Harrington v Secretary of State for Work And Pensions

Factual and Procedural Background

The appeal concerns the payment of the care component of disability living allowance, a disability benefit payable to children under 16. The Appellant, a child residing in the United Kingdom with her mother, had previously received this benefit from the Respondent. However, payments ceased on 19 May 2015 because the Respondent determined that Belgium, where the Appellant's father is self-employed and resident, was the competent state for payment of such benefits under Regulation (EC) No 883/2004 ("the Regulation").

The Appellant claimed entitlement to rely on United Kingdom law, her state of residence, to claim the care component. The Respondent contended that only Belgium's legislation applied, as the Appellant was a family member of a person self-employed in Belgium, governed by Belgian social security legislation.

Procedurally, the Appellant's initial claim for disability living allowance was accepted in 2014 but later revoked by the Respondent in 2015. The First-tier Tribunal allowed the Appellant's appeal on the basis of a difference of view between the UK and Belgium regarding the competent state, ordering payment until resolution. The Upper Tribunal overturned this, ruling the Appellant was not entitled to the allowance, prioritising Belgian legislation.

Subsequently, the matter was referred to the Administrative Commission due to the difference of view between the Member States. The Commission did not definitively resolve the issue but suggested that Article 21 of the Regulation should be interpreted in light of EU treaty provisions and recommended establishing priority rules for cash sickness benefits. The appeal to the Court of Appeal was stayed pending this process, with provisional payments made by the Respondent.

Legal Issues Presented

1. Whether the Appellant, as a resident insured person in the United Kingdom, is entitled to the care component of disability living allowance under UK legislation pursuant to Article 11(3)(e) of the Regulation.
2. Whether Article 21 of the Regulation, governing cash benefits for family members residing in a Member State other than the competent state, takes priority over the Appellant’s independent entitlement under UK legislation.
3. Whether the Upper Tribunal erred in interpreting the legislative changes from Regulation 1408/71 to Regulation (EC) No 883/2004, particularly regarding priority rules for cash sickness benefits.
4. Whether there was a difference of view between Belgium and the United Kingdom concerning the competent state for payment of the care component, affecting provisional payment obligations.

Arguments of the Parties

Appellant's Arguments

• The Appellant and her mother are insured persons resident in the United Kingdom and thus subject to UK legislation under Article 11(3)(e).
• No reason exists for derivative rights from the father under Article 21 to take priority over rights derived from the mother or the Appellant’s own independent rights under UK law.
• Article 21 does not express a rule of priority overriding Article 11(3)(e); the Appellant has concurrent rights under the legislation of the state of residence and derivative rights through her father.
• The change in wording from Regulation 1408/71 to the Regulation does not signify a legislative policy shift prioritising the state of economic activity over residence for cash benefits.
• Interpretation consistent with relevant United Nations Conventions on the Rights of the Child and Persons with Disabilities, emphasizing the best interests and protection of the child.

Intervener's Arguments (Aire Centre)

• The Appellant has an independent entitlement to cash sickness benefits under UK legislation as the legislation of her state of residence.
• The Upper Tribunal erred in applying a rule of priority based on derivative rights under Article 21 to override the Appellant’s own rights.
• The Regulation must be interpreted in accordance with Article 24 of the EU Charter of Fundamental Rights and relevant UN Conventions, prioritising the child’s best interests and family realities.

Respondent's Arguments

• The Regulation forms a complete and uniform system of conflict rules requiring that persons be subject to the legislation of only one Member State at a time, necessitating priority rules.
• The scheme prioritises the legislation of the state of economic activity over residence.
• The Appellant, as a family member of a self-employed person in Belgium, can only claim sickness benefits under Belgian legislation pursuant to Article 21.
• The Upper Tribunal correctly relied on the absence of the prior rule from Regulation 1408/71, which gave priority to the state of residence for cash benefits, indicating a legislative change.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began by confirming that the Appellant falls within the scope of the Regulation as an insured person resident in the United Kingdom entitled to sickness benefits, specifically the care component of disability living allowance. The applicable legislation is determined under Article 11(3) of the Regulation, where the Appellant falls under subparagraph (e) as a person not pursuing economic activity but resident in the UK.

The Court acknowledged the principle that an insured person is subject to the legislation of a single Member State, as emphasized in Article 11(1) and recital 15. However, it rejected the Respondent's contention that Article 21 operates as a priority rule displacing the legislation applicable under Article 11(3)(e).

Article 21 was interpreted not as a priority provision but as a safeguard preventing denial of cash benefits when insured persons or family members reside in states other than the competent state. It ensures continuation of benefits from the competent state regardless of residence but does not displace the legislation applicable to the insured person or family member under Article 11.

The Court examined the legislative history, noting that Regulation 1408/71 expressly provided that family members residing in a state other than the competent state were entitled to cash benefits from their state of residence unless not entitled, in which case the competent state's benefits applied. The current Regulation does not replicate this express priority rule but preserves the priority of the state of residence through Article 11(3)(e).

The Court found no indication that the EU legislature intended to change this position or to prioritize the state of economic activity over the state of residence for economically inactive persons entitled to cash sickness benefits such as the care component.

The Court further reasoned that interpreting the Regulation to prioritize the state of residence promotes free movement of workers and self-employed persons, avoiding disincentives arising from loss of benefits for children remaining in the state of residence.

The Court considered ancillary arguments based on UN Conventions and the EU Charter but found them neither necessary to decide nor sufficiently specific to affect the interpretation of the Regulation.

Finally, the Court noted that the Administrative Commission's opinion did not resolve the interpretative question and that it was for the Court to interpret the Regulation. The Court concluded that the Appellant is subject to UK legislation for the care component and that no priority rule in Article 21 displaces this.

Regarding the first ground of appeal, concerning priority of derivative rights from the mother over the father, the Court found it unnecessary to decide as the Appellant's independent entitlement under UK legislation sufficed.

Holding and Implications

The Court ALLOWED the appeal.

Holding: The Appellant is entitled in her own right to the care component of disability living allowance under United Kingdom legislation, which is the applicable legislation under Article 11 of the Regulation. There is no basis to give priority to any derivative rights from the father under Belgian legislation pursuant to Article 21 of the Regulation.

Implications: This decision confirms that for economically inactive insured persons such as children, the legislation of the state of residence governs entitlement to cash sickness benefits like the care component of disability living allowance. It clarifies that Article 21 does not operate as a priority rule overriding this principle. The ruling preserves the principle of a single applicable legislation under the Regulation without creating concurrent entitlements. No new precedent beyond the facts of this case is established.