05 Jun 2013

European Commission sues UK government over welfare restrictions

This blog has previously looked at the incorporation of the ‘contributory principle’ in the debate over welfare reform (here). A contributory-based welfare state would be one in which entitlements would depend on past contributions. The government has used this principle as the justification for retaining curbs on benefits for migrants. UK nationals have a ‘right to reside’ based solely on their UK citizenship, whereas migrants, including EU migrants, face additional barriers before they are eligible for many social security benefits, including Housing Benefit, Jobseekers Allowance and Income Support^[1]. The European Commission is taking the British government to court over this, claiming that it is discriminatory and against EU law^[2][3][4]. Iain Duncan-Smith, Secretary of State for Welfare and Pensions, claims that he will fight the case “every step of the way” and is confident that the European Court of Justice will side with the British government’s case^[5][6].

The Habitual Residence Test was originally introduced in 1994. Migrants pass the Habitual Residence Test by demonstrating an intention to stay in the UK. ‘Decision makers’ that demonstrate Habitual Residence can include:

The length and continuity of residence
The person’s future intentions
Their employment prospects
Their reasons for coming to the UK
Where the person’s ‘centre of interest’ lies

Migrants who do not pass this test are ineligible for many social security benefits. Many groups are excluded from this test, including European Economic Area (EEA) nationals classed as workers or self-employed (or the families of workers) and refugees^[7].

In May 2004, in response to public concerns regarding EU enlargement, an additional test was introduced that migrants had to fulfil to access social security benefits – the ‘right to reside’. Under this test, a person only has the ‘right to reside’ if they are economically active and/or able to support themselves (and their family). EEA nationals are required to pass this test to be eligible for social security benefits^[7][8].

The European Commission has claimed that this creates a barrier to citizens from other EU countries accessing social security benefits in the UK if they choose to reside in the UK, whereas UK citizens have an inherent ‘right to reside’ merely due to their UK citizenship (the ‘right to reside’ test is also applied to returning UK nationals). This means that the UK unfairly discriminates against nationals from other EU member states.

Iain Duncan Smith has called this action a “land grab” that the government will fight “every step of the way” in order to defend taxpayers money^[5][6]. Iain Duncan Smith has previously claimed that the UK could lose up to £155 million from ‘benefits tourism’^[9]. The UK is not alone in legal troubles with the EU over welfare. Iain Duncan Smith claimed that the Austrian government was engaged in a similar case regarding means tested welfare payments^[6].

The intention of these reform was to prevent ‘benefits tourism’. ‘Benefits tourism’ refers to the perceived threat that citizens from outside the country would seek to enter the country without an intention of working. The Centre for Research and Migration and the Migrants’ Rights Network have claimed that the perceived threat was unfounded and baseless^[10][11].

The same principle has also been invoked to justify bills in the Queen’s Speech, in which the government announced plans to require short-term migrants to pay for NHS care^[12].

Is it right that migrants have to go through tests that British people do not in order to receive welfare?

Should EU migrants have to go through tests that British people do not in order to receive welfare? Is this affected by citizens of Bulgaria and Romania gaining freedom of movement this year?
Should this contributory principle be expanded to include British people’s access to welfare benefits as well?

By Will Archdeacon

DWP press release