Secretary of State for Work and Pensions v GS (PC)

An EHIC constitutes comprehensive sickness insurance only where its conditions would enable the host state to recover the cost of healthcare from the issuing state. It does not suffice where the holder has become habitually resident in the host state, rather than being temporarily present there, and the issuing state could properly refuse reimbursement.

Habitual residence depends on the person’s habitual centre of interests, assessed from all the circumstances. Actual use of healthcare is immaterial: the question is whether the host state is protected against the financial risk. Proportionality may exceptionally qualify the insurance requirement, but cannot ordinarily excuse a complete absence of cover where social assistance is sought.

The claimant, an Italian national, sought state pension credit after reaching pension age. The Secretary of State refused the claim because he lacked a right to reside.

The First-tier Tribunal allowed his appeal. It held that he had acquired permanent residence after five years as a self-sufficient person, relying on an Italian EHIC as comprehensive sickness insurance. The Secretary of State appealed.

The Upper Tribunal considered whether the EHIC gave the United Kingdom a right of reimbursement from Italy, whether proportionality could cure any absence of insurance, and whether the claimant could instead rely on self-employment or dependency on his son.

1. Appeal allowed. The First-tier Tribunal erred in treating possession of an EHIC as sufficient comprehensive sickness insurance without considering the social-security regime governing it. Its decision was set aside and the claimant’s appeal against the refusal of state pension credit was dismissed.

2. Under Article 7(1)(b) of Directive 2004/38/EC, self-sufficiency requires comprehensive sickness insurance. The Secretary of State’s accepted position was that this condition can be met where the United Kingdom can recharge healthcare costs to another state. That depended here on whether Italy would have been liable under Article 22 of Regulation 1408/71.

3. Applying I v Health Service Executive C-255/13, the claimant’s habitual centre of interests was in the United Kingdom. He had returned intending to remain indefinitely, had family and a home there, and intended to establish a business there. He was therefore habitually resident, not on a temporary stay. Italy could properly refuse reimbursement under the EHIC. The card did not supply the required insurance cover.

4. It did not matter that the claimant may not actually have required treatment. The insurance requirement protects the host state against the risk of healthcare costs. An EHIC may nevertheless amount to comprehensive sickness insurance in other cases, particularly where its holder is genuinely and temporarily staying in the host state.

5. Proportionality could in principle qualify the requirement, following Baumbast C-413/99. The claimant’s position was materially different: he effectively had no cover and sought social assistance. In light of Mirga v SSWP [2016] UKSC 1, those circumstances did not justify waiving the requirement.

6. The alternative dependency case also failed. EU-law dependency requires a situation of real dependence. Occasional assistance from the claimant’s son did not establish dependence for the required five years, and there was no evidence of current real dependency. The Upper Tribunal had no power in this appeal to revise the separate 2009 pension-credit decision.

7. Finally, because the claimant’s right to reside immediately before the claim was only as a jobseeker, there was no residual entitlement to an individualised assessment of his circumstances.

• Upper Tribunal (Administrative Appeals Chamber): Allowed the Secretary of State’s appeal, set aside the First-tier Tribunal’s decision for error of law, and remade the decision by dismissing the claimant’s pension-credit appeal.
• First-tier Tribunal: On 24 July 2013, allowed the claimant’s appeal against the refusal of state pension credit, holding that he had acquired permanent residence through self-sufficient residence.