Don’T Intend Of The Children! Cjeu Approves Automatic Exclusions From Household Unit Of Measurement Benefits Inwards Illustration C-308/14 Committee Five Uk

Charlotte O'Brien, Senior Lecturer, York Law School 

The Court of Justice’s retreat from the zone of Member States’ welfare systems hastens. Having in i lawsuit suggested that citizenship is ‘destined to move our telephone substitution status’, in addition to provides the ground for a ‘degree of fiscal solidarity’, the Court had established that European Union nationals falling into temporary difficulties would move entitled to unopen to amount of back upward from a host state, depending on how ‘deserving’ the claim seemed to be.

But the Court has shifted away from notions of citizenship, so in that location may never move such a affair as a reasonable burden. Having established that European Union migrants claiming social benefits tin inwards regulation move dependent to a right to reside examine non applied to ain nationals inwards Brey, the Court found inwards Dano that a case-by-case assessment where someone was deemed to stimulate got moved for the ‘sole’ role of claiming benefits was non necessary. This was expanded inwards Alimanovic and Garcia Nieto to propose that jobseekers were non entitled to a case-by-case assessment either.  In Commission v UK we see the CJEU’s desires to adapt the UK’s discriminatory tendencies rather usurp the applicable legal framework.

The key tensions at the pump of the instance – the discriminatory effects of the right to reside test, in addition to its application to theatre unit of measurement benefits – are glossed over inwards a brief judgment. The Brey in addition to Dano principles are imported into Regulation 883/2004 (which concerns the coordination of social security inwards cross-border cases) in addition to applied to theatre unit of measurement benefits, patch the burden of proof is reversed so that a discriminating Member State is presumed to move acting lawfully if they brandish the ‘public finances’ trump card.  

The conclusion finds that the UK is entitled to apply the ‘right to reside’ examine to claimants for Child Benefit in addition to Child Tax Credit; UK nationals automatically fulfil the test, patch European Union national claimants must demonstrate that they fulfil the atmospheric condition of Article seven of Directive 2004/38 (which sets out the primary rules on European Union citizens moving to unopen to other Member State). In short, they must move workers, or stimulate got retained worker status, or move the theatre unit of measurement members of European Union national workers. This analysis addresses 4 issues that stand upward out inwards the judgment: (i) the extension of the ‘right to reside’ principle, inwards paragraph 44 of Brey, to override Article 4 inwards regulation 883/2004, in addition to the implications for other benefits; (ii) the number of direct versus indirect discrimination in addition to the reversal of the burden of proof on the number of justification; (iii) the failure to differentiate betwixt dissimilar ‘types’ of economical inactivity, jettisoning proportionality, extinguishing European Union citizenship, in addition to ignoring the rights of the children; in addition to (iv) the finding that the UK does non ‘systematically’ banking company check European Union nationals’ right to reside.    

(i) Distilling a telephone substitution regulation from para 44 of Brey

 

Article 4 of Regulation 883/2004 states:

“Unless otherwise provided for yesteryear this Regulation, persons to whom this Regulation applies shall savour the same benefits in addition to move dependent to the same obligations nether the legislation of whatsoever Member State as the nationals thereof.”

In Brey, the Court sidestepped this equal handling requirement, yesteryear finding that the produce goodness at number was social assistance. This was fabric to the lawfulness of the right to reside examine – the questions were inextricably interlinked, in addition to the nature of the produce goodness ‘must move examined inwards the context’ of the right to reside question. The right to reside examine was a lawful agency to avoid undue burdens on the ‘social assistance system’.

The classification of the produce goodness was of import inwards Brey. But inwards Commission v UK classification is treated as irrelevant – in addition to i judgement inwards Brey (there is ‘nothing to prevent, inwards principle, the granting of social benefits to Union citizens who are non economically active existence made conditional upon those citizens coming together the necessary requirements for obtaining a legal right of residence inwards the host Member State’) is made to produce a lot of legwork – finding that all benefits tin move dependent to a discriminatory right to reside test. Article 4 Regulation 883/2004 does non larn a await inwards other than to state that it has non been infringed.   

 

The Court found that the Regulation deals amongst competence, non eligibility for benefits. But this is besides simplistic. The Regulation does regulation aspects of eligibility – stating that house of residence cannot move a deciding cistron inwards many cases; stating that atmospheric condition as to insurance must move capable of existence discharged yesteryear insurance inwards other Member States, in addition to so on; in addition to it provides inwards Article 4 a regulation of equal handling for persons dependent to the Regulation. 

Family benefits are ‘pure’ social security. There is no ground for finding that they autumn inside the ‘social assistance’ exclusions of Directive 2004/38, or for finding that the primary police line requirement of equal handling inwards Article xviii TFEU should non apply. There is no specific provision inwards the Treaty or secondary police line excluding Union citizens from equal handling amongst regard to theatre unit of measurement benefits. They are squarely inwards the fabric reach of Regulation 883/2004, in addition to so dependent to the equal handling provision therein. In this way the Regulation offers unopen to protection to the children inwards migrating families, since they are typically subjects rather than agents of migration, in addition to it has normally been accepted that they should non move penalised for changes inwards their parents’ operate status.

Several provisions might thus plausibly forestall the application of a right to reside examine to Union citizens claiming a theatre unit of measurement benefit. But the Court’s reasoning is brusk in addition to elementary – it quotes the Brey statement. One judgement inwards a judgment that dealt amongst a dissimilar category of benefits, where the fabric business office of that conclusion is non existence followed, is arguably of insufficient legal weight to post away a presumption of equal treatment, inwards the absence of a Treaty provision or limited secondary police line provision to produce the displacing.

The end, contradictory, result, is that the limitations of Directive 2004/38 are independent of the provisions of Regulation 883/2004, so the Directive tin adopt a wider Definition of social assistance, but the equal handling provision inwards Regulation 883/2004 is saltation yesteryear limitations written into Directive 2004/38 – limitations intended for dissimilar benefits. This judgment imports the personal reach of Directive 2004/38 into Regulation 883/2004. But that Regulation has a deliberately wider personal scope. The ECJ made clear that the Regulation’s predecessor, Regulation 1408/71, was non confined to people inwards occupation inwards Dodl in addition to Oberhollenzer. Regulation 883/2004, far from narrowing the reach of Regulation 1408/71, was enacted to “replace in addition to extend” that instrument. Recital 42 refers explicitly to ‘the novel category of non-active persons, to whom this Regulation has been extended’. Here, the Court’s finding that such persons volition non move left without a competent state, exactly without produce goodness eligibility, is a lilliputian simplistic. Extrapolating that logic, domestic rules may good exclude such people (falling into Article eleven (3)(e)) from the whole fabric reach of the Regulation – inwards which case, for what is that State competent, in addition to why stimulate got a category 11(3)(e) at all, other than to bespeak to whose rules of exclusion apply?  

The implications of the judgment could stimulate got ramifications throughout the EU, for States that stimulate got non yet adopted such tests, in addition to for States that stimulate got so far limited them to benefits amongst an chemical constituent of social assistance, who mightiness conceivably whorl them out further. It could steepen the welfare cliff edge for those who stimulate got been working but who autumn out of operate (or stimulate got been a theatre unit of measurement fellow member of a worker in addition to cease to move so). It could outcome inwards excluding a number of workers who cannot adduce sufficient bear witness that their activities run into nationally-imposed definitions of work – e.g. coming together hours or earnings thresholds continually over a prolonged catamenia of time. And it could outcome inwards deepening kid poverty for vulnerable children, whose welfare mightiness otherwise stimulate got received unopen to protection from the coordination scheme. It endorses ‘hand-to-mouth’ citizenship.

(ii) Direct versus indirect discrimination in addition to reversing the burden of proof

The Commission claimed that the dominion created direct discrimination but the Court did non engage amongst that claim. It simply reiterated the Brey point, that in that location is null to forestall right to reside tests, in addition to so added that where such tests are adopted a Member State ‘commits indirect discrimination’.

But the status is straight discriminatory. Only European Union nationals must furnish bear witness of a right to reside. Only European Union nationals tin move excluded from entitlement due to economical inactivity. The application of an extra status to non-nationals was recognised as existence straight discriminatory inwards Grzelczyk.

The Court slightly confuses things yesteryear pointing out that a ‘residence condition’ is indirectly discriminatory. But the right to reside examine is not a residence condition. It is a requirement to move economically active in addition to is exclusively applied to European Union nationals.

On finding instead that indirect discrimination was at issue, the Court turned to the query of justification.

Typically, where a potential infringement has been made out, it is upward to the infringer to demonstrate that their actions are justified (see O’Flynn and Groener). The Member State must demonstrate that they are pursuing a legitimate aim, that the agency are proportionate in addition to appropriate, in addition to produce non perish beyond what is necessary.   

The justification requirement was rather swiftly dealt with, as the Court shied away from the judicial kryptonite that is the advert of populace finances. In spite of mounting evidence that fears of produce goodness tourism are misplaced, no bear witness of a threat to populace finances was required for this aim to move accepted as legitimate. The Court did non inquire whether the examine itself was proportionate or appropriate. Instead it asked whether the checks conducted as business office of the examine were proportionate in addition to appropriate.

And hither it shifts the burden of proof to the Commission. The Court summarised the information provided yesteryear the UK noting that claimants must furnish a ‘set of data’, in addition to farther checks are carried out ‘only inwards specific cases’ in addition to ‘only inwards the lawsuit of doubt’.

But the judgment does non tell us how much information is required of claimants, how many ‘specific’ cases atomic number 82 to farther checks, or how many cases involve ‘doubt’; the repeated usage of the give-and-take ‘only’ without these statistics tells us null almost scale or proportionality. 

Instead it is upward to the Commission to demonstrate that  ‘such checking does non satisfy the atmospheric condition of proportionality, that it is non appropriate for securing the attainment of the objective of protecting populace finances or that it goes beyond what is necessary to attain that objective.’

(iv) Dismissing the residue of Brey: jettisoning proportionality, extinguishing European Union citizenship, in addition to ignoring the children

Given the reliance placed upon para 44 inwards Brey, para 45 is conspicuous yesteryear its absence; it added ‘However, it is of import that the requirements for obtaining that right of residence… are themselves consistent amongst European Union law’.

And inwards Brey the Court found that European Union police line precluded the automatic barring of economically inactive persons from entitlement to benefits without assessment of their private circumstances. Relevant circumstances included the duration of residence, amount of income, amount in addition to duration of produce goodness claimed, etc.

This is the proportionality road to entitlement – where Union citizenship inwards theory offers a security network for those who autumn betwixt the categories inwards Directive 2004/38. It allows for unopen to differentiation based on circumstances, recognising that the label of ‘economic inactivity’ tin mask a broad attain of residence, economical in addition to integration histories, in addition to produce goodness claims may correspond a broad attain of claims of varying degrees of reasonableness.

In recent cases nosotros stimulate got seen the Court retreat from this approach, finding that a case-by-case assessment was non necessary where the claimant at number mightiness move a produce goodness tourist, or where she was a jobseeker. Here, this facial expression of Brey goes unmentioned, other than when summarising the Commission’s declaration that the examine is ‘an automatic machinery that systematically in addition to ineluctably bars claimants’ from benefits.

The Court did non engage amongst this argument. It appeared to consider automatic exclusion inherently lawful: ‘As the UK of Britain in addition to Northern Republic of Ireland submitted at the hearing, legality of the claimant’s residence inwards its territory is a substantive status which economically inactive persons must run into inwards monastic say to move eligible for the social benefits at issue’.

The absence of an option the world for eligibility for those deemed economically inactive is striking inwards European Union police line terms, (even if it is rather onetime intelligence inwards the UK), since it marks a deviation from the ‘real link’ instance law, whereby nearly-blanket rules had to stimulate got some proportionality-based exceptions. And it sends whatsoever Union citizenship-based right to equal handling (Article xviii TFEU) upward inwards smoke. It permits treating all ‘economically inactive’ migrants as every bit worthless, regardless of their grade of integration into society, regardless of their, or their family’s occupation history, in addition to regardless of the circumstances that stimulate got led to a loss of worker status. And it permits the total erasure of children’s rights from the factors to move considered, fifty-fifty though it is their rights in addition to their welfare existence contested – Child Benefit in addition to Child Tax Credit are specifically designed to address costs of protecting kid welfare. In a report analysing recent welfare changes, the United Nations Committee on the Rights of the Child has already expressed ‘serious concerns’ almost the UK’s imposition of cuts to taxation credits ‘regardless of the needs of the households’ concerned. The right to reside examine goes further, existence non simply a cutting but a disentitlement for affected children, fifty-fifty if they were born inwards the UK in addition to stimulate got no meaning links amongst their State of nationality.   

The Brey formulation treated as so pivotal, permitting right to reside tests, had itself rested on a serial of European Union citizenship cases, which established in addition to developed the ‘real link’ concept. Para 44 cited Martinez Sala, Grzelczyk, Trojani, Bidar in addition to Förster, all of which precluded the usage of blanket rules, in addition to all of which required unopen to assessment of circumstances of the case.

So the reliance upon the Brey formulation becomes fifty-fifty less persuasive, inwards lite of the deviation from all of the authorities upon which that formulation rests. Cases establishing the rights attendant upon European Union citizenship cannot credibly move used to build those rights in addition to that status disappear.   

(v) The systematic verification obfuscation

Article 14(2) of Directive 2004/38 allows Member States to verify whether the residence atmospheric condition laid out inwards that directive are met ‘in specific cases where in that location is a reasonable doubt’, adding that such verification ‘shall non move carried out systematically’.

As noted above, the Court found that the checking done yesteryear the UK did non amount to systematic verification. But this finding would stimulate got been helped yesteryear unopen to analysis of Article 14(2) in addition to the distinction betwixt permitted checks in addition to prohibited verification.

The government’s ain announcements propose in that location is something systematic going on. The authorities announced inwards 2014 that restrictions to benefits for European Union nationals would move ‘augmented yesteryear additional HMRC compliance checks to better detection of when EEA migrants cease to move entitled to these benefits. The checks volition apply to all EEA migrant claims’. The Budget made clear that these checks would move applied to ‘new in addition to existing awards’. In responding to a Freedom of Information request, the authorities confirmed that it had been carrying out ‘increased compliance checks’, issuing letters ‘targeted at EU/EEA Nationals’ requesting farther information and/or bear witness to banking company check that claimants met entitlement atmospheric condition for Child produce goodness in addition to Child Tax Credit.

Moreover, claimants confront routine requirements for ‘documentary evidence’ of entitlement, in addition to a ‘wide attain of checks in addition to an annual review’ inwards all cases of cross-border claims. It is hard to know what would infringe Article 14(2).

To summarise, this judgment seems driven yesteryear the teleology noted inwards the Advocate General’s Opinion – to avoid offending the UK authorities at all costs. The difficulty is that the legal framework does non rattling easily curvature to the desired outcome. The Court has seized upon i judgement inwards a previous judgment, in addition to clung to it as providing all the necessary ascendence to override whatsoever conflicting legal principle. The Court avoids habitation besides much on the relative weight of legal principles, yesteryear simply skipping the analysis. Article 4 of Regulation 883/2004; Article xviii TFEU; the prohibition of direct, as opposed to indirect discrimination; the appropriateness of the right to reside test; the effects of Brey amongst regard to proportionality; European Union citizenship; Article 14(2) of Directive 2004/38… they larn little, if any, attention. Primary police line in addition to secondary police line are presumptively displaced inwards the confront of a fragment of a judgment that the Court is choosing non to follow – a fragment taken out of context, in addition to pitted against the authorities upon which it is based.

The Court has missed an chance to engage inwards a principled in addition to honest review of the straight discriminatory nature of tests that impose atmospheric condition of economical activity on European Union nationals but non on ain nationals. That inwards itself is non surprising, since the legal fiction that such tests are indirectly discriminatory seems to move the pragmatic credence of a politically necessity. But inwards allowing such tests to seep beyond protection of the ‘social assistance system’ in addition to to regulation eligibility for all benefits related to ‘public finances’, inwards dismissing the equal handling provisions inwards primary in addition to secondary law, inwards importing atmospheric condition to curb the personal reach of Regulation 883/2004, inwards reversing the burden of proof for justification, in addition to deferring to the populace finances trump card, the Court has divined from recent instance police line a higher, telephone substitution regulation of exclusion, in addition to a default of discrimination. The children of economically inactive European Union nationals are now, inwards European Union terms, officially irrelevant, since right to reside tests that exclude them wholesale from entitlement larn the dark-green light, amongst no requirements for citizenship, existent links or proportionality to play a part. This may seem an inevitable outcome of the prevailing political wind, but a lilliputian to a greater extent than dependent champaign would stimulate got been welcome, to address the legal bases that were engaged, in addition to to perish on the judgment to a greater extent than carefully confined. Instead what nosotros stimulate got is lite on authority, but sweeping inwards its potential attain in addition to detrimental effects upon Union citizenship in addition to on European Union national children.     

Barnard & Peers: chapter 13

Photo credit: www.telegraph.com

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