Munteanu v Minister for Social Protection

• Jurisdiction: Ireland
• Judge: Ms. Justice Iseult O'Malley
• Judgment Date: 03 March 2017
• Neutral Citation: [2017] IEHC 161
• Court: High Court
• Docket Number: [2014 No. 723 JR]
• Date: 03 March 2017

BETWEEN

LOTI MUNTEANU

APPLICANT

AND

MINISTER FOR SOCIAL PROTECTION, IRELAND

AND

THE ATTORNEY GENERAL

RESPONDENTS

[2017] IEHC 161

O'Malley

[2014 No. 723 JR]

THE HIGH COURT

JUDICIAL REVIEW

European Union – Social security – Right to residence – Habitual residence condition (‘HRC’) – S. 246 of the Social Welfare Consolidation Act – Treaty on the Functioning of the European Union – Directive 2004/38/EC – Status of economically inactive Union citizen Whether ‘right to reside test’ was correctly applied to ascertain status of migrant European Union worker

Facts: The applicant had made applications to the first respondent for various allowances, which were refused by the first respondent on the ground that the applicant did not have the right to reside in the State. The applicant had challenged the test applied by the first respondent to determine the eligibility of the right to reside. The applicant argued that the ‘right to reside’ test applied by the first respondent to determine the ‘habitual residence condition’ was contrary to the EU law, which afforded free right to reside in any member states. The applicant asserted that art. 24(2) of the Directive 2004/38/EC should be interpreted narrowly as it was a derogation from the principle of equal treatment.

Ms. Justice Iseult O'Malley refused to grant the relief sought by the applicant. The Court held that the right to reside was dependent upon self-employment and in case of an economically inactive person upon his ability to show that he was not a burden on the State resources under Directive 2004/38/EC. The Court held that the derogation in art. 24 (2) allowed the member states to refuse access of beneficial schemes to a person whose right to reside was dependent upon continuous search for employment. The Court found that there was no evidence that the applicant was a worker in the State and her only engagement was being the seller of a magazine. The Court held that thus, the applicant was an economically inactive person and the exclusion of payment of special non-contribution cash benefits to such persons was not contrary to the EU law. The Court took into account the cash benefits availed by the applicant in the past, the debt incurred by her while getting an accommodation and the permanent nature of her difficulties owing to her unemployment.

JUDGMENT of Ms. Justice Iseult O'Malley delivered the 3rd day of March 2017

Introduction

1 The primary issue in this case is the application to migrant European Union citizens of the so-called “ right to reside” test set out in Irish social welfare legislation. The right to reside in the State is, by statute, a constituent element of the “habitual residence condition” (“the HRC”) which underpins entitlement to nearly all social welfare payments. The current regime is that any claimant for a social welfare payment must a) have a right to reside in the State and b) actually be habitually resident here. Irish citizens must satisfy the HRC but are automatically deemed to have a right to reside.

2 The applicant is a Romanian national living in Ireland. She has made applications to the respondent in respect of Supplementary Welfare Allowance (“SWA”), Jobseekers' Allowance and Child Benefit. All of these applications were refused by the respondent on the grounds that the applicant did not have a right to reside in the State as required by s. 246 of the Social Welfare Consolidation Act 2005 (as amended), and was therefore ineligible for such payments. The State's case is that EU law entitles it to impose a requirement that the claimant has a “right to reside” as defined under EU law. While accepting that the provision is discriminatory, in so far as it is one automatically satisfied by Irish nationals, it maintains that the measure is objectively justifiable to prevent persons from becoming an unreasonable burden on the State.

3 The applicant contends that the test applied by the respondent is incompatible with EU law, and that the properly applicable test depends on the nature and objective of each of the payments in question.

4 It is helpful to consider the European legislation and some relevant case-law before looking at the evidence in the case.

European legislation

Treaty Provisions

5 Article 18 of the Treaty on the Functioning of the European Union (“the TFEU”) sets out a general prohibition on discrimination on grounds of nationality within the scope of application of the Treaty, without prejudice to any special provisions contained therein.

6 Article 21 provides for the right of European Union citizens to move and to reside freely within Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect. This is, of course, one of the fundamental pillars of the Union.

7 Specific measures in relation to freedom of movement of workers are contained in Article 45 of the TFEU (formerly Article 39 of the Treaty Establishing the European Community (“the TEC”)). The article states that such freedom of movement entails the abolition of any discrimination based on nationality between workers of Member States as regards employment, remuneration and other conditions of work and employment. Paragraph 3 reads in full as follows:

“It shall entail the right, subject to limitations justified on grounds of public policy, public security or public health;

a) to accept offers of employment actually made;

b) to move freely within the territory of the Member States for this purpose;

c) to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action;

d) to remain in the territory of a Member State after having been employed in that State, subject to conditions which shall be embodied in regulations to be drawn up by the Commission.”

8. Article 48 provides as follows:

“The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure, adopt such measures in the field of social security as are necessary to provide freedom of movement for workers; to this end, they shall make arrangements to secure for employed and self-employed migrant workers and their dependants:

a) aggregation, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of the several countries;

b) payment of benefits to persons resident in the territories of Member States.”

Directive 2004/38/EC

9 Directive 2004/38/EC (hereafter “the directive”) is concerned with, inter alia, the right of residence consequent upon the right of free movement. It codifies and amends previous legislation that had dealt separately with workers, self-employed persons, students and other economically inactive persons, and its provisions apply to all Union citizens in these categories.

10 The recitals refer to the free movement of persons as one of the fundamental freedoms of the internal market. Recital 11 observes that the fundamental and personal right of residence in another Member State is conferred directly on Union citizens by the Treaty and is not dependent on the fulfilment of administrative procedures. However, the right is not unqualified. Recital 10 stipulates that persons exercising their right of residence should not become “an unreasonable burden” on the social assistance system of the host Member State during an initial period of residence. For this reason, the right of residence for Union citizens for periods in excess of three months should be subject to conditions.

11 Recital 16 states the converse proposition – that, as long as they do not become an “unreasonable burden” on the social assistance system, beneficiaries of the right of residence should not be expelled. It continues:

“Therefore, an expulsion measure should not be the automatic consequence of recourse to the social assistance system. The host Member State should examine whether it is a case of temporary difficulties and take into account the duration of residence, the personal circumstances and the amount of aid granted in order to consider whether the beneficiary has become an unreasonable burden on its social assistance system and to proceed to his expulsion. In no case should an expulsion measure be adopted against workers, self-employed persons or job-seekers as defined by the Court of Justice save on grounds of public policy or public security.”

12 Article 6 of the directive provides that all Union citizens have a right of residence on the territory of another Member State for a period of up to three months without any conditions other than the requirement to hold a valid identity card or passport.

13 Article 7 deals with the right to remain after the expiry of the three month period. All Union citizens have a right of residence for longer than three months if

• (Article 7(1)(a)) - they are working or self-employed in the host State; or if

• (Article 7(1)(b)) - they have “ sufficient resources” for themselves and their family members not to become “ a burden” on the social assistance system of the host State and have comprehensive sickness insurance; or if

• (Article 7(1)(c)) they are enrolled in a particular form of educational establishment.

14 By virtue of Article 7(3), a Union citizen who is no longer a worker or a self-employed person may nonetheless retain that status if he or she is temporarily unable to work due to accident or illness; or is in duly recorded involuntary unemployment after having been employed for more than one year and is registered as a jobseeker; or is in duly recorded involuntary unemployment after completing a fixed-term contract of less than a year or having become involuntarily unemployed during the first twelve months...