New Social Security Advisory Committee Report voices concerns

On 20 November 2014, the Social Security Advisory Committee (SSAC) published its Report on the regulations which remove entitlement to Housing Benefit for certain categories of European Economic Area (EEA) jobseekers. The Committee expresses a number of concerns about the impact of these measures, including what will happen to existing EEA migrants for whom returning to their ‘home’ country is not a realistic or viable option. The Government’s response is stark and uncompromising. But what is the position in EU law?

The Background to the Report

The Report arose from the Committee’s consideration of the Housing Benefit (Habitual Residence) Amendment Regulations 2014, SI 2014/539, which, from 1 April 2014 onwards, had the effect of removing access to Housing Benefit for EEA jobseekers who have a right to reside solely as jobseekers who are in receipt of income-based Jobseeker’s Allowance (JSA(IB)). This is, however, just one element of a programme of change designed to restrict EEA jobseekers’ access to out-of- work welfare benefits. These include:

• From 1 January 2014, jobseekers are unable to access JSA (IB) until they have been living in the UK for 3 months.
• Since 1 March 2014, the minimum earnings threshold guidance has been used by decision makers to determine if an EEA national’s previous or current work can be treated as genuine and effective in deciding whether they have a right to reside in the UK as a worker or if they are someone who has retained the status of a worker after becoming involuntarily unemployed.
• From 10 November 2014, the period for which JSA(IB) can be paid to jobseekers (i.e. those who do not have retained worker status) was reduced to 91 days (three months). If, at the end of three months unemployment, the jobseeker does not have ‘compelling evidence’ to show they have a ‘genuine prospect of work’, their JSA will end. For those jobseekers with retained worker status, JSA(IB) can be paid for up to six months, with a possibility of a short extension for those who have been in employment in the UK for at least one year.

The Explanatory Memorandum to the Housing Benefit (Habitual Residence) Amendment Regulations 2014 said the impact of the measure on the public sector would be “negligible”. However, the Committee drew attention to what was said in the Impact Assessment dated 27 February 2014:

“…, the policy would increase the risk that EEA migrants could fall into difficult circumstances were they unable to find employment, particularly if they were vulnerable, such as families with children. Families would not be left without UK state support. They can claim JSA(IB) for a period and in certain circumstances they may be able to apply for support from the Local Authority. Local Authority support is subject to statutory criteria e.g. under section 17 of the Children Act 1989 (for a child in need and their family) or section 21 of the National Assistance Act 1948 (provision of accommodation in certain circumstances). It is envisaged that any such costs to Local Authorities would be small and short-term.” (SSAC Report, p 55).

The Committee decided that it would be beneficial to gather information about the potential impacts of the measure and in April 2014, it held a consultation exercise in which it asked for responses from organisations that had evidence relating to a number of issues around the removal of Housing Benefit from EEA migrants, including:

• whether EEA migrants are experiencing particular difficulties in establishing whether or not they have retained worker status for benefit purposes;
• the impact for existing EEA migrants who lose their employment and who do not have the status of a retained worker; and
• the extent to which local authorities will be required to make help available under the Children Act 1989 and the National Assistance Act 1948, and the associated costs of doing so.

The SSAC’s Report

The Report describes some of the difficulties facing EEA migrants seeking to establish that they hold the status of a retained worker after the six months period of unemployment has ended:

• firstly, many migrants are only able to obtain transient work associated with certain industries, for example, agriculture, catering, hospitality etc. which pay minimal wages and use zero hours contracts;
• secondly, some employers are poor at record-keeping and tend to operate around the borders of legality, which means that expecting those employers to produce the required documentation in order to show that the EEA migrant has acquired worker status may be problematic.

The Report also questions the underlying assumption that all EEA migrants can be expected to leave the UK if and when their entitlement to income-based JSA and Housing Benefit ends after a period of unemployment lasting three or six months and simply return to their home country.

• Some EEA migrants, despite having lived in the UK for a significant period of time, have not acquired the right of permanent residence based on five years residence due to the transient nature of their work or problems producing the necessary documentation (see above).
• Some EEA migrants will have come to the UK at a very young age. For these existing EEA migrants, any connection with their ‘home’ country may now be very tenuous and requiring them to return ‘home’ could present significant difficulties.
• In addition, if these children and young persons are estranged from their families and their parents have never acquired the status of permanent residence, they would be impacted by the legislation – though their reason for seeking benefit would not be through leaving employment but upon becoming homeless.

The Committee also notes that those who run refuges for family members of EEA jobseekers who are victims of domestic violence would be unable to continue to provide support if their residents were unable to access Housing Benefit. Homeless organisations also express concern over EEA migrants who are single, able-bodied adults who have lost contact with their country of origin, stating that there would be a rise in rough sleeping of this group if homeless hostels could no longer finance accommodation for homeless EEA migrants due to the loss of Housing Benefit.

Given the above, the Committee expresses a degree of scepticism about the ‘likely savings to the exchequer’ estimated in the Impact Assessment to be £70 m (SSCA Report, p 52). The Committee comments:

“There is also a suggestion that local authorities are concerned that they will be faced with a financial burden that will be challenging to meet. So while it is stated that there will be savings for the Department for Work and Pensions, there are likely to be other significant additional pressures on other areas of public spending (for example on the National Health Service, the police, education, local authority services etc), leading to serious doubts whether the regulations reduce expenditure overall. The Committee would therefore welcome greater transparency about the overall impact on public spending,” (para 3.4).

The Government’s Response

The Government’s response to the Committee’s recommendations that action is needed in order to mitigate potential unintended and harmful effects on homelessness is blunt and uncompromising:

“The Government wishes to deter EEA migrants from coming to the UK if they do not have a firm offer of or realistic chance of securing work. Those who come to the UK to look for work should ensure that they have sufficient resources to pay for their accommodation needs, as well as other support that they or their family may need while here.

The best option for those EEA migrants who are unable to find work, who lack savings or support networks and who are at real risk of ending up destitute is to return home.”

Responding to the SSAC’s recommendation that particular consideration needs to be given to the impact the policy has on local authorities, the Government says that it has commissioned a survey of local authorities on how they have implemented the policy, and that the survey shows that:

“most local authorities have been working to prepare their staff and systems, and many have been active in ensuring that affected claimants and their families have accurate information about the changes.”

The survey — Findings from wave 26 of the local authority insight survey: removal of access to Housing Benefit for European Economic Area (EEA) jobseekers – is based on 153 responses (from a possible 380 local authorities in Great Britain). The figures also highlight that the number of EEA nationals who have been affected by the measure is, at least at this stage, relatively small:

• 74 per cent of local authorities who responded had less than 10 affected EEA jobseekers;
• 54 per cent of the local authorities who responded said that the affected EEA jobseekers included families with children; and
• 35 per cent had other vulnerable or difficult cases amongst their affected EEA jobseekers.

The position under EU law

The position of EEA migrants who have been denied access to assistance with housing costs or EEA migrants who are denied any further access to social assistance as they have been unable to find a new job within six months of becoming unemployed has not been considered directly by the Court of Justice. We do, however, have the following principles from EU case law:

• Genuine jobseekers are entitled to access benefit which is intended to facilitate access to employment on the same basis as nationals of the host Member State: Vatsouras (C-22/08) paras 40 and 45).
• EEA jobseekers should be given a reasonable time in which to find work in another Member State – though this right is time-limited: Antonissen (C-292/89) para 13.
• It is, however, a basic principle of EU law that persons who depend on social assistance will be taken care of in their own Member State: Trojani (C-456/02), AG para 70.
• This means there is nothing to prevent the granting of social security benefits to Union citizens who are not economically active being made conditional upon those citizens meeting the necessary requirements for obtaining a legal right of residence in the host Member State – namely, that they have sufficient resources to avoid becoming a burden on its social assistance system or that they have achieved a sufficient degree of social integration: Brey (C-140/12) para 44; applied in Dano (C-333/13) para 83.
• However, it is important that the requirements for obtaining the right of residence are themselves consistent with EU law. The competent national authorities must therefore have the power to assess, taking into account a range of factors in the light of the principle of proportionality, whether the grant of a social security benefit could place a burden on that Member State’s social assistance system as a whole: Brey (C-140/12) paras 45 and 72).
• Consequently, Member States should not use the right to reside condition as a blanket rule which automatically excludes EU citizens who are not economically active at the time they apply for social assistance: Brey (C-140/12) paras 76-77.

In the light of the above, it is arguable that the withdrawal out-of-work benefits from existing EEA migrants solely on the basis that they have has been unable to find a new job within six months of being unemployed is unlawful. This would be on the basis that, having regard to the EEA national’s degree of integration in UK society, including periods of employment, that it would be disproportionate to withdraw benefits in those circumstances. In cases where the EEA migrant with children is at risk of destitution, they should qualify for support from the local authority under the Children Act 1989. It is also arguable that this support should continue to be provided pending the resolution of the benefits issues, on the basis that this is necessary to ensure that their EU rights are protected: see Factortame (No 2) [1990] UKHL 13.