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CJEU: The UK can require recipients of child benefit & child tax credit to have a right to reside in the UK

The regulation on the coordination of social security systems lays down a series of common principles to be observed by the legislation of the Member States in that sphere so that the various national systems do not place at a disadvantage persons who exercise their right of freedom of movement and of residence within the EU. One of the common principles that the Member States must observe is the principle of equality. In the specific field of social security, the principle of equality takes the form of prohibiting any discrimination on grounds of nationality.

The Commission received numerous complaints from non-British EU citizens resident in the UK. They complained that the competent UK authorities had refused to grant them certain social benefits on the ground that they did not have a right to reside in the UK. Since the Commission took the view that the UK legislation does not comply with the regulation, it brought an action for failure to fulfil obligations against the UK. The Commission stated that under UK legislation it must be verified that persons claiming certain social benefits – including family benefits such as child benefit and child tax credit, which the present case concerns – are lawfully resident in the UK. According to the Commission, that condition is discriminatory and contrary to the spirit of the regulation since the regulation has regard only to the claimant’s habitual residence.

In response to those arguments, the UK, which relies on the judgment in Brey, 3 maintains that the host State may lawfully require that social benefits be granted only to Union citizens who fulfil the conditions for possessing a right to reside in its territory, conditions which are, essentially, laid down in an EU directive.4 Furthermore, while acknowledging that the conditions conferring entitlement to the social benefits at issue are more easily satisfied by its own nationals (as they have, by definition, a right of residence), the UK maintains that in each case the condition requiring a right of residence is a proportionate measure for ensuring that the benefits are paid to persons sufficiently integrated in the UK.

In today’s judgment, the Court dismisses the Commission’s action

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