High Court blow for EU citizens with pre-settled status trying to claim Universal Credit

The High Court has rejected an argument that the regulations making it difficult for Europeans with pre-settled status to access most public funds are discriminatory on the ground of nationality. The case is Fratila and Tanase v SSWP [2020] EWHC 998 (Admin).

Mr Justice Swift found that although the Social Security (Income-related Benefits) (Updating and Amendment) (EU Exit) Regulations 2019 do not constitute direct discrimination, they do amount to indirect discrimination. But he held that this discrimination was justified, and thus not unlawful.

Background 

Ms Fratila and Mr Tanase are both EU citizens living in the UK who were, at least initially, refused Universal Credit. Ms Fratila subsequently obtained full settled status and was thus indisputably eligible to claim benefits, but the case proceeded with Mr Tanase as the claimant.

Mr Tanase suffers from a number of health problems and came to the UK to be cared for Ms Fratila, his friend. Several months after arriving in the UK in January 2019, he applied for and was granted pre-settled status. He then applied for Universal Credit. His application was refused on the ground that he did not have a right to reside in the UK and so could not pass the habitual residence test.

Habitual residence and right to reside

People are only entitled to Universal Credit if they are, among other things, “in Great Britain”.

Regulation 9 of the Universal Credit Regulations 2013 specifies who can and can’t be treated as being in Great Britain. A person cannot be treated as being in Great Britain if they aren’t “habitually resident” in the UK. In turn, a condition of being habitually resident is having a “right to reside” in the UK. There are some exceptions under regulation 9(4), which lists categories of immigration status that allow the holder to skip the habitual residence test altogether.

EU citizens who are not covered by regulation 9(4), including those with pre-settled status, have to first show that they have a right to reside. Only then will they be considered under the habitual residence test.

Discrimination

The claimants argued that excluding pre-settled status for the purposes of the right to reside test was discrimination on the basis of nationality, contrary to Article 18 of the Treaty on the Functioning of the European Union (TFEU). 

Swift J found that there was “no coherent basis” for a finding of direct discrimination. But as the regulations were more likely to negatively affect non-British EU nationals than British nationals, Swift J held that this was an example of indirect discrimination.

The question then became whether the discrimination could be justified. 

Justification

The Department for Work and Pensions argued that excluding people with pre-settled status from benefits was not really a change: 

Regulation 9(3)(c)(i) of the Universal Credit Regulations… serves to maintain the status quo prior to the introduction of pre-settled status – i.e. that the exclusion of pre-settled status from the list of rights of residence that count for the purposes of the habitual residence test is in pursuit of the generic objective of protecting the social security system from claims by persons not sufficiently economically integrated into, or insufficiently closely connected with the United Kingdom.

Swift J agreed:

… the only persons advantaged by a grant of pre-settled status are those whose position under the EEA Regulations would not permit them to meet the requirements of regulation 9 as they stood prior to the amendment made by the 2019 Social Security Regulations. In this way the amendment made by those Regulations does, as the Secretary of State submits, maintain the status quo. More significantly for the purposes of the justification argument the restriction that applies to pre-settled status serves to maintain the prior rationale for the regulation 9 habitual residence requirement.

Finding that the indirect discrimination was justified, Swift J dismissed the claim.