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Self-sufficiency, health insurance and welfare benefits: the case of AMS


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In AMS v SSWP (PC) (final decision) [2017] UKUT 381 (AAC), Upper Tribunal Judge Ward dismissed a Dutch widow’s appeal against the refusal of her claim for state pension credit on the basis that she had no right to reside in the UK.

Although a disappointing result for Mrs AMS, the case is a great starting point to remind ourselves of the meaning of “self-sufficiency” under EU law. It also reminds us that self-sufficient EU nationals may, in some circumstances, access welfare benefits.


The claimant, a Netherlands national, is an 88-year-old widow. She was married to a British citizen who had served in the British armed forces and died in 1994. Her children are British nationals. She moved to the UK in 2006 to stay close to two of those children.

When she arrived in the UK in 2006, the claimant had savings of around £53,000. By January 2013, she had £5,000. It was also accepted that, starting from December 2012, she had comprehensive sickness insurance through a retirement pension from the Netherlands.

In April 2013, Mrs AMS claimed state pension credit. Her claim was denied on the basis that she could not show that she had a right to reside.

Right to reside and self-sufficiency

Under EU law, EU nationals have an initial right to reside in the UK for three months. After three months, to continue to have a right to reside, EU nationals must be exercising what are called Treaty Rights. The main ways of exercising EU Treaty Rights are by:

  • working
  • being self-employed
  • being self-sufficient with comprehensive sickness insurance
  • being a student with comprehensive sickness insurance

Generally speaking, EU nationals will automatically acquire the right to permanent residence in the UK once they have exercised their treaty tights for a continuous period of five years.

Therefore, to show that she had a right to reside at the time of her claim for state pension credit, Mrs AMS would have needed to show that:

  • she was exercising her treaty rights on that date; or
  • she had acquired the right to permanent residence by that date.

Either way, Mrs AMS was going to rely on exercising treaty rights by being “self-sufficient”.

Under article 7(1)(b) of Directive 2004/38/EC, self-sufficiency is defined as follows:

All Union citizens shall have the right of residence on the territory of another Member State for a period of longer than three months if they:

[…] have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State.

In other words, to be self-sufficient, EU nationals must have:

  1. sufficient resources not to become a burden on the welfare system of the country they live in; and
  2. comprehensive sickness insurance.

Unfortunately the Upper Tribunal found that Mrs AMS never met both requirements at the same time.

Self-sufficiency at the time of the claim for state pension credit

It was accepted by all parties that, at the time of her claim, Mrs AMS had comprehensive sickness insurance. Interestingly, Mrs AMS did not pay for private health insurance like many do, but instead could show that she had health insurance because the UK was entitled to recharge the cost of any healthcare she might require to the Netherlands. If you are interested in this topic, you should read this post by Colin Yeo.

Mrs AMS could therefore meet requirement (2). Unfortunately, she did not satisfy the Department for Work and Pensions that she had “sufficient resources not to become a burden on the social assistance system” of the UK.

Mrs AMS was represented pro bono by Tom de la Mare QC, instructed by the AIRE Centre. They argued that the Upper Tribunal was required to conduct a proportionality assessment when considering whether any grant of social assistance to the claimant would give rise to unreasonable burdens on the social assistance system of the UK. It needed to conduct that assessment before refusing the claim to pension credit.

In other words, the mere fact that an EU national receives social assistance is not sufficient to show that he or she is an “unreasonable burden” on the social assistance system of the UK.

This was in accordance with the Court of Justice decision in Brey (Case C-140/12). You can read more about the case on this post.

The Upper Tribunal had agreed in a previous interim decision that a “Brey assessment” was necessary, and now went on to carry it out. However it concluded that giving state pension credit to Mrs AMS would give rise to an unreasonable burden on the social assistance system of the UK.

Upper Tribunal Judge Ward came to this conclusion by looking at her income and expenditure, and finding a shortfall of approximately £200/month. He went on to look at what Mrs AMS would receive if she did get state pension (£558.58 per month). In addition, Judge Ward found that, should she receive state pension credit, the claimant would also automatically be entitled to housing benefit and a council tax reduction, for a further £541.67 per month. He ignored the fact that the claimant would not in fact ask for those housing costs, arguing that

“there is no way I am aware of by which a person can bind themselves not to claim a benefit to which they are entitled by statute”.

Judge Ward therefore found that, should Mrs AMS’s claim for state pension credit be allowed, she would be entitled to an additional income of around £1,100/month, or about £13,200/year. This would be, according to the judge, “for a period of not less than four years and very possibly some years longer”.

Following on to that, the judge went on to look at the “collective impact” this would have. In other words, what would be the impact on the British social assistance system as a whole were claims such as those made by Mrs AMS allowed. He said “there is nothing unusual about an elderly parent choosing to live somewhere near some of her children”. In other words, many elderly people might be in Mrs AMS’s position, so the impact on the public finances could be substantial.

This ultimately led to the conclusion that:

The burden to the State is of claims that are open-ended, by people whose advanced years mean that for the rest of their lives their material circumstances are unlikely to change, for what may, as here, be four-figure sums monthly. Whilst I acknowledge the circumstances of this elderly claimant, I am led to the conclusion that her claim for those reasons represented an “unreasonable burden” on the social assistance system of the United Kingdom.

Right to permanent residence

Mrs AMS could not, therefore, show that she was self-sufficient at the time of her claim.

The alternative would have been to show that she had acquired the right to permanent residence by the time of the claim, and therefore had a right to reside.

There was a long period of time during which AMS undoubtedly had “sufficient resources”, having arrived in the UK with over £50,000 in savings. Unfortunately, Mrs AMS did not hold comprehensive sickness insurance for a period of five years, and therefore could not show that she had acquired the right to permanent residence.

What’s next?

Depending on the widow’s wishes, her legal representatives are keen to appeal against this decision.

Matthew Evans, director of the AIRE Centre, was disappointed by the fact that the judge included access to housing benefits and council tax reduction when conducting the “proportionality assessment”, in a case where the claimant clearly did not need assistance with housing costs. In addition, it seems odd that the judge looked at the “burden” on the social assistance system forever, rather than for just five years, after which the claimant would acquire the right to permanent residence and therefore be entitled to those welfare benefits.

Even if the case is not appealed, or does not eventually succeed, Mrs AMS might be one of those EU nationals who will benefit from the government’s proposals on the position of EU nationals after Brexit. EU citizens who lived in the UK as self-sufficient would not need to show that they had comprehensive health insurance in order to qualify for the new ‘settled status’.

Whether or not Mrs AMS can benefit from this does, of course, also depend on whether EU nationals will be able to rely on any five-year period, or only on the five-year period immediately preceding the application for settled status. If EU nationals may only rely on the five years leading up to the application, Mrs AMS might still fail to show that she had sufficient resources for those five years.

That said, the fact that the government suggests it will not insist on health insurance gives me some hope that they will also be more lax with the “sufficient resources requirement”. Watch this space.

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