R (Tilianu) v Social Fund Inspector

JurisdictionEngland & Wales
CourtQueen's Bench Division (Administrative Court)
JudgeChristopher Symons QC
Judgment Date15 February 2010
Neutral Citation[2010] EWHC 213 (Admin)
Date15 February 2010
Docket NumberCase No: CO/9201/2009

[2010] EWHC 213 (Admin)

IN THE HIGH COURT OF JUSTICE

Queen's Bench Division

Administrative Court

Before: Mr Christopher Symons QC

(Sitting as a Deputy Judge of the High Court)

Case No: CO/9201/2009

Between
R (on the Application of) Marian Tilianu
Claimant
Social Fund Inspector
1st Defendant
and
The Secretary of State for Work and Pensions
2nd Defendant

Simon Cox (instructed by Streetwise Community law Centre) for the Claimant

Richard Gordon Q.C. (instructed by Richard Freeman and Co) for the 1st Defendant

Jason Coppel and Denis Edwards (Instructed by the Department of Work and Pension Legal Group) for the 2nd Defendant

Hearing dates: 19 January 2010

Crown Copyright ©

Christopher Symons QC

Christopher Symons QC:

1

This case raises issues concerning the right of European Union citizens, who have worked as self-employed workers but have ceased to be in work, to be paid jobseeker's allowances and crisis payments. The central issue turns on whether there is a practical distinction, for the purposes of obtaining certain benefits, between a worker who, prior to becoming unemployed, has been employed and a worker who has been self-employed.

2

This application for Judicial Review is brought by Mr. Tilianu, the Claimant, following the grant of permission by Belinda Bucknall Q. C. sitting as a Deputy High Court Judge on 11 th September 2009. The Claimant seeks orders from the Court quashing a decision of the Social Fund Inspector made on the 6 th August 2009 to refuse to direct the Secretary of State for Work and Pensions (“the Secretary of State”) to pay a crisis loan to the Claimant and the quashing of the decision of the Secretary of State dated 4 th September 2009 disallowing payment of jobseeker's allowance. In addition certain declaratory relief is sought.

The History

3

The Claimant is a citizen of Romania. In June 2008 he arrived in the United Kingdom and began working under the Construction Industry Scheme. There are some pay slips under that scheme which provide evidence that he worked from at least July until early December 2008. Thereafter the Claimant alleges that he worked for his uncle from 2 nd January 2009 until his admission into hospital on 26 th February 2009. However there is no supporting evidence of that work in the form of documentation and nothing to assist as to whether he was employed by his uncle as an employee or worked as a self-employed person.

4

The Claimant's admission to hospital was due to his suffering from multi-resistant tuberculosis. He remained in hospital until 13 th July 2009 and will remain on medication for some time to come.

5

The Claimant's first application for social security benefits was made for employment and support allowance, a means-tested benefit for persons incapable of work. That application was refused by the Secretary of State on 22 nd April 2009 on the basis that the Claimant did not have the right to reside in the United Kingdom and consequently was not habitually resident for benefit purposes. There was no appeal against that decision and I need to say no more about it at this stage.

6

Shortly after leaving hospital the Claimant made an application to the Secretary of State for income-based jobseeker's allowance ( JSA). A decision on that application was not made until the 22 nd August 2009 and in the meantime the Claimant had run out of funds. He therefore applied to the Secretary of State for a social fund crisis loan to purchase essential items while waiting for the JSA decision. That application was refused at the end of July 2009.

7

There is a right to have a decision refusing a crisis loan reviewed by a Social Fund Inspector (SFI). A review duly took place and on the 4 August the SFI decided that the Claimant was not entitled to a crisis loan because he was “a person from abroad”. It is apparent on the face of the decision that the SFI relied, in making his decision, on the fact that the Secretary of State in refusing employment and support allowance on the 22 nd April 2009 found that the Claimant failed the habitual residence test.

8

The Claimant requested a further review. The Claimant contended that he had a right to reside as a person who had retained self-employed status under Article 7(3)(c) of EC Directive 2004/38. The further review also produced a negative decision for the Claimant. On 6 th August 2009 Mrs Gough, the SFI, allowed the previous decision to stand. She relied on the earlier decision concerning habitual residence. She said:

“As he has had a recent decision, refusing benefit on the basis of being a person from abroad, no crisis loan can be paid for living expenses.

9

That decision is challenged by the Claimant. Two criticisms are made. First it is said that the decision is wrong as a matter of law and second that the approach taken by the SFI was wrong since it was apparent that she made no independent decision of her own in refusing the crisis loan but instead merely followed the decision of the Secretary of State. That was in spite of the fact that the Claimant had alleged that the decision of the Secretary of State was wrong by reference to the EC Directive 2004/38. There is no right of appeal from the decision to refuse a crisis loan.

10

In Mrs Gough's decision letter of 6 th August 2009 it is not clear to me whether she was agreeing with the arguments of the Claimant or reciting them but in my judgment that is not critical either way. She rejected the application for a crisis payment and in doing so appears to have relied on the earlier decision of the Secretary of State.

11

On 20 th August 2009 the Secretary of State decided that the Claimant was not entitled to JSA because he lacked a right to reside in the United Kingdom. That decision was reviewed by the Secretary of State on 4 th September 2009 and a new decision issued. The decision was that the Claimant was not habitually resident in the United Kingdom since he had no relevant right to reside in the United Kingdom. The decision appears to have been made on both the law and the facts. The submission made on behalf of the Claimant under the Directive was not addressed. This is the other decision which the Claimant seeks to quash as being wrong and unlawful.

12

On the application for permission the Secretary of State initially opposed the grant of permission at least in part on the basis that there was a right of appeal 1 to a Tribunal from this decision of the Secretary of State, and therefore an alternative remedy. However it was argued on the part of the Claimant that since there was an Upper Tribunal decision against the Claimant's submission under the Directive it would be a waste of time and resources to follow that alternative route knowing that the first-tier tribunal would reject the submission. In any event since permission was granted to the Claimant to pursue the SFI by the learned Deputy Judge a decision was taken by the Secretary of State not further to oppose permission being granted in the case against him. I have no doubt that was a sensible decision in the circumstances.

The Legal Background

13

JSA is provided for by the Jobseekers Act 1995 ( JSA Act) and the Jobseekers Allowance Regulations 1996 ( JSA regulations). Under section 1 of the JSA Act a claimant is entitled to JSA if he is not engaged in remunerative work but is available for, and is actively seeking, employment. Section 3 of the JSA Act provides for income based JSA to be paid to persons whose income does not exceed the prescribed applicable amount.

14

Under section 4(12) of the JSA Act regulations may prescribe an applicable amount of nil. Under regulation 85 and schedule 5 paragraph 14 of the JSA regulations a “person from abroad” has a nil applicable amount and is therefore not entitled to income-based JSA. By regulation 85A a person from abroad is someone who is not habitually resident in the United Kingdom and a claimant cannot be habitually resident unless he has a right to reside in the United Kingdom. That regulation by sub-paragraph (4) provides:

“(4) A claimant is not a person from abroad if he is —

o a worker for the purposes of Council Directive No 2004/38/EC 2;

o a self employed person for the purpose of that Directive;

o a person who retains a status referred to in sub-paragraph (a) or (b) pursuant to Article 7(3) of that Directive.

15

Income-based Employment and Support Allowance (ESA), provided for under the Welfare Reform Act 2007 and the Employment and Support Allowance Regulations 2008 (ESA regulations), is subject to the same residency requirement as income-base JSA. Under section 4(3) of the Welfare Reform Act, regulations may prescribe an applicable amount of nil and under regulation 69 of the ESA regulations a “person from abroad” has a nil applicable amount. Thus such a person is not entitled to income-based ESA.

16

Social fund crisis loans are provided for under section 138 of the Social Security Contributions and Benefits Act 1992 which provides:

“(1) There may be made out of the social fund, in accordance with this Part of this Act —

(b) payments by way of… crisis loan… to meet other needs in accordance with directions given or guidance issued by the Secretary of State.

17

Social fund direction 3 provides

“3(i) Subject to directions 14, 16 and 17, a social fund payment may be made to assist an applicant to meet expenses (except those excluded by these directions)—

(a) in an emergency, or as a consequence of a disaster, provided that the provision of such assistance is the only means by which serious damage or risk to the health or safety of that person, or to a member of his family, may be prevented;…”

18

Social fund direction 16 provides:

“A social fund payment under direction 3 shall be awarded only in order to alleviate the consequences of a disaster where...

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