Secretary of State for Work and Pensions v Tolley (deceased, acting by her personal representative)
| Jurisdiction | England & Wales |
| Judge | Lady Hale,Lord Toulson,Lord Clarke,Lord Reed,Lord Hodge |
| Judgment Date | 29 July 2015 |
| Neutral Citation | [2015] UKSC 55 |
| Court | Supreme Court |
| Date | 29 July 2015 |
[2015] UKSC 55
before
Lady Hale, Deputy President
Lord Clarke
Lord Reed
Lord Toulson
Lord Hodge
Appellant
Thomas de la Mare QC
Iain Steele
(Instructed by The Government Legal Project)
Respondent
Richard Drabble QC
Tim Buley
(Instructed by Public Law Department)
Heard on 5 and 6 May 2015
(with whom Lord Clarke, Lord Reed, Lord Toulson and Lord Hodge agree)
The issue is whether the United Kingdom is precluded, by Council Regulation (EC) No 1408/71 on the application of social security schemes to employed persons, self-employed persons and members of their families moving within the Community ("the Regulation"), from imposing a requirement of residence in Great Britain as a condition of entitlement to disability living allowance ("DLA") and thus depriving a claimant who has gone to live in another Member State of that benefit. DLA is a non-contributory and non-means-tested benefit consisting of a care component and a mobility component. It is not an income replacement benefit, as the recipient may or may not be working. Its purpose is to cater for the extra costs of requiring certain types of care or being unable or virtually unable to walk.
The claimant, Mrs Tolley, a British national, was born on 17 April 1952. She had paid national insurance contributions from 1967 to 1984 and been credited with some contributions thereafter, but none since the year 1993/94. Depending on whether she fulfilled the contribution conditions when she reached state retirement age, therefore, she might have been entitled to a state retirement pension. From 26 July 1993, she was awarded the care component of DLA on an indefinite basis, because she was unable to prepare a cooked meal for herself. On 5 November 2002, she and her husband moved permanently to live in Spain. She was not employed or self-employed there. In 2007, the Secretary of State for Work and Pensions decided that, as from 6 November 2002, she was not entitled to DLA.
She appealed to the First-tier Tribunal, which held that she was entitled to continue to receive DLA by virtue of article 10 of the Regulation. She died on 10 May 2011 and her husband was appointed to continue the proceedings in her place. The Secretary of State appealed to the Upper Tribunal, which also held that Mrs Tolley was entitled to the benefit, but for a different reason: [2012] UKUT 282 (AAC). Because she was insured against the risk of old age by virtue of her national insurance contributions, she was an "employed person" within the meaning of article 1(a) of the Regulation; that expression had the same meaning wherever it occurred in the Regulation; and the situation fell within article 22 of the Regulation. The Secretary of State appealed to the Court of Appeal, which dismissed the appeal, holding that it was bound by that court's previous decision in Commissioners for Her Majesty's Revenue and Customs v Ruas [2010] EWCA Civ 291, applying Martinez Sala (Case C-85/96) [1998] ECR I-2708, to hold that Mrs Tolley was an "employed person" for this purpose: [2013] EWCA Civ 1471. The Secretary of State now appeals to the Supreme Court of the United Kingdom.
Section 71(6) of the Social Security Contributions and Benefits Act 1992 ("the 1992 Act") provides that "A person shall not be entitled to a disability living allowance unless he satisfies prescribed conditions as to residence and presence in Great Britain". The conditions prescribed for this purpose by regulation 2(1) of the Social Security (Disability Living Allowance) Regulations 1991 (SI 1991/2890) are that "(a) on that day … (iii) he has been present in Great Britain for a period of, or for periods amounting in the aggregate to, not less than 104 weeks in the 156 weeks immediately preceding that day". It is, therefore, common ground that, under domestic law, Mrs Tolley was excluded from entitlement to DLA following her permanent move to Spain in November 2002. The question is whether that domestic law is compatible with the Regulation.
Article 2.1 of the Regulation No 1408/71 provides that "This Regulation shall apply to employed or self-employed persons and to students who are or have been subject to the legislation of one or more member states and who are nationals of one of the member states …." It is therefore common ground that Mrs Tolley falls within the personal scope of the Regulation.
It is also common ground that DLA is one of the benefits falling within the material scope of the Regulation, as defined in article 4. Had it been categorised as an "invalidity benefit" within the meaning of article 4.1(b), it would have been covered by article 10. This precludes the withdrawal of such benefits "by reason of the fact that the recipient resides in the territory of a member state other than that in which the institution responsible for payment is situated", in other words, it provides for full portability within the Union. However, in Commission v European Parliament (Case C-299/05) [2007] ECR I-08695, at para 68, following Molenaar (Case C-160/96) [1998] ECR I-843, para 25, and Jauch (Case C-215/99) [2001] ECR I-1901, para 25, the care component of DLA was categorised as a "cash sickness benefit" for the purpose of EU law.
Nevertheless, in Da Silva Martins (Case C-388/09) [2011] ECR I-5761, para 48, the Court observed that benefits relating to the risk of reliance on care, unlike sickness benefits, were not intended to be paid on a short term basis and might, in the detail of their application, display characteristics resembling invalidity and old age benefits. This case is an example of the problems of applying provisions designed with short term benefits in mind to benefits which are capable of applying on a long term basis such as DLA.
Article 13.1 lays down the general rule that persons to whom the Regulation applies shall be subject to the legislation of a single member state. "Legislation" is defined by article 1(j) in effect to mean all the legislation and other implementing measures of a member state relating to the branches and schemes of social security covered by article 4(1) and (2) or the special non-contributory benefits covered by article 4(2a). Article 13(2) defines the member state to whose legislation a person is subject, generally the lex loci laboris rather than where the person lives. Article 13(2)(a) refers to a "person employed" rather than an "employed person". Article 13.2(f) provides that:
"a person to whom the legislation of a member state ceases to be applicable, without the legislation of another member state becoming applicable to him in accordance with one of the rules laid down in the aforegoing sub-paragraphs or in accordance with one of the exceptions or special provisions laid down in articles 14 to 17 shall be subject to the legislation of the member state in whose territory he resides in accordance with the provisions of that legislation alone."
In Kuusijarvi (Case C-275/96) [1998] ECR I-3443, the court held that this did not preclude a member state from making the right to remain subject to its legislation of a person, who had ceased all occupational activity in its territory, dependent upon his continued residence there. The court observed that a person who has ceased all occupational activity in the territory of a member state no longer satisfies the conditions laid down in article 13(2)(a) (para 32).
Article 89 provides that "special procedures for implementing the legislations of certain member states are set out in annex VI". Points 19 and 20 of the United Kingdom's entry in annex VI relate to article 13(2)(f). Point 19 defines the date when UK legislation shall cease to apply for this purpose, so far as relevant, as the latest of (a) the day on which residence is transferred; (b) the day of cessation of employment or self-employment, whether permanent or temporary, during which the person was subject to UK legislation; or (c) the last day of any period of receipt of UK sickness, maternity or unemployment benefit which began before the transfer of residence. Point 20 provides, so far as relevant, that the fact that a person has become subject to the legislation of another member state in accordance with article 13(2)(f) "shall not prevent (a) the application to him by the United Kingdom as the competent state of the provisions relating to employed or self-employed persons of Title III, Chapter 1 … if he remains an employed or self-employed person for those purposes and was last so insured under the legislation of the United Kingdom".
Chapter 1 of Title III deals with the portability of sickness and maternity benefits. Article 19.1 provides that
"An employed or self-employed person residing in the territory of a member state other than the competent state, who satisfies the conditions of the legislation of the competent state for entitlement to benefits, …, shall receive in the state in which he is resident: (a) benefits in kind …; (b) cash benefits provided by the competent institution in accordance with the legislation which it administers. …"
The Upper Tribunal held in this case that articles 19, 20, 21 and 22 contemplate different situations with no overlap between them. Article 19 did not apply to Mrs Tolley,...
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