IN THE UPPER TRIBUNAL Case No CH/15/2009

ADMINISTRATIVE APPEALS CHAMBER

 

Before UPPER TRIBUNAL JUDGE WARD

 

Decision:

 

The appeal is allowed (although this does not help the claimant). The decision of the tribunal sitting at Stockport under reference 944/08/01569 on 17 October 2008 involved the making of an error of law and is set aside. Having made such further findings of fact as are necessary, I remake the tribunal’s decision in terms that:

 

The claimant’s appeal is dismissed. She is not entitled to housing benefit or council tax benefit on her claim of 28 May 2008. This is because she lacks the right to reside. Though she has comprehensive sickness insurance, at no material time has she had sufficient resources not to become a burden on the social assistance system during her period of residence in the United Kingdom (and alternatively, if it be relevant, she has become an unreasonable burden on it.)

 

REASONS FOR DECISION

 

1. This case raises two issues of wide concern to those who advise citizens of other EU Member States on benefit matters:

 

a. do the provisions of Regulation (EEC) No. 1408/71 applicable to the receipt by an EU citizen of National Health Service care mean that she has “comprehensive sickness insurance cover in the host member State?” and

b. when and how does the test of “sufficient resources” fall to be applied?

 

in each case, for the purposes of the right of residence for more than three months conferred by Article 7 of Directive 2004/38/EC.

 

2. The claimant is a Polish national, born in 1969. She had for many years lived in Sweden, where she had faced domestic violence from her (possibly former) husband and problems with his family. She came to the United Kingdom in August or September 2007 from Sweden, leaving her children (whose age is not stated) there. She stayed with her sister, who at that time lived in London, for 2-3 weeks. At that point, she returned to Sweden on the stated ground that her son was “abducted”. She moved into a home for single mothers in Sweden until December 2007, when she returned to the United Kingdom. From December 2007 until February 2008 she stayed with her sister. It is not possible to make further findings about that arrangement. At this point her (ex)-husband found out where she was. She said that he would have created problems. She left and moved to the Manchester area where she stayed with friends from February to May 2008. No further findings can be made about that arrangement either. They helped her find accommodation of her own, a one-bedroomed housing association flat, her tenancy commencing on 26 May 2008. (The submission on the claimant’s behalf that she had clocked up “almost nine months of self-sufficient residence” by this time is not borne out by the claimant’s own evidence to the appeal tribunal and my findings in this regard are as above.)

 

3. She had been since 1993 and continued to be in receipt of a monthly payment of an invalidity pension from the Försäkringskassa, the relevant body in Sweden, pursuant to a lifetime award, equating to a sum assumed for the purposes of the present appeal to be £121.68 weekly. She did not think about how she would support myself. She did not know about the cost of living in the U.K. She found that the pension was “not enough to live on”.

 

4. Her stated disabilities were epilepsy and depression. She did not work and was not seeking work. Her stay in the UK was envisaged to be permanent.

 

5. On 28 May 2008 she applied to the First Respondent local authority for housing benefit and council tax benefit and, by a decision dated 12 June 2008, was refused on the grounds, in effect, that she lacked the “right to reside”.

 

6. Her appeal was heard on 17 October 2008 and a decision issued three days later in the following terms:

 

“The Housing benefit and Council Tax benefit appeal is disallowed.

 

The decision of the Respondent in relation to Housing Benefit and Council Tax Benefit issued on 12/06/2008 is confirmed.

 

I am satisfied that Housing benefit and Council tax benefit are a form of social assistance. There is no evidence to suggest that the claimant would only need to claim either benefit for a short period. In those circumstances I consider that she would make herself an unreasonable burden on the public purse by making an indefinite claim to such benefits while remaining in the United Kingdom and being incapable of work. The claimant does not have any comprehensive sickness insurance. She may have something that equates to an E111 certificate but this is basic rather than comprehensive insurance.

 

For the foregoing reasons I dismiss the appeal.”

 

7. A statement of reasons issued on 17 November 2008 included the following passage:

 

“The claimant’s representative argued that the claimant should have a right to reside on the basis that she should have been treated as a self- sufficient person, having regard to the income she brought with her from Sweden. It certainly seemed to me to be the case that the Swedish pension exceeded the level below which social assistance might be granted. However, the second qualifying provision that relates to a self-sufficient person is that he or she is covered by comprehensive sickness insurance in the United Kingdom. The claimant had not taken out any form of sickness insurance.

 

It was argued by the claimant’s representative that the standard sickness cover in the form of an E111 should meet this proviso.

 

I accepted that the claimant had an income higher than state benefit level on the face of it. She did not, however, have any comprehensive sickness insurance and as a consequence did not meet the qualifying conditions for a self-sufficient person. Accordingly, I dismissed this appeal.”

9. The claimant sought permission to appeal to challenge the conclusion on the insurance issue only and the First-tier Tribunal judge who had heard the case granted it. In giving Directions, I intimated a provisional view that regardless of the outcome on the comprehensive insurance point, it appeared to be possible that the decision might fall to be affirmed on other grounds and invited submissions. I joined the Secretary of State as a party, who was prepared to concede that the claimant had sufficient health insurance. In this he was lately supported by the local authority. The reasons why this is so are set out from [20] – [28] below. However, both the Secretary of State and local authority argued that the claimant did not have the right to reside, on the grounds of a lack of self-sufficiency, and that benefit was correctly refused. For the claimant, it was argued that the claimant (as well as having the necessary health insurance, as was now conceded) had had sufficient resources and that, relying if need be on the decision in C-184/99 Grzelczyk v Centre Public d’Aide Sociale d’Ottignies-Louvain-la-Neuve [2002] 1 CMLR 19, she was entitled to the benefits claimed.

 

10. I held an oral hearing at the Manchester Civil Justice Centre on 8 June 2010 at which the claimant was represented by Mr K Kleinschmidt, welfare rights officer and the Secretary of State by Mr S Cooper, solicitor. I am very grateful to both for their assistance. The local authority was content to adopt the position of the Secretary of State and did not play an active part in the oral hearing.

 

11. The claimant did not attend the oral hearing. Mr Kleinschmidt had very properly indicated beforehand to the Upper Tribunal that:

 

“despite numerous attempts and discussion with staff at [the claimant’s] former housing association, I have been unable to contact [her]. To the best of my knowledge she is now likely living in Sweden.”

 

He felt able to proceed with the appeal to the Upper Tribunal on the basis of the claimant’s original signed authorisation to him.

 

12. As a preliminary point, I note that the decision refused the appeal on more than one ground (unreasonable burden by claiming social assistance and inadequate insurance), but the ground of refusal in the statement of reasons was based on inadequate insurance only. The two documents are, without explanation, mutually inconsistent in a significant respect and I regard that of itself as sufficient to cause the tribunal’s decision to be in error of law.

 

13. Turning to the substance, assuming she was otherwise entitled to housing benefit (as, on income grounds alone, she would have been), the claimant would not qualify if she fell foul of regulation 10 of the Housing Benefit Regulations 2006 which at the material time was in the following terms:

 

“(1) A person from abroad who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable…

 

(2) In paragraph (1), “person from abroad” means, subject to the following provisions of this regulation, a person who is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland.

 

(3) No person shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland unless he has a right to reside in (as the case may be) the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland other than a right to reside which falls within paragraph (3A).”

 

14. Paragraph (3A) sets out a list of types of the right to reside which are excluded by virtue of paragraph (3). Paragraph (3B) sets out a list of types of the right to reside which if held by a person will mean that he is in any event not a “person from abroad” for the purposes of regulation 10. The remainder of the regulation is not material.

 

15. Equivalent provisions exist in relation to council tax benefit in regulation 7 of the Council Tax Benefit Regulations 2006. There has been no suggestion that there is any material difference between the housing benefit and the council tax benefit regimes and I concentrate on the housing benefit regime in the interests of simplicity. It further appears that the claimant may in any case have been ineligible for council tax benefit on income grounds.

 

16. The list of persons who are not “a person from abroad” in regulation 10(3B) of the Housing Benefit Regulations 2006 does not avail the claimant and Mr Kleinschmidt has not sought to argue otherwise. Rather, he claimed that she was a self-sufficient person. If established, this would fall within paragraph (3) (and would not be excluded again by virtue of paragraph (3A). No argument was put that the claimant had a right to reside on any other basis.

 

17. I should add that, though the claimant is a Polish national, we need not be concerned with the particular provisions relating to nationals of Poland and other so-called A8 states, such as the Accession (Immigration and Workers Registration) Regulations 2004 S.I. 2004/1219 (as amended). These relate to those who work, which is not the claimant’s position, and have no relevance to those who are self-sufficient.

 

18. The key question was whether the claimant complied with Article 7 of Directive 2004/38/EC:

 

“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:

…

(b) have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State.”

 

19. I deal in turn with the issues of comprehensive sickness insurance cover and with sufficiency of resources.

 

Comprehensive Sickness Insurance Cover

 

20. The Secretary of State concedes that at the material time the claimant was able to rely on Council Regulation (EEC) No 1408/71 and Council Regulation (EEC) No 574/72 to meet the requirement for comprehensive sickness insurance. He considers that whether the claimant fell within the personal scope of Regulation 1408/71 was a matter for the Swedish authorities and it was clear that they considered that she did.

 

21. The benefit received by the claimant was the sjukersättning garantiersättning (invalidity benefit guaranteed income), which the Swedish authorities have confirmed fell to be exported from Sweden pursuant to Article 10 of Regulation 1408/71. It appeared, in consequence, that it is an invalidity benefit falling within Chapter 2 of Title III of that Regulation rather than a sickness benefit within Chapter 1. As was common ground, invalidity benefits are equated with pensions under EU social security practice for the purposes of entitlement to healthcare. It follows that the claimant’s entitlement to healthcare costs was governed by Articles 27-34 of the Regulation. The UK’s right to reimbursement was, in the words of the Secretary of State’s submission, “likely” to have been conferred by Article 28a, which provides:

 

“Where the pensioner entitled to a pension under the legislation of one Member State, or to pensions under the legislation of two or more Member States, resides in the territory of a Member State under whose legislation the right to receive benefits in kind is not subject to conditions of insurance or employment, nor is any pension payable, the cost of benefits in kind provided to him and to members of his family shall be borne by the institution of one of the Member States competent in respect of pensions, determined according to the rules laid down in Article 28(2), to the extent that the pensioner and members of his family would have been entitled to such benefits under the legislation administered by the said institution if they resided in the territory of the Member State where that institution is situated.”

 

22. The UK was entitled to seek reimbursement of such healthcare costs under Article 95 of Regulation 574/72 which, so far as relevant, provided:

 

“1. The amount of the benefits in kind provided pursuant to Articles 28(1) and 28a and Article 29(1) of the Regulation shall be refunded by the competent institutions to the institutions which provided the said benefits, on the basis of a lump sum which is as close as possible to the actual expenditure incurred.”

 

It goes on to set out a basis of calculation, while providing also that two or more Member States may agree to introduce other methods of calculation.

 

23. Accordingly, it was submitted on behalf of the Secretary of State:

 

“The cost of any healthcare which [the claimant] received in the UK could therefore have been requested from Sweden under those arrangements. [The claimant] was though never properly registered for the purposes of these arrangements, but steps are now being taken in conjunction with the Swedish authorities to regularise that position. It is for that reason that the Secretary of State maintains that such underlying entitlement to have her healthcare costs met by Sweden amounted to comprehensive sickness insurance for the purposes of the 2004 Directive.”

 

24. It is for this reason that the Secretary of State considered that the decision of the Court of Appeal in W(China) and X(China) v Secretary of State for the Home Department [2006] EWCA Civ 1494 at [10] can be distinguished. The Court observed:

 

“That argument overlooks the fundamental reason for the insurance requirement that was identified as the basis of the scheme of the Directive in Chen’s case [2005] QB 325 to prevent the presence of the European Union citizen placing a burden on the host state. Use of free state medical services exactly creates such a burden.”

 

The Secretary of State considers that W (China ) and X(China) does not apply to the present case, because of the existence of the right of recovery from Sweden.

 

25. In this, the position adopted by the Secretary of State appears consistent with the document promulgated by the European Commission under reference COM(2009)313 final and entitled “Communication from the Commission to the European Parliament and the Council on guidance for better transposition and application of Directive 2004/38/EC on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States”. Paragraph 2.3.2 states that:

 

“Any insurance cover, private or public, contracted in the host Member State or elsewhere, is acceptable in principle, as long as it provides comprehensive coverage and does not create a burden on the public finances of the host Member State. In protecting their public finances while assessing the comprehensiveness of sickness insurance cover, Member States must act in compliance with the limits imposed by Community law and in accordance with the principle of proportionality. Pensioners fulfil the condition of comprehensive sickness insurance cover if they are entitled to health treatment on behalf of the Member State which pays their pension. The European Health Insurance Card offers such comprehensive cover when the EU citizen concerned does not move the residence in the sense of Regulation (EEC) No 1408/71 to the host Member State and has the intention to return, e.g. studies or posting to another Member State.” (My italics added: see [26] below.)

 

26. I am concerned with legislation which has now been replaced by Regulation (EC) No 883/04 and Regulation (EC) No 987/2009. While I have not been addressed on the replacement legislation, I record that in a footnote in relation to the italicised passage in COM(2009)313, the Commission indicates its view that when Regulation (EC) No 883/04 replaced No 1408/71, “the same principles will apply”.

 

27. I was not addressed on the legislation underpinning the European Health Insurance Card, the successor to the E111 to which the First-tier Tribunal referred. However, details of that legislation can be found in the recent decision in C-211/08 Commission v Kingdom of Spain. The final sentence in the quoted extract from COM(2009)313 makes it appropriate to emphasise that the concession before me was made on the basis of the rights of recovery under Regulation 1408/71 and Regulation 574/72 and not on the basis of provisions relating to the European Health Insurance Card or its predecessor, the E111.

 

28. In considering whether the claimant had comprehensive sickness insurance cover, the tribunal did not have the advantage which I have had of specialist input on behalf of the Secretary of State. It was not referred to the relevant provisions of Regulations 1408/71 and 574/72 and did not address them in reaching its decision. Thereby, it was further in error of law.

 

Sufficiency of resources

29. In addressing the test of sufficiency of resources laid down by Article 7(1)(b) – see [18] above – a number of other provisions fall to be considered.

 

30. Article 8 allows, but does not require, Member States to operate a registration scheme and regulates the associated administrative formalities. So far as relevant, it provides that:

 

“(3) For the registration certificate to be issued, Member States may only require that…Union citizens to whom point (b) of Article 7(1) applies present a valid identity card or passport and provide proof that they satisfy the conditions laid down therein…

 

(4) Member States may not lay down a fixed amount which they regard as “sufficient resources”, but they must take into account the personal situation of the person concerned. In all cases this amount shall not be higher than the threshold below which nationals of the host Member State become eligible for social assistance, or, where this criterion is not applicable, higher than the minimum social security pension paid by the host Member State.”

 

31. Although the UK does not operate a registration scheme of this sort, it is inconceivable that the EU legislators intended a different substantive test or rules concerning evidence to apply according to whether a Member State operated a scheme or not and I regard the above provisions of Article 8 as applicable to the UK.

 

32. Article 14, so far as relevant, provides:

 

“(2) Union citizens … shall have the right of residence provided for in Articles 7, 12 and 13 as long as they meet the conditions set out therein.

 

In specific cases where there is a reasonable doubt as to whether a Union citizen…satisfies the conditions set out in Articles 7, 12 and 13, Member States may verify if these conditions are fulfilled. This verification shall not be carried out systematically.

 

(3) An expulsion measure shall not be the automatic consequence of a Union citizen’s …recourse to the social assistance system of the host Member State.”

 

33. Article 24, so far as relevant, provides:

 

“(1) Subject to such specific provisions as are expressly provided for in the Treaty and secondary law, all Union citizens residing on the basis of this Directive in the territory of the host Member State shall enjoy equal treatment with the nationals of that member State within the scope of the Treaty…”

 

34. Two of the recitals to the Directive are of particular note. By recital (10):

 

“Persons exercising their right of residence should not, however, become an unreasonable burden on the social assistance system of the host Member State during an initial period of residence. Therefore, the right of residence for Union citizens and their family members for periods in excess of three months should be subject to conditions.”

 

35. By recital (16):

 

“As long as the beneficiaries of the right of residence do not become an unreasonable burden on the social assistance system of the host Member State they should not be expelled. Therefore, an expulsion measure should not be the automatic consequence of recourse to the social assistance system. The host Member State should examine whether it is a case of temporary difficulties and take into account the duration of residence, the personal circumstances and the amount of aid granted in order to consider whether the beneficiary has become an unreasonable burden on its social assistance system and to proceed to his expulsion…”

 

36. It is appropriate to record that the Directive is the result of a process of codification and review of previous legislation, including Directives 90/364/EEC, 90/365/EEC and 93/36/EEC on rights of residence, respectively, for those nationals of Member States who did not enjoy such a right under other provisions of Community law, for employees and self-employed persons who have ceased their occupational activity, and for students. Each contains provisions with similarities to those which it is necessary to consider in this case.

 

37. The Directive was adopted having regard to, among other provisions, Articles 12 and 18 of the Treaty. By Article 12:

 

“Within the scope of application of this Treaty, and without prejudice to any special provision contained therein, any discrimination on grounds of nationality shall be prohibited.”

 

By Article 18:

 

“(1) Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect.”

 

38. The Directive is implemented in the UK by the Immigration (European Economic Area) Regulations 2006 SI 2006/1003 (“the EEA Regulations”). Argument before me was conducted on the basis of the Directive and there was no suggestion that the EEA Regulations led to a different result. I therefore do not burden this lengthy decision by setting out the relevant provisions of the EEA Regulations in full.

 

39. The issues with which this part of the appeal was concerned were principally:

 

(a) when does the question of self-sufficiency fall to be looked at?

(b) what is the correct approach to determining self-sufficiency?

 

40. At first glance, one might be tempted to conclude that the answer to the former question is at the time of a claim for benefit and in some cases that may be so. In the circumstances of this case, however, it is possible that a different answer as to that question may be provided by Grzelczyk. Mr Grzelczyk was a French national, who went to study in Belgium. Although he had carried out various student jobs whilst studying, the European Court of Justice, rather than examining any rights he might have had as a worker, considered the case in terms of his rights under Directive 93/96 (see above) and under Articles 6, 8 and 8a of the EC Treaty (now Articles 12, 17 and 18.) Under Directive 93/96 a student was required to provide a declaration of self-sufficiency and there were in recital (6) similar provisions to the opening words of recital (16) of Directive 2004/38 stating that a beneficiary of the Directive must not become an unreasonable burden on the public finances of the host Member State. In the first three years of his studies, Mr Grzelczyk defrayed his own costs of maintenance, accommodation and studies by taking on student jobs and by obtaining credit facilities. At the beginning of his fourth and final year of study, he applied to the relevant authority in Belgium for payment of social assistance (the “minimex”). The fourth year of studies was more demanding, involving the writing of a dissertation and the completion of a qualifying period of practical training. A student of Belgian nationality in the circumstances of Mr Grzelczyk would have qualified for the minimex.

 

41. The Court observed:

 

“36 The fact that a Union citizen pursues university studies in a Member State other than the State of which he is a national cannot, of itself, deprive him of the possibility of relying on the prohibition of all discrimination on grounds of nationality laid down in Article 6 of the Treaty.

37 As pointed out in paragraph 30 above, in the present case that prohibition must be read in conjunction with Article 8a(1) of the Treaty, which proclaims “the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in this Treaty and by the measures adopted to give it effect”.

 

38 As regards those limitations and conditions, it is clear from Article 1 of Directive 93/96 that Member States may require of students who are nationals of a different Member State and who wish to exercise the right of residence on their territory, first, that they satisfy the relevant national authority that they have sufficient resources to avoid becoming a burden on the social assistance system of the host Member State during their period of residence, next, that they be enrolled in a recognised educational establishment for the principal purpose of following a vocational training course there and, lastly, that they be covered by sickness insurance in respect of all risks in the host Member State.

 

39 Article 3 of Directive 93/96 makes clear that the directive does not establish any right to payment of maintenance grants by the host Member States for students who benefit from the right of residence. On the other hand, there are no provisions in the directive that preclude those to whom it applies from receiving social security benefits.

 

40 As regards more specifically the question of resources, Article 1 of Directive 93/96 does not require resources of any specific amount, nor that they be evidence[d] by specific documents. The article refers merely to a declaration, or such alternative means as are at least equivalent, which enables the student to satisfy the national authority concerned that he has, for himself and, in relevant cases, for his spouse and dependent children, sufficient resources to avoid becoming a burden on the social assistance system of the host Member State during their stay.

 

41 In merely requiring such a declaration, Directive 93/96 differs from Directives 90/364 and 90/365, which do indicate the minimum level of income that persons wishing to avail themselves of those directives must have. That difference is explained by the special characteristics of student residence in comparison with that of persons to whom Directives 90/364 and 90/365 apply.

 

42 That interpretation does not, however, prevent a Member State from taking the view that a student who has recourse to social assistance no longer fulfils the conditions of his right of residence or from taking measures, within the limits imposed by Community law, either to withdraw his residence permit or not to renew it.

 

43 Nevertheless, in no case may such measures become the automatic consequence of a student who is a national of another Member State having recourse to the host Member State's social assistance system.

 

44 Whilst Article 4 of Directive 93/96 does indeed provide that the right of residence is to exist for as long as beneficiaries of that right fulfil the conditions laid down in Article 1, the sixth recital in the directive's preamble envisages that beneficiaries of the right of residence must not become an “unreasonable burden on the public finances of the host Member State”. Directive 93/96, like Directives 90/364 and 90/365, thus accepts a certain degree of financial solidarity between nationals of a host Member State and nationals of other Member States, particularly if the difficulties which a beneficiary of the right of residence encounters are temporary.

 

45 Furthermore, a student's financial position may change with the passage of time for reasons beyond his control. The truthfulness of a student's declaration is therefore to be assessed only as at the time when it is made.

 

46 It follows from the foregoing that Articles 6 and 8 of the Treaty preclude entitlement to a non-contributory social benefit, such as the minimex, from being made conditional, in the case of nationals of Member States other than the host State where they are legally resident, on their falling within the scope of Regulation 1612/68 when no such condition applies to nationals of the host Member State.”

 

42. It appears therefore that even though it is the case that the right to reside subsists only as long as the conditions attaching to it are fulfilled (as indeed Article 14 of Directive 2004/38 also indicates), once Mr Grzelczyk had established his right to reside (presumably by making, at the outset of his studies, the declaration required by Directive 93/36) he was able, nonetheless, when being self-sufficient was apparently no longer an option, to rely on an interpretation leaning heavily on recital (6) of Directive 93/96, in order to establish discrimination contrary to (now) Article 12. The decision also provides some basis for concluding that the point is not confined to students.

 

43. I do, with respect, have a degree of difficulty with the application of the Grzelczyk decision, including because it sits uncomfortably with the reasoning in C-408/03 Commission v Kingdom of Belgium [2006] ECR I-2647, which in order to justify a restriction on the ability of a Member State to require legally binding commitments to provide resources to a person relies heavily (at [48]) on the proposition that the right to reside comes to an end when the conditions attaching to it are no longer fulfilled, rather than having the sort of ongoing effect which enabled Mr Grzelczyk to receive the minimex. On other findings of fact, I might have considered making a reference under Article 234. In the present case, however, I proceed on the basis of assuming (without deciding the point) that there may be an argument, given the similarity of the relevant provisions between Directives 93/36 and 2004/38 that if the claimant in the present case could establish that prior to the date of her claim for housing benefit and council tax benefit she met the condition in Article 7(1)(b) of sufficiency of resources, she might then lawfully have been denied benefit only if she had “become an unreasonable burden on the social assistance system of the host Member State” (2004/38, recital (16).)

 

44. If she could demonstrate that before the date of her claim she had sufficient resources, her position would be a different one from that of the claimants in Abdirahman and Ullusow v Secretary of State for Work and Pensions [2007] EWCA Civ 657. They had no right of residence under either the Treaty or the relevant domestic law and so the scope of Article 12 did not extend to them. If the scope of Article 12 were to apply to the present claimant, there would still be the question of justification to consider. I likewise make an assumption for the purposes of this case (without deciding the point or implying any view upon it) that the Secretary of State would not succeed in doing so.

 

45. The claimant has failed to keep contact with her representative and therefore no more evidence would be likely to be forthcoming even if I were to order a further fact-finding hearing. Having failed to maintain contact with her representative in these proceedings, the claimant must bear the consequences if the case is decided on the evidence as it stands. On the evidence before me, my findings are as set out in paragraphs [2] – [4]. I consider for the reasons below that the claimant did not have sufficient resources either when she entered the UK or subsequently.

 

46. I do not accept Mr Kleinschmidt’s argument that the question of sufficiency of resources could only be considered by the Secretary of State for the Home Department. The legislative linking of benefit entitlement to the right to reside (the legality of which in general terms is on the authorities not challengeable before the Upper Tribunal) makes it inevitable that the Secretary of State for Work and Pensions and on appeal the First-tier Tribunal and Upper Tribunal will need to decide such issues. I do not consider that paragraphs 071233-071235 of the DWP’s own guidance, which do offer a degree of support for Mr Kleinschmidt’s position, are correct.

 

47. I am not aware of any process by which the claimant would have had occasion to demonstrate to the Border and Immigration Agency that she had sufficient resources upon entry to the UK. The immigration law provisions applicable to EEA nationals are set out in Abdirahman at [8] to [26] and I need not repeat them here. They provide no obvious context for such an enquiry to have been made of her and nor can I find one in the Immigration Rules. I infer therefore that I am considering the point, as it were with a blank sheet.

 

48. The sufficiency of resources is defined by Article 7(1)(b) in terms of enabling the person “not to become a burden on the social assistance system of the host Member State during their period of residence” (my underlining). The claimant’s wish to stay in the UK was, on the evidence, not time-limited and appeared to be to stay permanently. Once she had resided legally in the UK for a continuous period of five years, she would have had the right of permanent residence conferred by Article 16. Once again, I assume, in favour of the claimant, that as a minimum she would have to have needed to show self-sufficiency for such a period rather than any longer period. This assumption is consistent with that made by the Commission in COM(2001)257 final, the Commission’s proposal for what became Directive 2004/38.

 

49. I do not accept Mr Kleinschmidt’s position that “burden” in Article 7 should be construed in the same way as “unreasonable burden” in recital (16). Recital (16) was a late addition to the legislative process (see [61] below), intended for clarification rather than to effect substantive change to the underlying concepts. According to its terms, it is evident that it is primarily concerned with supervening events, rather than with the conditions attaching to establishing a right of residence at the outset. If the legislator had wanted to say “unreasonable burden” in Article 7(1), he could have done so (as, for example, in Article 14(1).)

 

50. It is a feature of this case that the claimant’s income was greater than the applicable amount for income support. But income support (and similar benefits such as income-based jobseeker’s allowance (IBJSA)) is not the only form of “social assistance”; housing benefit also constitutes “social assistance” (see CH/1400/2006 and CH/3314/2005) and by the same reasoning so does council tax benefit. This reflects, and is consistent with, the notion that in the vast majority of cases, income support and IBJSA do not purport, of themselves, to cover housing costs. And yet, to be self-sufficient, a person needs a roof over their head; indeed, in many cases, providing it will be one of their biggest costs. I do not regard the Commission’s view (as expressed in COM(2209)313 final) as compelling a reading which ignores housing costs. It is the wording of the Directive that must prevail and Article 8(4) does not compel such a reading. The Directive is legislating for application across a large number of Member States, which may or may not have a system under which housing costs are dealt with by a distinct benefit. One cannot infer from the fact that because housing costs are dealt with separately in the UK from social assistance for other living costs that it was the Community legislator’s intention to exclude them from consideration. Nor do I see any force in Mr Kleinschmidt’s objection that to include housing costs would lead to different results in different parts of the country or in different Member States: while that may be so, it is entirely consistent with the emphasis in Article 8(4) on the claimant’s circumstances. (The First-tier Tribunal’s reasons on this point appeared to proceed on the footing that it sufficed that the claimant’s resources exceeded the applicable amount for income support purposes and overlooked the need for sufficient resources in relation to housing. Thereby (among other reasons) it was further in error of law on this aspect.)

 

51. However, in considering what resources were available to the claimant, I have to take into account Commission v Kingdom of Belgium, which indicates that:

“40. In paragraphs 30 and 31 of its judgment in Case C-200/02 Zhu and Chen [2004] ECR I-9925, the Court held that according to the very terms of the first subparagraph of Article 1(1) of Directive 90/364, it is sufficient for the nationals of Member States to ‘have’ the necessary resources, and that provision lays down no requirement whatsoever as to their origin. The correctness of that interpretation is reinforced by the fact that provisions laying down a fundamental principle such as that of the free movement of persons must be interpreted broadly.”

52. In the same way, it seems to me that a person who has accommodation made available to them by a third party is in principle entitled to have that taken into account towards determining the sufficiency of their resources. Further, it is clear from that case that a Member State may not insist that the arrangements be legally enforceable.

 

53. Although the claimant first came to the UK in August or September 2007, she left again shortly afterwards. When she returned in December 2007 she could have relied on the initial right of residence for up to three months which is conferred by Article 6 of Directive 2004/38 on all Union citizens who hold a valid identity card or passport. However, if she had instead been in a country operating a registration scheme under Article 8, she would have been entitled even then to apply for registration and a registration certificate would have had to have been issued “immediately”, provided she could supply the evidence required by Article 8(3): see Article 8(2). But whether one looks at the matter in December 2007 or in March 2008 (i.e. three months after her (second) entry to the UK), I am not satisfied on the evidence that she had sufficient resources “during her period of residence”, in particular as regards her accommodation arrangements. It may, of course, have been that the plan to stay with her sister was intended as something which would last the five years until the claimant acquired a right of permanent residence, only for the plan to be thwarted by the discovery by the (ex-)husband of where she was. However, I consider that unlikely. If the threat from the (ex-)husband was as claimed, it is unlikely that a sister’s house would have provided a reliable option for a five year period. Staying with friends in the Manchester area was clearly a stop-gap while they helped her to find her own accommodation.

 

54. Turning to considering the funds available to the claimant from her Swedish invalidity pension it seems to me that there is more than one way in which it is possible to consider whether a person has sufficient resources without contravening the principles of Article 8(4) and that within limits the question is one of fact. Given the essentially temporary nature of the accommodation made available from third parties, it is necessary to consider whether the invalidity pension would have sufficed to cover the claimant’s living costs, including accommodation. For the purposes of this exercise, the modest accommodation (a one-bedroomed housing association flat) which she did in fact obtain provides an appropriate benchmark.

 

55. One possible factor to take into account may be to look at what income a person in the circumstances of this claimant would have to have in order to be disqualified on income grounds from housing benefit. This does not contravene Article 8(4). In referring to “no higher than the level below which nationals of the host Member State become eligible for social assistance” “the level below which…” is reached at the tipping-point of becoming eligible for social assistance in the form of housing benefit. In the present case, on the claimant’s “eligible rent” of £57.54, I calculate that amount as being £149.02 if no disability premium falls to be applied and, applying the same methodology, £174.87 if one does. (Such a premium would apply to a UK national who had been in receipt of incapacity benefit for many years, reflecting the presumed higher subsistence costs of long-term illness or disability, and applying such an approach by analogy might well be consistent with Article 8(4)). Article 8(4), as well as requiring a case-by-case approach, also imposes only a maximum and if one therefore adopts an alternative approach, of taking the income support applicable amount and adding her eligible rent and council tax liability (£12.34), one gets to figures of £130.68 (no disability premium included) or £156.23 (disability premium included).

 

56. Having regard to these various figures, and applying the approach required by Article 8(4), I conclude that the claimant, did not by virtue of her weekly income of £121.68 possess sufficient resources.

 

57. For the sake of completeness, I record that there is no evidence suggesting that the limited periods for which accommodation was available to her from other sources would have sufficed to enable her to save enough for those savings, taken together with her ongoing invalidity pension payments, to enable her to become self-sufficient for the overall period.

 

58. One can appreciate that in a situation of domestic violence and other difficult family circumstances medium-term planning may be difficult, but that was what was required if the claimant was to establish a right to reside as a self-sufficient person. The legislation on the point is an illustration of the principle that in this context, “The exercise of the right of residence of citizens of the Union can be subordinated to the legitimate interests of the Member States” (Baumbast and R, quoted in Commission v Kingdom of Belgium at [37].) Ultimately, in social security law, as it would be in immigration law (see AG and others (Germany) v SSHD [2007] UKAIT 75) it is for a person in the claimant’s situation to establish their entitlement and she has not done so. Accordingly I remake the decision to reflect that in my view she lacked sufficient resources, in the terms set out at the head of these Reasons.

 

59. If I am wrong in the hypothesis that the question of whether the claimant was self-sufficient fell to be looked at earlier than the date of claim, then, applying the reasoning in [50], the tribunal still needed to consider the position with regard to her housing. By the time of her claim, the facts had moved further against the claimant in that she could apparently no longer secure accommodation on any basis without the help of social assistance. Looked at at the date of claim, she accordingly lacked sufficient resources then also.

 

60. As the claimant lacked sufficient resources at any material time to establish a right to reside on the basis of the Directive, Article 24 of the Directive cannot help her.

 

61. On the assumption I have made in favour of the claimant that she might be able to assert a right derived from Grzelczyk, if I am wrong in my conclusion that she had not established that she was self-sufficient at any material time, I consider that the burden she would impose on the UK’s social assistance system was an unreasonable one, as originally did the local authority. The purpose of the inclusion of recital (16) was to provide an indication of the criteria to follow in order to establish if a person had become an unreasonable burden on the social assistance of the host Member State: see Common Position (EC) No 6/2004 adopted by the Council on 5 December 2003 (2004/C54 E/02). For countries which, unlike the UK, do not attempt to link entitlement to benefit to the existence or otherwise of the right to reside, the natural context for such a decision is in the context of expulsion, which is why reference is made there to expulsion. In my judgment though, the criteria it sets out would be equally applicable in assessing the questions for an (assumed) extended right to social assistance of the type in Grzelczyk. In this case, the claimant had indicated a wish to stay in the UK indefinitely, but there was no indication that her need for housing benefit and council tax benefit would be temporary. This was not a short-term expedient in the immediate aftermath of an episode of domestic violence. The claimant had been unfit to work since 1993 (when she was aged 24) and had a life award of a Swedish invalidity pension, so there was no likelihood that the situation would change. Her residence in the UK had been only for a few months. The amount of benefit at issue would potentially be a significant proportion of her housing costs (roughly one-third), for effectively an indefinite period. Applying the criteria, I therefore conclude that she would have become an unreasonable burden on the social assistance of the United Kingdom. In remaking this decision, I give effect to this alternative position, in the terms set out at the head of these Reasons.

 

 

 

 

CG Ward

Judge of the Upper Tribunal

15 July 2010