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The High Court (Swift J) has given judgment in an important case concerning EU law non-discrimination principles, the EU Settlement Scheme, and entitlement to Universal Credit.

The Claimants are citizens of Romania who reside in the UK. They are not economically active, and (as was common ground) have no EU law right of residence in the UK. They do, however, have domestic law rights of residence, since they applied for and obtained leave to remain in the UK under the EU Settlement Scheme (“the EUSS”), which the UK government had established in preparation for the UK’s departure from the EU. In broad terms, the EUSS enables (i) EEA nationals who have lived in the UK for 5 years or more to obtain “settled status”, i.e. indefinite leave to remain; and (ii) EEA nationals who have lived in the UK for less than 5 years to obtain “pre-settled status”, i.e. limited leave to remain for up to 5 years.

The Regulations which govern entitlement to Universal Credit include (i) a requirement that a person have a qualifying right to reside in the UK or another part of the British Isles; and (ii) a stipulation that pre-settled status (i.e. limited leave to remain granted under the EUSS) does not qualify as a right to reside for this purpose. A person whose sole right to reside in the UK is based on pre-settled status is thus ineligible for Universal Credit. A holder of pre-settled status may, however, be eligible for Universal Credit if he/she has some other right to reside in the UK, e.g. as a worker exercising EU Treaty rights. Similar provisions apply to various other benefits.

The Claimants alleged that the stipulation that pre-settled status does not constitute a qualifying right to reside for the purpose of benefits eligibility contravened the prohibition of discrimination on grounds of nationality in Article 18 TFEU. The key issues in the case were: (i) whether the Claimants were entitled to rely on Article 18 TFEU in circumstances where they had only a domestic law right of residence in the UK (and no EU law right of residence); if so, (ii) whether the provision under challenge gave rise to direct or indirect discrimination; and, if any discrimination was indirect, (iii) whether it was justified.

Swift J held that an EU national with a domestic law right of residence in another member state can rely on Article 18 TFEU, notwithstanding that he/she has no EU law right of residence there; he based this conclusion on C-456/02 Trojani v Centre public d’aide sociale de Bruxelles [2004] 3 CMLR 38. He concluded, however, that the Regulations under challenge give rise only to indirect (not direct) discrimination, since many non-UK EU nationals are eligible for Universal Credit. He further held that such indirect discrimination is justified by the need to protect the social security system from claims by persons who are not sufficiently economically integrated into, or sufficiently closely connected with, the UK. He therefore held that there was no infringement of Article 18 TFEU, and dismissed the claim.

Thomas de la Mare QC acted for the Claimants. Sir James Eadie QC and George Molyneaux acted for the Secretary of State.

The judgment is available here.

Clerks

Staff