Luxembourg backs UK’s limit on migrants’ access to benefits

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The regulation on the coordination of social security systems lays down a series of common principles to be observed by the legislation of the member states in that sphere so that the various national systems do not place at a disadvantage persons who exercise their right of freedom of movement and of residence within the EU.

One of the common principles that the member states must observe is the principle of equality. In the specific field of social security, the principle of equality takes the form of prohibiting any discrimination on grounds of nationality.

The Commission received numerous complaints from non-British EU citizens resident in the UK. They complained that the competent UK authorities had refused to grant them certain social benefits on the ground that they did not have a right to reside in the UK. Since the Commission took the view that the UK legislation does not comply with the regulation, it brought an action for failure to fulfil obligations against the UK. The Commission stated that under UK legislation it must be verified that persons claiming certain social benefits – including family benefits such as child benefit and child tax credit, which the present case concerns – are lawfully resident in the UK. According to the Commission, that condition is discriminatory and contrary to the spirit of the regulation since the regulation has regard only to the claimant’s habitual residence.

In response to those arguments, the UK, which relies on the judgment in Brey, maintains that the host may lawfully require that social benefits be granted only to Union citizens who fulfil the conditions for possessing a right to reside in its territory, conditions which are, essentially, laid down in an EU directive. Furthermore, while acknowledging that the conditions conferring entitlement to the social benefits at issue are more easily satisfied by its own nationals (as they have, by definition, a right of residence), the UK maintains that in each case the condition requiring a right of residence is a proportionate measure for ensuring that the benefits are paid to persons sufficiently integrated in the UK.

In today’s judgment, the court dismissed the Commission’s action.

The court found, first of all, that the benefits at issue are social security benefits and therefore fall within the regulation’s scope.

Next, the court rejected the Commission’s principal argument, that the UK legislation imposes a condition supplementing that of habitual residence contained in the regulation.

In this connection, the court pointed out that the criterion of habitual residence, within the meaning of the regulation, is not a condition that must be met to qualify for benefits, but a “conflict rule” which is intended to prevent the concurrent application of a number of national legislative systems and to ensure that persons who have exercised their right of freedom of movement are not left without cover.

According to the court, the regulation does not set up a common scheme of social security, but allows different national social security schemes to exist. It thus does not lay down the conditions creating the right to benefits, because it is in principle for the legislation of each member state to lay down those conditions. In this context, the court stated that there is nothing to prevent the grant of social benefits to EU citizens who are not economically active being made subject to the requirement that those citizens fulfil the conditions for possessing a right to reside lawfully in the host member state.

As to the argument put forward by the Commission in the alternative, that checking of the right to reside amounts to discrimination, the court held that the condition requiring a right to reside in the UK gives rise to unequal treatment because UK nationals can satisfy it more easily than nationals of the other member states.

However, the court considered that this difference in treatment can be justified by a legitimate objective such as the need to protect the finances of the host member state, provided that it does not go beyond what is necessary to attain that objective.

In this regard, the court found that the UK authorities verify whether residence is lawful in accordance with the conditions laid down in the directive on the free movement of citizens. Thus, this verification is not carried out systematically by the UK authorities for each claim, but only in the event of doubt. It follows that the condition does not go beyond what is necessary to attain the legitimate objective pursued by the UK, namely the need to protect its finances.