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You are here: BAILII >> Databases >> Upper Tribunal (Administrative Appeals Chamber) >> JS v Secretary of State for Work and Pensions [2009] UKUT 81 (AAC) (05 May 2009) URL: http://www.bailii.org/uk/cases/UKUT/AAC/2009/81.html Cite as: [2012] AACR 7, [2009] UKUT 81 (AAC)

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JS v Secretary of State for Work and Pensions [2009] UKUT 81 (AAC)(05 May 2009)
European Union law
Council regulation 1408/71/EEC

 


INTERIM DECISION OF THE UPPER TRIBUNAL

ADMINISTRATIVE APPEALS CHAMBER

The claimant's appeal to the Upper Tribunal is allowed. The decision of the Sutton appeal tribunal dated 21 May 2004 involved an error on a point of law and is set aside. It is appropriate for the Upper Tribunal to re-make the decision on the claimant's appeal against the Secretary of State's decision dated 24 January 2002 (Tribunals, Courts and Enforcement Act 2007, section 12(2)(b)(ii) and (4)(a)). An interim decision can be given now in relation to the care component of disability living allowance. That decision is that the claimant's appeal is allowed and that the decision dated 24 September 1998 awarding the claimant the middle rate of the care component and the higher rate of the mobility component from and including 1 August 1998 does not fall to be superseded in relation to the care component with effect from 24 January 2002 or any earlier date on the ground of relevant change of circumstances on the claimant's ceasing to be ordinarily resident in Great Britain after 12 December 2001. The decision in relation to the mobility component is deferred until the outcome is known of the test cases currently before the Upper Tribunal, as explained in paragraphs 33 and 34 below.

REASONS FOR DECISION

1. As from 3 November 2008, cases pending before a Social Security Commissioner are to be dealt with by the Administrative Appeals Chamber of the new Upper Tribunal.

The appeal tribunal's decision

2. The appeal tribunal was concerned with the decision dated 24 January 2002 that, on supersession, the claimant was not entitled to either component of disability living allowance (DLA) from and including 13 December 2001 because the conditions relating to presence and ordinary residence in Great Britain were not met. The claimant appears first to have been awarded DLA with effect from 10 April 1997 and the most recent awarding decision, increasing the rate of mobility component, was effective from 1 August 1998. On 12 December 2001 he had moved to Germany with the intention of living there, at least for the immediate future. The appeal tribunal disallowed the claimant's appeal against the superseding decision, although under the mistake that his previous award was only of the mobility component. The appeal tribunal rejected the claimant's submission that his move to Germany was only temporary. On that basis, the appeal tribunal reached the only possible result if the British legislation was to be applied, together with the identification of DLA as a special non-contributory benefit for the purposes of Articles 10a(1) and 4(2a) of Council Regulation (EEC) No 1408/71 as in force in December 2001 (see Annex IIa) and therefore not required to be "exportable".

The appeal to the Commissioner/Upper Tribunal

3. Mr Commissioner Angus granted the claimant leave to appeal against the appeal tribunal's decision in December 2005 and shortly afterwards further consideration of the case was deferred to await the judgment of the European Court of Justice (ECJ) in Commission of the European Communities v European Parliament and Council of the European Communities, Case C-299/05, now reported at [2007] ECR I-8695. In that case there was a challenge by the European Commission to the validity of the revised form of Annex IIa inserted into Regulation No 1408/71 with effect from 5 May 2005 by Council Regulation (EEC) No 647/2005, at the same time as the insertion of a revised form of Article 4(2a). That challenge was restricted by the European Commission to certain benefits listed in the revised Annex IIa, including British DLA, but only the care component of DLA and not the mobility component. The ECJ decided on 18 October 2007 that the challenged benefits were not validly listed in Annex IIa and did not come within the meaning of "special non-contributory benefit" in Article 4(2a), because they were properly categorised as sickness benefits. Those provisions of Regulation No 1408/71 as amended from 5 May 2005 therefore could not prevent the "export" of at least the care component of DLA as a sickness benefit to another Member State. However, the specific conditions applicable to such benefits would have to be met.
4. The case was further deferred to await the outcome of four "test cases" pending before what was still then the Social Security Commissioner that had been identified as raising all probable combinations of circumstances to work out the effect of the ECJ judgment, including cases involving the mobility component and cases where the claimant had left the UK before 5 May 2005. Unfortunately, dates on which all the representatives involved would be free could not be found before 18 and 19 December 2008. Even more unfortunately, I have been delayed in making decisions in those test cases. The claimant had asked for his case no longer to be deferred, as he considered that it had special features. Since he was going to be visiting the UK in December 2008 and January 2009, I granted his request for an oral hearing, which took place on 15 December 2008.

The oral hearing

5. The claimant attended the hearing and was represented, or perhaps more accurately supported, by Mr John Amos of the Civil Service Pensioners' Alliance. The Secretary of State was represented by Mr Jeremy Heath of the Office of the Solicitor to the Department for Work and Pensions. Mr Heath had produced a highly detailed and technical written submission shortly before the hearing. It was necessary to allow Mr Heath time to make a further written submission as to the satisfaction of the conditions in Regulation No 1408/71 for the "export" of sickness benefits in the light of the claimant's oral evidence and further documents produced at the hearing. Mr Heath also very helpfully provided his own informal, but in my view reliable, translations of some letters written in German that the claimant had produced.
6. I am grateful to Mr Heath for his considerable efforts to ensure that no relevant aspect of the claimant's case is overlooked and for his characteristically fair and even-handed submissions. But inevitably, given the highly technical and complicated nature of the legal issues involved, the claimant has found it difficult to follow all the twists and turns. It was a great pleasure to meet him on 15 December 2008 and I am grateful to him for setting out so clearly his circumstances and his view of where justice lies in his case. I think that he appreciates that some of the ways in which he considers that the law has treated him unfairly (such as being forced from non-taxable incapacity benefit onto retirement pension at the age of 65) are not matters that I can deal with within the ambit of this decision. I am now in a position to give at least an interim decision. I shall try, no doubt unsuccessfully, to keep the level of technical legal analysis to a minimum, but some working out of the reasoning will be useful as a point of reference in other cases.

The appeal tribunal's errors of law

7. It is now clear that the appeal tribunal of 21 May 2004 made material errors of law that require its decision to be set aside. First, it confirmed the decision that on supersession the claimant was not entitled to DLA from and including 13 December 2001 when, as is now a matter of agreement, section 10(5) of the Social Security Act 1998 and regulation 7(2)(c) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999 as then in force prevented the decision of 24 January 2002 from taking effect from any date earlier than 24 January 2002. Second, and more importantly, its decision was not consistent with the effect of Regulation No 1408/71 in relation to the care component of DLA as revealed by the decision of the ECJ in Case C-299/05. Although Mr Heath for the Secretary of State has accepted in his submissions that that is so, some brief unpacking of the principles involved is necessary in order to explain the interim decision that is being made.

The basis for a substituted interim decision on the care component

Case C-299/05 and the position from 5 May 2005 onwards

8. The essential reasoning of the ECJ in Case C-299/05 (leaving aside for the moment the contentious question of whether the mobility component of DLA should be treated in the same way as the care component) was as follows (references to paragraph numbers are to the judgment). A benefit could only validly be listed as a special non-contributory benefit Annex IIa to Regulation No 1408/71 in the form inserted by Regulation No 647/05 (adopted by the European Council and the European Parliament on 13 April 2005 and taking effect from 5 May 2005) if it was truly such a benefit. If a benefit is to be regarded as a social security benefit within Article 4(1) of Regulation No 1408/71 it cannot be classified simultaneously as a special non-contributory benefit (paragraph 51). British attendance allowance and carer's allowance, and the care component of DLA, are care allowances, whose purpose is to help the disabled person to overcome, as far as possible, his or her disability in everyday activities (paragraph 67). Such benefits, granted on the basis of a statutorily defined position and which are intended to improve the state of health and quality of life of persons reliant on care must be regarded as "sickness benefits" within Article 4(1)(a) despite their essential purpose not being to supplement sickness insurance benefits (paragraphs 61 and 70). Accordingly, Regulation No 647/05 was annulled in so far as it included those benefits, and the other benefits from other Member States that were challenged, in Annex IIa.
9. That is enough on its own to secure that, with effect from 5 May 2005, Article 4(2a) could not be applied to require the payment of the care component of DLA only in the State of (habitual) residence. One of the necessary conditions in Article 4(2a) is that the benefit in question is listed in Annex IIa. From 5 May 2005 the care component of DLA has to be regarded as not listed there. The ECJ's judgment then requires that it be regarded as a sickness benefit. I do not, in the light of the date of the decision under appeal, have to decide in this case whether that position applies only to claimants who have a residence requirement first applied to them on or after 5 May 2005 or whether it also applies as from that date to those who, like the claimant in the present case, left the UK before 5 May 2005 and had the residence requirement in the British legislation applied first to them before that date.

Case C-299/05 and the position before 5 May 2005

10. In relation to the period before 5 May 2005, the approach in the previous paragraph does not supply a complete answer. Before the purported amendment from that date, attendance allowance, invalid care allowance (carer's allowance under a previous name) and DLA were all listed in Annex IIa and cannot be regarded as not having been. But the decision of the ECJ in Jauch v Pensionsversicherungsanstalt der Arbeiter (Case C-215/99) [2001] ECR I-1901 does supply the answer. The ECJ held there, differing from some previous decisions, that the fact that a benefit is listed in Annex IIa is not conclusive that it is a special non-contributory benefit. The conditions in Article 4(2a) must be examined before that conclusion can be reached (paragraphs 21 and 22). That principle was also applied by the ECJ in Leclere and Deaconescu v Caisse nationale des prestations familiales (Case C-43/99) [2001] ECR I-4265 and Hosse v Land Salzburg (Case C-286/03) [2006] ECR I-1771, and was approved implicitly but clearly in Case C-299/05 by the reference in paragraph 71 to "the post-Jauch legal context". Thus it must be asked whether prior to 5 May 2005 the care component of DLA was truly a special non-contributory benefit as defined in Article 4(2a) as in force at the time. The reasoning of the ECJ in Case C-299/05 then requires the answer no and the conclusion that the care component of DLA must be regarded as a sickness benefit.
11. Mr Heath for the Secretary of State was therefore right to accept that from 13 December 2001 onwards the question of whether Regulation No 1408/71 compelled the UK to allow the "export" of the claimant's care component of DLA was not governed by the rules on special non-contributory benefits, but by the rules on sickness benefits. The same will apply in other similar cases and was accepted by counsel for the Secretary of State at the oral hearing of the "test cases". The appeal tribunal of 21 May 2004 accordingly considered the wrong rules and failed to apply the right conditions or to make the necessary findings of fact. Mr Heath made some observations in his written submissions about the effect of the dates of the various crucial decisions that might be relevant in cases where claimants had not at the time challenged the supersession of the decision awarding DLA when they lost ordinary residence in Great Britain and who would therefore be forced to go for a revision of the superseding decision for official error. Those observations are not relevant here, where the concern is still the claimant's appeal against the superseding decision itself. I note also that the ruling of the ECJ in Case C-299/05 cannot be a "relevant determination" for the purposes of section 27 of the Social Security Act 1998 and its restrictions on the effect of "test cases" in relation to past periods.

Regulation No 1408/71 and the export of sickness benefit: personal scope

12. It is then necessary to go on consider the sickness benefit rules in Regulation No 1408/71, at any rate to the extent needed to reach a conclusion in the present case. It was accepted by Mr Heath that the claimant came within the personal scope of the Regulation, as defined in Article 2(1), by reason of his payments and crediting of national insurance contributions as an employed person which had qualified him for a state retirement pension from the age of 65. The claimant had mentioned that pension on the form on which he notified the Disability and Carer Benefits Directorate of his impending move to Germany, but Mr Heath had also made his own investigation of the claimant's contribution record, reported in footnote 27 on page 459 of the papers. As it may be relevant for other cases, as well as later on in the present case, I confirm that, although the claimant had ceased actual employment from about 1988, when he started to receive what was then sickness and invalidity benefit, with credited contributions, and reached pensionable age on 6 December 2000 and started to draw his state retirement pension, he was still an employed person within the meaning of Article 2(1) and the definition in Article 1(a), in particular the first indent of Article 1(a)(ii). In Algemeen Ziekenfonds Drenthe-Platteland v Pierick (Case 182/78) [1979] ECR 1977 and Martinez Sala v Freistaat Bayern (Case C-85/96) [1998] ECR I-2691 it was held that a person has the status of employed person within the meaning of Regulation No 1408/71 where he is covered, even in respect of a single risk, compulsorily or on an optional basis, by a general or special social security scheme, irrespective of the existence of an employment relationship. In particular, it was held in Pierick that the claimant there continued to be within the definition after he had started to draw the pension under the social security scheme to which he had contributed as an employee. All of that is confirmed by the information apparently resulting from Mr Heath's own investigations that the claimant was issued with a form E121 by the UK authorities on his leaving for Germany.

Regulation No 1408/71 and the export of sickness benefit: Article 28 (pensioners)

13. Mr Heath then suggested that the claimant could potentially succeed under Article 28(1) of Regulation No 1408/71, which is within Section 5 (Pensioners and members of their families) of Chapter 1 (Sickness and maternity) of Title III (Special provisions relating to the various categories of benefits):

"1. A pensioner who is entitled to a pension under the legislation of one Member State or to pensions under the legislation of two or more Member States and who is not entitled to benefits under the legislation of the Member State in whose territory he resides shall nevertheless receive such benefits for himself and for members of his family, in so far as he would, taking account where appropriate of the provisions of Article 18 and Annex VI, be entitled thereto under the legislation of the Member State or of at least one of the Member States competent in respect of pensions if he were resident in the territory of such State. The benefits shall be provided under the following conditions:

(a) benefits in kind shall be provided on behalf of the institution referred to in paragraph 2 by the institution of the place of residence as though the person concerned were a pensioner under the legislation of the State in whose territory he resides and were entitled to such benefits;

(b) cash benefits shall, where appropriate, be provided by the competent institution as determined by the rules of paragraph 2, in accordance with the legislation which it administers. However, upon agreement between the competent institution and the institution of the place of residence, such benefits may be provided by the latter institution on behalf of the former, in accordance with the legislation of the competent State."

Article 28(2) applies as such only to benefits in kind and provides, amongst other things, that where a pensioner is entitled to benefits under the legislation of a single Member State, the cost is to be borne by the competent institution of that State.

14. It may be that in some other cases difficult questions might arise about who is a "pensioner" for the purposes of Article 28(1). For instance, although it appears, especially from the definition of "benefits" and "pensions" in Article 1(t), that pensions would include payments of incapacity benefit or now employment support allowance, would they include payments of DLA? Paragraph 13 of the judgment of the ECJ in Chief Adjudication Officer v Twomey (Case C-215/90) [1992] ECR I-1823, R(S) 3/92, suggests that the answer is yes in so far as they are payments of sickness benefit. In the present case, the claimant was entitled to his state retirement pension from the UK and there can be no doubt that he was therefore a pensioner. The crucial questions are then whether he was not entitled to benefits under German legislation and whether the UK is the competent State for the purposes of the Article.

Regulation No 1408/71 and the export of sickness benefit: Article 28: not entitled to benefits under German legislation

15. On the first question, there was evidence in the form of a letter dated 20 December 2002 to the claimant from Pflegekasse bei der AOK - Die Gesundheitskasse für Niedersachsen (Care Fund of the General Local Fund - the Health Insurance Fund for Lower Saxony), first appearing at page 135 of the papers. This informed the claimant, according to Mr Heath's translation, that in the opinion of Medical Services, he needed care at Care Level I, but that he could not be granted cash benefits because he was covered by the social security agreement. He could claim benefits from 1 August 2002 through a contractual partner of the Care Fund in the sum of 384 euros per month. His chosen Care Service would be paid directly by the Care Fund. That is consistent with the certificate dated 6 August 2002 from the Brunswick Benefit Office, valid from 19 March 2002 to 30 November 2006, that he was severely disabled. It is also consistent with the current registration card for ambulante Pflegevericherung from the Care Fund, valid to the end of December 2009, that the claimant produced at the oral hearing.
16. Mr Heath also very helpfully provided a copy of parts of an official German document in English, apparently from the Federal Ministry of Health and Social Security, about long-term care insurance which included the following:

"Home care benefits are scaled according to the care level. If you are covered by statutory long-term care insurance, you can choose between non-cash benefits (care provided by an agency under contract to your long-term care insurance scheme, such as a social services agency or home care service) and cash benefits (which you would use to ensure that you receive appropriate care, for example with the help of relatives). It is also possible to receive a combination of non-cash and cash benefits."

It is evident, and I accept, that what the claimant received from 1 August 2002 was the first of the alternatives described there, but without being given the choice of taking cash benefits.

17. In his further submission dated 11 February 2009, Mr Heath submitted that the claimant's entitlement was therefore to a benefit in kind and that that entitlement did not preclude continued receipt of the care component of DLA as a sickness benefit under Article 28(1)(b). I agree, but first I must deal with another point that I failed specifically to put to Mr Heath at the oral hearing.
18. The point arises from section 12(8)(b) of the Social Security Act 1998, which prohibits an appeal tribunal (now a First-tier Tribunal), and therefore the Upper Tribunal when substituting a decision on an appeal, from taking into account circumstances obtaining after the date of the decision under appeal. In the present case, that date was 24 January 2002. The evidence that I have accepted above is that the claimant was not entitled to home care benefits at that date. It seems likely that there would be some gap before those benefits would be awarded, because of the need to join a long-term care insurance scheme, often in conjunction with health insurance cover, possibly to pay some contributions and then to be assessed. As at 24 January 2002 the claimant would only have been entitled to the provision of health treatment by the German institution in accordance with Article 28(1)(a), clearly a benefit in kind.
19. Then the most general point is what is meant in the main part of Article 28(1) by "benefits" in the phrase "is not entitled to benefits under the legislation of the Member State in whose territory he resides". Article 28 deals with both cash benefits and benefits in kind and the main part of Article 28(1) contains conditions that apply to both of sub-paragraphs (a) and (b) dealing with each type of benefit in turn. Does the word "benefits", used without any qualification, then cover both sorts of benefits? I do not think that the answer matters as at the date to which my decision must formally be restricted (24 January 2002). If the claimant was then entitled to health treatment from the relevant German institution, that was not under German legislation, but the result of the operation of Article 28(1)(a) itself. But, in view of the submissions received, I ought to say how I see the position as from 1 August 2002 (in case the Secretary of State wishes to supersede the award of the care component of DLA that I have concluded continues in effect from and including 24 January 2002).
20. I find the Article difficult to interpret and have not got much help from searching in the ECJ case-law. However, in my judgment the reference to not being entitled to benefits is to the type of benefit provision of which is being considered. Thus, in so far as provision of sickness benefits in kind under sub-paragraph (b) is being considered, the condition is whether the claimant is entitled to sickness benefits in kind under the legislation of the State of residence. In so far as provision of cash sickness benefits is being considered, the condition is whether the claimant is entitled to cash sickness benefits under the legislation of the State of residence. That seems to me consistent with the words of Article 28(1) read as a whole and to avoid what would be illogical differences in outcome if entitlement to one type of benefit excluded the operation of Article 28(1) in relation to the other type.
21. Accordingly, my view is that the operation of Article 28(1) would not have been automatically excluded from 1 August 2002. It would have depended on whether the home care benefit received by the claimant was properly to be classified as a cash benefit or as a benefit in kind. It is clear that the German authorities regard it as a benefit in kind (see the document mentioned in paragraph 16 above and the note of 20 September 2002 from the German delegation to an EC working party considering the proposal for a replacement for Regulation No 1408/71 (pages 493 to 495: also helpfully provided by Mr Heath)). But is that correct as a matter of EC law? The note just mentioned was in response to a request to state what benefits covered by care insurance were considered to be benefits in kind in the light of the ECJ's decision in Molenaar v Allgemeine Ortskrankenkasse Baden-Württemburg (Case C-160/96) [1998] ECR I-843. That decision specifically concerned German care insurance benefits, although in a slightly different context from the present. It is therefore necessary to look briefly at what the ECJ held there.
22. Paragraphs 5 and 6 of the judgment were as follows:

"5. Care insurance gives entitlement, first, to benefits designed to cover the costs incurred for care provided in the home by a third person. Those benefits, designated as `home care', the amount of which depends on the degree of reliance on care on the part of the person concerned, may be provided, at the choice of the recipient, either in the form of care dispensed by authorised bodies or in the form of a monthly allowance, known as `the care allowance', enabling recipients to choose the form of aid they consider most appropriate to their condition.

6. Secondly, care insurance gives entitlement to direct payment of the cost of nursing home or hospital care provided to the insured person, to allowances designed to cover the absence on holiday of the third party who usually looks after the person insured and to allowances and payments for various costs entailed by the insured person's reliance on care, such as the purchase and installation of special equipment and work required to adapt the home."

23. Paragraph 32 is as follows in the English text:

"32. As stated above, in particular at paragraphs 5, 6, 7 and 23 of this judgment, care insurance benefits consist, first, in the direct payment or reimbursement of expenses incurred as a result of the insured person's reliance on care, in particular medical expenses entailed by that condition. Such benefits, which are designed to cover care received by the person concerned, both in the home and in specialised centres, purchases of equipment and work carried out, indisputably fall within the definition of `cash benefits' referred to in Articles 19(1)(a), 25(1)(a) and 28(1)(a) of Regulation No 1408/71."

In paragraphs 33 to 36 the ECJ went on to hold that, by way of contrast, a "care allowance" was a sickness insurance cash benefit.

24. It is plain that something has gone wrong in the English text of paragraph 32. Articles 19(1)(a), 25(1)(a) and 28(1)(a) are all to do with benefits in kind and, if it had been intended to declare that the direct payment or reimbursement of expenses were cash benefits, the contrast with the following paragraphs would make no sense. Nor would the reference in paragraph 31 to an earlier decision's being authority that "benefits in kind" does not exclude the possibility that such benefits may comprise payments made by the institution in question, in particular in the form of direct payments or reimbursement of expenses. Reference to the French text, the working language of the ECJ, reveals the use of the words "prestations en nature" (benefits in kind), rather than "prestations en espèces (cash benefits). Thus, the English text of paragraph 32 must be read with the substitution of "benefits in kind" for "cash benefits" in the final sentence.
25. Accordingly, I have no doubt that the home care benefits to which the claimant was entitled under the German legislation from 1 August 2002 were benefits in kind. That entitlement did not then affect the operation of Article 28(1)(b) on the export of the care component of DLA as a cash sickness benefit.

Regulation No 1408/71 and the export of sickness benefit: Article 28: is the UK the competent State?

26. The second question arising under Article 28(1)(b) is whether the UK remained the competent State, so that it was a UK institution that was required to continue to provide the care component of DLA. I confess to a good deal of difficulty about this. The main part of Article 28(1) refers to the Member State competent in respect of pensions. That presumably means the pension or pensions, entitlement to which makes the person in question a pensioner. But if it is entitlement to the UK state retirement pension that makes the claimant here a pensioner, as I understand it the provisions of Regulation No 1408/71 on old age benefits do not use the concept of a competent State. And the question asked is whether the claimant would be entitled to the sickness benefit if he was resident in the State in question, which assumption might affect the competence of that State. However, I am prepared to assume that the general principle in Article 13 applies, that for the purposes of the Regulation persons are to be subject to subject to the legislation of a single Member State, as determined by Article 13(2) and the special rules in Articles 14 to 17 (none of which are relevant in the present case). It is also necessary to look at the provisions of Annex VI, specifically mentioned in Article 28(1).
27. The provisions of Article 13(2) on their own would seem to have made Germany the competent State from 13 December 2001 onwards. Article 13(2)(a) makes the State in which a person is employed the competent State even if the person resides in another State. But as the claimant here had permanently ceased all occupational activity well before 13 December 2001 and did not take up any such activity in Germany, that provision would seem not to apply. None of the intervening sub-paragraphs being relevant, his case would seem to fall into Article 13(2)(f):

"(f) a person to whom the legislation of a Member State ceases to be applicable, without the legislation of another Member State becoming applicable to him in accordance with one of the rules laid down in the aforegoing subparagraphs or in accordance with one of the exceptions or special provisions laid down in Articles 14 to 17 shall be subject to the legislation of the Member State in whose territory he resides in accordance with the provisions of that legislation alone."

28. However, the complex special rules for the UK in Annex VI alter the position. Points 19 and 20 of Section Y are relevant:

"19. Subject to any conventions concluded with individual Member States, for the purposes of Article 13(2)(f) of the Regulation and Article 10b of the Implementing Regulation, United Kingdom legislation shall cease to apply at the end of the day on the latest of the following three days to any person previously subject to United Kingdom legislation as an employed or self-employed person:

(a) the day on which residence is transferred to the other Member State referred to in Article 13(2)(f):

(b) the day of cessation of the employment or self-employment, whether permanent or temporary, during which that person was subject to United Kingdom legislation;

(c) the last day of any period of receipt of United Kingdom sickness or maternity benefit (including benefits in kind for which the United Kingdom is the competent State) or unemployment benefit which

(i) began before the date of transfer of residence to another Member State or, if later,

(ii) immediately followed employment or self-employment in another Member State while that person was subject to United Kingdom legislation.

20. The fact that a person has become subject to the legislation of another Member State in accordance with Article 13(2)(f) of the Regulation, Article 10b of the Implementing Regulation and point 19 above, shall not prevent:

(a) the application to him by the United Kingdom as the competent State of the provisions relating to employed or self-employed persons of Title III, Chapter 1 and Chapter 2, Section 1 or Article 40(2) of the Regulation if he remains an employed or self-employed person for those purposes and was last so insured under the legislation of the United Kingdom;

(b) his treatment as an employed or self-employed person for the purposes of Chapter 7 and 8 of Title III of the Regulation or Articles 10 or 10a of the Implementing Regulation, provided United Kingdom benefit under Chapter 1 of Title III is payable to him in accordance with paragraph (a)."

29. Without needing to speculate on whether point 19 might take the date that UK legislation ceased to apply any further on from three days after 12 December 2001, point 20(a) preserves the competence of the UK in relation to sickness benefits, among other benefits, for those within the definition of employed or self-employed person who were last insured as such in the UK. In that context, the reference can only be to an employed or self-employed person as defined in Article 1(a), with the meaning given in Pierick (see paragraph 12 above). Point 20 is relevant to all the provisions in Chapter 1 of Title III, not merely to those in Section 2 (employed or self-employed persons and members of their families). There would be no rational basis for excluding the other sections, and in particular Section 5 (pensioners and members of their families), from the effect of point 20.
30. Thus, in the present case, since the claimant was last insured as an employed person in the UK (any affiliation to German social security schemes not being on that basis) and he remained within the Pierick meaning of employed or self-employed person as a pensioner, point 20 applies. The UK is the competent State for the purposes of the provision of cash sickness benefits under Article 28(1)(b).

Regulation No 1408/71 and the export of sickness benefit: Article 28: conclusion

31. On those findings, Article 28(1)(b) of Regulation No 1408/71 requires the "export" to Germany of at least the claimant's entitlement to the care component of DLA as from 13 December 2001. I do not then need to explore whether or not he could also have succeeded under Article 19, where the conditions are much less restrictive (see Pierick and Twomey). Nor do I need to explore whether the operation of Article 19 is excluded by the more specific provisions in Article 28 in the case of pensioners or just what Article 34(2) is meant to achieve.

The interim decision on the appeal against the decision of 24 January 2002

32. The result is that the relevant change of circumstances that occurred on 13 December 2001, of the claimant ceasing to be ordinarily resident in Great Britain, could not in law have led to an alteration in the decision awarding the claimant DLA on an indefinite basis (at least as far as the care component is concerned). That decision, to that extent at least, continues to operate. The formal decision to that effect is set at the beginning of this document. I can see no obstacle to the Secretary of State now making payment of the accrued arrears. It is though open to the Secretary of State, if he considers the conditions met, to supersede the awarding decision from some later date on a relevant change of circumstances occurring after 24 January 2002 (for instance, the award of home care benefits to the claimant under German legislation). I have explained in detail above why in my judgment that particular change would not affect the claimant's entitlement to DLA.

The mobility component of DLA and the test cases

33. In the test cases currently before the Upper Tribunal mentioned briefly in paragraph 4 above, difficult issues arise about the treatment of the mobility component of DLA in the light of the decision of the ECJ in Case C-299/05. For instance, there is a question whether the nature and characteristics of the mobility component are such that, although its listing in Annex IIa to Regulation No 1408/71 from 5 May 2005 was not challenged by the European Commission, the reasoning that led to the care component being classified as a sickness benefit should lead to the same result for the mobility component. There is also a question whether the ECJ in that case was right, in the light of the specific terms of Regulation No 1408/71, to treat the care component and the mobility component as if they were separate benefits, rather than treating DLA as a single benefit, which would then have to be classified as a sickness benefit regardless of how mobility component would have been classified if it stood on its own. I cannot say much in advance of taking the next step in the test cases, but I am not able to give complete decisions in them without referring questions to the ECJ about the mobility component. I therefore plan (and hope not to add much to the already inordinate delay) to issue interim decisions on the care component similar to that in the present case in at least some of those test cases. I plan to issue at the same time or shortly afterwards a draft of the questions and directions for reference, on which the parties to the test cases will have the opportunity to comment. The ECJ's answers to the questions referred should enable final decisions to be made in the test cases and then, after the parties here have had the opportunity to comment, in the present case.
34. I have taken into account all that the claimant has said about the special features of his case, but I cannot see that on the case before me, restricted to questions of entitlement to DLA, I can go any further at the moment than the making of an interim decision dealing with the care

component. I think that any potential human rights arguments can only properly be assessed after the position in EC law has been authoritatively established, which requires the further references to the ECJ on the mobility component.

(Signed on original): J Mesher

Judge of the Upper Tribunal

Date: 5 May 2009