Neutral Citation: [2013] IEHC 340
THE HIGH COURT [2013 No.88 J.R.]
BETWEEN
Galian Genov
Applicant
AND IN THE CASE OF
[2013 No.140 JR]
Florae Gusa Applicant v
Minister for Social Protection, Ireland and Attorney General Respondents
Judgment of Mr. Justice Hedigan delivered on the 12th day of July 2013. Application
1. In these proceedings the applicants are seeking an order of certiorari quashing the decision of the first named respondent to refuse their application for jobseeker's allowance on the basis that the consideration of their application was erroneously premised on the provisions of Directive 2004/38.
They also seek a declaration that they should be assessed for social welfare support on the basis that, although not currently working, they retain the status of self-employed persons for the purposes of Regulation 883/2004 and/or Article 6(2) (c) (ii) of the European Communities (Free Movement of Persons) (No.2) Regulations, which give effect to Article 7(3) (b) of Directive 2004/38/EC, and/or retain the right to reside in the state pursuant to the Treaty on the Functioning of the European Union.
Factual background
2.1 The first named applicant Mr. Genov is a Bulgarian citizen who has resided lawfully in the state with his wife and two small children since 2009, when he registered as a self employed person with the Revenue Commissioners. He states that he commenced self employment in January 2010, and worked in a self-employed capacity until September 2012. He claims that he could no longer find work and therefore applied for jobseeker's allowance from the respondent on the 24th September, 2012.His application was refused by way of letter of the 8th November, 2012, with the first named respondent contending that following the effective cessation of his self-employment he could not comply with the right to reside requirement set out in s.240 of the Social Welfare Consolidation Act 2005 and S.I. 656 of 2006 and therefore he did not meet the habitual residence test, a qualifying condition for the payment. The applicant sought a statutory revision of this decision by letter dated the 24th January, 2013, wherein he asserted that he had a right to reside in the state and a right to receive jobseeker's allowance pursuant to Regulation 883/2004 and that the respondent could not apply a right to reside requirement since it was contrary to the guarantee of equal treatment in Article 3 of Regulation 883/2004.The respondent by undated decision received on the 5th February, 2013, refused to revise that decision and asserted that it was its view that the applicant did not come within the definition of persons covered in Regulation 883/2004.
Mr Genov is presently still seeking work in the state and is in receipt of child benefit in respect of his two children.
2.2 The second named applicant, Mr. Gusa is a Romanian national who indicates that he carried on a business as a self- employed plasterer between October 2008, and October 2012. In the year following his arrival in the state (from October 2007 to October 2008) he was financially supported by his adult children. In October 2012, Mr. Gusa resumed dependence on his children, having ceased self-employment. On the 22nd November, 2012, he was refused jobseeker's allowance also on the basis that he did not satisfy the conditions of habitual residence. Mr. Gusa to date has not received any social welfare payment with the exception of an exceptional needs payment.
3.3 When their applications for jobseeker's allowance were refused both applicants were advised that they could apply to the Minister for Justice, Equality and Law Reform for a permanent residence certificate under Regulation 12 of the European Communities (Free Movement of Persons) (No.2) Regulations 2006 in order to demonstrate their right to reside. Neither applicant to date has done this.
Applicant's Submissions
3.1. Jobseeker's Allowance is not social assistance;
The applicants argue thatjobseeker's allowance is not social assistance and falls within Regulation 388/2004 and not Directive 2004/38.They submit that the first named respondent should therefore have considered their applications under Regulation 388/2004.
Article 3(3) of Regulation 388/2004 provides that :-
"this regulation shall also apply to the special non-contributory cash benefits covered by Article 70."
Article 70 applies to special non-contributory cash benefits as listed in Annex X of the Regulation. Jobseeker's allowance is included in the Annex and the applicants argue that this demonstrates that it is not assistance but in fact social security.
The applicants submit that the judgment in the joined cases of Athanasios Vatsouras (C- 22/08) and Josif Koupatantze (C-23/08) v Arbeitsgemeinschaft (ARGE) Nurnberg 900 is relevant to their argument.
These cases found that basic benefits in favour of jobseekers cannot be regarded as social assistance within the meaning of Directive 2004/38. At para. 45 of the judgment the ECJ found:-
"Benefits of a financial nature which, independently of their status under national law, are intended to facilitate access to the labour market cannot be regarded as constituting 'social assistance' within the meaning of Article 24(2) of Directive 2004/38."
In CRAM Rhóne-Alpes v Giletti (C-379/85) the ECJ recognised that payments such as jobseekers allowance have attributes of social security .At p.976 of the judgment the ECJ held:-
"The fact that a single law may also provide for advantages which can be classified as assistance cannot alter, for the purposes of Community law, the intrinsic social security character of a benefit linked to an invalidity, old age or survivor's pension to which it is an automatic supplement. Regulation 883/04 states that some payments may have characteristics of both types of payments".
Similarly the applicants rely on Frilli v Belgian State (C-1/72) which held that social welfare payments that simultaneously contain elements belonging to both social assistance and social security, thus defying any general classification must be treated as social security.
Finally, the applicants point to the case of Brian Francis Collins v. Secretary of State for Work and Pensions (C-138/02) which held that jobseeker's allowance is a social security benefit and it requires the claimant to be actively seeking employment.
The applicants argue that since both of them are available for and actively seeking work and the payment is social security their applications should have been considered under Article 70 and Annex X of Regulation 883/2004 and not pursuant to Article 2004/38.
3.2 Right to reside;
The applicants disagree with the respondents' assertion that because they are no longer self-employed they no longer have a right of residence in the state. They contend that upon their lawful self-employment in the state, they derived a right of residence in the state premised upon inter alia Article 49 of the Treaty on the Functioning of the European Union (hereinafter the "TFEU") and as an extension therefrom have an entitlement to jobseeker's allowance pursuant to Regulation 883/2004.
The applicants refer to s.11 (2) of Regulation 883/2004 which provides :-
"For the purposes of this Title persons receiving cash benefits because of or as a consequence of their activity as an employed or self-employed person shall be considered to be pursuing the said activity".
The respondent in making its decision to deny the applicants jobseeker's allowance relied on, among other authorities, Solovastru & Anor. v. The Minister for Social Protection & Ors. [2011] IEHC 532. The applicants note that this case has been appealed to the Supreme Court.
Dunne J. in her decision therein followed the reasoning of the English High Court and Court of Appeal decision in R (on the application of Tilianu) v. Secretary of State for Work and Pensions [2010] E.W.C.A. Civ.1397. She found that persons who had been self-employed did not retain a right to reside for the purposes of Directive 2004/38 and therefore could not qualify for jobseeker's allowance. She found that the rights of self employed and employed workers were clearly distinct and that this distinction had not been modified by Directive 2004/38. The applicants point out that although rights under Regulation 883/2004 were not argued or considered in Tilianu they were raised in legal submissions in Solovastru. The Court however did not address those arguments in its judgment. The applicants argue therefore that there was a clear error of judgment in the case and/or that the decision was not based upon a review of significant relevant authority. They submit that it is appropriate for this Court to come to a different finding to Solovastru on the basis of the decision of Clarke J. in re Worldport Ltd. [2005] IEHC 189 where he held at p.5 of his judgment that:-
"Amongst the circumstances where it may be appropriate for a court to come to a different view would be where it was clear that the initial decision was not based upon a review of significant relevant authority, where there is a clear error in the judgment ..."
The respondent in making its decision to refuse the allowance also relied on certain legislation including The Social Welfare Consolidation Act 2005 regarding the right to reside. The applicants contend that this piece of legislation contravenes E.U. law and in particular Article 4 of Regulation 883/2004 which prohibits direct and indirect discrimination. Under s.141 of the Act a claimant must be habitually resident in the state to qualify for jobseeker's allowance .The applicants concede that this provision taken on its own is compatible with Regulation 883/2004. However, before the habitual residence test can be applied the person must first have the right to reside in the state as per s. 246(5) of the Act. Irish citizens are automatically deemed to have a right to reside. However, other nationals must pass the right to reside test and the applicant submits that this is discriminatory.
A right to reside is derived from Regulation 6(2) (a) (i) of S.I. 656 of 2006 for those who are self-employed. This regulation provides at 6(2) (c) (ii) that the status of a self employed person may be retained where:-
"(ii)He or she is in duly recorded involuntary unemployment after having been employed for more than one year and has registered as a job-seeker with a relevant office of the department of Social and Family Affairs and FAS."
The applicants submit that they fulfil this criteria and have a right to reside.
In the U.K., as in Ireland, the right to reside is derived from Directive 2004/38 and U.K. nationals are deemed automatically to have a right to reside. The stated purpose of the U.K. regulations was to reflect the terms of the Directive and to modify the right to reside requirement in the habitual residence test to take account of Article 24(2) of the Directive, which is concerned with social assistance.
On the 20th September, 2011, the European Commission issued a press release regarding social security coordination making the same point the applicants are now making in relation to discrimination. Entitled "Social Security Coordination: Commission requests United Kingdom to end discrimination of E.U. nationals residing in the U.K. regarding their rights to specific social benefits", the release indicated that the Commission had issued a reasoned opinion, seeking that the U.K. cease applying the right to reside test since it indirectly discriminated against non-U.K. nationals coming from other E.U. member states and contravened E.U. law.
The Commission stated in the second paragraph of the release that:-
"EU rules on the social security coordination (EC Regulation 883/2004) allow the U.K. 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-U.K. 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."
The Commission in making a distinction between rights accruing under Directive 2004/38 and rights accruing under Regulation 833/2004. stated that :-
"E.U. Social Security Coordination rules EC Regulation EC 883/2004 concern social security benefits and not social assistance benefits...[t]he 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)."
The compatibility of the right to reside test as applied to state pensions credit (which is a means tested non-contributory cash benefit) with the forerunner of Regulation 883/2004, Regulation 1408/71, was considered by the Supreme Court of the United Kingdom in Patmalniece v. Secretary of State for Work and Pensions [2011] UKSC 11 which was delivered on the 16th March, 2011, and therefore pre-dated the issuing of the reasoned opinion by the Commission cited above.
The purpose of the provision of a right to reside test in the U.K. was set out by Lord Hope at para. 38:-
"The underlying purpose was said to be to safeguard the United Kingdom's social security system from exploitation by people who wished to come to this country not to work but to live off income related benefits, while allowing those who come here genuinely to work to have access to them ...[t]he purpose of the habitual residence test was to prevent benefit tourism."
The applicant in Patmalniece had never worked in the U.K. She was an asylum seeker after Latvia acceded to the E.U. and sought to claim a pension in the U.K. It is noted in the judgments of the Court of Appeal and the Supreme Court that the applicant did not come to the U.K. to work and was not an economically active person. At para. 4 it is noted that:-
"But she has not worked at any time while she has been in this country, and she has no other income."
In Ireland White J. found in Hrisca v.Minister for Social Protection (unreported 161h February, 2012) that where an applicant had been self-employed for a number of years he was not a welfare tourist. The applicants argue that their case can be distinguished from Patmalneice and they cannot be categorised as a welfare tourists either, since they came to this state for the purpose of working which is evidenced by their self-employment records.
Moreover, they contend that their situation is different from that pertaining in Patmalniece in that the applicant in that case was subject to restrictions to take up employment by virtue of restrictions placed on the newly acceded states. These restrictions no longer apply in this state.
At para. 42 of the Supreme Court judgment in Patmalniece, the respondent accepted that the social welfare entitlement at issue could be paid to a person who was economically or socially integrated in the country. The applicants argue that they can demonstrate this integration and highlight that Mr. Gusa has four years of self-employment, Mr. Galin has three years, and both men came to the state with the intention of working here. They were therefore both economically active for a number of years.
The applicants submit that the application of the right to reside test against post-active or formerly self-employed persons in the state ostensibly means that no formerly self employed person can ever be deemed to be habitually resident in the state in the absence of achieving permanent residence. It appears that the applicants who are post-active economic migrants have less rights to jobseeker's allowance than a person entering the state for the first time who has never worked. It is submitted that it is neither legitimate nor proportionate and is contrary to Regulation 883/2004 ( which expressly provides that social security benefits and special non-contributory benefits are payable to self employed persons, post-active their self-employment). It is further submitted that this is contrary to Article 48 of the TFEU which provides that self-employed persons shall be provided for in respect of social security payments and Article 49 of the TFEU, which provides the right to establishment.
The applicants maintain that Robert Swaddling v Acijudication Officer (C-90/97) demonstrates that the right to reside test as provided in Regulation 2004/38 is contrary to E.U. law.
At para. 28 it stated that:-
"Pursuant to Article 1 (h) of Regulation No.1408/71, the term "residence" for the purposes of that regulation 'means habitual residence' and therefore has a Community wide meaning".
Thus the applicants deny that residence must mean legal residence and submit that from Swaddling it is clear that the habitual residence test is the only test that the member state is allowed to apply to employed/self-employed people under 833/04.This case has never been changed by legislation and that test remains the only test. The applicants submit that they pass this test.
3.3 Status of self-employed worker is retained on becoming unemployed;
The applicants argue that although they are not currently working they retain the status of self-employed worker and they rely on Article 11(2) of Regulation 883/04 in this regard.
This Article provides that a person who was self-employed in the state is considered under the regulation to retain the status of a self-employed person. The applicants argue that the provisions of Article 11(2) are reflected in the case of A.J.M van Roosmalen v Bestuur van de Bedrijfsvereniging voor de Gezondheid, Geestelijke en Maatschappelijke Belangen (C-300/84) where it was held that Regulation 1408/71, the forerunner of Regulation 388/2004 applies to someone who pursues/has pursued an occupation. At para. 23 of that judgment it was stated that:-
".... The expression 'self-employed person' within the meaning of Article 19(a) (iv) of Regulation no 1408/71 as amended by Regulation no 1390/81 .....applies to persons who are pursuing or have pursued ...an occupation in respect of which they receive income permitting them to meet all or some of their needs...".
In October 2004 in "Free Movement and Residence of Union Citizens within the European Union", the European Commission undertook an examination of all of the directives governing workers and the self-employed, which have now been repealed and replaced by Directive 2004/38.At p.7I of the document they dealt with Article 7(3) of Directive 2004/38 which is the equivalent of Regulation 6(ii) (c) of S.I. 656 of 2006.It sets out the circumstances when a person who has been a self-employed worker retains such a status. It states that:-
"Article 7(3) is based on and clarifies certain provisions of Directive 68/360 and incorporates Court of Justice case-law regarding the retention of worker status where the worker is no longer engaged in employed or self-employed activity."
The applicants also refer to European Law: Cases and Materials 2nd ed. (Cambridge University Press) where the learned authors state at p.832 that:-
"In particular, the Citizenship Directive ensures that right of entry, residence and expulsion and rights to social benefits, are now the same for all categories of economically active migrant".
Finally, the applicants rely on the joined cases C-22/08 and C-23/-08 Vatsouras and Koupatantze where at para. 5 of the judgment express reference was made to the rights of self-employed persons being retained in the event of the cessation of self-employment:-
"Article 7 of Directive 2004/38 provides:-
"1. All Union citizens shall have the right of residence on the territory of another Member State for a period of longer than three months if they:-
(a) are workers or self-employed persons in the host member States.....
...3.For the purposes of para.1 (a), a Union citizen who is no longer a worker or self-employed person shall retain the status of worker or self-employed person in the following circumstances......
(c) he/she is in duly recorded involuntary unemployment after completing a fixed term employment contract of less than a year or after having become involuntarily unemployed during the first twelve months and has registered as a job-seeker with the relevant employment office. In this case, the status of worker shall be retained for no less than six months."
3.4 Proportionality;
The applicants argue that any measures to restrict the applicants' right to jobseeker's allowance or support from the state must be proportionate. They rely on The Queen v Ministry of Agriculture, Fisheries and Food, ex parte FEDESA and Others (C-331/88) where the proportionality of E.U. law was addressed. At para.l3 of the judgment it was held:-
"The Court has consistently held that the principle of proportionality is one of the general principles of Community law. By virtue of that principle the lawfulness of the prohibition of an economic activity is subject to the condition that the prohibitory measures are appropriate and necessary in order to achieve the objectives legitimately pursued by the legislation in question; when there is a choice between several appropriate measures recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued."
The Court of Appeal and the Supreme Court in Patmalniece cited Carl Borawitz v Landesversicherungsanstalt Westfalen (C-124/99) which set out the objective of Article 3 (1) of Regulation 1408/71 (the precursor of Regulation 883/2004), being to ensure equal treatment in matters of social security, without distinction based on nationality and the prohibition of discrimination based on nationality whether direct or indirect. At para.26 it found that such discrimination was only permitted where:-
"...those provisions are justified by objective considerations independent of the nationality of the workers concerned, and if they are proportionate to the legitimate ain pursued by the national law."
The applicants argue it is not legitimate or proportionate to deny a self-employed person social security payments. In cases such as Patmalniece it may have been proportionate as the applicant had never worked in the state but this case can be clearly distinguished as the applicants have worked in Ireland.
Fabien Nemec v Caisse regionale d'assurance maladie du Nord-Est (C-205/05) related to a reference regarding Regulation 1408/71. In that case the E.C.J. held that all of the provisions of Regulation 883/2004 must be interpreted in light of Article 48 TFEU (a) and (b) which provides that:-
"The European parliament and the Council shall, acting in accordance with the ordinary legislative procedure, adopt such measures in the field of social security as are necessary to provide freedom of movement for workers; to this end ,they shall make arrangements to secure for employed and self-employed migrant workers and their dependants:
(a) aggregation ,for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit of all periods taken into account under the laws of several countries;
(b) payment of benefits to persons resident in the territories of Member States."
Thus people must be paid benefits the applicants contend and this Treaty must be borne in mind when deciding if it is proportionate to deny them payment. The respondents it is argued are failing to do this and persist in denying the applicants, as post-active self employed persons, payment of jobseeker's allowance.
Furthermore, it is argued that the E.C.J. has consistently held that payment of social security contributions, on which there is no return, is incompatible with Regulation 1408/71. In Joao Filipe da Silva Martins v Bank Betriebskrankenkasse - Pflegekasse (C- 388/09) it was held at para.73:-
"However, according to settled case-law such compatibility would exist only to the extent that, in particular, the national legislation concerned does not place the worker at a disadvantage compared to those who pursue all their activities in the Member State where it applies and does not purely and simply result in the payment of social security contributions on which there is no return".
This case is more relevant to Mr. Gusa's case than to Mr. Genov's. Mr. Genov is in receipt of child benefit. Mr. Gusa however has received no social welfare payment whatsoever apart from an exceptional needs payment. It raises the question of whether it is just to require a person to make contributions to the state if there is no return.
Respondents' Submissions
4.1 The right to reside
The respondents deny that the applicants are entitled to a right of residence in the state, as they claim, based on Regulation 883/2004.They submit that the law on this issue is settled. They contend that in the absence of an E.U. or national right to reside the applicants cannot circumvent Directive 38/2004 by relying on Regulation 833/2004 to establish a right to reside or to avail of social welfare payments which are conditional on legal residence in the state and argue that to do so would represent a negation of the very purpose of Directive 38/2004 and would have the capacity to create a new cohort of beneficiaries in social welfare payments which would exacerbate the economic problems facing the state.
The respondents deny that the right to reside test set out in s.246(5) of the Social Welfare Consolidation Act 2005 is incompatible with E.U. law or that it constitutes indirect discrimination as it applies only to non-Irish citizens.
They contend that the right of an E.U. national to reside in another member state is subject to restrictions given the express provisions of the TFEU and Directive 38/2004 which expressly underlines limitations and conditions to the right of residence of EU citizens. They argue that this is best illustrated in Michel Trojani v Centre public d'aide sociale de Bruxelles (CPAS ( C-456102). At para.l5 of the judgment the concept of "worker" within the meaning of Article 39 EC was discussed by the court. It was held that:-
"The essential feature of an employment relationship is, according to that case law that for a certain period of time a person performs services for and under the direction of another person in return for which he receives remuneration ..."
At para. 29 of the case the court held that:-
"....the answer to the first question must be that a person in a situation such as that of the claimant in the main proceedings, first, does not come under Articles 43 EC and 49 EC and, second, can claim a right of residence as a worker within the meaning of Article 39 EC only if the paid activity he carries out is real and genuine. It is for the national court to carry out the examinations of fact necessary to determine whether that is so in the case pending before it."
The court found that the right to reside in a state was not unconditional and held that it was open to a state to find that someone from another state who had recourse to social assistance no longer fulfilled the conditions of right of residence.
At paras.31-33 it was held that:-
"It must be recalled that the right to reside in the territory of the Member States is conferred directly on every citizen of the Union by Article 18(1) EC....That right is not unconditional, however. It is conferred subject to the limitations and conditions laid down by the Treaty and by the measures adopted to give it effect. ....Member States can require of the nationals of a Member State who wish to enjoy the right to reside within their territory that they themselves and the members of their families be covered by sickness insurance in respect of all risks in the host Member State and have sufficient resources to avoid becoming a burden on the social assistance system of that State during their period of residence."
In Solavsatru Dunne J. relied heavily on Tilianu and held at p.24 of her judgment that:-
"a right of an E.U. citizen to reside in another member State is not unrestricted. It is governed by the 2004 Directive in this Country, that directive has been implemented by the 2006 regulations...".
She then referred to a passage set out by Symes Q.C. at para. 42 of Tilianu :-
"Further the wording of the Directive is not apt in articles 7(3) (b)-(d) to cover self-employed persons. A distinction is drawn between workers, and having the status of worker on the one hand and self-employed persons on the other....Status of worker is used in Article 7(3) it is referring to someone in employment as opposed to self-employed person. When the same phrase is used in Article 7(3) (c) and d) in my judgment it has that same meaning..."
In her conclusion Dunne J. stated that:-
"I agree with the interpretation of Mr. Symons Q.C. on Article 71.1 see no basis for coming to a different conclusion on the interpretation of regulation 6.....[t]he status of involuntary unemployment" is in my view only capable of being applied to a person in paid employment."
In light of the decision in Solovastru the respondent says it is hard to see how the applicants can claim that Article 7(3) of Directive 2004/38 is supportive of their position that they remain lawfully resident in the state after the cessation of their self-employment.
The applicant submits that all of the foregoing makes it clear that the deriving of rights based on the treaty articles is subject to limitations and conditions and that one must be resident in the state in order to access benefits.
Thus, the applicants must show that they are resident in the state and the respondents contend that there is ample case-law to show that to be resident means to be legally resident. They rely on the case of In the Secretary of State for Work and Pensions v. Dias (C-325/09).1t is clear from this case that Article 16(1) and 16(4) of the Directive imply legal residence. At p.200 of the judgment the court held:-
Articles 16(1) and (4) of the Directive 2004/38 meant that periods of residence completed before 30 April 2006 on the basis solely of a residence permit validly issued pursuant to Directive 68/360 without the conditions governing entitlement to any right of residence having been satisfied, could not be regarded as having been completed legally for the purposes of the acquisition of the right of permanent residence under article 16(1) of Directive 2004/38".
The respondents contend therefore that it is only if the applicants are lawfully resident in the state that the question of their status as self-employed persons can be raised by them.
The respondent states that the applicants would be treated differently if they could show lawful residence. The respondent notes the judgment of Murray J. in the Supreme Court in Goncescu v Minister for Justice Equality and Law Reform & ors, [2003] IESC 49 where he stated under the heading "first argument":-
"However, I would agree with Counsel for the Appellants that if the Appellants could be considered as lawfully resident in the State, that is to say persons who had been granted leave to enter and reside as immigrants in the State, then the manner in which their applications for establishment were examined would have to be viewed from a different perspective. Persons who are given permission by the State to enter and reside as immigrants ,which includes those granted refugee status or allowed to remain for humanitarian reasons, are lawfully resident in the State as of right....it could certainly be forcefully argued that a Czech or Romanian national who was thus lawfully resident in the State but who, for the purpose of making an application for establishment ,was required to abandon their lawful residence and associated activities such as their job, so as to return to their home state to make such an application would be subject to purely formalistic requirements which treated them differently solely on the grounds of nationality or which unduly impaired the benefits conferred by the European Agreements. Recognition of this approach is perhaps inherent in the exception which exists in the practice of the department of Justice to consider applications for establishment from such non-nationals who have legal entitlement to reside in the state without requiring them to return to their home state."
He continued under the heading "status of the applicants":-
"If persons in the position of the appellants were entitled as of right to remain and reside in the State for the purpose of seeking to make an application for establishment rights, it would be a negation of the legitimate system of control envisaged by the European agreement and in particular Article 59 (1). It would also encourage abuse and undermine the integrity of the system by which asylum seekers are permitted to enter the State for the purpose of having their applications examined and granted or refused on their merits."
The applicants have relied on the Swaddling case. However para. 25 of that case states:-
"Under Article 10(a) of Regulation No 1408/71, payment of a benefit such as income support is conditional upon the claimant residing in the territory of the member State under whose legislation he is entitled to that benefit".
The respondents submit that it is unlikely that the Commission is going to take a case against the U.K regarding its right to reside test. While a reasoned opinion was initiated by the Commission on the 291h September, 2011, the Commission has not taken any further action in the matter and has not commenced legal proceedings against the U.K. which given the time period that has elapsed would suggest that it does not intend to do so even though the U.K. has not altered its legislation in this regard. Ireland's laws regarding the right to reside are the same as the U.K. and the Commission has not taken any steps against Ireland.
The respondents contend that, in the event, no evidence was provided to the deciding officer in respect of either of the applicants' applications for jobseeker's allowance that they had a right to reside. In their respective decisions the applicants were invited to apply for residence based on Regulation 15 of S.I. 656/2006, but they did not do so. Why the applicants have made no application for permanent residence remains unclear. Furthermore, the applicants have presented no evidence in the within proceedings that they are in a position to establish a right to reside under the European Communities (Free Movement of Persons) (No.2 regulations 2006 (SI 656 of2006), the European Communities Alien Regulations 1977 (SI 393 of 1977) or the EC Right of Residence of Non-economically Active persons Regulations 1997(S.I. 57 of 1997).
4.2 Objective justification;
The respondents argue that in respect of special non-contributory cash benefits of the kind set out in Annex X of Regulation 388/2004, including jobseeker's allowance, it is open to member states to make entitlement to those benefits dependent on the right to reside in the host country, even though of necessity, such a right will be enjoyed by all nationals but only some non-nationals. They contend that such restriction is objectively justified.
Before a person can access social welfare payments the right to reside test must be passed. It is the respondent's view that if someone does not have the right to reside in the state he/she should not have the right to access such entitlements. The respondents submit that this is reasonable, fair and objectively justified in order to prevent an undue burden on the social welfare system. This is especially so in this case given that it is clear that the applicants in addition to not being legally resident, cannot provide for their minimum level of subsistence at the present time.
The respondents argue therefore that lawful limitations imposed by measures adopted pursuant to Articles 21, 48 and 50 of the TFEU, cannot be described as discriminatory or otherwise in contravention of E.U. law. The provisions represent a constitutional compromise which strikes a lawful balance between competing and complex objectives, that of free movement and the avoidance of non-active persons of one member state being an undue financial burden on another member state.
The respondents argue that the decision of the Supreme Court in the United Kingdom Patmalniece is of persuasive value. The Court in that case rejected the argument that the right to reside test for pension credit constituted direct discrimination on the basis of nationality. The Court accepted that it did constitute indirect discrimination but that such discrimination was justified and was a proportionate response to the legitimate aim of protecting the public purse.
4.3 The applicants are no longer self-employed;
The respondents contend that the applicants no longer have the status of self-employed persons for the purposes of Regulation 833/2004 on becoming unemployed and therefore do not retain a right to reside under Article 6(2) (c) (ii) of The EC (Free Movement of Persons) (No.2) Regulations 2006. The applicants, not claiming to be workers are only otherwise entitled to reside in this jurisdiction as self-employed persons and as they are no longer self-employed persons they are not entitled to a right of residence: consequently they are not habitually resident in this jurisdiction and are not entitled to jobseeker's allowance.
The issue of the status of self-employed persons within the meaning of Regulation 388/2004 was dealt with comprehensively in the case of Solovastru and the respondents submit that that case is decisive for the case before the Court now. The respondents cannot see how the applicants retain the status of self-employed persons when they cease employment which is self-declared in this case. In their third affidavits the applicants aver that they are jobseekers as they are looking for work. The respondent submits that you are either a job-seeker or are self-employed but you cannot be both and the distinction between employed and self-employed workers as remains set out in the directive, in Tilianu and by Dunne J in Solovastru.
4.4 Jobseeker's allowance is social assistance;
The respondents refute the claim that jobseeker's allowance is social security. It is acknowledged at Article 70 of Regulation 883/2004 that special non-contributory cash benefits set out in Annex X of Regulation 883/2004 have characteristics of both social security benefits and social assistance. The respondents contend that jobseeker's allowance can be and should be considered social assistance.
However, the respondents submit that whether or not jobseeker's allowance can properly be classified as social security benefits or social assistance is not relevant to the issue of entitlement to jobseeker's allowance at all, since the applicants did not establish a right of residence in the first instance and were not habitually resident in the state. They note that the distinction between what may be termed social security benefits and social assistance did not affect Lady Hale's judgment in Patmalneice at para.103 that any such non contributory cash benefits may be subject to a right of residence test.:-
"If nationals of one member state have the right to move to reside in another member state under European Union law, it is logical to require that they also have the right to claim these "special non-contributory cash benefits" there -in other words that the state in which they reside should be responsible for ensuring that they have the minimum means of subsistence to enable them to live there. But if they do not have the right under European Union law to move to reside there, then it is logical that that state should not have the responsibility for ensuring their minimum level of subsistence".
Decision
5.1 The issues that arise in this case are as follows;
(a) the right to reside in the State,
(b) inherent discrimination and objective justification,
(c) whether the applicants are still self-employed, and
(d) whether Jobseeker's Allowance is social security or social assistance.
The right to reside
5.2 The right of an European Union national to reside in another Member State is subject to restriction by that other state, herein Ireland. That this is so is clear from the provisions of the Treaty on the Functioning of the European Union (TFEU) and Directive 38/2004. See the judgment of the European Court of Justice in Trojani v. Centre Public d'Aide Sociale de Bruxelles, Case C- 456/02 at paragraphs 31-33:-
"31. It must be recalled that the right to reside in the territory of the Member States is conferred directly on every citizen of the Union by Article 18(1) EC ..
"32. That right is not unconditional, however. It is conferred subject to the limitations and conditions laid down by the Treaty and by the measures adopted to give it effect."
"33. Among those limitations and conditions, it follows from Article 1 of Directive 90/364 that Member States can require of the nationals of a Member State who wish to enjoy the right to reside within their territory that they themselves and the members of their families be covered by sickness insurance in respect of all risks in the host Member State and have sufficient resources to avoid becoming a burden on the social assistance system of that State during their period of residence."
And later in the same judgment at paragraph 45;
"It should be added that it remains open to the host Member State to take the view that a national of another Member State who has recourse to social assistance no longer fulfils the conditions of his right of residence. In such a case the host Member State may, within the limits imposed by Community law, take a measure to remove him. However, recourse to the social assistance system by a citizen of the Union may not automatically entail such a measure (see, to that effect, Grzelczyk, paragraphs 42 and 43)."
Thus, it is open to this country to impose certain limitations and conditions upon the right to reside. These may be based upon the proposition that a national of another Member State should not become a burden on the social assistance system of this State. Both applicants were economically inactive upon arrival in Ireland. Both, subsequently, became active as self-employed persons but eventually could no longer find work. As they have both been found by the authorities to be non-self-sustaining nor to have comprehensive health insurance and as these are conditions laid down by the authorities of this State as necessary in order to qualify for a right to reside, they have no right to reside.
5.3 The consequences of this lack of any right to reside is that they do not qualify for any of the social welfare benefits they seek because whether these benefits are social security benefits or social assistance, they both constitute support which is a burden on the State. See Patmalniece v. Secretary of State for Work and Pensions [2011] UK SC 11 where Lady Hale stated at paragraph 103:-
"The question is whether it is legitimate to limit these benefits, entitlement to which under the Regulation depends upon the Member State in which the claimant resides, to people who are entitled to reside in that Member State. In answering that question, it is logical to look at the European law on the right to reside. If nationals of one Member State have the right to move to reside in another Member State under European Union law, it is logical to require that they also have the right to claim these 'special non-contributory cash benefits' there in other words that the State in which they reside should be responsible for ensuring that they have the minimum means of subsistence to enable them to live there. But if they do not have the right under European Union law to move to reside there, then it is logical that that State should not have the responsibility for ensuring their minimum level of subsistence."
Moreover, Article 70(4) of Regulation 883/2004 provides that:-
"The benefits referred to in paragraph 2 shall be provided exclusively in the Member State in which the persons concerned reside, in accordance with its legislation."
The authorities in Ireland have imposed through legislation a requirement of a right to reside in order to qualify for Jobseeker's Allowance. The applicants fail that requirement because they do not have a right to reside and thus they are not entitled to claim the said benefit.
Is the right to reside test discriminatory?
6.4 This question has been considered in the Supreme Court of the United Kingdom where there also exists provision for a right to reside test such as is found ins. 246(5) of the Social Welfare Act 2005. See again Patmalniece (cited above) at paragraph 24 where Lord Hope stated:
"The effect of article 4(2a) of Regulation 1408/71 is that social assistance benefits such as state pension credit share features with social security. But I agree with the Court of Appeal that the widening of the scope of Regulation 1408/71 does not preclude a justification of indirect discrimination which is based on the nature of the benefit. The Secretary of State's justification lies in his wish to prevent exploitation of welfare benefits by people who come to this country simply to live off benefits without working here. That this is a legitimate reason for imposing the right of residence test finds support in Advocate General Geelhoed's opinion in Trojani v Centre Public d'Aide Sociale de Bruxelles [2004] 3 CMLR 820, para 70 that it is a basic principle of Community law that persons who depend on social assistance will be taken care of in their own Member State."
Thus, the right to reside test was indirectly discriminatory but was a condition which was objectively justifiable on grounds other than just the applicant's nationality.
The question was also dealt with by the Court of Justice of the European Communities in Collins [2004] ECR 1 - 2703. At paragraph 73 of its judgment, the Court held that the right to equal treatment provided in the Treaties:-
"... does not preclude national legislation which makes entitlement to a jobseeker's allowance conditional on a residence requirement, in so far as that requirement may be justified on the basis of objective considerations that are independent of the nationality of the persons concerned and proportionate to the legitimate aim of the national provisions."
The respondents state that it has always been and it remains the State's view that those without a right to reside in the State should not have access to social welfare entitlements and thus have made this a requirement in s. 246 cited above. I accept the respondents' argument that this provision is objectively justified in the interests of preserving the limited resources of this State in funding its social welfare system. This clearly is a logical and reasonable rationale, is one that stands independent of the nationality of the applicants herein because it applies to all citizens of Member States other than Ireland regardless of their nationality and seems proportionate to the legitimate aim of best using the limited resources of the State. Moreover, I consider that the judgment of Dunne J. in the case of Petru Solovastru and Aurica Solovastru v. Minister for Social Protection & Ors. (High Court, 9/06/2011) is also determinative of this case. Dunne J. (at paragraph 24) stated:-
"A right of an EU citizen to reside in another Member State is not unrestricted. It is governed by the 2004 Directive in this country, that Directive has been implemented by the 2006 Regulations ...."
6.5 In the light of the above findings I do not think the question as to whether the applicants are still self-employed arises. They are both, in fact, no longer employed in any work at all. They have never been employed by anyone or anybody in the State. Furthermore, I fail to see the significance of whether the Jobseeker's Allowance is social security or social assistance. If the applicants obtain access to any support from the social welfare system of the State, then they have become a financial burden upon it.
6.6 For all the above reasons, the applicants are not entitled to the reliefs sought herein.
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