Zambrano Carers: ‘Benefits Tourism’ Appeal Dismissed

R (HC) v Secretary of State for Work and Pensions [2017] UKSC 73 (15 November 2017)

Lady Hale found this to be a “very troubling” case but she agreed with Lord Carnwath that the appeal had to be dismissed. The thing that troubled her Ladyship was that the welfare of British children was at stake. In addition to the fact that HC’s case involved the interpretation of the landmark decision in Zambrano (Case C-34/09, EU:C:2011:124), the impact of the government’s actions on the neglected rights of British children remained a striking feature of this appeal. However, despite the exceptional nature of the Zambrano right of residence, the Supreme Court pointed out that the CJEU’s ruling is not predisposed to maintaining the unity of the family and does not guarantee any particular quality of life or standard of living. “HC” has been living the UK since 2008. She is Algerian and became an overstayer when her marriage to a British citizen ended owing to domestic violence. Her right of residence was not in doubt because she is a Zambrano carer, i.e. a non-EU citizen who was the primary carer of an EU citizen. The Zambrano principle precludes EU member states from enacting measures against a Zambrano carer in circumstances where those measures result in the deprivation of the genuine enjoyment of the dependent EU citizen’s rights under EU law.

Oldham Council accommodates HC and her children under section 17 of the Children Act 1989. She receives £80.5 per week in subsistence and utility costs. It was undisputed that this was sufficient for the family to remain. Notably, Zambrano carers are precluded from claiming various income-related benefits by the operation of the Social Security (Habitual Residence) (Amendment) Regulations 2012, the Allocation of Housing and Homelessness (Eligibility) (England) (Amendment) Regulations 2012 and the Child Benefit and Child Tax Credit (Miscellaneous Amendments) Regulations 2012. These regulations limit Zambrano carers’ rights to claim some types of non-contributory social security assistance accessible by “habitually resident” persons. The changes aimed to curb potential annual expenditure between £3.8m and £9.4m that 700 people a year qualifying for Zambrano rights would trigger in terms of income support, housing benefit and council tax benefit. HC complained that her British children had to survive on “the bare minimum” because they were precluded from enjoying the same benefits and opportunities of growing up in Britain like normal British children such as their British step-siblings/cousins with the result “that they do not in practice have the same rights.”

Lower Courts

At first instance, Supperstone J dismissed HC’s challenge to the regulations. Applying in Bah v UK (2012) 54 EHRR 21 he held that the discrimination was justified on the facts of HC’s case. The Court of Appeal upheld the decision. Arden, Burnett and Elias LJJ unanimously held that EU law does not entitle Zambrano carers to the same level of payments of social assistance as lawfully resident EU citizens. In light of Patmalniece [2011] UKSC 11, they took the view that the discrimination between Zambrano carers and other benefits claimants is not direct discrimination on the grounds of nationality but is indirect discrimination on immigration status.

Arden LJ did not see Zambrano “as an exceptional or unprincipled piece of jurisprudence” and observed that it creates residence rights necessary to give meaning and effectiveness to an EU citizenship’s status. Her Ladyship judged that EU law does not apply when a member state treated some people within its jurisdiction less favourably than others. Applying Dano (C-333/13, EU:C:2014:2358), member states are not constrained by any EU treaty provision or legislative measure from deciding the level of benefits for Zambrano carers.

Interpreting the law in the “real world and freed from the shackles of unreality”, Arden LJ followed Lady Hale’s approach in Patmalniece that only EU nationals could rely on article 18 of the TFEU. The authorities of Vatsouras (C-22/08, EU:C:2009:344) and Martínez Sala (C-85/96, EU:C:1998:217) confirmed this analysis.

The Supreme Court

The court rejected the idea that denying conventional welfare and housing provision to a Zambrano carer and her child is unlawful because of causing unlawful discrimination under article 21 of the CFR and/or under article 14 of the ECHR. Lords Clarke, Wilson and Sumption agreed with Lord Carnwath’s lead judgment and Lady Hale delivered a concurring judgment.

(i) The Zambrano Principle

The Zambrano line of cases only concern the risk that the dependents of Zambrano carers might be compelled to leave EU territory and thus be deprived of the genuine enjoyment of their rights as EU citizens. The Zambrano judgment did not address issues of financial support and entitlement to benefits despite AG Sharpston’s rejection of arguments about the non-EU primary carer being an “unreasonable burden” on public finances. Dereci (Case C-256/11, EU:C:2011:734) confirmed the exceptional nature of the Zambrano doctrine. Reliance placed in Rendón Marín (C‑165/14, EU:C:2016:675, see here) to expand the scope of EU law to include social benefits did nothing to displace that analysis.

In Agyarko [2017] UKSC 11 (see here), Lord Reed shed light on Zambrano and associated jurisprudence. His Lordship’s dissection of the key principles led him to conclude that in CS (C‑304/14, EU:C:2016:674, see here) the CJEU focused on situations where the dependent EU citizen would be obliged in practice to leave EU territory altogether. Critically, Elias LJ had hit the nail on the head in Harrison (Jamaica) [2012] EWCA Civ 1736. Therefore, Lord Carnwath explicitly approved Elias LJ’s conclusion that:

67. … The right of residence is a right to reside in the territory of the EU. It is not a right to any particular quality of life or to any particular standard of living.

Baumbast (Case C-413/99, EU:C:2002:493), as subsequently applied in Ibrahim (C-310/08, EU:C:2010:80) and Teixeira (C-480/08, EU:C:2010:83) did not assist HC because these authorities concerned the interpretation of EU Regulation 1612/68 on the free movement of workers which was contextually different. The unconditional nature of the right of the primary carer derived under article 12 of Regulation 1612/68 led HC to argue that once the right of residence is established the need to show a positive right to claim social assistance falls away. She claimed that since Zambrano carers’ residence rights occur without any need for self-sufficiency or limitation these rights must be regarded as attracting benefits identical to habitually resident persons.

HC ran the academic argument that the Supreme Court had a golden opportunity to cure the “hand-to-mouth” nature of citizenship. Consequently, the court needed to accept that in Ibrahim the CJEU ruled out any basis for a condition of self-sufficiency in the legislation in question, or in the case law and specifically pointed out that the ruling in Baumbast had not been based on a finding of self-sufficiency. However, Lord Carnwath had two difficulties with this proposition. Firstly, the domestic law context was quite different because the rights asserted in those cases were not limited by domestic law. Conversely, in HC’s case the issue was whether the regulations limiting her entitlement to assistance complied with EU law. Secondly, it was not clear-cut that Zambrano residence rights automatically triggered the protection of a right to equal treatment under EU law. The situation begged the question whether the CFR applied to HC’s case at all.

(ii) Discrimination: CFR and ECHR

Lady Hale’s judgment in Patmalniece precluded the application of article 18 of the TFEU to third country nationals. HC invoked article 21 of the CFR. However, article 51 limits the CFR’s application to “only when” member states “are implementing Union Law”. Relying on Martínez Sala, HC submitted that the Zambrano principle brings the carer and child “within the scope” of the EU treaties personally or ratione personae. The choice between section 17 support and mainstream welfare benefits was portrayed as a choice between different modes of implementing EU law. Equally, the intervening AIRE Centre questioned the domestic regulation of Zambrano carers’ entitlement to financial assistance under EU law.

The government disagreed that Martínez Sala – which specifically dealt with EU citizens’ rights – aided HC as it was unrelated to the CFR. Applying the logic in Ymeraga (C-87/12, EU:C:2013:291), it was necessary to show a direct link between the act in question and the implementation of EU law. Since refusing the Ymeraga family did not involve the implementation of EU law, the CFR had no application. Moreover Dano sealed the argument that without any specific requirement or condition of EU law, decisions about the level of non-contributory benefits fall outside the CFR’s scope because the CJEU held that member states are not implementing EU law by prescribing conditions for the grant of special non-contributory cash benefits and the extent of such benefits. Accepting the government’s submissions, Lord Carnwath held that:

28. … The test is not whether Mrs HC is personally within the scope of EU law in some way. The issue must be judged by reference to the test set by article 51, which is directed to “implementation” of EU law. Once it is determined that EU law does not require more for the children of a Zambrano carer than practical support sufficient to avoid their being obliged to leave the Union, that also sets the limits of what is involved in its implementation.

The UK had the choice to be more generous by “gold-plating” EU law, but that was an option under national law. Ultimately, the point about the regulation of the provision of financial assistance was incorrect.

The case under article 14 of the ECHR was similarly thin because discrimination on the basis of immigration status is a fundamental and accepted part of both EU and national law and cannot on its own give rise to an issue under article 14. The differences between HC’s treatment as a Zambrano carer specifically and the treatment of others only reflected the rules of EU law which produced her Zambrano carer status. Unless allocations are “manifestly without reasonable foundation”, the ECtHR accepts that national authorities primarily control the allocation of public funds in the social security context. Because “benefits tourism” and the burden on the state must be reduced, like Arden LJ it was “impossible” for Lord Carnwath to hold that the objectives underpinning the regulations fell outside the wide margin of discretion allowed to national governments in this field.

(iii) Children Act 1989

The government’s response to the Zambrano principle relied on section 17 which binds local authorities to promote children’s welfare and, consonant with the duty, promotes their upbringing by their families. Ryder LJ addressed the scope of the duty in R (C) [2016] EWCA Civ 707 and rejected the idea that it was unlawful for the local authority to set financial support by reference to levels of child benefit, or to amounts paid to asylum-seekers, rather than assessing their actual needs. The duty intends to cover a wide range of circumstances.

In HC’s case the duty arose from a responsibility established by EU law but Lord Carnwath held that the allocation of that responsibility, as between central and local government, is a matter of domestic law only. Yet, even as a national responsibility, the importance of the duty remains undiminished. Overall, since judicial review is a “backstop”, Lord Carnwath concurred with Lady Hale’s analysis that consistency of approach between local authorities is clearly desirable and the legislation allows for the provision of national guidance for the duty to be discharged.

(iv) Lady Hale

Gravitating towards a more child-focussed approach, her Ladyship’s judgment struck a more philosophical chord than Lord Carnwath’s mechanical dissection of pure law. Rather than adults’ rights, two very young British children’s rights hung in the balance. Being with their mother and having a home were central to remaining in their own country but its officials were more preoccupied with marginalising them by relegating the status of Zambrano carers to that of mere third country nationals. Equally, the misconception was exposed by the fact that the tremors caused by the Zambrano judgment resulted in the amendment of the Immigration (European Economic Area) Regulations 2006 in order to give Zambrano carers the right to live and work in the UK. Somewhat puzzled by the contradictions in the official narrative, Lady Hale observed:

41. Yet Zambrano carers are not like any other third country nationals. They have British (or other EU citizen) children dependent upon them.

Purported official consultations were inadequate and uncertainty loomed over whether central or local government actually realised that section 17 was the only means for these children to escape destitution. It was not meant to be a long-term substitute for social housing or means-tested benefits. But conveniently in its present form section 17 enables local authorities to provide services such as “accommodation and giving assistance in kind or in cash”. Advantages and disadvantages accompany the flexible provision.

Advantageously, any services provided can be modified to fit the needs of the particular child or family and can supplement, indeed enhance, benefits and services available under alternative legislation. Conversely, in comparison with the benefits and services denied to HC’s children, numerous disadvantages emerged. First, statute allows the local authority to judge when a child is “in need”. Second, the provision of services is discretionary and the statutory duty is a “target duty” rather than a duty owed to any individual child. Third, the absence of standard rates for cash assistance results in risk of inconsistency between authorities. Fourth, cash assistance does not automatically result in entitlement to other assistance, such as free school meals, to which receipt of certain benefits is a passport. Fifth, the local authority’s decision can only be challenged by judicial review which is costly and narrow and is a poor replacement for an appeal to the First-tier Tribunal (Social Entitlement Chamber). Furthermore, the short-term nature of section 17 was further illustrated by the fact that HC’s annual package for accommodation, food and utilities was approximately £11,368.76 and the local authority’s annual budget for section 17 support was £12,000.

To resolve legal problems, in reviewing the situation since 2013, in keeping with the various statutory duties owed under section 17, section 11 of the Children Act 2004 and section 175 of the Education Act 2002, the local authority must consider (i) the need to promote actively the welfare of the children, (ii) the fact that these children are British, with the right to remain here for the rest of their lives, and (iii) the impact on the proper development of the children which would occur if they were denied a level of support equivalent to their peers which is fixed closer to subsistence rather than being designed to lift children out of poverty.

Without the fallback of section 17, EU law would be left unimplemented. However, the administration of the provision bridged the gap by allowing the children of Zambrano carers to remain in the UK. Her Ladyship opined that if the CFR applied to section 17’s administration, then the possibility arose that the contextual discrimination against these children might fall within article 21. In that scenario, the present justifications would be unimpressive because they were aimed at third country national parents rather than British children.

Particularly, the aim of strengthening immigration control was irrelevant as the children were British and thus had the greatest connection with the UK for the allocation of benefits. The economic aim of saving money was flimsy because responsibility was transferred from one part of government to another. However, section 17 served to provide these children with what they need and deserve. Overall, whilst the search for superior alternatives was desirable, that fact alone did not put the UK in breach of EU law. Consequently, there was no need for a reference to the CJEU. Albeit somewhat reluctantly, Lady Hale agreed that the appeal had to be dismissed.

Comment

This decision was recently applied in Patel [2017] EWCA Civ 2028, where among other things the decision in Chavez-Vilchez (C-133/15, EU:C:2017:354, see here) was held not to alter the Zambrano doctrine and merely served as a reminder that the Zambrano principle had to be carefully applied focussing on whether the EU citizen child or dependant could remain in the UK in practice rather than in legal theory. The Court of Appeal held that Chavez-Vilchez does not symbolise “any kind of sea-change to the fundamental approach to be taken” and does not diminish the authority of cases such as Harrison and HC’s case which implement Zambrano but pre-date Chavez-Vilchez.

In particular, Irwin LJ used Lord Carnwath’s conclusion on the correctness of Harrison to justify his own approach that the Zambrano principle could not be regarded as a back-door route to residence by non-EU citizen parents. The upshot is that marriage to a British citizen is not an automatic passport for the spouse to remain in the UK. Those without leave to remain who marry a British citizen and have children do so at the risk that they might be compelled to leave the country. Such developments only reconfirm the narrow nature of the substance of rights test. Even so, Lord Carnwath acknowledged that had the CFR been held to apply interesting questions would have arisen under article 21. After all, as Martijn van den Brink has pointed out: “The true importance of the test is not what it has changed so far, but its potential to effect further change.”