law to afford access to social assistance to those who have no right of residence here. RLC |
On 25 June 2009 the Court of Appeal (Lord Clarke of Stone-cum-Ebony MR and Moses and Sullivan LJJ) dismissed the appellants appeal against the decision of the Commissioner: [2009] EWCA Civ 621. RLC |
State pension credit: the 2002 Regulations STA |
State pension credit is a means tested non-contributory benefit. STA |
The details of how it is calculated do not matter for present purposes. Ratio |
But it is worth noting that it is made up of two elements, a guarantee credit and a savings credit, each of which have their own rules as to eligibility. Ratio |
Section 2(2)(b) of the State Pension Credit Act 2002 provides that the guarantee credit is the difference between the prescribed amount and the claimants income. STA |
Income includes retirement pension income, and an overseas arrangement such as a state pension from another Member State is retirement pension income for this purpose: sections 15(1)(c) and 16(1)(g). STA |
Section 1(2)(a) provides that a claimant is entitled to state pension credit if he is in Great Britain. STA |
Section 1(5)(a) provides that regulations may make provision as to the circumstances in which a person is to be treated as being in or not being in Great Britain for the purposes of the Act. STA |
Regulation 2 of the 2002 Regulations was amended by regulation 5 of the Social Security (Habitual Residence) Amendment Regulations 2004 (the 2004 Amendment Regulations). STA |
As so amended, it was in the form that was in force from 1 May 2004 to 29 April 2006. STA |
This is the period during which the appellant made her claim. STA |
In that form it provided as follows: (1) Subject to paragraph (2), a person is to be treated as not in Great Britain if he is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland, but for this purpose, no person is to be treated as not habitually resident in the... |
(2) For the purposes of treating a person as not in Great Britain in paragraph (1), no person shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland if he does not have a right to reside in the United Kingdom, the Channel Islands, the Isle of Man o... |
The persons referred to in regulation 2(1)(a) are various categories of persons who are afforded rights of residence by EU law. Ratio |
Among these categories are nationals of other EU Member States who are workers (that is to say, in employment or looking for work with a genuine chance of being engaged) or who are self-employed. Ratio |
They have a right to reside here and they are not to be treated as not habitually resident in the United Kingdom. Ratio |
So if they are actually in this country too, they are in Great Britain for the purpose of entitlement to state pension credit under the statute. Ratio |
Other nationals of EU Member States who have a right to reside in the United Kingdom or elsewhere in the Common Travel Area and are habitually resident in the United Kingdom or elsewhere in the Common Travel Area are also eligible to claim state pension credit if they are in Great Britain. Ratio |
As they have a right to reside in the Common Travel Area, they are brought within the scope of the opening words of regulation 2(1) by regulation 2(2) which was inserted by regulation 5(c) of the 2004 Amendment Regulations. Ratio |
All Irish nationals have a right to reside in the Republic of Ireland by virtue of their nationality. Ratio |
As the Common Travel Area includes the Republic of Ireland they too are eligible to claim state pension credit if they are in Great Britain. Ratio |
The appellant does not fall within any of the provisions listed in regulation 2(1)(a) to (e). Ratio |
That being so, she can only qualify for entitlement to state pension credit if she is in Great Britain and habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland. Ratio |
That is the effect of the opening words of regulation 2(1). Ratio |
But regulation 2(2) provides that no person shall be treated as habitually resident in the United Kingdom or elsewhere in the Common Travel Area if he does not have a right to reside in the United Kingdom or elsewhere in the Common Travel Area. Ratio |
As the appellant does not have that right, she is not to be treated as habitually resident in the United Kingdom (regulation 2(2)). Ratio |
So she is to be treated as not in Great Britain for the purposes of section 1 of the 2002 Act (regulation 2(1)). Ratio |
The Community law provisions STA |
At the time when the appellant made her claim the Treaty Establishing the European Community (the EC Treaty) contained the general prohibition on discrimination to which, subject to the special provisions of the Regulation, article 3(1) of Regulation 1408/71 gave effect. STA |
Article 12 (now, post-Lisbon, article 18 of the Treaty on the Functioning of the European Union) provided: Within the scope of application of this Treaty, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited. STA |
The Council, acting in accordance with the procedure referred to in article 251, may adopt rules designed to prohibit such discrimination. STA |
Article 18 (now article 21 TFEU) provided: 1. STA |
Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect. STA |
2 STA |
the Council may adopt provisions with a view to facilitating the exercise of the rights referred to in paragraph 1; save as otherwise provided in this Treaty, the Council shall act in accordance with the procedure referred to in article 51. STA |
The Council shall act unanimously throughout this procedure. STA |
Article 39 (now article 45 TFEU) provided for free movement of workers. STA |
It included, among other things, the following rights mentioned in article 39(3): (c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action; (d) to remain in the territory of a M... |
Article 42 (now article 48 TFEU) of the EC Treaty provided: The Council shall, acting in accordance with the procedure referred to in article 251, adopt such measures in the field of social security as are necessary to provide freedom of movement for workers; to this end, it shall make arrangements to secure for migran... |
The Council shall act unanimously throughout the procedure referred to in article 251. STA |
Regulation 1408/71 contains a system for the coordination of the different social security schemes of the Member States, while respecting the different characteristics of the national legislation: see the fourth recital of its preamble. Ratio |
It was made under article 42 EC. Ratio |
Its object is to ensure that social security schemes governing workers in each Member State moving within the EU are applied in accordance with uniform EU criteria. Ratio |
To this end it lays down a set of rules founded in particular upon the prohibition of discrimination on grounds of nationality or residence and upon the maintenance by a worker of his rights acquired by virtue of one or more social security schemes which are or have been applicable to him: Cases C-95/99, C-96/99 and C-... |
Article 2 provides as to the persons covered by the Regulation (the personal scope) as follows: 1. STA |
This Regulation shall apply to employed or self-employed persons and to students who are or have been subject to the legislation of one or more Member States and who are nationals of one of the Member States or who are stateless persons or refugees residing within the territory of one of the Member States, as well as t... |
It has been conceded for the purposes of these proceedings that the appellant falls within the personal scope of Regulation 1408/71 under article 2(1). STA |
This is because she falls within the definition of employed person in article 1(a), which includes any person who is insured for one or more of the contingencies covered by the branches of a social security scheme for employed or self-employed persons. STA |
The effect of the meaning that is given to employed person is that the Regulation applies to persons who have retired from employment in the EU but who remain insured because of contributions paid during their working life. Ratio |
One of its main functions is to provide for retired workers who are living in a Member State which is different from that in which they worked. Ratio |
The appellant remains insured under the Latvian social security scheme by virtue of the contributions paid during her working life there. Ratio |
She did not come to this country to work here, but the basis of her residence in this country is irrelevant to the personal scope of Regulation 1408/71. Ratio |
Its application is not limited to those whose current residence arises from an exercise of the right of free movement for the purpose of employment or other economic activity conferred by EU law. Ratio |
Article 3 of Regulation 1408/71 addresses the issue of equality of treatment. STA |
It was amended by Regulation (EC) No 647/2005 with effect from 13 April 2005. STA |
As amended, it provides as follows: 1. STA |
Subject to the special provisions of this Regulation, persons to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the nationals of the State. STA |
The parties are agreed that article 3(1) prohibits both direct and indirect discrimination in respect of the appellants entitlement to state pension credit on grounds of nationality. STA |
They are also agreed that it does not prohibit indirect discrimination if it is objectively justified by considerations independent of the nationality of the person concerned. STA |
Article 4 sets out the matters covered by Regulation 1408/71 (the material scope). STA |
Article 4(1) provides that the Regulation shall apply to all legislation concerning the branches of social security listed in that paragraph, including old- age benefits: paragraph (1)(c). STA |
Article 4(2) provides as follows: 2. STA |
This Regulation shall apply to all general and special social security schemes, whether contributory or non-contributory, and to schemes concerning the liability of an employer or shipowner in respect of the benefits referred to in paragraph 1. STA |
General social benefits of a kind not listed in article 4(1) were held not to constitute a social security benefit within the meaning of Regulation 1408/71: Case 249/83 Vera Hoeckx v Centre Public dAide Sociale de Kalmthout [1987] 3 CMLR 638, para 14. PRE |
But article 4(2a), which was inserted by Regulation (EEC) No 1247/92 with effect from 1 June 1992, as amended by Regulation (EC) No 647/2005 with effect from 13 April 2005, now provides so far as relevant: This Article shall apply to special non-contributory cash benefits which are provided under legislation which, bec... |
Special non-contributory cash benefits means those: (a) which are intended to provide either: (i) supplementary, substitute or ancillary cover against the risks covered by the branches of social security referred to in paragraph 1, and which guarantee the persons concerned a minimum subsistence income having regard to ... |
and (c) which are listed in Annex IIa. STA |
Among the special non-contributory benefits listed in Annex IIa in respect of the United Kingdom is state pension credit: para Y(a). STA |
The parties are agreed that state pension credit falls within the material scope of Regulation 1408/71 as a special non-contributory benefit to which it applies. STA |
Article 4(4) of Regulation 1408/71 provides: This Regulation shall not apply to social and medical assistance, to benefit schemes for victims of war or its consequences. STA |
State pension credit is a means tested non-contributory benefit. STA |
As such, it would not previously have fallen within the definition of social security. STA |
As a non- discretionary cash benefit, it does not fall within the concept of social assistance either, unlike a discretionary cash benefit or the provision of social services. STA |
But it falls within the material scope of the Regulation because it is among the special non-contributory benefits listed in Annex IIa. STA |
For this purpose it is classified as a social security benefit. STA |
Issues Ratio |
The appellant contends that the refusal of state pension credit to a Latvian because she did not have a right to reside in the United Kingdom is prohibited by article 3(1) of Regulation 1408/71. ARG |
Her case is that the refusal was on grounds of nationality, as the requirement to have a right to reside is met in the case of all UK nationals simply by virtue of their British nationality whereas nationals of the other Member States, other than Irish citizens (who can rely on their right to reside in Ireland), do not... |
The Secretary of State concedes, and the Court of Appeal held in paras 25-26 of its judgment [2009] EWCA Civ 621, that regulation 2 of the 2002 Regulations is covertly, or indirectly, discriminatory between Latvian and United Kingdom nationals in that fewer nationals of EU Member States other than the United Kingdom ha... |
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