The child lived with her mother in the United Kingdom and received the care component of disability living allowance, which was defined as a “cash benefit” for the purpose of article 21 of Regulation (EC) No 883/2004 (“the Regulation”) on the co-ordination of social security systems . The mother, who was the child’s appointee, also received state benefits. Her father, who was separated but not divorced from the mother, was a self-employed resident of Belgium. The Work and Pensions Secretary stopped paying the care component on the basis that the competent state for the payment of the benefit was Belgium because she was a family member of the father who was self-employed in Belgium and her entitlement was solely governed by the social security legislation of Belgium. The child asserted that, as an “insured person” for the purposes of article 1(c) of the Regulation, the United Kingdom was the competent member state and the legislation applicable to her for the purposes of Title II of the Regulation was United Kingdom legislation with the consequence that, as a resident of the United Kingdom, article 11(3)(e) of the Regulation meant that she was entitled to a cash sickness benefit such as disability living allowance. In allowing the child’s appeal and setting aside the decision of the Work and Pensions Secretary, the First-tier Tribunal (Social Entitlement Chamber) determined that there was a “difference of view” between the United Kingdom and Belgium as to which was the competent state within the meaning of article 6 of Parliament and Council Regulation (EC) No 987/2009 setting out the procedure for implementing Regulation 883/2004. Consequently, the child was entitled to receive the care component until that difference of view was resolved. The Work and Pensions Secretary appealed. The Upper Tribunal (Administrative Appeals Chamber) held that the First-tier Tribunal wrongly concluded that there was a difference of view and set aside its decision. In reconsidering the matter, the Upper Tribunal considered that the child was not entitled to disability living allowance because the father as a self-employed person in Belgium came within article 11(3)(a) of the Regulation and the legislation applicable to him was Belgian legislation but that neither the child or mother pursued an activity as an employed or self-employed person within the meaning of article 11(3)(a) and they did not fall within article 11(3)(b)–(d). Therefore, they fell within article 11(3)(e) because they were resident in the United Kingdom, whose relevant legislation applied to both of them. In then considering whether the child was entitled to United Kingdom benefits in her own right or whether she was limited to claiming benefits under Belgian legislation as a member of her father’s family, the Upper Tribunal held that article 21 of the Regulation took priority over, or overrode, any entitlement under United Kingdom legislation. The child further appealed having maintained her entitlement to rely on United Kingdom law as her state of residence to claim the care component.
On the appeal—
Held, appeal allowed. When interpreting European Union legislation, the correct approach was to consider each provision of the relevant Regulation in context and in the light of the relevant European Union law as a whole, having regard to the objectives of the Regulation and European Union law. The aim underlying Regulation (EC) No 883/2004 was the co-ordination of social security systems with a view to enabling free movement for workers and the self-employed. The starting point would be that there was a single legislative system applicable to an insured person with the provisions of Title II of the Regulation, and article 11 in particular, determining which was the applicable legislation for a particular insured person. The child did not fall within article 11(3)(b) to (d) but did fall within article 11(3)(e) as a United Kingdom resident and was subject to the legislation of that member state of residence. Therefore, the child was an insured person as she satisfied the conditions required under the legislation of the competent member state, namely the United Kingdom, to have the right to benefits. While it was clear from the wording of article 11(1) of the Regulation that there was to be a single member state whose legislation was applicable, article 21 of the Regulation did not operate to take priority over the legislation of another member state and therefore did not have the effect of making Belgian law applicable to her where her father was economically active so as to create rights derived from the fact that she was a family member resident in a state other than Belgium because she was an insured person to whom United Kingdom legislation was applicable by virtue of article 11(3)(e). The wording and purpose of article 21 did not suggest, unlike other articles in the Regulation, that it was intended as a rule of priority which displaced legislation that would otherwise be applicable to apply article 11. An insured person included both the economically active and also the economically inactive, such as a child entitled under the legislation of a member state to receive certain social security benefits. Article 11 determined the state whose legislation was applicable to such a person. Therefore, articles 1(c) and 11 of the Regulation meant that a family member resident in a state other than the competent state of an economically active parent was entitled under the legislation of the state where the family member resided. The priority of the state of residence in respect of that entitlement was preserved because the applicability of the legislation of the state of residence derived from article 11(3)(e) and there was no provision of the Regulation which displaced that priority. That interpretation was consistent with ensuring free movement of workers and the self-employed and reflected the nature and purpose of the cash sickness benefit in the present case. It also respected the principle that an insured person was subject to the legislation of a single state and gave meaning to the qualification in article 11(3)(e) that the applicable legislation would be the legislation of the member state of residence without prejudice to other provisions in the Regulation. Accordingly, the child was entitled in her own right to payment of the care component of disability living allowance under the relevant provisions of the United Kingdom legislation as the applicable legislation applying article 11 and there was no basis for giving priority to any potential rights derived from her father under the legislation of the state where he was self-employed (paras 36, 37, 41, 43, 44, 50, 51, 52, 53, 54, 60, 61, 62).
Adrian Berry and Desmond Rutledge (instructed by Osbornes) for the child.
Galina Ward KC (instructed by the Treasury Solicitor) for the Work and Pensions Secretary.
Thomas de la Mare KC, Ravi Mehta and Eleanor Sibley instructed by (Herbert Smith Freehills LLP) for the intervener.