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Notes:
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Reported as [2012] AACR 7.
European Union law – Council Regulation 1408/71/EEC – effect of ECJ judgment in Case C-215/99 that care component of disability living allowance not validly listed in Annex IIa as a special non-contributory benefit – circumstances in which pensioner resident in another EU Member State entitled to continue to receive care component as a sickness benefit
The claimant was in receipt of both components of disability living allowance (DLA) as well as state retirement pension. On 13 December 2001 he moved to Germany. The Secretary of State decided that the claimant was not entitled to either component of disability living allowance from that date because the conditions relating to presence and ordinary residence in Great Britain were not met. The appeal tribunal disallowed the claimant’s appeal, applying the British legislation, together with the identification of DLA for the purposes of Articles 10a(1) and 4(2a) of Council Regulation (EEC) No 1408/71 as in force in December 2001 as a special non-contributory benefit and therefore not required to be “exportable”. The claimant appealed further. The case was deferred to await the judgment of the European Court of Justice (ECJ) in Case C-299/05 Commission of the European Communities v European Parliament and Council of the European Union, decided on 18 October 2007 and reported at [2007] ECR I-8695. The ECJ decided that the challenged benefits in that case, which included the care component of British DLA but not the mobility component, were not validly listed in Annex IIa as “special non-contributory benefit” for the purposes of Article 4(2a), because they were properly categorised as sickness benefits. Those provisions of Regulation No 1408/71 as amended from 5 May 2005 therefore could not prevent the “export” of at least the care component of DLA as a sickness benefit to another Member State. However, the specific conditions applicable to such benefits would have to be met. Only the care component was in issue in this case, as the mobility component was to be the subject of a reference to the ECJ in other cases [Case C-537/09 Bartlett, Gonzalez Ramos and Taylor v Secretary of State for Work and Pensions, 5 May 2011; NG v SSWP (DLA) [2012] UKUT 26 (AAC)].
Held, allowing the appeal, that:
1. the judgment of the ECJ in Case C-299/05 was enough on its own to secure that, with effect from 5 May 2005, Article 4(2a) could not be applied to require the payment of the care component of DLA only in the State of (habitual) residence, as one of the necessary conditions in Article 4(2a) is that the benefit in question is listed in Annex IIa and from 5 May 2005 the care component of DLA has to be regarded as not listed there and must be regarded as a sickness benefit (paragraphs 8 and 9);
2. in relation to the period before 5 May 2005, following Case C-215/99 Jauch v Pensionsversicherungsanstalt der Arbeiter [2001] ECR I-1901, it must be asked whether prior to 5 May 2005 the care component of DLA was truly a special non-contributory benefit as defined in Article 4(2a) as in force at the time. The reasoning of the ECJ in Case C-299/05 then requires the answer no and the conclusion that the care component of DLA must be regarded as a sickness benefit (paragraph 10);
3. it followed that the question of whether Regulation No 1408/71 compelled the UK to allow the “export” of the claimant’s care component of DLA was not governed by the rules on special non-contributory benefits, but by the rules on sickness benefits, and the appeal tribunal had accordingly considered the wrong rules and failed to apply the right conditions or to make the necessary findings of fact (paragraph 11);
4. applying those rules, the claimant came within the personal scope of the Regulation, as defined in Article 2(1), by reason of his payments and crediting of national insurance contributions as an employed person which meant that he retained that status in retirement: Case 182/78 Algemeen Ziekenfonds Drenthe-Platteland v Pierik [1979] ECR 1977 and Case C-85/96 Martinez Sala v Freistaat Bayern [1998] ECR I-2691 followed (paragraph 12);
5. as a person entitled to a pension under UK legislation the claimant was potentially entitled to receive DLA as a sickness benefit under Article 28(1) of Regulation No 1408/71, providing he was not entitled to benefits under German legislation and that the UK was the competent State for the purposes of that Article (paragraphs 13 and 14);
6. at the date of the decision under appeal the claimant was not entitled to benefits under German legislation, and the home care benefits to which he later became entitled under the German legislation were benefits in kind and not cash sickness benefits and therefore did not affect the operation of Article 28(1)(b) on the export of the care component of DLA as a cash sickness benefit (paragraphs 19 to 25);
7. the case fell within the special rules for the UK in Annex VI which preserve the competence of the UK in relation to sickness benefits for those within the definition of employed or self-employed person who were last insured as such in the UK. That provision applied to the claimant because he remained within the Pierik meaning of employed or self-employed person as a pensioner, and so the UK was the competent State for the purposes of the provision of cash sickness benefits under Article 28(1)(b) (paragraphs 26 to 30);
8. Article 28(1)(b) of Regulation No 1408/71 therefore required the “export” to Germany of the claimant’s entitlement to the care component of DLA as from 13 December 2001 and the relevant change of circumstances that occurred on 13 December 2001, of the claimant ceasing to be ordinarily resident in Great Britain, could not in law have led to an alteration in the decision awarding him DLA care component on an indefinite basis (paragraphs 31 and 32).
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