Patmalniece v Secretary of State for Work and Pensions

Factual and Procedural Background

The Appellant, a Latvian national born on 1 June 1938, entered The United Kingdom on 12 June 2000 and unsuccessfully claimed asylum in 2004. After Latvia joined the European Union on 1 May 2004, the Appellant remained in the country but never worked in The United Kingdom and relied solely on a small Latvian state pension.

In August 2005 the Appellant applied for state pension credit—an income-related, non-contributory benefit administered by the Respondent (the Secretary of State). Her application was refused on 7 September 2005 because she lacked a “right to reside” as required by regulation 2 of the State Pension Credit Regulations 2002 (“the 2002 Regulations”).

The Appellant appealed, arguing that regulation 2 violated article 3(1) of Council Regulation 1408/71 by discriminating on grounds of nationality. An appeal tribunal accepted that argument on 12 December 2005, but on 11 June 2008 Commissioner Rowland allowed the Respondent’s appeal, finding only indirect discrimination which was objectively justified. On 25 June 2009 the Court of Appeal dismissed the Appellant’s further appeal. The present judgment concerns her appeal to the Supreme Court.

Legal Issues Presented

1. Whether regulation 2 of the 2002 Regulations constitutes direct discrimination contrary to article 3(1) of Regulation 1408/71.
2. If only indirect discrimination arises, whether that discrimination is objectively justified by considerations independent of nationality.
3. Whether favourable treatment afforded to Irish nationals within the “Common Travel Area” undermines any justification for the indirect discrimination.

Arguments of the Parties

Appellant's Arguments

• Regulation 2 imposes a “right to reside” condition that United Kingdom nationals satisfy automatically, whereas nationals of other Member States do not, amounting to direct discrimination on grounds of nationality.
• Article 3(1) of Regulation 1408/71 requires the United Kingdom to ignore the discriminatory rule and treat the Appellant as if she were a national.
• Even if discrimination is characterised as indirect, it is not justified because the Respondent’s aim could be achieved by immigration control rather than benefit exclusion.
• The exemption for Irish nationals shows that the Respondent’s purported fiscal justification is inconsistent and therefore unsound.

Respondent's Arguments

• The measure is not directly but only indirectly discriminatory; it applies to everyone and hinges on habitual residence plus a right to reside.
• The discrimination pursues a legitimate objective—protecting public finances by denying means-tested benefits to economically inactive migrants who have no right to reside—and is proportionate.
• State pension credit is a “special non-contributory cash benefit”; Member States may restrict such benefits to persons socially or economically integrated with the host State.
• The preferential treatment of Irish nationals is authorised by Protocol (No 20) on the Common Travel Area and therefore does not undermine the justification.

Table of Precedents Cited

Court's Reasoning and Analysis

Judge Hope, delivering the lead opinion, held:

• The statutory scheme requires claimants to be “in Great Britain,” a composite test of habitual residence plus a right to reside. Although every United Kingdom national automatically satisfies the latter element, both nationals and non-nationals must prove habitual residence; thus the measure is not formulated exclusively by reference to nationality.
• Applying Bressol, the Court treated the measure as indirectly discriminatory because it places non-UK nationals at particular disadvantage.
• Indirect discrimination may be lawful if justified. The Respondent’s objective—protecting the tax-funded social-assistance system from persons lacking economic or social integration—was recognised in EU case law (notably Trojani) as legitimate.
• The “right to reside” requirement is applied universally and is conceptually independent of nationality; therefore the justification is based on objective considerations and is proportionate.
• The special position of Irish nationals is preserved by Protocol (No 20) on the Common Travel Area; those arrangements relate to free movement between the two States and do not invalidate the broader justification.
• Accordingly, article 3(1) of Regulation 1408/71 does not invalidate regulation 2.

Judges Walker and Hale delivered separate concurring opinions; Judge Walker dissented on justification but agreed that the issue was domestic and required no reference to the Court of Justice.

Holding and Implications

APPEAL DISMISSED.

The Court concludes that regulation 2 of the 2002 Regulations, though indirectly discriminatory, is objectively justified and therefore compatible with EU law. The immediate effect is that the Appellant remains ineligible for state pension credit. The judgment signals that Member States may impose “right to reside” tests on special non-contributory cash benefits, provided such tests are applied uniformly and pursue the legitimate aim of safeguarding public finances; no new precedent is set beyond affirming existing EU principles on indirect discrimination and justification.