Ecj Ruling On Payment Of Child Benefits To Eu Citizens With No Right To Reside In The Uk


Employment, European Union, Welfare Benefits

The European Court of Justice (ECJ) today (see June 14th 2016 BBC News article here) confirmed that the UK does not have to pay child benefit and child tax credits to citizens of other EU countries if they are not working and as a result have no right to reside in the UK. The Court’s judgement is here.

This is a quite separate issue from the EU requirements that the UK pay benefits for children who are abroad, despite the suggestion in the BBC report that it covers this.

EU Directive 2004/38, which governs the right of EU citizens and their family to move and reside in other member states, allows national governments to require economically inactive EU nationals to demonstrate they have a right of residence as a condition for qualifying for social security benefits (see the full text of the directive here).

People who come to the UK to look for a job only have the right to reside for a limited period and must leave after three months if they do not have a genuine prospect of work (See EU rules on free movement here).

People who are working have the right to reside (as do their family) for so long as they are in employment. But if they lose their job or stop working for some other reason they only retain the right to reside for a limited period, depending on how long they had been working for previously.

The ECJ has confirmed that when people do not have, or no longer have, a right to reside then they have no entitlement to these benefits. While this is a welcome result, it is in the context that the government does not publish and does not appear even to collect information on how many people have their benefits stopped on this basis. Nor does it provide any information on how many (if any) people are actually required to leave the UK when they lose their right to reside.

The case does not involve the question of benefits paid to people whose children are abroad, a practice the government must continue, albeit at a rate based on the cost of living in their home country, having failed to secure the desired aim of changing this in its pre-referendum renegotiation.

Despite overall low rates of unemployment of EU citizens in the UK, the UK also contains the largest proportion of EU job-seekers who have never worked, suggesting that our residence-based benefits system is all too easy to access. These migrants cost the taxpayer nearly £400 million a year. (See Migration Watch UK briefing paper ‘Non-active EU migrants and access to welfare’, link here.)

Ensuring a claimant has the right to reside in the UK is important for Britain in a way that is not the case for other member states because key elements of the UK welfare system are not based on individual contributions but paid out of general taxation (See MWUK briefing paper ‘EU nationals and access to the British Welfare State’, link here). For instance benefits in France, Poland, Germany and the Netherlands are more based on individual and employer contributions or insurance-based systems.

Migration Watch UK has recommended that there should be no access to benefits for EU migrants in the UK who are job seekers and that the employed and self-employed should have to wait for six months before qualifying.

14th June 2016

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