The Secretary of State for Work And Pensions v Garland

Under Council Regulation (EC) No. 1408/71, the prohibition on residence clauses for old-age benefits is subject to provisions coordinating qualifying periods. Article 45 requires periods of residence or insurance completed under another Member State’s legislation, in an employed or self-employed capacity, to be taken into account. Physical residence alone is insufficient. A reciprocal order does not deem residence in Gibraltar to be residence in the United Kingdom or create a qualifying period where no relevant scheme or contributions exist. Residence on a specified birthday or date of claim remains impermissible under Article 10.

The Secretary of State appealed against the Upper Tribunal’s decision that Mr Garland was entitled to a Category D retirement pension under his claim of 27 February 2009. The Minister had rejected the claim, and the First-tier Tribunal had dismissed his appeal. The Upper Tribunal allowed his appeal: [2013] UKUT 0300 (AAC).

The central issues were whether periods spent in Gibraltar and the Isle of Man could be aggregated under the reciprocal orders and European Union social-security rules, and whether the residence conditions in regulation 10 of the 1979 Regulations were incompatible with those rules.

McCombe LJ gave the judgment of the court. Richards and Floyd LJJ agreed.

1. The appeal was allowed. The Upper Tribunal’s decision that Mr Garland was entitled to a Category D retirement pension was set aside.
2. Article 10.1 of Council Regulation (EC) No. 1408/71 contains a prohibition on certain residence clauses, but its opening words make that prohibition subject to other provisions of the Regulation. The decision in Stewart v Secretary of State (C-503/09) therefore did not make every residence requirement unlawful.
3. Stewart established that residence on a specified birthday or on the date of claim could not be used to deny entitlement to a person resident in another Member State. The Minister properly conceded that regulation 10(b) of the 1979 Regulations could not be applied in that way. However, the present case fell within Article 45, because it concerned periods of residence or insurance completed under legislation applicable to an employed or self-employed person. Article 45 required qualifying periods under another Member State’s legislation to be taken into account.
4. Article 45 did not treat every period of physical residence as qualifying. The relevant period had to be completed under a Gibraltar scheme, whether general or special, and in the capacity specified by the Regulation. Mr Garland had made no Gibraltar contributions and had completed no relevant qualifying period there. The Gibraltar Order gave him the same rights and liabilities as if the United Kingdom and Gibraltar were separate Member States; it did not deem Gibraltar residence to be United Kingdom residence or create a qualifying period. There was consequently no Gibraltar period to aggregate with residence in the Isle of Man, and it was unnecessary to decide the further effect of the Isle of Man Order.
5. Article 94.4 was a transitional provision for benefits refused or suspended before 1 October 1972 because of nationality or residence. It did not apply because no such refusal or suspension had occurred. Regulation 883/2004 was also irrelevant: the lawfulness of the Minister’s decision fell to be determined by the legislation in force when that decision was made.

1. Court of Appeal (Civil Division): Appeal allowed. The Upper Tribunal’s order was set aside.
2. Upper Tribunal (Administrative Appeals Chamber): Appeal allowed and entitlement to a Category D retirement pension declared, [2013] UKUT 0300 (AAC).
3. First-tier Tribunal (Social Security): Appeal against the Minister’s decision dismissed.