IG v Secretary of State for Work and Pensions

Section 65(7) of the Social Security Contributions and Benefits Act 1992 validly prevents an award of attendance allowance where the United Kingdom is not the Member State competent to pay sickness benefits under Regulation 883/2004.

EU social-security coordination does not guarantee that moving between Member States will leave every benefit entitlement unchanged. A non-competent State may exceptionally confer an additional benefit where there are sufficiently close connecting factors and this will not disproportionately impair the predictability and effectiveness of the coordination rules. That approach does not require the United Kingdom to disregard section 65(7) for a sickness benefit generally subject to the rule against overlapping benefits.

The claimant, a Lithuanian pensioner resident in the United Kingdom, claimed attendance allowance in July 2012. The Secretary of State refused the claim because Lithuania, which paid her pension, was the competent State for sickness benefits under Regulation 883/2004.

The First-tier Tribunal allowed her appeal but set aside its decision and referred the case to the Upper Tribunal under section 9(5)(b) of the Tribunals, Courts and Enforcement Act 2007. The Upper Tribunal therefore determined whether the Secretary of State had been right to refuse the claim.

The central issue was whether section 65(7) of the Social Security Contributions and Benefits Act 1992 could lawfully preclude entitlement where the United Kingdom was not the competent State.

1. The Secretary of State’s decision was confirmed. The claimant was not entitled to attendance allowance. Lithuania was the competent State for sickness benefits and section 65(7) of the Social Security Contributions and Benefits Act 1992 therefore excluded an award.

2. As a matter of domestic construction, section 65(7) was clear and effective. Its placement in the provision governing the period of an award, rather than the general entitlement provision, was appropriate because the competent State may change over time. The claimant’s United Kingdom pension credit was a special non-contributory cash benefit, not a pension capable of making the United Kingdom competent.

3. Regulation 883/2004 is a system of coordination, not harmonisation, made to support free movement under Article 48 TFEU. It generally subjects a person to the law of one Member State for a class of benefit. It does not guarantee that the exercise of free movement will have a neutral effect on every social-security entitlement, particularly sickness benefits.

4. A non-competent State may in some circumstances create an additional entitlement. It requires sufficiently close connecting factors with that State and must not disproportionately affect the predictability and effectiveness of the Regulation’s coordination rules. Although habitual residence supplied a sufficient connection here, the claimant could not satisfy the latter requirement.

5. The CJEU authorities preventing total exclusion of a non-competent State’s benefit concerned either loss of all entitlement or a benefit bought by contributions or taxation, or benefits for which overlapping was generally contemplated. This claimant retained sickness-benefit entitlement from Lithuania. Attendance allowance was a sickness benefit generally subject to the anti-overlap rule in Article 10, read with Article 54, of Regulation 883/2004. The United Kingdom was consequently not precluded by EU law from applying section 65(7).

• Upper Tribunal (Administrative Appeals Chamber): On a reference under section 9(5)(b) of the Tribunals, Courts and Enforcement Act 2007, confirmed the Secretary of State’s refusal of attendance allowance.
• First-tier Tribunal: Allowed the claimant’s appeal, then set aside its own decision and referred the case to the Upper Tribunal for decision.