Patmalniece v Secretary of State for Work and Pensions
| Jurisdiction | England & Wales |
| Judge | LORD HOPE,LORD WALKER |
| Judgment Date | 16 March 2011 |
| Neutral Citation | [2011] UKSC 11 |
| Court | Supreme Court |
[2011] UKSC 11
Lord Hope, Deputy President
Lord Rodger
Lord Walker
Lady Hale
Lord Brown
Appellant
Simon Cox
Alison Pickup
(Instructed by Tower Hamlets Law Centre)
Respondent
Clive Lewis QC
Jason Coppel
(Instructed by DWP/DH Legal Services)
Intervener (The AIRE Centre)
Richard Drabble QC
Charles Banner
(Instructed by Bates Wells & Braithwaite LLP)
Heard on 29 and 30 November 2010 and 1 December 2010
LORD HOPE (with whom Lord Rodger agrees)
The issue in this appeal is whether the conditions of entitlement to state pension credit prescribed by regulation 2 of the State Pension Credit Regulations 2002 (SI 2002/1792) ("the 2002 Regulations") are compatible with EU law. Regulation 2 is not easy to summarise in a few words, but its general effect is to restrict entitlement to state pension credit to those who have a right to reside in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland ("the Common Travel Area"). The question is whether this is compatible with article 3(1) of Council Regulation (EC) No 1408/71 ("Regulation 1408/71").
Regulation 1408/71 was replaced on 1 May 2010 by Regulation (EC) No 883/2004, which need not be examined as all the relevant events preceded that date. Article 2(1) of Regulation 1408/71 provides that the Regulation applies to employed persons or self-employed persons who are or have been subject to the social security legislation of a Member State as well as to members of their families. Article 3(1) provides, in respect of those to whom the Regulation applies, for equality of treatment in the application of social security schemes. They are to be entitled to the same benefits under the legislation of any Member State of the kind to which Regulation 1408/71 applies as the nationals of that State. The general effect of the 2002 Regulations, on the other hand, is as stated above. Entitlement to state pension credit depends on whether the person concerned has a right to reside in the United Kingdom or elsewhere in the Common Travel Area.
The problem arises because regulation 2(2) of the 2002 Regulations affects nationals of different Member States in different ways. A citizen of the United Kingdom has a right to reside in the United Kingdom by virtue of his or her right of abode under section 2(1) of the Immigration Act 1971. An Irish citizen has, by virtue of his or her Irish nationality, a right to reside in the Republic of Ireland. In their case regulation 2 of the 2002 Regulations does not preclude entitlement to state pension credit. But nationals of other Member States do not qualify for the same treatment unless they have a right to reside here, which they do not have simply on the grounds of their nationality.
The appellant was born in Latvia on 1 June 1938. She came to the United Kingdom on 12 June 2000 before Latvia joined the European Union. She claimed asylum on the ground that, as she is of Russian ethnic origin, she had a well founded fear of persecution if she were to return there. Her claim to asylum was finally refused in January 2004, but no steps were taken to remove her from this country. On 1 May 2004 Latvia joined the EU, so pursuant to derogations from article 39(3) of the EC Treaty the appellant became entitled to work here if she complied with the Workers Registration Scheme in the Accession (Immigration and Worker Registration) Regulations 2004: see Zalewska v Department for Social Development (Child Poverty Action Group and another intervening) [2008] UKHL 67; [2008] 1 WLR 2606. She had worked in factories and as a kitchen assistant for about 40 years in Latvia. She is in receipt of a retirement pension from the Latvian social security authorities which is worth between £50 and £170 a month, depending upon the rate of exchange for the time being. But she has not worked at any time while she has been in this country, and she has no other income.
In August 2005 the appellant claimed state pension credit from the respondent, the Secretary of State for Work and Pensions. Her claim was refused on 7 September 2005 on the ground that she lacked a right to reside in the United Kingdom. She appealed against that refusal, asserting direct discrimination on grounds of her nationality contrary to article 3(1) of Regulation 1408/71. Her case was that it was her Latvian nationality that precluded the entitlement to state pension credit which she would have had if she had been a United Kingdom national. On 12 December 2005 the appeal tribunal allowed her appeal on the grounds of direct discrimination. But on 11 June 2008 Commissioner Rowland allowed the respondent's appeal against that decision. He held that the imposition of the right to reside test was indirect discrimination, but that it was justified as a proportionate means of achieving the legitimate aim of protecting the public finances of the host member state. There was, in his view, no obligation on the United Kingdom under Community law to afford access to social assistance to those who have no right of residence here. On 25 June 2009 the Court of Appeal (Lord Clarke of Stone-cum-Ebony MR and Moses and Sullivan LJJ) dismissed the appellant's appeal against the decision of the Commissioner: [2009] EWCA Civ 621.
State pension credit is a means tested non-contributory benefit. The details of how it is calculated do not matter for present purposes. But it is worth noting that it is made up of two elements, a guarantee credit and a savings credit, each of which have their own rules as to eligibility. Section 2(2)(b) of the State Pension Credit Act 2002 provides that the guarantee credit is the difference between the prescribed amount and the claimant's income. Income includes retirement pension income, and an overseas arrangement such as a state pension from another Member State is retirement pension income for this purpose: sections 15(1)(c) and 16(1)(g). Section 1(2)(a) provides that a claimant is entitled to state pension credit if he is "in Great Britain". Section 1(5)(a) provides that regulations may make provision as to the circumstances in which a person is to be treated as being in or not being in Great Britain for the purposes of the Act.
Regulation 2 of the 2002 Regulations was amended by regulation 5 of the Social Security (Habitual Residence) Amendment Regulations 2004 ("the 2004 Amendment Regulations"). As so amended, it was in the form that was in force from 1 May 2004 to 29 April 2006. This is the period during which the appellant made her claim. In that form it provided as follows:
"(1) Subject to paragraph (2), a person is to be treated as not in Great Britain if he is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland, but for this purpose, no person is to be treated as not habitually resident in the United Kingdom who is –
(a) a worker for the purposes of Council Regulation (EEC) No 1612/68 or (EEC) No 1251/70 or a person with a right to reside in the United Kingdom pursuant to Council Directive No 68/360/EEC or No 73/148/EEC or a person who is an accession state worker requiring registration who is treated as a worker for the purpose of the definition of 'qualified person' in regulation 5(1) of the Immigration (European Economic Area) Regulations 2000 pursuant to regulation 5 of the Accession (Immigration and Worker Registration) Regulations 2004; or
(b) a refugee within the definition in article 1 of the Convention relating to the Status of Refugees done at Geneva on 28 July 1951, as extended by article 1(2) of the Protocol relating to the Status of Refugees done at New York on 31 January 1967; or
(c) a person who has been granted exceptional leave to enter the United Kingdom by an immigration officer within the meaning of the Immigration Act 1971, or to remain in the United Kingdom by the Secretary of State; or
(d) a person who is not a person subject to immigration control within the meaning of section 115(9) of the Immigration and Asylum Act 1999 and who is in the United Kingdom as a result of his deportation, expulsion or other removal by compulsion of law from another country to the United Kingdom; [or]
(e) a person in Great Britain who left the territory of Montserrat after 1 November 1995 because of the effect on that territory of a volcanic eruption.
(2) For the purposes of treating a person as not in Great Britain in paragraph (1), no person shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland if he does not have a right to reside in the United
Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland."
The persons referred to in regulation 2(1)(a) are various categories of persons who are afforded rights of residence by EU law. Among these categories are nationals of other EU Member States who are workers (that is to say, in employment or looking for work with a genuine chance of being engaged) or who are self-employed. They have a right to reside here and they are not to be treated as not habitually resident in the United Kingdom. So if they are actually in this country too, they are "in Great Britain" for the purpose of entitlement to state pension credit under the statute. Other nationals of EU Member States who have a right to reside in the United Kingdom or elsewhere in the Common Travel Area and are habitually resident in the United Kingdom or elsewhere in the Common Travel Area are also eligible to claim state pension credit if they are in Great Britain. As they have a right to reside in the Common Travel Area, they are brought within the scope of the opening words of regulation 2(1) by...
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