Secretary of State for Work & Pensions v Burley & Anor

An old-age pension may be reduced on export where the entitlement derives from UK legislation giving effect to a social-security agreement with a non-member state. Paragraph 7 of Section Y in Annex VI to EC Regulation No 1408/71 must be construed purposively. It covers legislation which continues such an agreement for existing beneficiaries, as well as legislation which initially brings it into force.

The transitional Social Security (Australia) Order 2000 therefore fell within the derogation. Article 10's general non-reduction rule did not apply. The later EC Regulation No 883/2004 had no effect before its implementing regulation took effect.

The Secretary of State appealed against a decision of Commissioner Angus allowing the Burleys' appeal concerning reductions to their retirement pensions. The Burleys had received enhanced UK pensions based partly on deemed contributions arising from residence in Australia. After moving permanently to France, their pensions were reduced.

The Appeal Tribunal had dismissed their appeal on 17 October 2005. The Commissioner allowed it on 21 March 2007. The central issue was whether EC Regulation No 1408/71, particularly Article 10 and paragraph 7 of Section Y in Annex VI, prevented the reduction.

1. The appeal was allowed unanimously. The Burleys could not rely on Article 10 of EC Regulation No 1408/71 to prevent the reduction of their enhanced pensions after moving permanently to France.
2. The court held that EC Regulation No 883/2004 had not yet been implemented. Articles 89 and 91 required an implementing regulation before it applied, and Article 87 prevented rights being acquired for the period before its date of application. The 1971 Regulation therefore remained in force.
3. Article 10 contained a general rule against reducing old-age cash benefits merely because the recipient resided in another Member State. That rule was subject to the derogation in paragraph 7 of Section Y in Annex VI.
4. Paragraph 7 was to be interpreted purposively. It covered UK legislation which continued in force, as well as legislation which initially brought into force, a social-security agreement between the United Kingdom and a third state. The Social Security (Australia) Order 2000 continued the relevant modifications for existing beneficiaries after termination of the Australian Agreement. It therefore came within paragraph 7 to that limited extent.
5. The continuing pension entitlement remained subject to Article 3(5) of the Agreement on Social Security between the Governments of the UK and Australia. That provision made the enhanced pension cease when the pensioner ceased to be permanently resident in the United Kingdom.
6. The alternative argument based on the Grana-Novoa ruling also succeeded. The relevant provisions of EC Regulation No 1408/71 did not cover an international social-security convention between a single Member State and a non-member state, even where incorporated into domestic law. The Burleys' continuing enhanced rights derived from the UK-Australia agreement and legislation giving effect to it, so Article 10 could not assist them.
7. The court noted that the enhanced pension would resume if the Burleys became permanently resident in the United Kingdom again. Any separate public-law issue arising from advice allegedly given before their move was not relevant to the statutory interpretation issue.

1. Court of Appeal (Civil Division) On 23 April 2008, the court unanimously allowed the Secretary of State's appeal from Commissioner Angus.
2. Social Security and Child Support Commissioners Commissioner Angus allowed the Burleys' appeal on 21 March 2007. Leave to appeal was granted on 6 July 2007.
3. Appeal Tribunal The Appeal Tribunal dismissed the Burleys' appeal on 17 October 2005.