After several formal and informal contacts between the European Commission and the UK authorities, the Commission has decided to refer the United Kingdom to the EU's Court of Justice because, in breach of EU law, it fails to apply the 'habitual residence' test to EU nationals who reside in the UK and claim social security benefits. Instead, the UK applies a so-called “right to reside” test, as a result of which EU citizens cannot receive specific social security benefits to which they are entitled under EU law such as child benefit.
Under EU law, the scial security benefits in question have to be granted to people from other EU Member States on condition that their place of habitual residence is in the UK. This condition, and the criteria for the determination of habitual residence, were unanimously reaffirmed by Member States at EU level in 2009 as part of an update of EU rules on social security coordination. According to these criteria, in order to be considered genuinely habitually resident in a Member State, a person has to show that his or her habitual centre of interest is located there.
The Commission considers that these criteria laid down by EU law are strict enough and thus ensure that only those people who have actually moved their centre of interest to a Member State are considered habitually resident there and no longer resident in the Member State where they previously lived. A thorough and strict application of these criteria for determining habitual residence constitutes a powerful tool for Member States to make sure that these social security benefits are only granted to those genuinely residing habitually within their territory.
The “right to reside” test is an additional condition for entitlement to the benefits in question which has been imposed unilaterally by the UK. UK nationals have a “right to reside” in the UK solely on the basis of their UK citizenship, whereas other EU nationals have to meet additional conditions in order to pass this “right to reside” test. This means that the UK discriminates unfairly against nationals from other Member States. This contravenes EU rules on the coordination of social security systems which outlaw direct and indirect discrimination in the field of access to social security benefits.
The UK social security benefits concerned are:
• Child benefit
• Child tax credit
• Jobseeker’s allowance (income-based)
• State pension credit
• Employment and support allowance (income-related)