The Court of Justice of the European Union has dealt a blow to EU citizens in the UK with pre-settled status, as it has ruled that UK legislation denying them social assistance benefits does not constitute discrimination.
The case concerned a dual Croatian-Dutch national who moved to Northern Ireland with her partner, a Dutch citizen, and their two children in 2018. The mother, referred in the case as CG, has not been working and at a certain point she moved to a women’s refuge with no resources.
In 2020, she applied for the post-Brexit residence system and was granted pre-settled status. She then applied for universal credit, a comprehensive welfare benefit, but the Department for Communities in Northern Ireland rejected the request.
She therefore challenged the decision before the Appeal Tribunal of Northern Ireland, arguing that the difference in treatment between UK nationals and EU citizens legally resident in the UK with regard to universal credit breached the principle of non-discrimination set out in the EU Treaty.
The Tribunal referred the question to the EU Court of Justice, which has still jurisdiction on cases preceding 31 December 2020.
A status with fewer rights
As the UK has withdrawn from the European Union, it has established a residence system for EU citizens who were living in the country before 30 December 2020. EU nationals and their family members had until 30 June 2021 to apply for the new scheme (late applications are possible in certain cases).
If they had resided in the UK for 5 years, they could acquire settled status and stay indefinitely, with most of the rights they had before Brexit.
If they had resided in the UK for less than 5 years, they could acquire pre-settled status and complete the 5-year requirement, but in the meantime they would have fewer rights and later they would have to re-apply for full settlement.
The settled status system was set up on the basis of residence, without any requirement about economic resources. However, to grant universal credit, the UK still applies the law deriving from EU free movement rules. These require economically inactive EU citizens who reside in another EU country for longer than 3 months but less than 5 years to have sufficient resources, including comprehensive sickness insurance (after five years, they can acquire permanent residence).
On this basis, UK law requires EU citizens with pre-settled status to prove additional residence rights to be able to access social benefits. These conditions are especially hard to meet by the most vulnerable,
EU judges confirmed on Thursday that EU member states can refuse social benefits to inactive EU citizens who do not meet the requirements. They also ruled that the UK refusal of social assistance to an EU citizen with pre-settled status is “compatible with the principle of equal treatment guaranteed by EU law”.
However, the Court added that “the competent national authorities” must check that the refusal does not breach the rights of the person and his or her children according to the EU Charter of Fundamental Rights, in particular the rights of the child and the respect for human dignity and family life.
The Court also said that member states can establish more favourable rules, in practice passing the ball back to UK courts.
The ball is in the UK court
In the UK, a separate legal challenge on access to benefits for EU citizens with pre-settled status is ongoing.
The case was launched by two Romanian citizens (Fratila and Tanase) who arrived in the UK in 2014 and 2019 respectively, obtained pre-settled status and were refused universal credit. Like CG, they challenged the decision arguing it was a matter of discrimination based on nationality.
The High Court initially found that the treatment they had suffered was lawful. However, in December 2020, the Court of Appeal of England and Wales ruled that they should have been entitled to equal treatment to UK citizens. The Secretary of State for Work and Pensions has further appealed the ruling and the Supreme Court has now to make the final decision.
Luke Piper, head of policy at campaigning group the3million, said that Thursday was a “bad day” and that the judgment by the EU Court of Justice “leaves more questions than answers”.
“Practical implications are unclear at the moment, because it all hinges on the Fratila case in the Supreme Court,” he told Europe Street.
“Important that this debate, even in Fratila, is about the application of EU law and not the withdrawal agreement. The problem ultimately comes back to that fundamental one. If a grant of pre-settled status doesn’t give you equal treatment rights, then how do EU citizens acquire a status to prove they are protected by the withdrawal agreement?” he added.
EU citizens with settled status are not impacted by the ruling.
A ruling on access to healthcare
In a separate case, the EU Court has also confirmed the right of economically inactive EU citizens residing in another member state to be affiliated to the public health service, although that may not be free of charge.
The case refers to an Italian married to a Latvian who settled in Latvia with his wife and their two children. He applied to join the Latvian health system but the request was refused because he was neither employed nor self-employed in the country.
The EU Court on Thursday said that a member state cannot refuse to affiliate to its public sickness insurance scheme an EU citizen who comes under its legislation.
Judges however repeated that economically inactive EU citizens who live for more than 3 months and less than 5 years in another member state must “have comprehensive sickness insurance cover for themselves and their family members so as not to become an unreasonable burden on the public finances of that member state”.
The host country of an economically inactive EU citizen can thus make the affiliation to the health system subject to conditions, such as having private insurance or paying a contribution to the public scheme, EU judges said. But they added that “proportionality” should apply so that “it is not excessively difficult for that citizen to comply with such conditions”.
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