Lawfulness of residence requirement for disability living allowance referred by UK Supreme Court to European Court of Justice

Lady Hale

The issue of whether as a matter of EU law the UK may impose a requirement of residence in Great Britain as a condition of entitlement to disability living allowance (DLA) is to be considered by the European Court of Justice.

The UK Supreme Court unanimously decided to refer three questions to the ECJ in Luxembourg following an appeal by the Secretary of State for Work and Pensions, after British national Linda Tolley successfully challenged a decision to deprive her of the disability benefit when she moved from the UK to Spain.

Deputy President Lady Hale , Lord Clarke, Lord Reed, Lord Toulson and Lord Hodge heard that the claimant had worked in the UK and paid national insurance contributions from 1967 to 1984, with some further contributions up to 1993/94.

From 1993 she was awarded the care component of DLA on an indefinite basis, because she was unable to prepare a cooked main meal for herself.

After moving permanently to Spain in November 2002, the Secretary of State decided that she was no longer entitled to DLA by reason of section 71(6) Social Security Contributions and Benefits Act 1992 and the regulations thereunder, which required her to be resident in Great Britain.

Mrs Tolley appealed against this decision on the basis that UK domestic law was incompatible with the EU law laid down in Council Regulation (EC) No 1408/71, which provides that certain benefits - including those categorised as an “invalidity benefit” - are “fully portable” within the EU.

The care component of DLA has, however, been categorised in a number of EU cases as a “cash sickness benefit”.

Mrs Tolley’s entitlement to receive it when she no longer resided in the UK depended on whether she was an “employed person” for the purposes of the Chapter 1 of Title III of the Regulation, as the rights of “unemployed persons” to export sickness benefits are severely limited.

The meaning of “employed person” in article 1 of the Regulation has been broadly defined by the ECJ in cases such as Dodl and Oberhollenzer, involving other benefits as extending to anyone who is insured under a social security scheme irrespective of the existence of an employment relationship.

Mrs Tolley argued that she was an employed person as she was insured by reason of her national insurance contributions against the risk of old age under UK legislation.

Alternatively, she remained subject to the legislation of the UK for the purposes of article 13, which lays down the general rule that a person should only be subject to the legislation of a single member state.

The Secretary of State argued that Mrs Tolley could not be an employed person for the purpose of the specific provisions of Chapter 1 of Title III, or that she fell within article 13(2)(f) because the legislation of the UK had ceased to be applicable to her, and she had therefore become subject to the legislation of Spain.

Mrs Tolley’s appeal was allowed by the First-tier Tribunal, but she died shortly afterwards and her husband was appointed to continue the proceedings in her place.

The Secretary of State appealed against the First-tier Tribunal’s decision but the appeal was rejected by the Upper Tribunal and by the Court of Appeal prompting the appeal to the Supreme Court.

The Supreme Court said it was obliged to refer questions of EU law to the CJEU if the application of the Regulation in the circumstances of the case were not clear.

In a written judgment, Lady Hale said: “In this court’s view, although the matter was not argued before us, the principled solution to a case such as this would be to treat the care component of DLA as an invalidity benefit for the purpose of the Regulation, and thus freely exportable under article 10, leaving the detailed provisions of Chapter 1 of Title III to deal with sickness benefits stricto sensu. Then none of the current issues would have arisen.

“However, if DLA remains to be treated as a sickness benefit, the court agrees with the Government that none of the cases relied upon by Mrs Tolley and the English courts was concerned with whether, in the light of the specific provisions of Title III relating to unemployed persons, the broad definition inDodl could apply to the provisions relating to ‘employed persons’.”

The court referred three questions to the CJEU:

1. Is the care component of the United Kingdom’s Disability Living Allowance properly classified as an invalidity rather than a cash sickness benefit for the purpose of Regulation No 1408/71?

2. (i) Does a person who ceases to be entitled to UK Disability Living Allowance as a matter of UK domestic law, because she has moved to live in another member state, and who has ceased all occupational activity before such move, but remains insured against old age under the UK social security system, cease to be subject to the legislation of the UK for the purpose of article 13(2)(f) of Regulation No 1408/71?

(ii) Does such a person in any event remain subject to the legislation of the UK in the light of Point 19(c) of the United Kingdom’s annex VI to the Regulation?

(iii) If she has ceased to be subject to the legislation of the UK within the meaning of article 13(2)(f), is the UK obliged or merely permitted by virtue of Point 20 of annex VI to apply the provisions of Chapter 1 of Title III to the Regulation to her?

3. (i) Does the broad definition of an employed person in Dodl and Oberhollenzer ECR I-5065apply for the purposes of articles 19 to 22 of the Regulation, where the person has ceased all occupational activity before moving to another member state, notwithstanding the distinction drawn in Chapter 1 of Title III between, on the one hand, employed and self-employed persons and, on the other hand, unemployed persons?

(ii) If it does apply, is such a person entitled to export the benefit by virtue of either article 19 or article 22? Does article 22(1)(b) operate to prevent a claimant’s entitlement to the care component of DLA being defeated by a residence requirement imposed by national legislation on a transfer of residence to another member state?

Share icon
Share this article: