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Pension credit can be limited to those with right to reside

21 March 2011

Limiting state pension credit to people with the right to reside in the UK or Ireland does not amount to discrimination, the Supreme Court has ruled.

The court heard that a Latvian pensioner, aged 72, claimed the restriction directly discriminated against her on the grounds of nationality. She came to the UK as an asylum seeker in 2000, four years before Latvia joined the EU.

Galina Patmalniece said she would be persecuted if she remained in Latvia because she was an ethnic Russian. Her asylum application was rejected but no steps were taken to remove her from the UK.

Giving the leading judgment in Patmalniece v Secretary of State for Work and Pensions [2011] UKSC 11, Lord Hope said the parties agreed that direct and indirect indiscrimination in entitlement to state pension credit on the grounds of nationality were unlawful under article 3(1) of EU Regulation 1408/71.

Patmalniece argued that the requirement for the credit that claimants had a right to reside in the UK was automatically met by UK nationals and excluded the nationals of all other member states apart from Ireland.

However, the Court of Appeal unanimously ruled that conditions for entitlement to state pension credit in the UK were not overtly based on the nationality of the claimant because other EU nationals could satisfy the right to reside test.

Giving the leading judgment, Moses LJ held that indirect discrimination in this case was justified on grounds independent of nationality.

Lord Hope said the approach taken by the ECJ to the issue was set out in the ECJ decision in Bressol v Gouvernement de la Communauté Française [2010] 3 CMLR 559.

He said the Belgian legislation involved in that case was similar in structure to regulation 2 of the State Pension Credit Regulations 2002.

Lord Hope said Bressol showed that the regulation was not directly discriminatory on the grounds of nationality.

“But it puts nationals of other member states at a particular disadvantage, so it is indirectly discriminatory. As such, to be lawful, it has to be justified.”

The deputy president of the Supreme Court said the secretary of state’s justification “lies in his wish to prevent exploitation of welfare benefits by people who come to this country simply to live off benefits without working here”.

He said that the Advocate General’s opinion in a further ECJ case, Trojani v Centre Public d’Aide Sociale de Bruxelles [2004] 3 CMLR 820, suggested that it was “open to member states to say that economical or social integration is required” before giving access to their social assistance systems.

Lord Hope held that the secretary of state had provided a sufficient justification.

He added that for “economic, historical and social reasons Ireland is simply different from the other member states”.

The deputy president dismissed the appeal. Lords Rodger and Brown and Lady Hale agreed, but Lord Walker dissented.

Kathy Meade, solicitor at Tower Hamlets Law Centre, said Galina Patmalniece had worked for 40 years in Latvia and contributed to their social security scheme. She needed the pension credit to top up her Latvian pension, which was worth only around £50 per week.

“We accepted that under domestic law she was not entitled to the credit, but we argued that, under EU regulations, excluding her was direct discrimination,” Meade said.

She said a ruling in favour of Patmalniece would have had a wide impact on other EU nationals who could not afford to support themselves.

A spokeswoman for the Department of Work and Pensions said she was pleased the Supreme Court had confirmed the Court of Appeal’s decision.

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