Introduction

The case of Secretary of State for Work and Pensions v Versnick & Anor ([2024] EWCA Civ 1454) addresses pivotal issues surrounding the eligibility of European Union (EU) nationals for Universal Credit (UC) in the United Kingdom (UK) post-Brexit. This judgment, delivered by the England and Wales Court of Appeal (Civil Division) on November 29, 2024, examines whether an EU national can rely on his British spouse's benefits as evidence of self-sufficiency under Article 7(1)(b) of Directive 2004/38/EC, also known as the Citizens' Rights Directive.

The appellants, the Secretary of State for Work and Pensions, contest the Upper Tribunal's (UT) decision which favored the First Respondent, Mr. Wilfried Versnick, a Belgian national. The primary contention revolves around whether Mr. Versnick can utilize his wife's welfare benefits to qualify for UC, thereby establishing his self-sufficiency.

Summary of the Judgment

The Upper Tribunal initially allowed Mr. Versnick’s appeal against the Secretary of State’s refusal of a joint UC claim, determining that he could be considered self-sufficient by relying on his wife’s benefits. The Secretary of State appealed, presenting three grounds of appeal alleging legal errors in the UT's assessment. The Court of Appeal upheld the UT's decision, dismissing all grounds of appeal raised by the Secretary of State.

Key findings include:

• The UT correctly interpreted that resources derived indirectly from the spouse’s welfare benefits could be considered in assessing self-sufficiency.
• The UT established that in this specific case, the First Respondent did not impose an unreasonable burden on the UK's social assistance system.
• The Court of Appeal agreed that the UT did not err in law, reinforcing the principle that the origin of resources should not inherently disqualify an EU national from establishing self-sufficiency.

Analysis

Precedents Cited

The judgment extensively references prior decisions of the Court of Justice of the European Union (CJEU) to elucidate the interpretation of the Citizens' Rights Directive. Notable cases include:

• Zhu and Chen v Secretary of State for the Home Department (Case C-200/02): Established that the origin of resources used to demonstrate self-sufficiency under EU law is irrelevant, provided that the resources meet the necessary threshold.
• Conditions of Residence and Deportation: Commission of the European Communities v Belgium (Case-408/03): Reinforced that the source of resources should not be scrutinized, focusing instead on whether the individual poses a burden on the host state's social assistance system.
• Alopka v Ministre du Travail et de l'Immigration (Case C-86/12): Affirmed the application of the aforementioned principles under the Citizens' Rights Directive.
• Dano v Jobcenter Leipzig (Case C-333/13) and Bajratari v Secretary of State for the Home Department (Case C-93/18): Further consolidated the stance that the mere receipt of social assistance does not automatically render an individual an unreasonable burden.
• CG v Department for Communities in Northern Ireland (Case C-709/20): Clarified non-discrimination principles, emphasizing that denial of rights based on socio-economic status would be disproportionate.

Legal Reasoning

The Court of Appeal meticulously dissected the UT's legal reasoning, acknowledging that the UT appropriately applied EU law principles regarding self-sufficiency. Central to the decision was the understanding that:

• Resources, irrespective of their origin, are valid in determining self-sufficiency as long as they meet the criteria set forth in Article 7(1)(b) of the Directive.
• The UT correctly identified that in the present case, the First Respondent's reliance on his spouse's benefits did not exacerbate the UK's social assistance burden but, counterintuitively, reduced it.
• The causal link test was aptly applied, where the court assessed whether the exercise of free movement rights by Mr. Versnick directly imposed an unreasonable burden on the UK's social assistance system.
• Article 8(4) of the Directive was appropriately interpreted by the UT, ensuring that no fixed amounts could unduly restrict self-sufficiency assessments.

Furthermore, the Court of Appeal rejected the Secretary of State's arguments, emphasizing that the UT’s nuanced approach in evaluating the specific circumstances of the case was legally sound and in alignment with established EU jurisprudence.

Impact

This judgment has far-reaching implications for EU nationals residing in the UK post-Brexit. It strengthens the position that EU nationals can rely on indirect resources, such as a spouse’s benefits, to establish self-sufficiency for UC eligibility. Key impacts include:

• Clarification of Self-Sufficiency Criteria: Reinforces that the origin of resources should not be a barrier, provided the resources suffice under the Directive.
• Protection Against Discrimination: Enhances the protection of EU nationals from discriminatory practices in accessing social benefits based on the source of their resources.
• Policy Guidance: Provides clear guidelines for tribunals and courts in assessing UC eligibility, promoting consistency in decisions involving EU nationals.
• Administrative Practices: May influence the Department for Work and Pensions (DWP) to reconsider their criteria and assessment methodologies for UC claims by EU nationals.

Complex Concepts Simplified

Directive 2004/38/EC (Citizens' Rights Directive)

A piece of EU legislation that grants EU nationals the right to move and reside freely within member states, subject to certain conditions such as self-sufficiency and comprehensive sickness insurance.

Self-Sufficiency (Article 7(1)(b))

The requirement that an individual has sufficient resources to avoid becoming a burden on the host state’s social assistance system during their stay.

Universal Credit (UC)

A UK social security benefit intended to support individuals with low income or out of work, replacing several other benefits to streamline support.

Habitual Residence Test

A criterion used to assess whether a person is habitually residing in the UK, which impacts their eligibility for certain benefits.

Settled Status

Post-Brexit status granted to EU nationals living in the UK, providing them with the right to continue residing and accessing benefits similarly to permanent residents.

Conclusion

The Court of Appeal’s decision in Secretary of State for Work and Pensions v Versnick & Anor underscores the judiciary's commitment to upholding EU principles on free movement and non-discrimination, even in the post-Brexit context. By affirming that the origin of resources does not inherently negate an individual’s self-sufficiency, the court ensures that EU nationals are not unfairly disadvantaged when accessing social benefits through indirect means, such as a spouse's welfare payments.

This judgment not only reinforces existing legal frameworks but also provides clear direction for future cases, promoting fairness and consistency in the administration of social benefits to EU nationals in the UK. It highlights the delicate balance between national welfare policies and the preservation of fundamental EU rights, setting a significant precedent for similar cases moving forward.

Ultimately, this case exemplifies the ongoing interplay between national policies and broader European legal standards, emphasizing the necessity for courts to navigate these waters with both legal rigor and an appreciation for the underlying principles of free movement and mutual respect among member states.