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EU Court backs UK limits on child benefits

EU Court backs UK limits on child benefits

Photo © James Steidl - Fotolia - 158

(LUXEMBOURG) - The UK can require recipients of child benefit and child tax credit to have the right of residence in Britain, the European Court of Justice ruled on Tuesday.

In its ruling, the Luxembourg-based Court said that while the requirement did amount to discrimination under EU rules - where national systems are not allowed to place at a disadvantage EU citizens who exercise their right of freedom of movement and residence within the EU - this was justified by the need to "protect the finances of the host Member State".

The principle of equality is one of the common principles that EU Member States must observe. In the field of social security, this means prohibiting any discrimination on grounds of nationality.

The background to the case was that the European Commission received many complaints from non-British EU citizens who were resident in the UK, on the grounds that the competent UK authorities had refused to grant them certain social benefits because they did not have a right to reside in the UK.

The Commission brought the action because it took the view that the UK legislation did not comply with the regulation.

UK legislation requires verification that anybody claiming certain social benefits - including family benefits such as child benefit and child tax credit - which the present case concerns - are lawfully resident in the UK.

The Commission maintained this condition was discriminatory and contrary to the spirit of the regulation since the regulation has regard only to the claimant's habitual residence. The UK, for its part, maintained that it could lawfully require that social benefits be granted only to Union citizens who fulfil the conditions for possessing a right to reside on its territory, conditions which are, essentially, laid down in an EU directive.

The UK also maintained that the condition requiring a right of residence is a proportionate measure for ensuring that benefits are paid to people who are sufficiently integrated in the UK.

In its ruling, the Court found that the benefits being social security benefits meant that they did fall within the regulation's scope.

It rejected the Commission's principal argument, that the UK legislation imposed a condition supplementing that of habitual residence contained in the regulation.

The Court found that the regulation did not lay down the conditions creating the right to benefits, and that it was in principle for the legislation of each Member State to lay down those conditions.

The Court therefore states that "there is nothing to prevent the grant of social benefits to EU citizens who are not economically active being made subject to the requirement that those citizens fulfil the conditions for possessing a right to reside lawfully in the host Member State."

So while the Court acknowledged that a residence check did treat UK nationals preferentially, the need to protect the finances of the host Member State was a "legitimate objective".

European Court of Justice C-308/14 - Commission v United Kingdom - case documents

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