Secretary of State for Work and Pensions v MS

For the purposes of Regulation (EC) 883/2004, universal credit is a single, unified minimum-subsistence benefit. Its child element is an amount within the calculation of one award, rather than a separate entitlement capable of severance as a family benefit.

The classification of a benefit under EU law is autonomous and depends on its purpose and conditions of entitlement. It cannot, however, rewrite domestic legislation. The child element is embedded in the calculation of universal credit and loses any separate identity when all elements form a maximum amount subject to income deductions.

A claimant is not responsible for a child under regulation 4(4) of the Universal Credit Regulations 2013 unless the child normally lives with the claimant and one or more other non-couple persons.

The Secretary of State appealed against a First-tier Tribunal decision concerning the claimant’s universal-credit award. The claimant, a Slovak national with a permanent right to reside in the United Kingdom, financially supported her son, who lived and attended school in Slovakia with his grandparents.

The Secretary of State had removed the child element from the award from 26 July 2017. The First-tier Tribunal held that the claimant had main responsibility for her son and included the child element from 12 September 2017.

The central issues were whether the claimant could be treated as responsible for her son under regulation 4 of the Universal Credit Regulations 2013, and whether the child element was a severable social-security family benefit under Regulation (EC) 883/2004.

1. Appeal allowed. The First-tier Tribunal made an error of law. Its decision was set aside and remade under section 12(2)(a) and (b)(ii) of the Tribunals, Courts and Enforcement Act 2007. From 26 July 2017, the claimant’s universal credit had to be calculated without an amount for her son.

2. Regulation 4(4) of the Universal Credit Regulations 2013 applies only where a child normally lives with two or more persons who are not a couple. Only then must it be decided which person has main responsibility. The claimant’s son normally lived with his grandparents, not with both them and the claimant. Regulation 4(4) therefore did not apply.

3. The child element of universal credit was not severable into a distinct benefit for the purposes of Regulation (EC) 883/2004. Universal credit is one non-contributory, minimum-subsistence benefit. Its components form the maximum amount of a single award, which is then reduced by deductions for income. The child element is consequently part of the household’s overall expenses and needs, and does not retain a separate identity.

4. EU classification is autonomous and turns on a benefit’s purpose and conditions of entitlement, rather than its domestic label. Coordination under the Regulation may permit severance of genuinely distinct components, but it cannot substantially rewrite domestic legislation. Unlike the mobility and care components of disability living allowance, the child element was too embedded in the calculation of universal credit to be detached. Even if severance had been possible, it would not have been a family benefit.

5. Decisions on social assistance under Directive 2004/38/EC did not determine classification under Regulation (EC) 883/2004. The Tribunal also declined to make a reference to the European Court of Justice. It had no relevant power under Article 158 of the Withdrawal Agreement and, in any event, considered the answer sufficiently clear.

• Upper Tribunal (Administrative Appeals Chamber): The Secretary of State’s appeal was allowed. The First-tier Tribunal decision was set aside and remade so that no child element was included from 26 July 2017.
• First-tier Tribunal (Social Entitlement Chamber): On 19 August 2020, it held that the child element should be included from 12 September 2017. That decision misapplied regulation 4(4) of the Universal Credit Regulations 2013.