Britain residency test discriminates against EU citizens: EU

(BRUSSELS) - Britain is discriminating against citizens from other EU nations by subjecting them to a residency test before they can get certain social security benefits, the European Commission said on Wednesday.

The European Union's executive arm warned London that it could be referred to the European Court of Justice, where it could face stiff fines if it fails to stop the practice and bring its legislation into line with EU laws.

British authorities require EU nationals who move to Britain to pass a so-called "right-to-reside" test before they can enjoy social security rights such as child benefits, a state pension credit and unemployment compensation.

Britons do not have to take such a test to secure these benefits.

"As this test indirectly discriminates non-UK nationals coming from other EU member states it contravenes EU law," the European Commission said.

The commission cited the example of an Italian woman who moved to Britain where she worked for an Italian company for two years until she was made redundant in April 2009.

Despite having paid taxes and national insurance contributions, her claim for income-based jobseekers' allowance, an unemployment benefit, was denied on the grounds that she did not have the right to reside in Britain.

Any discrimination in providing social security benefits, the commission said, is an obstacle to free movement rights of the 27-nation EU.

Britain was given two months to inform the European Commission of steps taken to remedy the situation.