Iman Alhashem v The Secretary of State for Work and Pensions
| Jurisdiction | England & Wales |
| Judge | Lady Justice Arden,Lord Justice David Richards,Mr Justice Mitting |
| Judgment Date | 21 April 2016 |
| Neutral Citation | [2016] EWCA Civ 395 |
| Docket Number | Case No: C3/2014/0321 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 April 2016 |
[2016] EWCA Civ 395
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE UPPER TRIBUNAL
(Administrative Appeals Chamber)
Judge Edwards Jacob
CE41532012
Royal Courts of Justice
Strand, London, WC2A 2LL
Lady Justice Arden
Lord Justice David Richards
and
Mr Justice Mitting
Case No: C3/2014/0321
Helen Mountfield QC and Tom Royston (instructed by Howells Solicitors) for the Appellant
Julia Smyth (instructed by Government Legal Department) for the Respondent
Hearing date: 15 March 2016
ISSUE FOR DECISION AND SUMMARY OF CONCLUSION
This appeal is about social security and raises questions of law to which EU law applies.
Mrs Alhashem, a Dutch citizen, has been living in the UK since 2010. She was at first awarded job seeker's allowance (" JSA"), but this ended because she was unable to sign on for work because of ill health. She then applied for employment and support allowance ("ESA"). On 12 November 2011, the Secretary of State refused her claim on the basis that she did not have the right to reside in this country. She appealed to the First–tier Tribunal ("the FTT") on two grounds. Only the second ground is relevant. She claimed that it was not permissible under EU law to deny access to benefits intended to facilitate access to the labour market to someone who had the right to reside as a job seeker, so that ESA had to be made available to jobseekers in the UK who met the financial conditions for eligibility. The FTT rejected this ground, as subsequently did the Upper Tribunal ("the UT") (Upper Tribunal Judge Edward Jacobs) on appeal to it. Judge Jacobs concluded that:
[ESA] is for claimants who are unable to access the labour market. As a condition of receiving the benefit, claimants may have to undertake work-related activity in order to help them get fit for work. But that does not make [ESA] a benefit that is intended to facilitate access to the labour market in the sense of EU law. (emphasis in the original)
Judge Jacobs amplified his conclusion when refusing permission to appeal to this Court:
The purpose of work-related activity is to assist a claimant to recover sufficiently to be able to work. In other words, it operates at a stage that is preliminary to the point at which a claimant could access the labour market within the meaning of EU case law.
Mrs Alhashem, for whom Ms Helen Mountfield QC together with Mr Tom Royston appears, contends this reasoning is erroneous in law. The Secretary of State, for whom Ms Julia Smyth appears, contends that the decision of the UT was right essentially for the reason that the UT gave.
In my judgment, the contention of the Secretary of State is correct for the detailed reasons given below. EU law makes a distinction between "social assistance" and benefits paid to enable a job seeker's integration into the labour market ("labour market-related benefits"). EU law requires the latter only to be made available to job seekers who are EU citizens coming from other member states and meet the financial conditions for eligibility. In Case C-67/14 Jobcenter Berlin Neukolln v Alimanovic, the CJEU stated the test for identifying the category into which a benefit falls: the test is whether the function of the benefit is "predominantly" for facilitating access to the job market. If this is met, the benefit is a labour market-related benefit. This category does not include benefits paid to provide welfare for persons with a disability who cannot, or cannot yet, work to enable them to subsist. EU law thus recognises that, unless the liability of a state paying non-contributory benefits is restricted by an appropriate test, a state which pays generous benefits may be the subject of "benefits tourism", where persons move to that state to take advantage of non-contributory benefits. Applying that test to the facts, ESA is social assistance and not a labour market-related benefit.
MORE ABOUT ESA
ESA was introduced by the Welfare Reform Act 2007 to replace incapacity benefit. It is aimed at promoting a change in attitudes to people with disabilities with regard to work. The impact assessment stated that the starting point for the assessment would be that the overwhelming majority of customers were capable of some work, given the right support. That would lead to better employment outcomes for people with disabilities. Treating people in line with their capabilities, instead of making assumptions based on their condition, would have a positive impact on the attitude of others to people with disabilities.
When claimants apply for ESA, they undergo a work capability assessment to see whether they have a limited capability to work and, if so, whether they also have a limited capability for work-related activity. Work-related activity depends on what it is reasonable for a claimant to do. Examples include attending workshops to learn how to write a CV, or basic skills training (it is said that this facility may make this benefit more attractive to some job seekers than JSA). I will call individuals who have made valid claims whose claims are being assessed "the WCA group". If Mrs Alhashem's claim was accepted as valid she would start in this group.
If the individual has limited capability to work and also limited capability to undertake work-related activity, he or she is placed in a support group ("the Support Group"). If an individual has a limited capability to work but does not have limited capability to do work-related activity, he or she is placed in a separate group ("the Work Related Activity Group"). The individual is expected to engage in that activity as a condition of receiving benefits. This requirement is known as "work-related conditionality." I will call this group of claimants "the third group." Rules enable a person receiving ESA to do some specified types of work while receiving the benefit. Of those applying for ESA for the period January to March 2015, some 74% were found to be entitled to ESA. Of those, 64% were placed in the Support Group and 11% were placed in the Work Related Activity Group (these percentages are approximate but are adjusted for the outcome of appeals): see Employment and Support Allowance: outcomes of Work Capability Assessments, Great Britain, Quarterly official statistics bulletin 10 December 2015.
We are concerned here with only one type of ESA, namely ESA as a non-contributory benefit. It is paid to a person because of his inability to support himself by work due to disability. It is paid irrespective of his contributions paid by deductions from wages. A job seeker who comes to the UK from another member state and has never previously been a worker in the UK will not therefore have made any contributions to public funds to support the payment of this benefit.
Since the decision of the Upper Tribunal, both parties filed witness statements – by Mr Michael Spencer, a Solicitor employed by the Child Poverty Action Group in the case of the appellant and by Mr Iain Walsh, Head of the ESA and Work Capability Assessment Policy Division at the Department for Work and Pensions respectively. By filing this evidence, the parties intended to assist this Court, which does not have the specialist knowledge of the FTT or UT in this case, better to understand the nature of the benefit: it was succinct and informative. I would admit that evidence. We cannot of course resolve an issue of fact on which the deponents disagree.
Relevant EU case law
EU law allows a member state to confine "social assistance" to those who lawfully reside in that state: see, in relation to workers from other member states, Case C-456/02 Trojani v Centre Public d'aide sociale de Bruxelles. This right is preserved by Article 24(2) of the Citizenship Directive ( Directive 2004/38). This however also gives member states the option to withhold types of "social assistance" from certain types of citizens of other member states. The concept of "social assistance" is very broad: it covers "all assistance introduced by the public authorities, whether at national, regional or local level, that can be claimed by an individual who does not have resources sufficient to meet his own basic needs and the needs of his family" ( C-140/12 Pensionsversicherungsanstalt v Brey at [61]).
But there are special rules for job seekers and workers. A member state must in general make benefits which are paid to these groups available also to EU citizens who are not resident in that state but are exercising their freedom of movement rights as job seekers or workers.
The scope of the special rule for job seekers has been considered by the CJEU. The function of the CJEU is to provide the national court with the elements for the interpretation of EU law which may be of assistance to it in deciding the case pending before it. It is for the national court to carry out the determination of fact necessary to enable it to determine the application of EU law in the case before it. I shall set out a summary of the elements of interpretation provided by three decisions of the CJEU about the entitlement of job seekers to social security benefits in another member state. I examine these in chronological order. The third is the most important on this appeal, but it needs to be read together with the other two to deduce the current state of EU law.
Case-138/02 62002CJ0138">Collins v Secretary of State for Work and Pensions 62002CJ0138"> [2005] QB 145 decides that the principle of non-discrimination applied to a decision by a member state to discriminate against...
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