Pension Entitlement Depends on Social Integration

Posted: 20th April 2011

Are the conditions of entitlement to state pension credit under the 2002 State Pension Credit Regulations compatible with EU law? That is the question raised by a recent Supreme Court case in which a Latvian national attempted to claim the same pension credit rights afforded to British and Irish citizens.

Under the general provisions of European law, citizens of any EU member state are subject to the same obligations and enjoy the same benefits under the legislation of any member state as the nationals of that state.
However, the basis of entitlement under the 2002 State Pension Credit Act is whether the claimant is ‘in Great Britain’. Regulations under the Act set out the circumstances in which a person is treated as being in, or not being in, Great Britain. The test is whether or not the person is ‘habitually resident’ in the United Kingdom or elsewhere in the ‘Common Travel Area’ of Great Britain, Ireland, the Isle of Man and Channel Islands. But the rules as to when a person is or is not to be treated as ‘habitually resident’ do introduce tests that raise issues about nationality.
‘Habitually resident’ means that the person must be resident for the purposes of work or other prescribed purposes. Everyone, including United Kingdom nationals, must meet this requirement. But while all United Kingdom nationals have a right to reside in the United Kingdom, not all of them would be able to meet the test of habitual residence.
When retired factory worker Galina Patmalniece, a Latvian national of Russian origin, moved to the UK in 2000, she hoped to win refugee status. Although she failed in her applications, she became entitled to remain in Britain as a consequence of Latvia’s accession to the EU in 2004. Ms Patmalniece was not able to acquire a right to ‘habitual residence’ however, because she is no longer a worker, is not self-employed, is not self-sufficient or a member of a family of such a person.
Counsel for Ms Patmalniece submitted that the requirement to have a right to reside here discriminated directly between citizens of the United Kingdom and citizens of other Member States. It was argued for the Department of Work and Pensions, however, that a person would only be eligible to receive state pension credit if they could show economic integration in the United Kingdom or a sufficient degree of social integration here. What the regulations sought to do was to prevent exploitation of welfare benefits by people who came to this country simply to live off benefits, without working or having worked here.
The conclusion of the Supreme Court was that, although the 2002 Regulations discriminated against nationals of other EU member states, the conditions laid down are objectively justifiable on grounds independent of a claimant’s nationality.
The appeal by Ms Patmalniece was duly dismissed.
This area is complex, and is complicated further by the obscure language of the relevant legislation. British nationals who spend considerable time out of the UK, as much as nationals of other member states, could be in danger of falling foul of the ‘habitual residence’ requirement and should seek expert advice if concerned.

Are the conditions of entitlement to state pension credit under the 2002 State Pension Credit Regulations compatible with EU law? That is the question raised by a recent Supreme Court case in which a Latvian national attempted to claim the same pension credit rights afforded to British and Irish citizens.

Under the general provisions of European law, citizens of any EU member state are subject to the same obligations and enjoy the same benefits under the legislation of any member state as the nationals of that state.

However, the basis of entitlement under the 2002 State Pension Credit Act is whether the claimant is ‘in Great Britain’. Regulations under the Act set out the circumstances in which a person is treated as being in, or not being in, Great Britain. The test is whether or not the person is ‘habitually resident’ in the United Kingdom or elsewhere in the ‘Common Travel Area’ of Great Britain, Ireland, the Isle of Man and Channel Islands. But the rules as to when a person is or is not to be treated as ‘habitually resident’ do introduce tests that raise issues about nationality.
‘Habitually resident’ means that the person must be resident for the purposes of work or other prescribed purposes. Everyone, including United Kingdom nationals, must meet this requirement. But while all United Kingdom nationals have a right to reside in the United Kingdom, not all of them would be able to meet the test of habitual residence.

When retired factory worker Galina Patmalniece, a Latvian national of Russian origin, moved to the UK in 2000, she hoped to win refugee status. Although she failed in her applications, she became entitled to remain in Britain as a consequence of Latvia’s accession to the EU in 2004. Ms Patmalniece was not able to acquire a right to ‘habitual residence’ however, because she is no longer a worker, is not self-employed, is not self-sufficient or a member of a family of such a person.

Counsel for Ms Patmalniece submitted that the requirement to have a right to reside here discriminated directly between citizens of the United Kingdom and citizens of other Member States. It was argued for the Department of Work and Pensions, however, that a person would only be eligible to receive state pension credit if they could show economic integration in the United Kingdom or a sufficient degree of social integration here. What the regulations sought to do was to prevent exploitation of welfare benefits by people who came to this country simply to live off benefits, without working or having worked here.

The conclusion of the Supreme Court was that, although the 2002 Regulations discriminated against nationals of other EU member states, the conditions laid down are objectively justifiable on grounds independent of a claimant’s nationality.



The appeal by Ms Patmalniece was duly dismissed.



This area is complex, and is complicated further by the obscure language of the relevant legislation. British nationals who spend considerable time out of the UK, as much as nationals of other member states, could be in danger of falling foul of the ‘habitual residence’ requirement and should seek expert advice if concerned.