Social assistance, proportionality and the right to reside as a self-sufficient person

Immigration analysis: Simon Cox, the migration lawyer for the Open Society Justice Initiative, be-lieves the decision in Brey ought to lead to a change of approach by authorities administering the UK social assistance system and those concerned with immigration status to economically inactive Eu-ropean Economic Area (EEA) nationals.

Original news

Pensionsversicherungsanstalt v Brey: C-140/12 [2013] All ER (D) 198 (Sep)

The Court of Justice of the European Union (CJEU) made a preliminary ruling concerning the interpretation of Directive 2004/38/EC, art 7(1)(b) (the Citizens Directive) on the right of citizens of the European Union and their family members to move and reside freely within the territory of the member states. The request had been made in proceedings between a German national and the Pensions Insurance Institution of Austria, concerning the latter's refusal to grant him the compensatory supplement provided for in Austrian legislation to augment his German retirement pension.

What issues did this case raise?

The CJEU dealt with two issues.

What benefits make up an EU state's 'social assistance system' for the purposes of the Citizens Di-rective on the right of citizens and family members to move and reside freely?

The CJEU gives this phrase a broad interpretation--all assistance 'introduced by' public authorities 'that can be claimed by an individual who does not have resources sufficient to meet his own basic needs and the needs of his family' (para [61]). The CJEU does not clarify whether this includes benefits which do not de-pend upon a lack of claimant resources (eg, UK child benefit and NHS provision) and/or benefits based on contributions made by the claimant or family.

Can a claim for social assistance be refused automatically on the ground that the claimant is a for-eign EU citizen whose right to reside in the state is as a self-sufficient person?

The CJEU decided that such a rule is contrary to EU law. This right to reside is only lost if the benefit claim would lead to an unreasonable burden on the social assistance system. This assessment must be based on consideration of the personal circumstances and the principle of proportionality, as well as the likely effect of the claim on the benefit system as a whole.

Does the decision have any implications as regards the European Commission's outstanding infringement proceedings against the UK in relation to the right to re-side test?

In May 2013, the European Commission announced its decision to bring infringement proceedings against the UK for its denial of social welfare benefits to EU citizens who lack a right to reside in the UK. The Com-

mission's legal ground is that the requirement to show a right to reside discriminates on nationality grounds contrary to Regulation (EC) 883/2004 on coordination of social security.

Just like the UK 'right to reside' test, the Austrian benefit rule required 'lawful residence'. In Brey the Com-mission seems to have advanced the same argument as in its infringement case against the UK. In his Opinion, Advocate-General Wahl pointed out that this question had not been raised by the Austrian court and invited the court not to deal with it (paras [25]-[27], [79]).

The CJEU's judgment quotes the equal treatment rule of Regulation (EC) 883/2004 (para [11]), but does not thereafter mention discrimination. Instead, the court carefully limited the scope of the case to whether EU law permits a rule for automatic denial of a benefit like the one Mr Brey had claimed (para [32]). By answering that question in the negative, the court could avoid giving an express answer to the discrimination issue.

Nevertheless, the court's judgment has implications for the infringement proceedings. First, no doubt the UK will use some of the court's reasoning--and the Advocate-General's skepticism--to try to persuade the Com-mission to drop the case. After all, if the Commission's argument were right, the court had power to rule on that basis in Brey. Second, for the reasons below, the ruling ought to result in UK benefit decisions under its 'lawful residence' test becoming more careful and claimant-favourable. This will reduce the impact of that test and, perhaps, its importance to the Commission and to the UK.

Does the decision have any other implications as regards the UK's right to reside test for access to benefits for EEA nationals and beyond?

The decision ought to lead to a change of approach to economically inactive EEA nationals by authorities administering the UK social assistance system and those concerned with immigration status.

In the UK, having a 'right to reside' is a condition of entitlement to means-tested benefits, child benefit and homelessness assistance. Many EEA nationals have a right to reside under the rules for workers, self-employed persons and persons with permanent residence. Otherwise, the basis for such a right will usu-ally need to be 'self-sufficiency' under the Citizens Directive. Benefits authorities routinely regard claiming a means-tested benefit as proof that the claimant is not self-sufficient. This is despite tribunal decisions calling that approach into question, for example, SG v Tameside Metropolitan Borough Council [2010] UKUT 243 (AAC).

Brey shows that insufficiency of resources does not itself demonstrate that an EEA national lacks a right to reside as a self-sufficient person. Decision-makers must now assess what additional burden on public funds would likely arise from a grant of the benefit claimed and then consider whether this would be an unreasona-ble burden in light of the facts about the claimant and the benefit in question.

The judgment also affects the approach of the Home Office to EEA nationals and their family members, in particular, the right of permanent residence. This right is acquired on completion of five years residence in compliance with the Citizens Directive condition (Secretary of State for Work and Pensions v Czop and an-other: C-147/11 and C-148/11 [2012] All ER (D) 65 (Sep). Brey shows the self-sufficiency condition could be met by residence without sufficient resources, depending on the facts of the case.

What are the implications for lawyers?

This decision is important for lawyers advising EEA nationals and family members on claims to a right to re-side as self-sufficient in immigration and welfare cases. The judgment leaves much scope for argument:

o What is the likely burden on public funds--is the current problem only temporary?

o What would the consequences for the social assistance system be of refusing the benefit--eg, would another agency such as social services then be obliged to assist the claimant?

o Would the likely burden be 'unreasonable' or 'proportionate'?

o What connections does the claimant have to the UK and what contribution has she (and her family?) made to the UK?

o In cases where a past period was in issue--What burden (if any) did the claimant in fact impose on the social assistance system during that period?

Based in London, Simon Cox develops, implements and manages legal strategies and projects to promote the rights of international migrants worldwide. He works closely with the Open Society Foundations' Interna-tional Migration Initiative. Simon is an Associate Tenant of Doughty Street Chambers.

Interviewed by Kate Beaumont.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.