Alhashem v The Secretary of State for Work and Pensions

For EU free-movement purposes, a benefit is labour-market related only where its sole or predominant function is to facilitate access to employment. A benefit whose predominant function is to provide subsistence and welfare to people with limited capability for work is social assistance, even if some recipients undertake work-related activity or are permitted limited work.

The assessment concerns the benefit as a whole and its practical operation. It cannot be artificially severed into groups where movement between those groups forms part of the scheme. A host state may therefore restrict such social assistance to persons with the requisite right to reside.

A Dutch citizen living in the United Kingdom had received jobseeker’s allowance until ill health prevented her signing on. The Secretary of State refused her subsequent claim for non-contributory employment and support allowance (ESA) because she lacked a right to reside.

The First-tier Tribunal and, on appeal, the Upper Tribunal rejected her contention that EU law required ESA to be available to an EU jobseeker because ESA facilitated access to the labour market. She appealed to the Court of Appeal. The court proceeded on the assumption, without deciding, that she was a jobseeker for EU-law purposes. The central issue was whether ESA was social assistance or a labour-market-related benefit.

1. Appeal dismissed. Lady Justice Arden, with whom Lord Justice David Richards and Mr Justice Mitting agreed, held that the EU-law distinction was governed by the predominant function of the benefit. The special entitlement of an EU jobseeker applies only to a benefit whose sole or predominant function is to facilitate access to the labour market. A subsistence benefit does not qualify merely because it contains an element directed towards future work.

2. Non-contributory ESA was social assistance. Its primary function was the welfare and subsistence of persons who could not work, or had limited capability for work, because of disability or a past episode in their lives. The large majority of eligible claimants were in the Support Group and were not required to undertake work-related activity. Work-related conditionality for another group, and permission for limited work, did not alter ESA’s predominant character.

3. The court rejected the submission that ESA should be divided into a separate benefit for the Work Related Activity Group. The scheme was designed to permit movement between its groups as claimants’ capabilities changed. Severance would be inconsistent with that structure, particularly given that the composite benefit considered in Alimanovic had been treated as one benefit.

4. The court did not decide whether ESA paid to the Work Related Activity Group, if separately constituted, would be labour-market related. It also did not decide whether the claimant was in fact a jobseeker. The Upper Tribunal’s conclusion was correct and the witness statements were admitted.

• Court of Appeal (Civil Division): Appeal dismissed: [2016] EWCA Civ 395.
• Upper Tribunal (Administrative Appeals Chamber): Upper Tribunal Judge Edward Jacobs dismissed the appeal from the First-tier Tribunal, holding that ESA was not a benefit intended to facilitate access to the labour market for EU-law purposes. No citation is stated in the judgment.
• First-tier Tribunal: Rejected the claimant’s EU-law ground of appeal against the Secretary of State’s refusal of non-contributory ESA.