European nationals and sickness benefits
Henri Krishna looks at rules which determine which European state is responsible for the payment of certain ‘cash sickness benefits’.
UK legislation requires that the UK is the ‘competent state’ for payment of‘cash sickness benefits’ to European national claimants covered by the EU social security co-ordination rules (‘the Co-ordination Rules’ – EC Regulation 883/04 and 987/2009).1 ss65(7), 70(4A) and 72(7B) Social Security Contributions and Benefits Act 1992; s84 Welfare Reform Act 2012
Cash sickness benefits for the purpose of these Co-ordination Rules have been held to be the disability living allowance (DLA) care competent, attendance allowance (AA) and carer’s allowance. Personal independence payment (PIP) daily living competent is treated as a cash sickness benefit by the DWP.2 Commission of the European Communities v European Parliament and Council of the European Union, C-299/05 , although for the DLA care component the Supreme Court has made a referral to the Court of Justice of the EU as to whether it should be classified as an invalidity benefit in some circumstances: SSWP v Tolley (deceased)  UKSC 55.
This article examines recent Upper Tribunal decisions and new DWP guidance about who is covered and which European Economic Area (EEA) state is the competent state for the purposes of claiming cash sickness benefits.
Who is covered by the rules?
To be covered by the Co-ordination Rules the claimant must first come within the ‘personal scope’ of the rules. All EEA nationals who have been ‘subject to the legislation of’ one or more member states are covered, as are their family members and survivors. This means that the claimant normally must have moved between EEA states (eg, lived in more than one state) and had the right to claim benefits or have paid the equivalent of national insurance contributions in at least one state.3 Petit v Office national des pensions  EUECJ C-153/91 and art 1(l) EC Regulation 883/2004
The Upper Tribunal recently pointed out that there are many more people covered by the current Co-ordination Rules than under previous legislation.4 SSWP v BM  UKUT 526 (AAC)
It is no longer necessarily only those who have been ‘economically active’ or paid national insurance who come within the scope of the rules.
New DWP guidance (Memo DMG 26/15) reflects the decision.5 paras 9–11
This guidance excludes step-parents from the definition of ‘family member’ from whom rights can be derived.6 para 28 Memo DMG 26/15
However, arguably that is wrong, as article 1(i)(2) EC Regulation 883/2004 covers spouses, ‘minor children’ and ‘dependent children’ as members of an EEA national’s family. Given that there is no reference to the biological relationship in that definition, it is arguable that step-families should not be excluded. See CPAG’s Beneﬁts for Migrants Handbook
for further details about family members and the Co-ordination Rules.
Which is the competent state?
The general rule is that the competent state is the state in which the claimant is working or treated as working. For those who are not currently economically active, the competent state is normally the state of residence.7 Art 11 EC Regulation 883/2004
This is now acknowledged in the DWP’s guidance.8 para 6 Memo DMG 26/15
For payments classed as ‘special non-contributory benefits’, which includes the mobility component of DLA, it is always the state of residence whose legislation applies.9 Art 70(4) and Annex X of EC Regulation 883/2004. The PIP mobility component is treated as a special non-contributory benefit by the DWP – para 4.4 Memo DMG 26/15
For ‘cash sickness benefits’, the Co-ordination Rules differ from these general rules. They treat the question of which is the competent state for cash sickness benefits differently, depending on whether an EEA national receives a pension or not, and where family members derive rights from the EEA national.10 ‘Pension’ covers old age pensions as understood in the UK but may cover lump sums and other benefits paid prior to retirement age. See art 1(w) EC Regulation 883/2004, JS v SSWP  UKUT 81 (AAC) and KS v SSWP  UKUT 19 (AAC)
If an EEA national is resident in one member state (‘state A’) but, for example, works in another member state (‘state B’) such that it is her/his competent state under the general rule, for cash sickness benefits state B will normally be the competent state.11 Arts 17–21 EC Regulation 883/2004
For family members of such an EEA national, state B will also normally be the competent state for paying their cash sickness benefits, whatever state they themselves reside in.
Where an EEA national gets a pension from one member state but is resident in another state from which s/he gets no pension, the state paying the pension is normally the competent state for paying cash sickness benefits.12 Arts 23–30 EC Regulation 883/2004. Note that if the pensioner is a worker then under art 31 the competent state is determined as for other worker in arts 17–21.
The same state may also be responsible for paying cash sickness benefits to the pensioner’s family members.
Where a family member has both her/his own rights under the Co-ordination Rules and also derives rights in respect of the competent state for cash sickness benefits as described above, there are complex rules about which rights take precedence.13 Art 32 EC Regulation 883/2004
Milo and his mother Anna are Dutch and moved to the UK six months ago. Frank, Milo’s father and Anna’s husband, is a British national but is currently living and working in the Netherlands. Anna is not working. Therefore, the Netherlands is the competent state for Frank and when DLA is claimed for Milo the UK is found not to be the competent state even though Milo is resident there. This is because Milo is Frank’s family member and Frank’s status as a worker takes precedence for cash sickness beneﬁts.
Gustav moves from the Czech Republic to live with his daughter who is working in the UK, as his health is deteriorating. He gets a pension from the Czech state but is not entitled to a UK state pension. When he claims AA, the UK is found not to be the competent state even though he is now resident in the UK and part of his daughter’s household. This is because his pension from the Czech Republic makes it the competent state for cash sickness beneﬁt and even if he could derive any rights from his working daughter, his own rights would take precedence in these circumstances.
Disputes about the ‘competent state’
The Co-ordination Rules make provision where there is a dispute about which country is the ‘competent state’. Three recent Upper Tribunal decisions highlight when and how these rules should apply, and the DWP’s recent memos provide official guidance.14 Memo DMG 26/15; Memo DMG 27/15
In SSWP v HR  UKUT 571 (AAC), the judge points to the implementing regulations for rules on the handling of a ‘difference of view’ between states regarding competence. A difference of view is held to be something more general than a ‘dispute … [or] disagreement following discussion or argument’ but evidence will be needed of its existence (see SSWP v FF). If states cannot resolve this difference themselves within a month of it arising, reference should be made to the EU’s Administrative Commission. Provisional payments should be made to the claimant pending the Administrative Commission’s decision on competence. Normally, these are from the state of residence, provided all other conditions of entitlement are met under that state’s legislation. Provisional payments should not be delayed pending any appeal about competence.
In SSWP v AK
 UKUT 110 (AAC), it is held that if a state decides it is not competent then it must pass the claim ‘without delay’ to the state it believes is competent. If there is no difference of view, any such claim should be treated by the competent state as made on the date originally submitted in the first state.15 Judge Jacobs indicates some ambiguity in the regulations on this point (para 29 of HR and para 31 of AK) although at para 30 of Memo DMG 26/15 the DWP seems to accept that the claim be treated as made on the date originally submitted.
Finally, SSWP v FF  UKUT 488 (AAC) concerns what constitutes evidence of a difference of view about competence. In this case, in the absence of any formal written evidence, the claimant’s evidence that he had been given a verbal refusal was held to be suficient and as such he should be entitled to provisional payments pending resolution of any disagreement. It is understood that the DWP is seeking leave to appeal in this case.
Taken together, the decisions demonstrate is that the Co-ordination Rules do not contemplate EEA nationals having to work out how the rules apply themselves. Rather, the Co-ordination Rules are an administrative tool for member states when dealing with social security claims by EEA nationals exercising their rights of free movement. This is what the preamble and opening articles to EC Regulation 987/2009 make clear as an objective.16 See particularly paras 10 and 11 of the preamble and Art 2 EC Regulation 987/2009
The recent DWP guidance now covers situations where the DWP does not believe the UK to be the competent state, but another state disagrees.17 paras 29–30 Memo DMG 26/15; Memo DMG 27/15 18 para 3 Memo DMG 27/15
However, little direct reference is made to the Upper Tribunal decisions which seem to have inspired the new guidance and there is no reference to the observations about what constitutes a differences of view or the evidence required to show that one exists. There is a reference to ‘acceptable evidence’ but no definition of what this is.18 para 3 Memo DMG 27/15
The guidance states that provisional payments will only be made where ‘similar benefits’ are available in both states involved.19 Note to para 4 Memo DMG 27/15
This is not an issue addressed directly by the Upper Tribunal and would seem to depend on interpretation of Article 6(2) EC Regulation 987/2009. However, given the comment in SSWP v HR that the rules on provisional payments pending resolution of disagreements are there to protect ‘claimants … by definition, (i) in need of financial assistance and (ii) disabled or incapacitated and often elderly’ solely where a disagreement arises regarding competence, it may be arguable that this protection should extend even where no ‘similar benefit’ exists in the other state.20 SSWP v HR  UKUT 571 (AAC) para 18
Otherwise, this would seem to defeat the ‘general principles’ as laid out in Article 2 and the preamble to the regulation.
This series of Upper Tribunal decisions has helped to clarify poorly understood parts of the Co-ordination Rules. The DWP’s new guidance may bring improvements in how it applies the rules. It is inevitable that further cases concerning this complex set of rules will reach the Upper Tribunal and will shed further light on how they should work in practice. In the meantime, advisers can consult CPAG’s Beneﬁts for Migrants Handbook.
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