IN THE UPPER TRIBUNAL Case No. CDLA/0735/2009
ADMINISTRATIVE APPEALS CHAMBER
Before Judges Patrick Howell QC, Elisabeth A Jupp and Robin C A White
Attendances:
For the Appellant: Mr Thomas de la Mare
For the Respondent Mr Richard Drabble QC
Decision: The decision of the tribunal of 21 August 2008 is erroneous in law and we set it aside.
It is appropriate for us to make the decision which the tribunal should have made.
Our substituted decision: The respondent remained entitled to receive the care component of disability living allowance following her permanent move to Spain on 5 November 2002. The decision of 8 January 2007 under appeal, purporting to supersede and terminate her previous indefinite award from 6 November 2002, is set aside as ineffective.
REASONS FOR DECISION
A. Introduction
1. For ease of comprehension, we will refer in this decision to the appellant as “the Secretary of State” and to the respondent as “the claimant.”
2. There was an oral hearing before a three-judge panel on 2 April 2012. The Secretary of State was represented by Mr de la Mare, and the claimant by Mr Drabble QC. We are grateful to both of them for their submissions and assistance to us in determining this appeal.
B. The issue in this appeal
3. The issue arising in this appeal is whether the claimant could continue to receive the care component of disability living allowance (DLA) when she moved permanently from the United Kingdom to Spain in November 2002 having regard to the provisions of Council Regulation (EC) 1408/71 of 14 June 1971 (as amended) on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community.
C. The background
4. The claimant, who was born on 17 April 1952, was in receipt of the lowest rate of the care component of DLA on an open-ended award from 26 July 1993 on the grounds that she could not prepare a cooked main meal for herself.
5. It subsequently came to the attention of the Secretary of State that the claimant had moved to Spain on 5 November 2002.
6. On 8 January 2007, the Secretary of State superseded the award of DLA determining that there was no entitlement to receipt of the benefit from 6 November 2002.
7. The claimant appealed that decision on a number of grounds.
8. The appeal came before a First-tier Tribunal for determination on 21 August 2008. That tribunal allowed the appeal applying Article 10 of Regulation 1408/71. A full statement of reasons was provided.
9. The Secretary of State appealed against the tribunal’s decision on the grounds that Article 10 of Regulation 1408/71 did not assist the claimant in retaining any right to payment of DLA following her move to Spain.
10. The appeal comes before us with the permission of a Judge of the First-tier Tribunal.
11. The claimant died on 10 May 2011, and the claimant’s husband has been made her appointee by decision of the Secretary of State dated 2 August 2011 for the purposes of proceeding with the present appeal in place of his deceased wife.
D. Some common ground
12. It is common ground that the First-tier tribunal was correct in holding that the claimant had no further entitlement under the United Kingdom domestic law provisions alone from 6 November 2002, and the only question was whether the residence conditions that prevented this were themselves overridden by her rights as a citizen of the Union under Regulation 1408/71. The First-tier tribunal held that she continued to be entitled to her care component despite leaving the United Kingdom by virtue of Article 10 of Regulation 1408/71, which overrides residence conditions of that kind as regards “invalidity, old-age or survivors’ cash benefits, pensions for accidents at work or occupational diseases and death grants acquired under the legislation of one or more Member States.”
13. Both parties were agreed that this decision must be set aside as based on a misdirection, since the benefit at issue in this case is not within any of the categories to which Article 10 applies. For the purposes of Regulation 1408/71, the care component of DLA has been held by the Court of Justice of the European Union to constitute a cash sickness benefit whose exportability is governed by the separate provisions of Chapter 1 of Title III of the Regulation. Both parties accepted that this has been clearly established by the case-law of the Court of Justice.
The facts on which this appeal should proceed
14. We accept that the appeal should proceed on the basis of a set of facts, most of which have been found by the First-tier Tribunal. Those facts are as follows.
15. The claimant, who was born on 17 April 1952, was a United Kingdom national. She was in receipt of the lowest rate of the care component of DLA on an open-ended award from 26 July 1993 on the grounds that she could not prepare a cooked main meal for herself.
16. On 5 November 2002, the claimant moved permanently to Spain.
17. The claimant’s national insurance contributions record indicated that, prior to 1975, she was insured from 21 July 1967 to 5 April 1975. Thereafter the record is as follows:
Years 1975/76 to 1983/84: paid Class 1 NICs
Year 1984/85: 38 NIC credits, Class 1 NICs
Year 1985/86: 25 NIC credits
Years 1986/87 to 1989/90: blank record of NICs
Year 1990/91: 5 NIC credits
Year 1991/92: 53 NIC credits
Year 1992/93: 7 NIC credits
Years 1993/94 to date blank record of NICs
18. Invalid Care Allowance was in payment from 4 March 1991 to 31 May 1992, which accounts for the national insurance credits for this period.
19. The claimant undertook no employment or self-employment in Spain.
20. The claimant died on 10 May 2011.
E. National law
21. We do not need to set out in much detail the national provisions on the award of DLA and its payment. The key provision of national law relevant to this appeal concerns the effect of the departure abroad of a person in receipt of DLA.
22. The relevant part of Regulation 2 of the Social Security (Disability Living Allowance) Regulations 1991 provides:
Conditions as to residence and presence in Great Britain
2.—(1) Subject to the following provisions of this regulation, the prescribed conditions for the purposes of section 71(6) of the Act as to residence and presence in Great Britain in relation to any person on any day shall be that—
(a) on that day—
(i) he is ordinarily resident in Great Britain; and
…
(ii) he is present in Great Britain; and
(iii) he has been present in Great Britain for a period of, or for periods amounting in the aggregate to, not less than 26 weeks in the 52 weeks immediately preceding that day; … .
(2) For the purpose of paragraph (1)(a)(ii) and (iii), notwithstanding that on any day a person is absent from Great Britain, he shall be treated as though he was present in Great Britain if his absence is by reason only of the fact that on that day—
…
(d) his absence from Great Britain is, and when it began was, for a temporary purpose and has not lasted for a continuous period exceeding 26 weeks; or
(e) his absence from Great Britain is temporary and for the specific purpose of his being treated for incapacity, or a disabling condition, which commenced before he left Great Britain, and the Secretary of State has certified that it is consistent with the proper administration of the Act that, subject to the satisfaction of the foregoing condition in this sub-paragraph, he should be treated as though he were present in Great Britain.
… .
23. It is agreed that the determination of this appeal should proceed on the basis of the finding of fact made by the First-tier Tribunal that the claimant left Great Britain on 5 November 2002 on a permanent and not any temporary basis, the savings provisions in Regulation 2(2) can have no application to the claimant. It follows that any continuing entitlement to payment of the care component of DLA can only be grounded on the application of rules of European Union Law.
F. European Union Law
24. We refer throughout this decision to European Union Law even though the period in issue includes a period prior to the entry into force of the Treaty of Lisbon which might render it more appropriate to refer at times to European Community Law.
25. The parties in this appeal have taken very disparate views on the proper interpretation of the provisions of Regulation 1408/71.
26. Regulation 1408/71 concerns the co-ordination of differing national social security systems in order to avoid social security rules operating as a barrier to the free movement of workers. Over time its terms have been extended beyond workers (employed persons) to include self-employed persons, students, and civil servants. The latter extension is only relevant in those Member States which have separate social security systems for civil servants.
27. Article 1 of Regulation 1408/71 contains a long list of terms defined in the Regulation.
28. The terms “employed person” and “self-employed person” are defined in Article 1(a). Only the definitions in Article 1(a)(i) to (ii) have any relevance to this case:
employed person and self-employed person mean respectively:
(i) any person who is insured, compulsorily or on an optional continued basis, for one or more of the contingencies covered by the branches of a social security scheme for employed or self-employed persons or by a special scheme for civil servants;
(ii) any person who is compulsorily insured for one or more of the contingencies covered by the branches of social security dealt with in this Regulation, under a social security dealt with in this Regulation, under a social security scheme for all residents or for the whole working population, if such person:
— can be identified as an employed or self-employed person by virtue of the manner in which such scheme is administered or financed, or
— failing such criteria, is insured for some other contingency specified in Annex I under a scheme for employed or self-employed persons, or under a scheme referred to in (iii), either compulsorily or on an optional continued basis, or where no such scheme exists in the Member State concerned, complies with the definition given in Annex I.
29. The words “under a social security dealt with in this Regulation” are otiose, and appear to have been introduced as a typographical error when Council Regulation (EC) No 118/97, [1997] OJ L28/1, was adopted. That was an amending regulation which included in its Annex an updated version of Regulation 1408/71 and introduced these words. We have ignored them. We observe that when the Court of Justice cited the definitions of these terms in Case C-516/09 Borger, Judgment of 10 March 2011, it simply omitted the words from the definition.
30. Annex I spells out the persons included for each Member State for which there is an entry in Annex I in relation to the definitions provided for in Article 1(a)(ii). These statements are required because of the many different ways in which the Member States organise their social security systems. The entry for the United Kingdom reads:
Any person who is an “employed earner” or a “self-employed earner” within the meaning of the legislation of Great Britain or of the legislation of Northern Ireland shall be regarded respectively as an employed person or a self-employed person within the meaning of Article 1(a)(ii) of the Regulation. …..
31. Article 1(q) of Regulation 1408/71 defines “the competent State” as the “Member State in whose territory the competent institution is situated.” “Competent institution” is defined in Article 1(o) as:
(i) the institution with which person concerned is insured at the time of the application for benefit; or
(ii) the institution from which the person concerned is entitled or would be entitled to benefits if he or a member of members of his family were resident in the territory of the Member State in which the institution is situated; or
(iii) the institution designated by the competent authority of the Member State concerned; or
(iv) in the case of a scheme relating to an employer’s liability in respect of the benefits set out in Article 4(1), either the employer or the insurer involved or, in default thereof, a body or authority designated by the competent authority of the Member State concerned;
32. “Competent authority” under Article 1(l) means “in respect of each Member State, the Minister, Ministers or other equivalent authority responsible for social security schemes throughout or in any part of the territory of the State in question.”
33. Article 1(r) defines periods of insurance as follows:
periods of insurance means periods of contribution or periods of employment or self-employment as defined or recognized as periods of insurance by the legislation under which they were completed or considered as completed, and all periods treated as such, where they are regarded by the said legislation as equivalent to periods of insurance … ;
34. Note also that “residence” means “habitual residence”, while “stay” means “temporary residence.”
35. Article 2 of Regulation 1408/71 entitled “Persons covered” provides, so far as relevant to this appeal:
1. This Regulation shall apply to employed and self-employed persons and to students who are or have been subject to the legislation of one or more Member States and who are nationals of one of the Member States … .