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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Patmalniece v Secretary of State for Work and Pensions [2009] EWCA Civ 621 (25 June 2009) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2009/621.html Cite as: [2009] EWCA Civ 621, [2009] 4 All ER 738, [2009] 3 CMLR 36, [2010] PTSR 128 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOCIAL SECURITY COMMISSIONERS
Mr Commissioner Rowland
CPC/1072/2006
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE MOSES
and
LORD JUSTICE SULLIVAN
____________________
Galina ![]() ![]() |
Appellant |
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- and - |
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Secretary of State for Work and Pensions |
Respondent |
____________________
WordWave International Limited
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Mr Clive Lewis QC and Mr Jason Coppel (instructed by The Office of the Solicitor to The Department for Work and Pensions Services) for the Respondent
Hearing date: 1st April 2009
____________________
Crown Copyright ©
Lord Justice Moses:
"(2) A claimant is entitled to state pension credit if -
(a) he is in Great Britain;
(5) Regulations may make provision for the purposes of this Act –
(a) as to circumstances in which a person is to be treated as being or not being in Great Britain;"
Regulation 2 of the 2002 regulations provides:
"(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 united Kingdom who is-
(a) a worker for the purposes of Council Regulation (EEC) No 1612/68 or (EEC) No 1251/70 or a person with a right to reside in the United Kingdom pursuant to Council Directive No 68/360/EEC or No 73/148/EEC or a person who is an accession worker for the purpose of the definition of "qualified person" in regulation 5(1) of the Immigration (European Economic Area) Regulations 2000 pursuant to regulation 5 of the Accession (Immigration and Worker Registration) Regulations 2004 ..." or
((b)-(e) identify other persons who, like workers are not to be treated as not habitually resident)
"(2) For the purpose 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 or the Republic of Ireland."
"intended to fill a gap in measures to safeguard the public purse against exploitation by people with no right to reside here, irrespective of nationality." (§17)
"any person who is insured, compulsorily…for one or more of the contingencies covered by the branches of a social security scheme for employed…persons".
"1. 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".
"23. In this respect, it must be borne in mind that the object of Article 3(1) of Regulation No 1408/71 is to ensure, in accordance with Article 48 of the Treaty, equal treatment in matters of social security, without distinction based on nationality, for the persons to whom that regulation applies by abolishing all discrimination in that regard deriving from the national legislation of the Member States (Case C-131/96 Mora Romero v Landesversicherungsanstalt Rheinprovinz [1997] ECR 1-3659, paragraph 29).
24. It is settled case-law that the principle of equal treatment, as laid down in that article, prohibits not only overt discrimination based on the nationality of the beneficiaries of social security schemes but also all covert forms of discrimination which, through the application of other distinguishing criteria, lead in fact to the same result (Mora Romero, paragraph 32).
25. Accordingly, conditions imposed by national law must be regarded as indirectly discriminatory where, although applicable irrespective of nationality, they affect essentially migrant workers or where the great majority of those affected are migrant workers, as well as conditions which are applicable without distinction but can more easily be satisfied by national workers than by migrant workers or where there is a risk that they may operate to the particular detriment of migrant workers (Case C-237/94 O'Flynn v Adjudication Officer [1996] ECR I-2617, paragraph 18).
26. It is otherwise only if those provisions are justified by objective considerations independent of the nationality of the workers concerned, and if they are proportionate to the legitimate aim pursued by the national law (O'Flynn, paragraph 19)." (my emphasis)
"who have sufficient resources to avoid becoming a burden on the social assistance system of the host member state during their period of residence." (Article 1)
As Kaczmarek explains, the change made by Council Directive 2004/38/EC, from 30 April 2006, removed the requirement of being economically active or self-sufficient but only after five years' lawful presence (§23); Ms Patmalniece
's claim was made before she had been lawfully present for the necessary years since Latvia's accession.
"36. In those circumstances, a citizen of the Union in a situation such as that of the claimant in the main proceedings does not derive from art 18 EC the right to reside in the territory of a member state of which he is not a national, for want of sufficient resources within the meaning of Directive 90/364. Contrary to the circumstances of the case of Baumbast's case [2003] ICR 1347, [2002] ECR I-7091 (para 92), there is no indication that, in a situation such as that at issue in the main proceedings, the failure to recognise that right would go beyond what is necessary to achieve the objective pursued by that directive."
"1. This Regulation shall apply to all legislation concerning the
following branches of social security:
(a) sickness and maternity benefits;
(b) invalidity benefits, including those intended for the maintenance or improvement of earning capacity;
(c) old-age benefits;
(d) survivors' benefits;
(e) benefits in respect of accidents at work and occupational diseases;
(f) death grants;
(g) unemployment benefits;
(h) family benefits."
The Latvian institution responsible for payment is not entitled to suspend or withdraw her pension by virtue of Article 10.1 :
"Waiving of residence clauses — Effect of compulsory insurance on reimbursement of contributions
Save as otherwise provided in this Regulation invalidity, old-age or survivors' cash benefits, pension for accidents at work or occupational diseases and death grants acquired under the legislation of one or more Member States shall not be subject to any reduction, modification, suspension, withdrawal or confiscation by reason of the fact that the recipient resides in the territory of a Member State other than that in which the institution responsible for payment is situated."
"Whereas the provisions for coordination of national social security legislations fall within the framework of freedom of movement for workers who are nationals of Member States and should contribute towards the improvement of their standard of living and conditions of employment;
Whereas freedom of movement for persons, which is one of the cornerstones of the Community, is not confined to employed persons but also
extends to self-employed persons in the framework of the freedom of establishment and the freedom to supply services;"
The Court of Justice expressed this purpose, in Spruyt v Bestuur van de Sociale Verzekeringsbank [1986] ECR 1 685, thus:
"18. In that respect it should be noted, first, that the provisions of Regulation no 1408/71 and in particular those of Annex VI thereto, were adopted to implement Article 51 of the EEC Treaty and must be interpreted in the light of the objective of Article 51, which is to contribute to the establishment of the greatest possible freedom of movement for migrant workers, which is one of the foundations of the Community.
19. Article 51 requires the Council to adopt such measures in the field of social security as are necessary to provide freedom of movement for workers by securing, inter alia, payment of benefits for persons resident in the territories of the Member States. The aim of Articles 48 to 51 would not be attained if, as a consequence of the exercise of their right to freedom of movement, workers were to lose the advantages in the field of social security guaranteed to them by the laws of a single Member State.
20. Consequently, the purpose of Article 10 (1) of Regulation no 1408/71 concerning the waiving of residence clauses is to guarantee the person concerned his right to social security benefits even after taking up residence in a different Member State and to promote the free movement of workers, by insulating those concerned from the harmful consequences which might result when they transfer their residence from one Member State to another."
"Whereas the considerable differences existing between national legislations as regards the persons to whom they apply make it preferable to establish the principle that the Regulation applies to all persons insured under social security schemes for employed persons and for self-employed persons or by virtue of pursuing employment or self-employment;
Whereas it is necessary to respect the special characteristics of national social security legislations and to draw up only a system of coordination;" (3rd and 4th Recitals)
"Whereas it is necessary, within the framework of that coordination, to guarantee within the Community equality of treatment under the various national legislations to workers living in the Member States and their dependants and their survivors;"
"This Regulation shall not apply to social and medical assistance, to benefit schemes for victims of war or its consequences".
This provision, which requires a distinction to be drawn between social security and social assistance, led to the amendments to 1408/71 by which benefits which had the characteristics of both social security and social assistance were included.
In 1992, 1408/71 was amended to bring within the scope of the regulation what were described as "special non-contributory benefits". The relevant parts of the amendment, in Council Regulation (EEC) No 1247/92 read :
"2. In Article 4, the following paragraphs shall be inserted:
'2a. This Regulation shall also apply to special non-contributory benefits which are provided under a legislation or schemes other than those referred to in paragraph 1 or excluded by virtue of paragraph 4, where such benefits are intended:
(a) either to provide supplementary, substitute or ancillary cover against the risks covered by the branches of social security referred to in paragraph 1 (a) to (h), or
(b) solely as specific protection for the disabled.'
4. The following Article shall be inserted:
'Article 10a
Special non-contributory benefits
Notwithstanding the provisions of Article 10 and Title III, persons to whom this Regulation applies shall be granted the special non-contributory cash benefits referred to in Article 4 (2a) exclusively in the territory of the Member State in which they reside, in accordance with the legislation of that State, provided that such benefits are listed in Annex IIa. Such benefits shall be granted by and at the expense of the institution of the place of residence.'"(my emphasis).
"Whereas it is also necessary to take account of the case law of the Court of Justice stating that certain benefits provided under national laws may fall simultaneously within the categories of both social security and social assistance because of the class of persons to whom such laws apply, their objectives and their manner of application;
Whereas the Court of Justice has stated that, in some of its features, legislation under which such benefits are granted is akin to social assistance in that need is an essential criterion in its implementation and the conditions of entitlement are not based upon the aggregation of periods of employment or contributions, whilst in other features it is close to social security to the extent that there is an absence of discretion in the manner in which such benefits as are provided thereunder are awarded and in that it confers a legally defined position upon beneficiaries;
Whereas Regulation (EEC) No 1408/71 excludes from its scope, by virtue of Article 4 (4) thereof, social assistance schemes;
Whereas the conditions referred to and their methods of application are such that a system of coordination which differs from that currently provided for in Regulation (EEC) No 1408/71 and which takes account of the special characteristics of the benefits concerned should be included in that Regulation in order to protect the interests of migrant workers in accordance with the provisions of Article 51 of the Treaty;
Whereas such benefits should be granted, in respect of persons falling within the scope of Regulation (EEC) No 1408/71, solely in accordance with the legislation of the country of residence of the person concerned or of the members of his or her family, with such aggregation of periods of residence completed in any other Member State as is necessary and without discrimination on grounds of nationality;
Whereas it is necessary nevertheless to ensure that the existing system of coordination in Regulation (EEC) No 1408/71 continues to apply to benefits which either do not fall within the special category of benefits referred to or are not expressly included in an Annex to that Regulation; whereas a new Annex is needed for this purpose," (my emphasis)
"20. As the Court has consistently held (see, for example, Case 284/84 Spruyt [1986] ECR 685, paragraphs 18 and 19), the provisions of Regulation No 1408/71 adopted to give effect to Article 51 of the EC Treaty (now, after amendment, Article 42 EC) must be interpreted in the light of the objective of that article, which is to contribute to the establishment of the greatest possible freedom of movement for migrant workers. The aim of Articles 48 and 49 of the EC Treaty (now, after amendment, Articles 39 EC and 40 EC), Article 50 of the EC Treaty (now Article 41 EC) and Article 51 of the Treaty would not be attained if, as a consequence of the exercise of their right to freedom of movement, workers were to lose the social security advantages guaranteed them by the legislation of one Member State, especially where those advantages represent the counterpart of contributions which they have paid."
It is worth recalling Article 42:
"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 migrant workers and their dependants:
(a) aggregation, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of the several countries;
(b) payment of benefits to persons resident in the territories of Member States.
The Council shall act unanimously throughout the procedure referred to in Article 251."
"2a. This Article shall apply to special non-contributory cash benefits which are provided under legislation which, because of its personal scope, objectives and/or conditions for entitlement has characteristics both of the social security legislation referred to in paragraph 1 and of social assistance.
'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 the economic and social situation in the Member State concerned; or
(ii) solely specific protection for the disabled, closely linked to the said person's social environment in the Member State concerned, and
(b) where the financing exclusively derives from compulsory taxation intended to cover general public expenditure and the conditions for providing and for calculating the benefits are not dependent on any contribution in respect of the beneficiary. However, benefits provided to supplement a contributory benefit shall not be considered to be contributory benefits for this reason alone; and
(c) which are listed in Annex IIa." ...my emphasis)
"45. It should be added that it remains open to the host Member State to take the view that a national of another Member State who has recourse to social assistance no longer fulfils the conditions of his right of residence. In such a case the host Member State may, within the limits imposed by Community law, take a measure to remove him. However, recourse to the social assistance system by a citizen of the Union may not automatically entail such a measure."
Lord Justice Sullivan:
Lord Clarke of Stone-cum-Ebony, MR: