Exporting AA, CA and DLA care

 

The European Court of Justice (ECJ) has recently given an important judgement - Commission of the European Communities v the European Parliament and the Council of the European Union (C-299/05, 18 October 2007). The effect of the judgement is to allow for the exportation to any other European Economic Area (EEA) of States Attendance Allowance (AA), Carers Allowance (CA) and the care component of Disability Living Allowance (DLA). Pamela Fitzpatrick provides some background and details of this decision.

The right to export certain benefits within the EEA comes from EC Regulation 1408/71.1 For a fuller account of the scope of this regulation, see CPAG's Welfare Benefits and Tax Credits Handbook. Generally, this only applies to those benefits paid on a long-term basis which are intended for retirement, bereavement, invalidity or industrial injury.2 Article 10 EC Regulation 1408/71 Prior to 1 June 1992, it was possible to export AA, DLA and CA to another EEA state because they were considered to be 'invalidity benefits' under EC law and consequently were fully exportable under the Regulation.

This position was confirmed in the case of Newton Case C-356/89, where the European Court of Justice (ECJ) held that mobility allowance (the predecessor to DLA) was an invalidity benefit for the purpose of 1408/71 and was fully exportable.

In June 1992, Regulation 1408/71 was amended to include a new category of 'special non-contributory' benefits.3 Regulation 1247/92 introduced Articles 4(2)(a) and Article 10a. Article 5 of the Regulation was also amended so as to provide that member states list the benefits considered to fall within this category in Annex IIa to Regulation 1408/71 Following this change, member states were required to list the benefits considered to fall within this category in Annex IIa to Regulation 1408/71. The UK listed AA, CA and DLA 4 The UK has also listed income support, income -based JSA and pension credit as special noncontributory benefits as special noncontributory benefits and consequently from that date any new claimants would not be allowed to export their benefit.5 Some people who were entitled to one of the benefits prior to 1 June 1992 retain the right to export benefit

However, a number of decisions by the ECJ began to cast doubt upon the validity of this change in status. In Jauch Case C-215/99, the ECJ rejected a submission that the listing of a benefit in Annex IIa to Regulation 1408/71 was conclusive of its nature as a special noncontributory benefit. The Court held that given the importance accorded by the EC Treaty to the principle of freedom of movement for workers, any provisions which derogate from the principle of exportability of social security benefits must be interpreted strictly.

A special noncontributory benefit not only had to be listed within Annex IIa, but it also had to be 'special' and noncontributory Applying those principles, the Court held that an Austrian care allowance was not a 'special noncontributory benefit' within Article 10a, even though it had been expressly listed as such in Annex IIa.

Shortly after Jauch, in the case of Leclere and Deaconescu (case C-43/99), the Court reached a similar conclusion and held that the inclusion of a maternity allowance by a member state in Annexe IIa was invalid. This point was reiterated in the judgement of Hosse Case C-286/03 in respect of a carer's allowance.

In the light of the developing case law, the European Commission examined all the benefits which could be categorised as 'special noncontributory benefits and put forward draft legislation intended to reflect the judgements of the Court. The amendment would have had the effect that all three benefits would be again fully exportable. However, three member states, including the UK, blocked the new legislation, and the Regulation was subsequently adapted to allow for an amendment for the UK and two other member states.

This led to the unprecedented move by the European Commission to bring an action in the ECJ against the European Parliament and the European Council to have the amendment annulled. The Commission submitted that the three UK benefits did not meet the conditions for allowing their payment to be restricted only to people residing in the UK.

The ECJ held that only those benefits which have the dual characteristic of being special and noncontributory can be included in the list in Annex IIa. There was no dispute that the UK benefits were noncontributory, but it was necessary to examine whether the benefits were 'special'.

Article 4(2a) of the Regulation applies to special noncontributory cash benefits which are provided under legislation which, because of its personal scope, objectives and or conditions for entitlement, has characteristics both of social security legislation and of social assistance.

Under Article 4(2a) of the Regulation, a benefit can only be deemed to be 'special' if its purpose is solely that of specific protection for the disabled, closely linked to the social environment of those persons in that member state. However, the ECJ considered that the benefits at issue do not have that sole function. In fact, although they unquestionably promote the independence of the persons who receive them and protect the disabled in their national social context, they are also intended to ensure the necessary care and supervision of those persons, where it is essential. They cannot therefore be classified as special benefits.

The Court also states that a special benefit is defined by its purpose. It must either replace or supplement a social security benefit, whilst remaining distinguishable from it. Furthermore, it must be by its nature social assistance justified on economic and social grounds and fixed by legislation setting objective criteria. By contrast, a benefit is regarded as a social security benefit where it is granted, without any individual and discretionary assessment of personal needs, to recipients on the basis of a statutorily defined position and relates to one of the risks expressly listed in Article 4(1) of the Regulation.

The Court goes on to state that all three benefits, apart from the mobility component of DLA, are exportable. Only DLA (i.e., the mobility component) can be considered to include a social assistance component and is therefore not exportable. As a consequence, the Court annuls the inclusion of the three benefits in the list of 'special noncontributory benefits' in Annex IIa to Regulation 1408/71, with the exception of the mobility component of DLA.

The Court exercises its power to provisionally maintain the effects of inclusion of the mobility component of DLA so that, within a reasonable period, appropriate measures can be taken which, the Court suggests, might lead the UK to decide 'to create an allowance which concerned that component alone'.

The Government has stated that they are still considering the judgement and will make a statement before the end of the year. However, the UK Government is bound by the ECJ and has no route to overturn or to amend the UK legislation in order to avoid complying with it. Therefore, claimants should be advised where appropriate to ask for their benefit to be exported and appeal any refusal on the basis of the ECJ judgement.

Claimants previously refused one of these benefits can put in a fresh claim, but are unlikely to be able to backdate their benefit claim. This is because the judgement does not simply give an interpretation of the law, but has acted to annul one area of EC law.

The DWP has advised claimants who think the judgement affects them to contact The Exportability Co-ordinator, Room B120D, DCS, Warbreck House, Warbreck Hill Rd, FY2 0YE; email exportability.team@dwp.gsi.gov.uk.

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