Introduction

The case of Secretary of State for Work and Pensions v. AH (CA) ([2016] UKUT 148 (AAC)) addresses a pivotal issue in European Union social security law, specifically concerning the determination of the competent state for the payment of carer's allowance (CA). The claimant, AH, a self-employed individual residing in Portugal since 1999, sought CA from the UK for the care of her grandmother, who was a UK resident receiving attendance allowance (AA). The crux of the dispute centered on whether the UK remained the competent state for CA payments despite AH's residence and self-employment in Portugal.

The parties involved were:

• Claimant: AH, a self-employed individual residing in Portugal.
• Respondent: Secretary of State for Work and Pensions, representing the UK government's interests.

Summary of the Judgment

The Upper Tribunal (Administrative Appeals Chamber) heard the appeal against the Secretary of State's refusal to grant CA to AH, who was not resident in Great Britain at the relevant times. The First-tier Tribunal had previously allowed AH's appeal, determining that the CA should be handled by the UK as the competent state, given its provision of AA to AH's grandmother in Portugal.

Judge Charles Turnbull, presiding over the Upper Tribunal, set aside the First-tier Tribunal's decision. The Upper Tribunal held that under Regulation 883/04, the competent state for the payment of sickness benefits to the claimant (AH) is determined by where the claimant pursues her self-employed activity, which in this case is Portugal. Therefore, the UK was not the competent state to pay CA to AH, leading to the dismissal of her appeal.

Analysis

Precedents Cited

The Judgment extensively references the European Court of Justice (ECJ) case Commission of the European Communities v European Parliament (C-299/05), [2007] ECR I 8695. In this case, the ECJ classified AA, CA, and the care component of the Disability Living Allowance (DLA) as 'sickness benefits' under Regulation 883/04, which coordinate social security systems within the EU.

Additionally, the Judgment references Regulation (EC) No 1408/71, the predecessor to Regulation 883/04, noting its similar provisions until it was replaced in 2010.

Legal Reasoning

The core of the legal reasoning revolves around determining the competent state for the payment of CA. Under Regulation 883/04, specifically:

• Article 11.1: Establishes that a person subject to the Regulation is subject to the legislation of a single Member State.
• Article 11.3(a): States that a self-employed person is subject to the legislation of the Member State where they pursue their activity.
• Section 70(4A) of the Social Security Contributions and Benefits Act 1992: Incorporates Regulation 883/04 into UK law, stipulating that the competent state must be identified based on Regulation 883/04 criteria.

The Upper Tribunal concluded that since AH was self-employed and residing in Portugal, Regulation 883/04, particularly Article 11.3(a), made Portugal the competent state for the payment of her CA. The Court rejected the Claimant's argument that CA should be linked to the competent state responsible for AA to her grandmother, emphasizing that Regulation 883/04 focuses on the claimant's circumstances rather than those of third parties.

Impact

This Judgment reinforces the application of Regulation 883/04 in determining competent states for social security benefits, emphasizing the primacy of the claimant's circumstances. It clarifies that CA, despite its connection to AA, is governed by the same coordination rules focused on the recipient (the carer) rather than the beneficiary (the person receiving care). This decision sets a precedent for similar cases where claimants seek benefits while residing and working in different EU member states, ensuring consistency in the interpretation and application of EU social security regulations.

Complex Concepts Simplified

Regulation (EC) No 883/2004

This Regulation coordinates social security systems across EU member states to ensure that individuals moving within the EU do not lose their social security rights. It determines which member state's social security legislation applies to an individual to avoid duplication or gaps in coverage.

Competent State

The "competent state" refers to the member state responsible for paying a specific social security benefit. Determining the competent state is crucial to ensure that the correct social security system applies, especially for individuals residing or working in different EU countries.

Sickness Benefits

These are social security benefits provided to individuals who are unable to work due to illness or disability. In this context, AA and CA are classified as sickness benefits under EU law.

Carer's Allowance (CA)

CA is a benefit provided to individuals who care for someone with substantial care needs. It is intended to support carers financially, recognizing the contribution they make to the well-being of those they care for.

Conclusion

The Upper Tribunal's decision in Secretary of State for Work and Pensions v. AH (CA) underscores the importance of adhering to the strict criteria set out in Regulation 883/04 for determining the competent state for social security benefits. By prioritizing the claimant's self-employment and residency in Portugal, the Judgment ensures that social security benefits like CA are administered consistently across EU member states, respecting the individual's primary link to their country of work and residence.

This case highlights the intricate balance between national legislation and EU regulations in the realm of social security law. It serves as a crucial reference for future cases involving cross-border social security claims, emphasizing the necessity of aligning national entitlement conditions with overarching EU legal frameworks to maintain coherence and fairness in benefit distributions.