Brussels, 30 May 2013
Social security benefits: Commission refers UK to Court for incorrect application of EU social security safeguards
After several formal and informal contacts between the European Commission and the UK authorities, the Commission has decided to refer the United Kingdom to the EU's Court of Justice because, in breach of EU law, it fails to apply the 'habitual residence' test to EU nationals who reside in the UK and claim social security benefits. Instead, the UK applies a so-called “right to reside” test, as a result of which EU citizens cannot receive specific social security benefits to which they are entitled under EU law such as child benefit.
Under EU law, the social security benefits in question have to be granted to people from other EU Member States on condition that their place of habitual residence is in the UK. This condition, and the criteria for the determination of habitual residence, were unanimously reaffirmed by Member States at EU level in 2009 as part of an update of EU rules on social security coordination (Regulation EC/987/2009 laying down the implementing rules for Regulation EC/883/2004 on the coordination of social security systems). According to these criteria, in order to be considered genuinely habitually resident in a Member State, a person has to show that his or her habitual centre of interest is located there.
The Commission considers that these criteria laid down by EU law are strict enough and thus ensure that only those people who have actually moved their centre of interest to a Member State are considered habitually resident there and no longer resident in the Member State where they previously lived. A thorough and strict application of these criteria for determining habitual residence constitutes a powerful tool for Member States to make sure that these social security benefits are only granted to those genuinely residing habitually within their territory.
The “right to reside” test is an additional condition for entitlement to the benefits in question which has been imposed unilaterally by the UK. UK nationals have a “right to reside” in the UK solely on the basis of their UK citizenship, whereas other EU nationals have to meet additional conditions in order to pass this “right to reside” test. This means that the UK discriminates unfairly against nationals from other Member States. This contravenes EU rules on the coordination of social security systems which outlaw direct and indirect discrimination in the field of access to social security benefits.
The UK social security benefits concerned are:
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. 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 Commission has received several complaints from EU nationals that are habitually resident in the UK but have been denied access to the UK social security benefits in question because they do not meet the “right to reside” condition in UK law. The problem is also the subject of a number of petitions to the European Parliament on which the Commission was asked to comment.
The factors to be taken into account when determining the place of habitual residence in line with EU law include: family situation (family status and family ties); duration and the continuity of presence; employment situation (nature and specific characteristics of any activity pursued, in particular the place where such activity is habitually pursued, the stability of the activity, and the duration of the work contract; exercise of a non-remunerated activity; in the case of students, source of their income; housing situation, in particular how permanent it is; Member State in which the person is deemed to reside for taxation purposes; reasons for the move; the intention as it appears from all the circumstances. None of these criteria is in itself decisive. They have to be examined as part of an overall assessment.
The Commission requested the United Kingdom to end discrimination against EU nationals in September 2011 (see IP/11/1118) but no measures to end the discrimination have been notified to the Commission.
Whereas EU law on the free movement of Union citizens (Directive 2004/38/EC) does allow Member States to restrict access to social assistance, EU rules on coordination of social security do not allow for restrictions on social security benefits in the case of EU nationals that are workers, direct family members of workers or habitually resident in the Member State in question.
EU Social Security Coordination:
For more information on infringement procedures:
On the general infringement procedure: MEMO/12/12
On the April infringement package decisions: MEMO/13/470
Homepage of László Andor, EU Commissioner for Employment, Social Affairs and Inclusion: http://ec.europa.eu/commission_2010-2014/andor/index_en.htm
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