European Commission - Press release
Social security coordination: Commission requests United Kingdom to end discrimination of EU nationals residing in the UK regarding their rights to specific social benefits
Brussels, 29 September 2011 - EU nationals who habitually reside in the UK are subject to the so-called 'right to reside' test to qualify for certain social security benefits. As this test indirectly discriminates non-UK nationals coming from other EU Member States it contravenes EU law. This is why the European Commission has requested the United Kingdom to stop its application. The request takes the form of a "reasoned opinion" under EU infringement procedure. The UK has two months to inform the Commission of measures it has taken to bring its legislation into line with EU law. Otherwise, the Commission may decide to refer the UK to the EU's Court of Justice.
EU rules on the social security coordination (EC Regulation EC 883/2004) allow the UK to grant social benefits only to those persons who habitually reside in the UK, however Article 4 of this Regulation prohibits indirect discrimination through the requirement for non-UK citizens to pass an additional right to reside test. Any discrimination in providing social security benefits (including non-contributory cash benefits) also constitutes an obstacle to free movement guaranteed by Article 21 of the Treaty.
Under UK law, certain social security benefits - namely Child Benefit, Child Tax Credit, State Pension Credit, Income-based Allowance for Jobseekers, Income-based Employment and Support Allowance - are only granted to persons with a "right to reside" in the UK. While UK nationals have the right to reside solely based on their UK citizenship, other EU nationals have to fulfil additional conditions in order to pass a so-called 'right to reside' test. This means the UK indirectly discriminates against nationals from another Member State.
For example, a non-UK citizen from another Member State came to the UK from Italy (where she had lived since 1989) to work for an Italian company. She worked in the UK from April 2007 until April 2009 when she was made redundant. All throughout her employment in the UK, she paid taxes and national insurance contributions, yet her claim for income-based jobseekers' allowance was refused on the grounds that she did not have a right to reside in the UK. If the UK had applied EU social security coordination rules, those citizens confirmed as habitually resident in the UK would enjoy the same protection as habitual residents in other EU Member States.
The concept of habitual residence has been defined at EU level as the place where the habitual centre of interests of the person is located. The Commission considers that the criteria for assessing habitual residence are strict and thus ensure that only those persons who have actually moved their centre of interest to a Member State are considered habitually resident there. This is a powerful tool for the Member States to make sure that these social security benefits are only granted to those genuinely residing habitually within their territory.
EU social security coordination rules (EC Regulation EC 883/2004) concern social security benefits and not social assistance benefits. Under these rules, EU citizens have the same rights and obligations as nationals of the country where they are covered.
The EU directive on the free movement of EU citizens (Directive 2004/38/EC) allows for restrictions of access to social assistance only, but it cannot restrict the access to social security benefits (including special non-contributory cash benefits). In the absence of any such explicit derogation, the principle of equal treatment ensures that EU citizens may not be treated differently from the nationals of a Member State.
EU Social Security Coordination:
For more information on the infringement procedures:
MEMO/11/646 - Infringement package overview