Decision No: C3/95(ICA)

	SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

		SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

	INVALID CARE ALLOWANCE

	Appeal to a Social Security Commissioner

	on a question of law from a Tribunal's decision

	dated 21 December 1994

	DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	This is an appeal by the claimant against the decision of a Social Security Appeal Tribunal which held that there was no grounds to review the decision of an Adjudication Officer who had held that claimant was not entitled to Invalid Care Allowance (ICA) from 30 July 1990 while ordinarily resident in the Republic of Ireland.

2.	I held a hearing of the appeal at which claimant was not present but was represented by Mr Allamby of Law Centre (NI) and the Adjudication Officer was represented by Mrs Patricia Smith, Departmental Solicitors Office.

3.	Briefly the facts are that claimant lodged a claim for Invalid Care Allowance (ICA) in the following circumstances.  She lives in the Republic of Ireland, with her husband who teaches in Ballygawley in County Tyrone.  The evidence was that the claimant would travel with her husband to her father-in-law’s house in Ballygawley and spent 35 hours per week looking after her father-in-law.  This she did from 30 July 1990 until 5 May 1991.  Her father-in-law died on 14 May 1991 so the period under consideration is approximately 9½ months.  Her claim for ICA was disallowed by an Adjudication Officer.

4.	Against that decision claimant lodged notice of appeal but subsequently withdrew the appeal.  In June 1992 the Law Centre issued a letter on behalf of the claimant requesting a review on the grounds that there was an error in law in the decision.  In view of the complicated legal issues involved the Adjudication Officer decided in accordance with section 19(2) of the Social Security Administration (Northern Ireland) Act 1992 to refer the question of review and the relevant entitlement to ICA to a Social Security Appeal Tribunal.

5.	In the request for a review the Adjudication Officer sought answers to the following questions:-

	(1)	whether or not there are grounds to review the original decision disallowing ICA because the decision contained an error in law;?

	(2)	whether claimant is entitled to ICA from 30 July 1990 while ordinarily resident in the Republic of Ireland?

6.	These questions raise two important issues.  Firstly, whether or not regulation 9 of the Social Security (Invalid Care Allowance) (Regulations) Northern Ireland 1976 was properly made and secondly whether or not claimant was entitled to the benefit of Article 10 of Regulation (EEC) No. 1408/71 and/or the benefit of Regulation (EEC) No. 1612/68.

7.	The Tribunal went into the matter very thoroughly and in great detail and held that the decision of the Adjudication Officer made on 16 November 1990 was not given in ignorance of or based on a mistake as to some material fact, nor had there been a relevant change of circumstances since the decision was given, nor was the decision erroneous in point of law and consequently there were no grounds to review that decision.  That decision confirmed the finding that claimant was not entitled to ICA.  The Tribunal found as a fact that for the purposes of Regulations 1408/71 and 1612/68 that claimant was “a worker”.  It also found that Regulation 9 was not ultra vires.

8.	The law is found in Section 37 of the Social Security (NI) Act 1975 now consolidated in Section 70 of the Social Security Contributions and Benefits (NI) Act 1992 which declares “A person shall not be entitled to an allowance under this section unless he satisfies prescribed conditions as to residence or presence in Northern Ireland”.

	The prescribed conditions are contained in regulation 9 of the Social Security (Invalid Care Allowance) Regulations (NI) 1976 and are as follows:-

		“9(1)   Subject to the following provisions of this regulation, the prescribed conditions for the purpose of section 37(4) of the Act (person not to be entitled to an invalid care allowance unless he satisfies prescribed conditions as to residence or presence in Northern Ireland) in relation to any person in respect of any day shall be –

		(a)	that he is ordinarily resident in Northern Ireland; and

		(b)	that he is present in Northern Ireland; and

		(c)	that he has been present in Northern Ireland for a period of, or periods amounting in the aggregate to, not less than 26 weeks in the 12 months immediately preceding that day”.

9.	The claimant sought leave to appeal against the decision of the Tribunal on the following grounds:-
	(1)	That the Tribunal misdirected itself in law in concluding that regulation 9 of the Social Security (Invalid Care Allowance) Regulations (Northern Ireland) 1976 were properly made.

	(2)	The Tribunal misdirected itself in law in holding that Article 10 of regulation 1408/71 did not apply, in particular Caisse Regionale D’Assurance Maladie Rhone-Alpes v Giletti established that a person is not precluded from acquiring entitlement to benefit acquired under the legislation of one or more Member States merely because he or she does not reside within the territory of the Member State in which the organisation responsible for payment of the benefit is situated.

	(3)	The Tribunal misdirected itself in law and made inadequate findings of fact on the question of whether indirect discrimination separated against the claimant under Article 7(2) of Regulation 1612/68.  The Tribunal held (quite correctly in our view) that the residence test is not directly discriminatory against non-UK nationals, but, did give no reason as to why the test was considered not to be indirectly discriminatory.  The question the Tribunal should have addressed is whether the residence test would be likely to disproportionately affect (in this case) Irish nationals.

	The Chairman of the Tribunal granted leave to appeal.

10.	As far as the first ground of appeal is concerned I have dealt with that question in C15/98(IB) and have taken into consideration decisions of Great Britain Commissioners CS/137/93 and CM/473/92.  I am satisfied that there is no valid point in the argument that the Regulations were not properly made and were ultra vires.  Consequently the Tribunal was correct in its decision on this point.

11.	Turning to the second point which deals with Article 10 of Regulation 1408/71 the Tribunal in its decision recorded:-

		“We have been convinced by the arguments put forward by the Adjudication officer in paragraph 26 – 43 of the submission and we feel that we cannot do better than to adopt these paragraphs as the reasoning behind our decision.”

	I have often commented that this is a very unsatisfactory way of recording a decision because unless one has the Adjudication Officer’s submission then one does not know the reasons for the Tribunal’s decision.  Turning to the paragraphs which were adopted by the Tribunal, they referred to arguments relating to various decisions of the European Court, in particular Case No. 51/73 (referred to as Smieja case) Bestuur Der Sociale Verzekeringsbank v Smieja (1973) ECR 1213 and case No. 356/89, Newton-v-Chief Adjudication Officer [1991] 1 CMLR 149 referred to as Newton.  The Adjudication Officer argued that the claimant could not acquire an entitlement under 1408/71 because she could not overcome the initial requirements for entitlement, namely residence and presence and that the decisions which were quoted to the Tribunal all related to people who had acquired an entitlement in one Member State before moving to another Member State.  Also the Adjudication Officer had argued, that even if the Tribunal had decided that the claimant could acquire entitlement to ICA without being resident in Northern Ireland that the benefit could not be exported and argued that the Newton case held that benefit could only be exported in the case of persons who are or have been subject, as employed or self-employed persons, to the legislation of the Member State paying the benefit and by reason of past contributions had entitlement to some insurance based benefit.  The Adjudication Officer accepted however that on the evidence of claimant’s past work record that she can be regarded as a worker under regulation 1408/71 but not for the purpose of 1612/68.

12.	It would be useful at this point to set out Article 10 of Regulation (EEC) No 1408/71, paragraph (1) provides:-

		“Article 10(1) of Regulation (EEC) 1408/71 provides accordingly:

			“Save as otherwise provided in this Regulation, invalidity, old-age or survivors’ cash benefits, pensions for accidents at work or occupational diseases and death grants acquired under the legislation of one or more Member State shall not be subject to any reduction, modification, suspension, withdrawal or confiscation by reason of the fact that the recipient resides in the territory of a Member State other than that in which the institution responsible for payment is situated.”

		The “legislation” under which the right of benefits is acquired under Article 10(1) is national legislation modified by the provisions of Community law.

	Article 3(1) of the Regulation 1408/71 provides:-

		“Subject to the special provisions of this Regulation; persons resident in the territory of one of the Member States to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the nationals of that State.”

	Article 7(1) and (2) of Regulation (EEC) No 1612/68 provides:-

		“1	A worker who is a national of a Member State may not, in the territory of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and, should he become unemployed, reinstatement or reemployment.

		2	He shall enjoy the same social and tax advantages as national workers.
13.	At the hearing before me Mr Allamby argued that the Tribunal was correct in finding that the claimant was a worker by virtue of both Regulations 1408/71 and 1612/68 and was entitled to the benefit of both.

14.	Mr Allamby argued that the claimant was a full-time carer for her father-in-law for 35 hours per week which only ceased four days before the birth of claimant’s fourth child.  In any event her father-in-law died the following week and Mr Allamby argued that it was clear from the case law that the term “worker” must be given its ordinary meaning in the light of the objectives of the Treaty.  He argued that the term must not be given a narrow or restricted meaning as the freedom of movement was one of the Community’s fundamental freedoms.

15.	Mrs Smith argued strongly that the work which claimant carried out in looking after her father-in-law was not sufficient to attract the benefit of the Regulation 1612/68 because although “worker” is not defined in that regulation, she argued that the qualifications for entitlement to the term “worker” were laid down in Court decision Levin C53/81 [1982] ECR 1035 in which the work carried out or the activities carried out must cover the pursuit of effective and genuine activities and not activities in such a small scale as to be regarded as marginal and ancillary, and quoted various European Court decisions relating to what could be termed effective and genuine activities.

16.	I have considered these arguments.  The Adjudication Officer, in his written submission to the Tribunal which was referred to in the Tribunal’s decision, accepted that claimant could be regarded as an employed person who has been subject to the legislation of one or more States in her own right in accordance with Article 1(A) of Regulation (EEC) No. 1408/71 by virtue of her previous work record and in accordance with Article 2 was covered by the Regulation.  The Tribunal had found that it could not accept the argument of the Adjudication Officer relating to regulation 1612/68 and found that claimant could be considered as a worker within the Regulations.  I am quite satisfied that the case law and the facts support that finding.  There was no definition of “worker” in the Regulations, consequently it was left to the European Court to fill the gap.  The attitude of the Court is set out clearly in two cases; Levin case 53/81 [1982] ECR 1035 and Kempf v Secretary of State for Justice case 139/85 [EEC] 1986.  In Levin the Court held:-

		“It follows that the concepts of “worker” and “activity as an employed person” must be interpreted as meaning that the rules relating to freedom of movement for workers also concern persons who pursue or wish to pursue an activity as an employed person on a part-time basis only and who, by virtue of that fact obtain or would obtain only remuneration lower than the minimum guaranteed remuneration in the sector under consideration.  In this regard no distinction may be made between those who wish to make do with their income from such an activity and those who supplement that income with other income, whether the latter is derived from property or from the employment of a member of their family who accompanies them.

		It should however be stated that whilst part-time employment is not excluded from the field of application of the rules on freedom of movement for workers, those rules cover only the pursuit of effective and genuine activities, to the exclusion of activities on such a small scale as to be regarded as purely marginal and ancillary.  It follows both from the statement of the principle of freedom of movement for workers and from the place occupied by the rules relating to that principle in the system of the Treaty as a whole that those rules guarantee only the free movement of persons who pursue or are desirous of pursuing an economic activity.”

		In Kempf the Court held:-

		“The Court has consistently held that freedom of movement for workers forms one of the foundations of the Community.  The provisions laying down that fundamental freedom and, more particularly, the terms “worker” and “activity as an employed person” defining the sphere of application of those freedoms must be given a broad interpretation in that regard, whereas exceptions to and derogations from the principle of freedom of movement for workers must be interpreted strictly.

		It follows that the rules on this topic must be interpreted as meaning that a person in effective and genuine part-time employment cannot be excluded from their sphere of application merely because the remuneration he derives from it is below the level of the minimum means of subsistence.  In that regard it is irrelevant whether those supplementary means of subsistence are derived from property or from the employment of a member of his family, as was the case in Levin, or whether, as in this instance, they are obtained from financial assistance drawn from the public funds of the Member State in which he resides, provided that the effective and genuine nature of his work is established.

		That conclusion is, indeed, corroborated by the fact that, as the Court held most recently in Levin, the terms “worker” and “activity as an employed person” for the purposes of Community law may not be defined by reference to the national laws of the Member States but have a meaning specific to Community law.  Their effect would be jeopardized if the employment of rights conferred under the principle of freedom of movement for workers could be precluded by the fact that the person concerned has had recourse to benefits chargeable to public funds and created by the domestic legislation of the host State.

		For those reasons, it must be stated in answer to the question submitted for a preliminary ruling that where a national of a Member State pursues within the territory of another Member State by way of employment activities which may in themselves be regarded as effective and genuine work, the fact that he claims financial assistance payable out of the public funds of the latter Member State in order to supplement the income he receives from those activities does not exclude him from the provisions of Community law relating to freedom of movement for workers.”

17.	In light of the Court’s decision I am satisfied that claimant can be considered to be a “worker” under both 1408/71 and 1612/68.

18.	The next question to be considered is whether or not the claimant can acquire entitlement to the benefit because she cannot overcome the residence and the presence conditions as argued by Mrs Smith.  Prior to the hearing an Adjudication Officer submitted a written memorandum on the question of Article 10 as follows:-

		“2.1	In deciding the effect of Article 10 it is necessary to consider its purpose.  It is accepted that, in contrast to United Kingdom Courts, the European Court “… seeks to give effect to what it conceives to be the spirit rather than the letter of the treaties” – See R v HENN [1981] AC 850.  This means that when interpreting European Community Legislation the purpose of the provision and not just the meaning of the words used must be considered.

		2.2	The purpose of Article 10 was considered by the European Court of Justice in case C51/73 (SMIEJA).  The Court stated:-

				“14.	Article 10(1) ensures for the recipient full entitlement to various cash benefits, pensions, and other grants acquired under the legislation of one or more Member States, even while he resides in the territory of a Member State other than that in which the institution responsible for payment is situated.

				15.	The aim of this provision is to guarantee the party concerned his right to have the benefit of such payments even after (my emphasis) taking up residence in a different Member country eg his country of origin.”

			The Court went on to say:-

				“20.	As already stated, the purpose of this provision is to promote the free movement of workers, by insulating those concerned from the harmful consequences which might result when they transfer their residence (my emphasis) from one Member State to another.

		2.3	In view of the above, I submit that Article 10 only applies where a person has moved residence from one Member State to another.  It does not apply where a person has been habitually resident in only one Member State.  Consequently, [claimant] cannot benefit from the provisions of Article 10 as she has not changed her State of residence but has always been habitually resident in the Republic of Ireland.

		2.4	Mr Allamby quotes the case of Giletti as support for his argument.  I submit that the joined cases of Giletti and Others (379, 380 and 381/85, and 93/86), all involved an actual change of the state of residence, whereas, [claimant] has only resided in the Republic of Ireland.  Further argument on the application of Article 10 is contained in paragraphs 29-42 of the reference to the Social Security Appeal Tribunal dated 19 October 1992.”

19.	Mr Allamby argued that the whole principle behind regulation 1408/71 was to provide freedom of movement of workers in accordance with Articles 48 – 51 of the Treaty through the application of Social Security Schemes to employed and self-employed persons moving within the Community.  He said it was clear then that the Tribunal had erred in law in its decision in finding that regulation 1408/71 did not apply.  He then referred to the Giletti case (379/85) and said that in the Judgment of the Court it stated that the Regulations implied not only that the person could retain rights moving from one Member State to take up residence in another Member State, but also that he may not be prevented from acquiring a right merely because he did not reside in the State whose institutions were liable for the payment of the benefit.  He also referred to decision of a Great Britain Commissioner CF22/92.

20.	Mrs Smith adopted the arguments in the Adjudication Officer’s written memorandum from which I have quoted.  She went on to argue that the purpose of Article 10 must be looked at and the answer was to be found in C51/73 (SMIEJA) case and argued that the Giletti case could be distinguished from the present case on the facts and that the facts in CF22/92 were totally different from the instant case.

21.	I have considered these arguments.  It is clear that the purpose of the regulation is to facilitate the freedom of movement of workers.  Articles 48 and 49 of the Treaty granted to employed persons the right to seek and take up employment throughout the Community without discrimination on the grounds of nationality which among other things provides the migrant worker with constant social security protection whenever moving within the Community for the purpose of employment and removes the territorial barriers inherent in national social security systems.  The free movement of persons is achieved by means of equality of treatment of all employees and self-employed persons moving within the Community regardless of their nationality.  In terms of social security, this means that the migrant worker must be given the same treatment under the social security system of the Member State to which he is affiliated as those workers who have lived and worked in that State all their lives.  The migrant worker must be entitled to have his social security rights determined in the same way as the worker who has been affiliated to the same social security system all his working life.  Claimant worked in Northern Ireland, lodged her claim in Northern Ireland and collected her benefit in Northern Ireland and consequently unless she is afforded equality of treatment she would be discriminated against.

22.	I have considered the arguments of the Adjudication Officer relating to the meaning of the word “acquired”.  I have read Great Britain Commissioner’s decision CA/49/93 which considered the court cases of Giletti, Newman, Smieja and Caracciola.  The Commissioner came to the conclusion that all those cases related to follow-on benefits and that the issue in them was an accretion, supplement, or follow-on and therefore did not apply to as a new claim.  I have considered this argument.  None of the cases referred to relate to a person working and claiming benefit in the host state.  I therefore find that that decision has no relevance to the instant case.  I have also considered Commissioners Decision CM/2263/1995 and while it disallowed benefit claimed after the amendment to Article 10 of Regulation of 1407/71 made before but in anticipation of the decision in Hughes.  I am satisfied on the facts that CM/2263/1995 also is not relevant to this case.

23.	I reject the argument that the protection of the Regulation only applies to someone who actually moves residence from one Member State to another.  The argument that the words “even after” in Smieja supports that argument is to my mind flawed because paragraph 14 of the same judgement set out clearly that a worker can acquire rights in one state while residing in another.

24.	I am satisfied that Article 10(1) assists the claimant in this and that she is not debarred from acquiring the right to benefit because of the territorial regulations.

25.	As far as the third ground of appeal, mainly that regulation 1612/68 is indirectly discriminatory, I find it unnecessary to comment upon in view of my findings on entitlement.

26.	I am satisfied that the Tribunal erred in holding that the decision of the Adjudication Officer could not be reviewed because I am satisfied that there was an error of law in that decision in that it did not consider European law.  I therefore allow the appeal and set aside the decision of the Tribunal.  I feel it is a proper case for me to exercise the powers vested in me to give the decision which should have given namely that the decision of the Adjudication Officer can be reviewed and revised.  In light of my findings I hold that the claimant is entitled to ICA from 29 July 1990 to 5 May 1991.

C C G McNally

COMMISSIONER

8 May 2000

C-3-95(ICA)