Factual and Procedural Background
This appeal concerns a decision by the Upper Tribunal (Administrative Appeals Chamber) ("UT") dated 15 May 2023, sealed 19 May 2023, involving the Secretary of State for Work and Pensions ("Appellant") and two Respondents: a Belgian national ("First Respondent") and a UK national ("Second Respondent"). The First Respondent arrived in the UK in May 2017, married the Second Respondent shortly thereafter, and obtained pre-settled and later settled status under the EU Settlement Scheme.
Prior to arriving in the UK, the First Respondent was self-employed with modest profits. Since arrival, he had not worked or sought work but received Carer's Allowance for caring for the severely disabled Second Respondent, who received various legacy welfare benefits. The couple made a joint Universal Credit ("UC") claim in July 2020, which was initially refused due to the First Respondent failing the habitual residence test.
The First Respondent requested mandatory reconsideration and appealed the decision to the First-tier Tribunal ("FtT"), which allowed the appeal and set aside the Secretary of State’s decision. The Secretary of State then appealed to the UT, which allowed the appeal but remade the decision in favour of the First Respondent, concluding he was entitled to joint UC at the couple rate.
Legal Issues Presented
- Whether a European Union national can rely on benefits paid to their spouse, a British citizen, as evidence of self-sufficiency under Article 7(1)(b) of Directive 2004/38/EC (the Citizens' Rights Directive) to qualify for Universal Credit.
- Whether the First Respondent had sufficient resources to be considered self-sufficient prior to the UC claim.
- The proper interpretation and application of Article 8(4) of the Directive in this context.
- The assessment of the burden placed on the UK’s social assistance system if UC was awarded to the First Respondent.
Arguments of the Parties
Appellant's Arguments
- The UT erred in law by allowing the First Respondent to rely on resources derived from social assistance received by the Second Respondent to establish self-sufficiency under Article 7(1)(b) of the Directive.
- The UT misinterpreted and misapplied Article 8(4) of the Directive by conflating the eligibility threshold for social assistance with the actual amount payable.
- The UT failed to adequately consider whether the First Respondent had sufficient resources to support the Second Respondent, thus potentially imposing an unreasonable burden on the UK’s social assistance system.
- The UT erred in assessing the burden on the social assistance system by miscalculating relevant time periods, underestimating cumulative burden from similar cases, and providing inadequate reasoning.
Respondents' Arguments
- The First Respondent was entitled to rely on the Second Respondent’s welfare benefits, including social assistance, as part of the household resources to establish self-sufficiency.
- The UT correctly applied the law, including Article 8(4) of the Directive, recognizing that the resources available met the ceiling of sufficiency without imposing a minimum floor.
- The First Respondent’s presence did not increase the burden on the UK’s social assistance system; rather, the social assistance payable to the Second Respondent decreased upon their cohabitation.
- The UT’s assessment of the burden was reasonable, taking into account the limited size and time-limited nature of the relevant cohort and the proportionality of the financial impact.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Trojani v Centre Public d'Aide Sociale de Bruxelles (CPAS) (Case 456/02) |
Principle that persons dependent on social assistance are to be cared for in their own Member State. |
Accepted as establishing the basic principle that social assistance recipients should rely on their home state, not host state. |
| Pensionsversicherungsanstalt v Brey (Case-140/12) |
Definition and scope of "social assistance" in EU law. |
Used to clarify that social assistance covers public authority aid for individuals lacking sufficient resources, and to assess burden on host State. |
| Zhu and Chen v Secretary of State for the Home Department (Case C-200/02) |
Resources origin irrelevant for self-sufficiency; fundamental right to free movement. |
Applied to hold that reliance on resources of another person does not undermine self-sufficiency. |
| Commission of the European Communities v Belgium (Case-408/03) |
Origin of resources not necessary for public finance protection; proportionality of restrictions. |
Supported reasoning that resources from third party support can establish self-sufficiency. |
| Alopka v Ministre du Travail, de l'Emploi et de l'Immigration (Case C-86/12) |
Continued application of principles on self-sufficiency and free movement rights. |
Referenced as confirming relevant EU law principles. |
| Dano v Jobcenter Leipzig (Case C-333/13) |
Examination of financial situation excluding social benefits to determine self-sufficiency. |
Considered but distinguished due to factual difference regarding origin of resources. |
| Bajratari v Secretary of State for the Home Department (Case C-93/18) |
Disproportionate interference in requiring origin of resources for Union citizen minors. |
Noted but distinguished as not involving resources originating from social assistance of host State. |
| CG v Department for Communities in Northern Ireland (Case C-709/20) |
Non-discrimination principle and limits on residence rights without sufficient resources. |
Referenced to illustrate limits on residence rights without meeting Directive conditions. |
| Cooke v Secretary of State for Social Security [2001] EWCA Civ 734 |
Specialist tribunal expertise in complex social security law. |
Emphasized deference to specialist tribunal’s factual and legal assessments. |
| R (Jones) v First-Tier Tribunal (Social Entitlement Chamber) [2013] UKSC 19 |
Support for specialist tribunal expertise and appellate caution. |
Reinforced approach to appeals on points of law and respect for tribunal expertise. |
Court's Reasoning and Analysis
The Court analysed whether the First Respondent could rely on resources derived from the Second Respondent’s social assistance benefits to establish self-sufficiency under Article 7(1)(b) of the Directive. It noted that while EU law generally prohibits reliance on social assistance to claim residence rights, the critical factual feature here was that the First Respondent’s presence did not increase but rather decreased the burden on the UK’s social assistance system. The UT applied a causal link test, concluding that no additional burden arose from the First Respondent’s exercise of free movement rights.
The Court considered relevant EU case law, including Zhu and Chen and Brey, confirming that the origin of resources is generally irrelevant, but distinguished those cases as not involving indirect reliance on social assistance benefits of the host State. Nonetheless, the Court accepted the UT’s narrow and fact-specific approach given the absence of increased burden.
Regarding Article 8(4) of the Directive, the Court held the UT correctly interpreted it as setting a ceiling on sufficiency without imposing a minimum floor, and that the household income met this ceiling. The Court rejected the Appellant’s contention that the UT improperly “stretched” social assistance amounts across household members.
On the burden assessment, the Court deferred to the specialist tribunal’s expertise, finding no error of law in the UT’s evaluation of the relevant time periods, cohort size, and proportionality of the financial impact. The Court noted the UT’s finding that the cohort was small and the burden time-limited, and that the monthly increase was a relatively small proportion of household income.
The Court emphasized the importance of the causal link between the EU national’s free movement and any burden on social assistance, which was absent here due to the reduction in social assistance payments upon the First Respondent joining the household. It also noted that once the First Respondent attained settled status, any entitlement to social assistance would derive from his own rights, not from free movement.
Holding and Implications
The Court DISMISSED the Secretary of State’s appeal.
The direct effect of this decision is that the First Respondent is entitled to Universal Credit jointly with the Second Respondent at the couple rate, based on the determination that he had sufficient resources and did not impose an unreasonable burden on the UK’s social assistance system. The Court’s decision is fact-specific and does not establish a broad precedent allowing indirect reliance on social assistance benefits; rather, it confirms the necessity of a causal link between the exercise of free movement rights and any burden imposed. No new legal principles were established beyond the application of existing EU and UK law in this unique factual context.