Purposive Approach to 2004 Citizens Directive: Supreme Court Rules No Entitlement to Welfare Benefits For Economically Inactive EU Citizens in the UK


The Supreme Court has just recently  notified the very  interesting  case of  Mirga (Appellant) v Secretary of State for Work and Pensions (Respondent); [2016] UKSC 1 Samin (Appellant) v Westminster City Council (Respondent) [2016] UKSC .

The appeals were brought in the Supreme Court  by a Polish national, Roksana Mirga, and an Austrian national, Wadi Samin, against decisions of the Court of Appeal upholding determinations that they were not entitled to certain benefits, namely income support and housing assistance respectively, pursuant to the provisions of United Kingdom domestic law.

The essential issue was whether the provisions and the current implementation of the domestic law in question infringed the rights of residence in the UK of citizens of European Union member states.

It was   mainly also the  provisions  of the Citizens Directive and  principles arising out  of ECJ caselaw that were  substantially  considered by the Supreme Court and   resulted in  the dismissal  of the appeals.

MS MIRGA’S APPEAL

Period of Economic Activity for Ms Mirga and refusal of income support: The applicable EU provisions in relation to Ms Mirga were that in 2004, ten countries, including Poland, acceded to the EU pursuant to the Treaty on Accession 2003.  By virtue of articles 10 and 24 of the Act of Accession forming the second part of the Treaty, existing member states, including the UK, were accorded, by way of derogation, certain transitional powers. Those powers included a right to derogate in relation to the free movement of workers within the EU, which was then governed by Regulation (EEC) No 1612/68 in relation to nationals, known as “A8 nationals” of eight of the ten new member states. Those powers of derogation in relation to Polish nationals were contained in paragraphs 1-14 of Part 2 of Annex 12 to the 2003 Accession Treaty. So long as these provisions were in force, they enabled a host member state to exclude Polish nationals from freedom of movement rights unless they had been working in that state for an uninterrupted period of 12 months  following accession.

The European Union (Accessions) Act 2003 was enacted, which, under section 2, permitted the Secretary of State to make the A8 Regulations (which were revoked in May 2011). Regulations 2 and 5 of the A8 Regulations provided that A8 nationals would only have full access to the UK labour market if they had been in registered employment under the Worker Registration Scheme for a continuous period of 12 months. The consequence was that, so long as the A8 Regulations were in force, A8 nationals could not become “qualifying persons” under the EEA Regulations unless and until they had performed registered employment for a continuous period of at least 12 months.

Ms Mirga who was residing in the UK finished her education in April 2005 and embarked on registered work within the meaning of the Accession (Immigration and Worker Registration) Regulations 2004 (SI 2004/1219). She continued with that registered work until November 2005. In February 2006, she became pregnant and started to do unregistered work, which she continued for two months or so. In June 2006, she left home for rented accommodation, and did a month’s further unregistered work around June 2006. In August 2006, she claimed income support under the Income Support (General) Regulations 1987 (SI 1987/1967) on the grounds of her pregnancy. Her baby son was born in October 2006.

The Secretary of State for Work and Pensions refused Ms Mirga’s application for income support, and his decision was upheld by the First-tier Tribunal, whose decision was affirmed, albeit for different reasons, by Judge Rowland in the Upper Tribunal. The Upper Tribunal decided that the Secretary of State was entitled to refuse Ms Mirga’s application because she did not have a right of residence in the UK under the A8 Regulations and therefore was excluded from the ambit of income support by virtue of the Income Support Regulations. The Upper Tribunal’s decision was upheld by the Court of Appeal in a judgment given by Laws LJ, with which Tomlinson LJ and Sir David Keene agreed – [2012] EWCA Civ 1952.

Summary of submissions Relevant to Ms Mirga in the Supreme Court: On behalf of the Secretary of State it was contended that, at the time that Ms Mirga applied for income support, she was ineligible for income support under the Income Support Regulations, because she was a “person from abroad”. This was on the basis that she could not claim to be a  worker  as she was an A8 national who had not done 12 months’ registered employment under the A8 Regulations, and thus could not be a “qualifying person” for the purpose of the EEA Regulations. Even if the A8 Regulations did not apply,  it was argued  that Ms Mirga would still not have been a worker, as the EEA Regulations would have required her to have worked for at least 12 months before she claimed income support.  There is no question of Ms Mirga having been a  jobseeker , a  self-employed person , or a  student under the EEA Regulations. It was also submitted that it was  clear that Ms Mirga could not claim to be a  self-sufficient person  under the EEA Regulations, as she had no significant means of support and no health insurance.

It was argued argument on behalf of Ms Mirga,  that, in the light of her right to respect for her private and family life, under article 8 of the European Convention on Human Rights, she could  not be removed from the UK, and therefore her right of residence in the UK, as accorded by article 21.1 of TFEU, could not  be limited or cut back in the way that the Income Support Regulations sought  to do, namely by restricting her rights to income support because she had not achieved a continuous 12 month period in registered employment. The  alternative argument was  that, even if it would be permissible to refuse Ms Mirga income support on that ground, it was  only possible in practice if it would be proportionate to do so, and in particular if the grant of income support to her would place an unreasonable burden on the social assistance system of the UK, and there had been no inquiry into that question.

Supreme Court’s Considerations in relation to Ms Migra: It was noted by the Supreme Court that the contention on behalf of Ms Mirga was  that, as she is a worker (albeit one whose work was temporarily interrupted owing to her pregnancy), article 21.1 of TFEU accorded her the right to “reside freely” within the EU, and therefore within the UK, and that the denial of income support to her, at a time when she needed it in order to be able to live in the UK, was an impermissible interference with that right, as she would, in practice, be forced to return to Poland. The Supreme Court considered that that  argument could not  be said to reflect the fundamental importance of freedom of movement and freedom of establishment to the single market concept, as well as the significance attached in articles 18 and 19 of TFEU to the avoidance of discrimination between citizens of a member state and other EU nationals.

The Supreme Court was of the view that the argument faced real difficulties. It was stated that the right accorded by article 21.1 of TFEU, which was  relied on by Ms Mirga, although fundamental and broad, was  qualified by the words “subject to the limitations and conditions laid down in the Treaties and in the measures adopted to give them effect”. In the present case, the “measures” included the 2004 Directive, and presumably included the 2003 Accession Treaty, which was adopted under article 49 of the Treaty on European Union.

It appeared clear to the  Supreme Court  from the terms of paragraph 10 of the preamble that it was a significant aim of the 2004 Directive that EU nationals from one member state should not be able to exercise their rights of residence in another member state so as to become “an unreasonable burden on the social assistance system”.  It also seemed clear that any right of residence after three months can be “subject to conditions”.  This was  reflected in the terms of article 7.1, in that it limits the right of residence after three months to those who are workers, self-employed, students, or with sufficient resources and health insurance “not to become a burden on the social assistance system of the host member state”.  Indeed, it was  worth noting that article 14.1 even limits the right of residence in the first three months. It further appeared  clear from article 24, that EU nationals’ right of equal treatment in host member states was  “subject to … secondary law”, and in particular that they can be refused social assistance “where appropriate”.

The Supreme Court therefore considered that when one turns to the 2003 Accession Treaty and the 2004 Directive, because Ms Mirga had not done 12 months’ work in the UK , she could not claim to be a worker, and, because she  was  not a jobseeker,  self-employed, a  student, or self-sufficient, it seemed to follow that she could be validly denied a right of residence in the UK, and therefore could  be excluded from social assistance. In those circumstances, it must follow that article 21.1 TFEU could not  assist her.

The Supreme Court noted that the fact that Ms Mirga may have to cease living in the UK to seek assistance in Poland did not appear to assist her argument. Although the refusal of social assistance may cause her to leave the UK, there would be no question of her being expelled from this country. The Court found  it hard to read the 2004 Directive as treating refusal of social assistance as constituting a species of constructive expulsion even if it results in the person concerned leaving the host member state. As the Court saw it, the Directive distinguishes between the right of residence and the act of expulsion. Further the  Directive makes it clear that the right of residence is not to be invoked simply to enable a national of one member state to obtain social assistance in another member state. On the contrary: the right of residence is not intended to be available too easily to those who need social assistance from the host member state.

MR SAMIN’S APPEAL

Period of Economic Activity for Mr Samin and refusal of housing benefit– After occupying temporary accommodation, Mr Samin lived in a studio flat in North London, which he had to vacate after four years in June 2010. He then applied to Westminster City Council for housing under the homelessness provisions in Part VII of the Housing Act 1996 . After making inquiries, the Council decided that he was “a person from abroad who is not eligible for housing assistance” within the meaning of section 185(1) of the Housing Act, because he did not have the right of residence in the UK under the Immigration (European Economic Area) Regulations 2006 (SI 2006/1003). That decision was affirmed in the Central London County Court by His Honour Judge Mitchell, whose decision was in turn upheld by the Court of Appeal for reasons given by Hughes LJ, with which Etherton and Tomlinson LJJ agreed – [2012] EWCA Civ 1468; [2012] WLR(D) 336.

Summary of Submission Relevant to Mr Samin in the Supreme Court– With the support of the Secretary of State for Communities and Local Government, it was contended for the Council that Mr Samin was not a  worker  within the EEA Regulations because he  was now permanently incapable of work, and in any event he could not  claim to be a  worker  because he had not worked for 12 months in the UK.  Accordingly, it was argued, Mr Samin was  not a “qualified person” under the EEA Regulations, from which it followed that he was  ineligible for the purposes of the Housing Act. It was  also argued  that Mr Samin could not  claim to be a self-sufficient person within the EEA Regulations because he had  no assets and no health insurance.

It was however  argued on behalf of Mr Samin  that the refusal of housing assistance to Mr Samin constituted unlawful discrimination in breach of article 18 of the TFEU, even though he may not have had a right of residence in the UK. The alternative argument raised on behalf of Mr Samin reflected the alternative argument in Ms Mirga’s case, namely that there should have been an investigation as to whether it was proportionate to refuse Mr Samin housing assistance, in particular on the ground that it represented an unreasonable burden of the UK social assistance system.

Supreme Court’s Considerations in relation to Mr Samin: The Supreme Court noted that the first line of argument on behalf of Mr Samin was that the Council’s refusal to provide Mr Samin with housing assistance under Part VII of the Housing Act constituted “discrimination on grounds of nationality” prohibited by article 18 of TFEU, because such assistance would have been accorded to a citizen of the UK, or a qualifying worker from another member state, who was otherwise in the same position as Mr Samin.

The Supreme Court considered also  that the   argument appeared  to face similar difficulties as in Ms Mirga’s case. This was  because the  article 18 right which he relied on did not constitute a broad or general right not to be discriminated against.  First, its ambit is limited to “the scope of the Treaties”, which means that it only comes into play where there is discrimination in connection with a right in the TFEU or another EU Treaty. Secondly, the article 18 right is “without prejudice to any special provisions contained [in the Treaties]”.

CASELAW COUNTING AGAINST THE APPELLANTS

First Arguments Considered:

Although the Appellants sought to  rely much  upon the decision of the Third Chamber in Pensionsversicherungsanstalt v Brey (Case C-140/12) [2014] 1 WLR 1080, the Supreme  Court considered that  the case did provide  the appellants with much assistance because it seemed clear that the first point raised by each appellant must be rejected as acte éclaré following the recent Grand Chamber judgments in Dano and another v Jobcenter Leipzig (Case C-333/13) [2015] 1 WLR 2519 (which was published after the Court of Appeal decided these cases) and in Alimanovic (Case C-67/14) EU:C:2015:597,

The central reasoning of the Third Chamber in Brey was considered to be  in paragraphs  75-78. In paragraph  75, having considered a number of points, the court concluded that “the mere fact that a national of a member state receives social assistance is not sufficient to show that he constitutes an unreasonable burden on the social assistance system of the host member state”. In the following paragraph, the court stated that the fact that a non-national has applied for the benefit in issue in that case was “not sufficient to preclude [him] from receiving it, regardless of the duration of residence, the amount of the benefit, and the period for which it is available”. In paragraph  77, the court made the point that domestic legislation, such as the Austrian law in that case, could not provide that a national of another member state, who was not a worker, self-employed or a student, should be automatically barred from receiving a social benefit. In the next paragraph, the court stated that the competent authorities  should be able “when examining the application of a Union citizen who is not economically active and is in Mr Brey’s position” to “take into account” certain factors. They included “the amount and regularity of [the applicant’s] income”, the fact that he had received a certificate of residence, the period for which he would receive the benefit, and “the extent of the burden [it] would place” on the social security system. These factors were, the court said in para 78 of the judgment in Brey, for the domestic court to assess.

The Supreme Court however considered that Brey was an unusual case, because the applicant had been issued with a certificate of residence by the Austrian government, a factor which appeared to have played a significant part in the court’s thinking, as it was recited in the re-formulated question in paragraph 32 and it was  referred to expressly and impliedly in the crucial paragraph 78 of the judgment, and indeed in the final ruling of the Third Chamber. It appeared to the Supreme Court that the reasoning in Brey could not  assist the appellants on the instant appeals, in the light of the subsequent reasoning of the Grand Chamber in the subsequent decisions in Dano and Alimanovic.

It was noted by the Supreme Court at  paragraph  60 of Dano, that  the Grand Chamber said that the right granted by article 18 of TFEU was subject to the restrictions  noted  by the Supreme Court in their judgement , and the court referred in support to the decision in Brey, and in particular paragraphs  46ff. In paragraph  46 of Brey, the Chamber had referred to “the right of nationals of one member state to reside in the territory of another members state without being … employed or self-employed” as being “not unconditional”.  It was also  noted that the Grand Chamber also referred to article 20 of TFEU and article 24 of the 2004 Directive in terms which made it clear that the rights they grant should, in the instant context, be treated similarly to the rights granted by article 18.

The Supreme Court further noted that at  paragraph  61 of Dano, the Grand Chamber described the right under article 18 of the TFEU as having been “given more specific expression in article 24 of [the 2004 Directive]”. In paragraph  63, citing Brey, paragraph  61, the court pointed out that if someone has recourse to “assistance schemes established by the public authorities”, he may “during his period of residence, become a burden on the public finances of the host member state which could have consequences for the overall level of assistance which may be granted by that state”.  In paragraph  69, it was made clear that “a Union citizen can claim equal treatment with nationals of the host member state only if his residence in the territory of the host member state complies with the conditions of [the 2004 Directive]”. In paragraph  73, the court summarised the effect of article 7(1) of the 2004 Directive, and said in the following paragraph that, if “persons who do not have a right of residence under [the 2004 Directive] may claim entitlement to social benefits under the same conditions as those applicable to nationals [that] would run counter to an objective of the Directive”. In paragraph  76, the purpose of article 7(1)(b) of the 2004 Directive was described as being “to prevent economically inactive Union citizens from using the host members state’s welfare system to fund their means of subsistence”.  The Supreme Court also  noted that finally, in paragraph  80 the Grand Chamber said that a person’s “financial situation … should be examined specifically … in order to determine whether he meets the condition of having sufficient resources to qualify … under article 7.1(b)”.

The Supreme Court was of the view that the authority of the decision in Dano had been reinforced by the decision in Alimanovic, where, in paragraph 44 and 50 respectively, the Grand Chamber specifically referred to what was said in paragraphs  63 and 69 of the judgment in Dano with approval. More broadly, the Grand Chamber in Alimanovic confirmed that a Union citizen can claim equal treatment with nationals of a country, at least in relation to social assistance, only if he or she can satisfy the conditions for lawful residence in that country. Thus, it was confirmed that article 24.2 of the 2004 Directive was, in effect, a valid exception to the principle of non-discrimination.

The Supreme Court considered that Dano and Alimanovic clearly demonstrate that the jurisprudence of the Grand Chamber of the Court of Justice is inconsistent with first argument on behalf of Ms Mirga and Mr Samin, at least in so far as the  argument is focussed on the 2004 Directive.  It was  fair to say that those cases were not concerned with the 2003 Accession Treaty, however it was noted that , the House of Lords concluded in Zalewska v Department for Social Development [2008] 1 WLR 2602 that the A8 Regulations, which reflect the provisions of the 2003 Accession Treaty, were consistent with EU law, and nothing  the Supreme Court  heard or read in connection with the appeal cast doubt on that conclusion. In particular, it appeared  to be consistent with the reasoning in Brey, Dano and Alimanovic.

Accordingly, in the Supreme Court’s judgment, following the clear guidance from the Grand Chamber in Dano and Alimanovic, the first arguments raised on behalf of Ms Mirga and Mr Samin could not  be maintained.

Second line of Argument Considered:

It was noted that the arguments based on proportionality were that the determination of the authorities and the courts and tribunals below in the case of both Ms Mirga and Mr Samin were flawed because no consideration was given to the proportionality of refusing each of them social assistance bearing in mind all the circumstances of their respective cases, and in particular that the authority or tribunal concerned failed to address the burden it would place on the system if they were to be accorded the social assistance which they sought. In that connection, reliance was placed by the Appellants on the Court of Justice’s decisions in St Prix v Secretary of State for Work and Pensions (Case C-507/12) [2014] PTSR 1448, Baumbast v Secretary of State for the Home Department (Case C-413/99) [2003] ICR 1347 and Brey.

It was noted by the Supreme Court that St Prix was concerned with the question whether a person ceased automatically to be a “worker” for the purpose of the 2004 Directive, and therefore the EEA Regulations, if she temporarily ceased work owing to the fact that she was pregnant. The case was considered to provide no assistance to the appellants’ arguments as advanced, except to emphasise the purposive approach to be adopted to the interpretation of the 2004 Directive.

 The Supreme Court did  not consider that the appellants  could derive any assistance from Baumbast.  It was noted that Mr Baumbast’s case was predicated on the fact that he did not need any assistance from the state. Even if the decision was  relied on by analogy, it was of no help to the appellants. The thrust of the court’s reasoning in that case was that, where an applicant’s failure to meet the requirements of being “a self-sufficient person” was very slight, his links with the host member state were particularly strong, and his claim was particularly meritorious, it would be disproportionate to reject his claim to enjoy the right of residence in that host state. Even though the applicant had a very strong case in the sense that he fell short of the self-sufficiency requirements in one very small respect, the court decided that he could rely on disproportionality only after considering the position in some detail.

In relation to the case of Brey, the Supreme Court distinguished  that case as set out above. The Supreme Court stated that Alimanovic,  at paragraph 59, the Grand Chamber specifically mentioned that the court in Brey had stated that “a member state [was required] to take account of the individual situation of the person concerned before it … finds that the residence of that person is placing an unreasonable burden on its social assistance system”. However, the Grand Chamber went on to say that “no such individual assessment is necessary in circumstances such as those in issue in this case”.  It therefore  seemed  unrealistic to the Supreme Court to  require “an individual examination of each particular case”.

SUPREME COURT’S CONCLUSIONS

The Supreme Court concluded that where a national of another member state is not a worker, self-employed or a student, and has no, or very limited, means of support and no medical insurance (as was the position of Ms Mirga and Mr Samin), it would severely undermine the whole thrust and purpose of the 2004 Directive if proportionality could be invoked to entitle that person to have the right of residence and social assistance in another member state, save perhaps in extreme circumstances. It would also place a substantial burden on a host member state if it had to carry out a proportionality exercise in every case where the right of residence (or indeed the right against discrimination) was invoked.

The Supreme Court considered that even  if there  was a category of exceptional cases where proportionality could come into play, they did not consider that either Ms Mirga or Mr Samin could possibly satisfy it. It was considered that they were in a wholly different position from Mr Baumbast: he was not seeking social assistance, he fell short of the self-sufficiency criteria to a very small extent indeed, and he had worked in this country for many years. By contrast Ms Mirga and Mr Samin were seeking social assistance, neither of them had any significant means of support or any medical insurance, and neither had worked for sustained periods in this country. The whole point of their appeals was to enable them to receive social assistance, and at least the main point of the self-sufficiency test is to assist applicants who would be very unlikely to need social assistance

The Supreme Court   further stated that whatever sympathy one may naturally feel for Ms Mirga and Mr Samin, their respective applications for income support and housing assistance represent precisely what was said by the Grand Chamber in Dano, at  paragraph 75 (supported by its later reasoning in Alimanovic) to be the aim of the 2004 Directive to stop, namely “economically inactive Union citizens using the host member state’s welfare system to fund their means of subsistence”.

 The Supreme Court dismissed both  appeals.

OBSERVATION

Although the decision of the Supreme Court arises out of the context  of  entitlement to welfare benefits, substantial reliance upon  the  provisions of  the 2004 Citizens Directive in these two appeals, goes to show that also in the separate context of  seeking to  resist expulsion, as is now apparent from recent Court of Appeal decisions in this area,  residence  in  the UK in very  close continuing  compliance with the  provisions of the  Directive  (in combination  with   having very close  regard to  relevant principles arising out of ECJ caselaw),  comes very much to the fore more  so where  judicial proceedings are in play.

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