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Notes:
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CJEU decision and UT decision reported as [2012] AACR 8.
European Union law – free movement and citizenship of the Union – residence and presence conditions for incapacity benefit in youth – whether conditions precluded by European law
The claimant was a British national born in November 1989 who had Down’s syndrome. She moved with her parents to Spain in August 2000 and they had lived there since then. Her mother, as her appointee, made a claim for short-term non-contributory incapacity benefit, referred to as “incapacity benefit in youth”, for her daughter from her 16th birthday. The claim was refused by the Secretary of State on the ground that the claimant did not satisfy the condition of presence in Great Britain. Her mother appealed on her behalf against the decision. Following rejection of that appeal, she appealed to the Upper Tribunal, claiming that the decision refusing to award her daughter such incapacity benefit was incompatible with European Union law. It was common ground that the claimant satisfied all the conditions for an award of short-term incapacity benefit in youth, except those prescribed in regulation 16(1) of the Social Security (Incapacity Benefit) Regulations 1994 connected with ordinary residence, past presence and presence in Great Britain on the date of claim. The Upper Tribunal stayed the proceedings and referred the case to the Court of Justice of the European Union for a preliminary ruling on the questions whether short-term incapacity benefit in youth is an invalidity benefit within the meaning of Article 4(1)(b) of Regulation (EEC) No 1408/71 and, if so, whether the three conditions in regulation 16(1) of the 1994 Regulations are compatible with the law of the European Union ([2011] UKUT 35). It was not disputed that both the benefit in issue and the claimant came within the scope of Regulation 1408/71.
Held, that:
1. where it is established, at the time of the claim, that the claimant has a permanent or long-term disability, short-term incapacity benefit in youth has, in view of the continuity between it and long-term incapacity benefit, the characteristics of an invalidity benefit within the meaning of Article 4(1)(b) of Regulation No 1408/71 (paragraphs 43 to 54);
2. the purpose of Article 10 of Regulation No 1408/71 is to protect the persons concerned against any adverse effects that might arise from the transfer of their residence from one Member State to another. It followed from that principle not only that the person concerned retains the right to receive benefits referred to in that provision acquired under the legislation of one or more Member States even after taking up residence in another Member State, but also that the acquisition of such entitlement may not be refused on the sole ground that the person does not reside in the Member State in which the institution responsible for payment is situated: Case 51/73 Smieja [1973] ECR 1213, Case 92/81 Camera [1982] ECR 2213 and Joined Cases 379/85 to 381/85 and 93/86 Giletti and Others [1987] ECR 955 followed (paragraphs 61 to 63);
3. incapacity benefit in youth did not fall within the exception laid down in Article 10a of Regulation No 1408/71 under which special non-contributory benefits were not exportable, as it was not listed in Annex IIa to that Regulation, and since no other provision of the Regulation allowed Member States to derogate, in a situation such as that of the claimant, from the principle, enshrined in Article 10(1), of waiving residence clauses, it followed that invalidity benefits are, as a rule, exportable to a Member State other than that in which the institution responsible for payment is situated: Case C-20/96 Snares [1997] ECR I-6057 and Case C-228/07 Petersen [2008] ECR I-6989 (paragraphs 67 and 68);
4. in exercising their powers to determine the conditions concerning entitlement to benefits, Member States must comply with the law of the European Union and, in particular, with the provisions of the Treaty on the Functioning of the European Union (TFEU) giving every citizen of the Union the right to move and reside within the territory of the Member State, and it would be incompatible with that right were citizens to receive, in the Member State of which they are nationals, treatment less favourable than that which they would enjoy if they had not availed themselves of the opportunities offered by the Treaty in relation to freedom of movement: Case C-224/98 D’Hoop [2002] ECR I-6191. Such a restriction can be justified only if it is based on objective considerations independent of the nationality of the persons concerned and is proportionate to the legitimate objective of the national provisions (paragraphs 83 to 87);
5. national legislation which makes acquisition of the right to short-term incapacity benefit in youth subject to a condition of past presence in the competent Member State to the exclusion of any other element enabling the existence of a genuine link between the claimant and that Member State to be established, goes beyond what is necessary to attain the objective pursued and therefore amounts to an unjustified restriction on the freedoms guaranteed by Article 21(1) TFEU for every citizen of the Union and is precluded by European law (paragraphs 90 to 104);
6. the condition of presence in the competent Member State on the date on which the claim is made also constituted a restriction on the freedoms conferred by Article 21(1) TFEU on citizens of the Union which could not be justified as appropriate to attain the legitimate objective of the national provisions, as it enables neither a genuine link to be established between those claimants and the competent Member State nor the financial balance of the national social security system to be preserved and is therefore precluded by European law (paragraphs 105 to 110).
Following the decision of the Court, the Upper Tribunal judge decided that the claimant was not barred from entitlement on her claim for incapacity benefit in youth by reason of the presence and residence conditions in the legislation governing that benefit.
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