Non-Discrimination in Benefit Eligibility Post-Brexit: Fratila v Secretary of State for Work and Pensions

Introduction

The case of Fratila & Anor v Secretary of State for Work and Pensions ([2021] UKSC 53) represents a pivotal moment in the interpretation of post-Brexit legislation concerning the eligibility of EU nationals for non-contributory benefits in the United Kingdom. This Supreme Court judgment addresses whether statutory provisions, introduced by the Social Security (Income-related Benefits) (Updating and Amendment) (EU Exit) Regulations 2019 (hereafter referred to as the 2019 Regulations), comply with EU law, specifically Article 18 of the Treaty on the Functioning of the European Union (TFEU), which prohibits discrimination based on nationality.

The case centers on Romanian nationals who, holding pre-settled status under the EU Settlement Scheme (EUSS), were denied Universal Credit—a non-contributory benefit—in the UK. The appellants challenged these refusals, arguing that the 2019 Regulations constitute unlawful discrimination under EU law.

Summary of the Judgment

The United Kingdom Supreme Court ultimately allowed the appeal, upholding the decision that the respondents could not rely on Article 18 TFEU based solely on their pre-settled status under domestic law. The court referenced the Court of Justice of the European Union’s (CJEU) judgment in the CG v Department for Communities in Northern Ireland case, which clarified that Article 18 TFEU's anti-discrimination protections apply specifically to situations governed by the EU's rights to free movement and residence. Since the respondents’ residency was based on domestic law rather than EU law, the protections under Article 18 did not apply, thereby validating the 2019 Regulations.

Analysis

Precedents Cited

The judgment extensively references previous case law to frame the legal context:

Patmalniece v Secretary of State for Work and Pensions (AIRE Centre intervening) [2011] UKSC 11 – emphasized that discrimination under EU law must be assessed within the framework of specific EU directives, particularly those governing free movement and residence.
Bressol v Gouvernement de la Communaut francaise (Case C-73/08) [2010] – established that indirect discrimination must be justified by a legitimate aim and that such justifications are narrowly construed.
Dano v Jobcenter Leipzig (Case C-333/13) [2015] – clarified the application of free movement rights in the context of social benefits, reinforcing that eligibility is contingent upon residence in accordance with EU directives.
Test Claimants in the FII Group Litigation v Revenue and Customs Comrs [2020] UKSC 47 – highlighted the limitations of introducing new arguments on appeal, especially when they involve unresolved factual issues.
CG v Department for Communities in Northern Ireland (Case C-709/20) [2021] – pivotal in determining the applicability of Article 18 TFEU, stipulating that non-discrimination protections are tied to residence rights under EU law rather than domestic law.

These precedents collectively influenced the court's interpretation of the scope and applicability of EU anti-discrimination provisions post-Brexit.

Legal Reasoning

The Supreme Court's legal reasoning hinged on the relationship between EU law and domestic law post-Brexit, particularly regarding the retention of rights under the Withdrawal Agreement. The court determined that Article 18 TFEU’s anti-discrimination clause is applicable only to individuals whose residency rights in the UK are grounded directly in EU law, as per the conditions outlined in the Directive 2004/38/EC.

Since the respondents’ residency status was derived from pre-settled status under domestic amendments rather than directly from EU law, they fell outside the protective ambit of Article 18 TFEU. Consequently, the 2019 Regulations’ differentiation between UK nationals and EU nationals lacking EU-based residency rights was not discriminatory under EU law.

Furthermore, the respondent's attempt to invoke the Charter of Fundamental Rights of the European Union (the Charter) was dismissed. The court found that introducing the Charter at this stage would present unresolved factual disputes, which are unsuitable for appellate consideration.

Impact

This judgment has significant implications for the post-Brexit legal landscape in the UK:

Clarification of Anti-Discrimination Protections: The decision delineates the boundaries of EU anti-discrimination protections post-Brexit, confining them to scenarios where residency rights are explicitly rooted in EU law.
Benefit Eligibility Criteria: The ruling upholds the UK's legislative framework for determining eligibility for non-contributory benefits, allowing continued differentiation between UK nationals and EU nationals without EU-based residency rights.
Legal Certainty: By deferring to the CJEU's judgment in the CG case, the Supreme Court reinforces the binding nature of CJEU decisions on UK courts, ensuring consistency in the application of EU-derived law during the transition period.
Future Litigation: The judgment sets a precedent that may limit the scope of claims based on EU law protections for individuals whose residency rights are established through domestic arrangements, potentially narrowing avenues for future discrimination claims.

Complex Concepts Simplified

Article 18 TFEU

Article 18 of the Treaty on the Functioning of the European Union prohibits discrimination based on nationality within the scope of EU law. This means that EU citizens should not face disadvantageous treatment in member states purely because of their nationality, especially in contexts covered by EU directives on free movement and residence.

Pre-Settled Status

Pre-settled status is a form of residency permission granted to EU citizens and their family members living in the UK before the end of the Brexit transition period. It allows individuals to reside in the UK but does not grant the same comprehensive rights as settled status, particularly concerning access to certain public benefits.

Indirect Discrimination

Indirect discrimination occurs when a provision, criterion, or practice that appears neutral on the surface disproportionately disadvantages a particular group. In this case, the 2019 Regulations indirectly discriminated against EU nationals without EU-based residency rights by making their eligibility for benefits contingent upon criteria not imposed on UK nationals.

The Directive 2004/38/EC

This directive governs the rights of EU citizens to move and reside freely within the EU. It outlines the conditions under which EU citizens can obtain residency rights and the associated protections against discrimination.

Conclusion

The Supreme Court's decision in Fratila & Anor v Secretary of State for Work and Pensions solidifies the boundaries of non-discrimination protections for EU nationals in the UK post-Brexit. By affirming that Article 18 TFEU does not extend protections to those whose residency rights are grounded solely in domestic law, the court upheld the government's ability to legislate benefit eligibility without contravening EU anti-discrimination principles. This judgment underscores the nuanced interplay between EU law and domestic legislation during the transitional period and provides clarity on the application of non-discrimination provisions in a post-Brexit context.