After several formal and informal contacts between the European Commission and the UK authorities, the commission has decided to refer the United Kingdom to the EU Court of Justice because, in breach of EU law, it failed to apply the habitual “residence test” to EU nationals who reside in the UK and claim social security benefits. Instead, the UK applies a co-called “Right to Reside” test, as a result of which EU citizens cannot receive specific social security benefits to which they are entitled under EU law such as child benefit.
Under EU law, the social security benefits in question have to be granted to people from other EU member states on condition that their place of habitual residence is in the UK. This condition, and the criteria for the determination of habitual residence, were unanimously reaffirmed by member states at the EU level in 2009. According to this criteria, in order to be considered genuinely habitually resident in a member state, a person has to show that his or her habitual centre of interest is located there. The Commission considered that his criteria laid down by the EU law are strict enough and thus ensures that only those people who have actually moved their centre of interest to a member state are considered habitually resident there and no longer resident in the member state where they previously lived. A thorough and strict application of this criteria for determining habitual residence constitutes a powerful tool for member states to ensure that these social security benefits are only granted to those genuinely residing habitually within their territory.
The right to reside test is an additional condition for entitlement of the benefits in question which has been imposed unilaterally by the UK. UK nationals have a right to reside in the UK solely on the basis of the UK citizenship, whereas other EU nationals have to meet additional conditions in order to pass this right to reside test. This means that the UK discriminates unfairly against nationals from other member states. This contravenes EU Rules on the co-ordination of social security systems which outlaw direct and indirect discrimination in the field of access to social security benefits. The UK social security benefits concerned are Child Benefit, Child Tax Credits, Job Seekers Allowance (income based), State Pension Credit and Employment and Support allowance (income related).