CA-2024-001773 - [2025] EWCA Civ 1057

Rights of Residence under EU law

EU law was capable of having direct effect in the UK prior to 1 January 2021. Rights of residence under EU law derive from the Treaty on the Functioning of the European Union (“TFEU”) and more particularly from the Citizens’ Rights Directive, 2004/38/EC of 29 April 2004 (the “CRD”). To explain the nature and extent of the rights of EU citizens to reside in another Member State under EU law, it is necessary to consider four key authorities of the CJEU from which a number of propositions can be drawn.

TFEU

Article 18 of the TFEU prohibits discrimination on grounds of nationality. Article 21 provides for the right of free movement in the following terms:

Every citizen of the Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect.”

Article 45 explains the right of free movement as entailing the right subject to limitations to move freely within the territory of Member States, to accept offers of employment and to stay in a Member State for the purpose of employment in accordance with provisions governing the employment of nationals of that State.

Citizens’ Rights Directive

The CRD was a consolidating directive which was intended to codify and review the existing provisions relating to the right of free movement and residence (recital 3); union citizens should have the right of residence not exceeding three months without being subject to any conditions or formalities (recital 9), but persons exercising their right of residence should not become an unreasonable burden on the social assistance system of the host Member State and the right of residence for EU citizens and their family members in excess of three months should be subject to conditions (recital 10) and it is for the State to decide whether to grant social assistance during the first three months of residence (recital 21). The Charter of Fundamental Rights of the EU was respected and observed by the CRD (recital 31).

The object of the CRD was to lay down the conditions governing the right of free movement and residence, including the limits placed on that right on grounds of public policy, public security and public health (Article 1). Member States were required to grant leave to enter their territory to EU citizens and family members (Article 5).

Article 6 conferred the right of residence for up to three months:

Union citizens shall have the right of residence on the territory of another Member State for a period of up to three months without any conditions or any formalities other than the requirement to hold a valid identity card or passport.

The provisions of paragraph 1 shall also apply to family members in possession of a valid passport who are not nationals of a Member State, accompanying or joining the Union citizen.”

Article 7 dealt with residence for more than three months. This was subject to conditions that broadly required the person to be economically active, a student with insurance or former workers who retain that status on various grounds, or family member of such a person, to have a right to reside. This is the full text of Article 7:

All Union citizens shall have the right of residence on the territory of another Member State for a period of longer than three months if they:

are workers or self-employed persons in the host Member State; or

have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State; or

— are enrolled at a private or public establishment, accredited or financed by the host Member State on the basis of its legislation or administrative practice, for the principal purpose of following a course of study, including vocational training; and

— have comprehensive sickness insurance cover in the host Member State and assure the relevant national authority, by means of a declaration or by such equivalent means as they may choose, that they have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence; or

are family members accompanying or joining a Union citizen who satisfies the conditions referred to in points (a), (b) or (c).

The right of residence provided for in paragraph 1 shall extend to family members who are not nationals of a Member State, accompanying or joining the Union citizen in the host Member State, provided that such Union citizen satisfies the conditions referred to in paragraph 1(a), (b) or (c).

For the purposes of paragraph 1(a), a Union citizen who is no longer a worker or self-employed person shall retain the status of worker or self-employed person in the following circumstances:

he/she is temporarily unable to work as the result of an illness or accident;

he/she is in duly recorded involuntary unemployment after having been employed for more than one year and has registered as a job-seeker with the relevant employment office;

he/she is in duly recorded involuntary unemployment after completing a fixed-term employment contract of less than a year or after having become involuntarily unemployed during the first twelve months and has registered as a job-seeker with the relevant employment office. In this case, the status of worker shall be retained for no less than six months.

he/she embarks on vocational training. Unless he/she is involuntarily unemployed, the retention of the status of worker shall require the training to be related to the previous employment.

By way of derogation from paragraphs 1(d) and 2 above, only the spouse, the registered partner provided for in Article 2(2)(b) and dependent children shall have the right of residence as family members of a Union citizen meeting the conditions under 1(c) above. Article 3(2) shall apply to his/her dependent direct relatives in the ascending lines and those of his/her spouse or registered partner.”

Article 8 permitted the host state to require EU citizens to register with the relevant authorities for periods of residence longer than three months.

Article 14 defined the right of residence, in the following terms:

Union citizens and their family members shall have the right of residence provided for in Article 6, as long as they do not become an unreasonable burden on the social assistance system of the host Member State.

Union citizens and their family members shall have the right of residence provided for in Articles 7, 12 and 13 as long as they meet the conditions set out therein.

An expulsion measure shall not be the automatic consequence of a Union citizen's or his or her family member's recourse to the social assistance system of the host Member State.

By way of derogation from paragraphs 1 and 2 and without prejudice to the provisions of Chapter VI, an expulsion measure may in no case be adopted against Union citizens or their family members if:

the Union citizens are workers or self-employed persons, or

the Union citizens entered the territory of the host Member State in order to seek employment. In this case, the Union citizens and their family members may not be expelled for as long as the Union citizens can provide evidence that they are continuing to seek employment and that they have a genuine chance of being engaged.”

Article 16 established the general rule that EU citizens would have a right of permanent residence in a Member State after residing in that State for a continuous period of 5 years.

Article 24 contained the right of equal treatment, including a derogation from that right in relation to a Member State’s provision of social assistance and maintenance aid for studies:

Subject to such specific provisions as are expressly provided for in the [TFEU] and secondary law, all Union citizens residing on the basis of this Directive in the territory of the host Member State shall enjoy equal treatment with the nationals of that Member State within the scope of the Treaty. The benefit of this right shall be extended to family members who are not nationals of a Member State and who have the right of residence or permanent residence.

By way of derogation from paragraph 1, the host Member State shall not be obliged to confer entitlement to social assistance during the first three months of residence … nor shall it be obliged, prior to acquisition of the right of permanent residence, to grant maintenance aid for studies, including vocational training, consisting in student grants or student loans to persons other than workers, self-employed persons, persons who retain such status and members of their families.”

Article 37 permitted Member States to retain laws, regulations or administrative provisions which were more favourable to persons covered by the Directive.

Key Authorities on the CRD

The Court was taken to four cases where the CJEU has considered the meaning and scope of these instruments. The first was Cases C-424/10 and C-425/10 Ziolkowski v Land Berlin [2013] 3 CMLR 37. That case involved Polish nationals who had lived in Germany since the late 1980s (at a time when Poland was not a member of the EU). They had been granted humanitarian protection in Germany. In 2005, a year after Poland acceded to the EU, they applied for an extension of their right of residence, alternatively a right of permanent residence under EU law on the basis of continuous residence exceeding five years (relying on Article 16 of the CRD). That application was refused by the German authorities on grounds that the applicants were not economically active and were unable to support themselves. Following a series of appeals, the German court referred a question to the CJEU. That Court held that the concept of legal residence in Article 16 of the CRD meant a period of residence which complied with the conditions of Article 7 of the CRD (para 46). The existence of national provisions which were more favourable to the applicants by allowing them to reside in Germany even though they were not economically active was permitted by Article 37 of the CRD but did not form part of the system introduced by the CRD (paras 49-50). The conclusion (at para 51) was:

“In the light of the foregoing, the answer … is that art.16(1) of [the CRD] must be interpreted as meaning that a Union citizen who has been resident for more than five years in the territory of the host Member State on the sole basis of the national law of that Member State cannot be regarded as having acquired the right of permanent residence under that provision if, during that period of residence, he did not satisfy the conditions laid down in art.7(1) of the [CRD].”

The second case was Case C-333/13 Dano v Jobcentre Leipzig [2015] 1 CMLR 48. In that case, a Romanian national applied for basic jobseekers’ provision in Germany. There was no evidence that she had worked in Germany or Romania or ever sought a job in Germany. The authorities refused her application and the applicant appealed. The Leipzig court referred a question to the CJEU as to whether the refusal of benefits to this applicant was discriminatory by reference to Article 18 TFEU or Article 24 of the CRD, because such benefits would have been payable to German nationals in a similar situation. The Court noted that the principle of non-discrimination laid down generally in Article 18 TFEU was given “more specific expression” in Article 24 of the CRD (para 61), and that Article 24 was subject to a derogation in Article 24(2) (para 64). It followed that an EU citizen could claim equal treatment with nationals of a host Member State “only if his residence in the territory of the host Member State complies with the conditions of the [CRD]” (para 69). There was no obligation on a host Member State to confer entitlement to social benefits to a national of another Member State during the first three months of residence under Article 6 of the CRD (para 70), nor was there any obligation to confer entitlement to such a person who resided for longer than three months if they were not during that time complying with the conditions of Article 7 CRD (paras 71, 73). The CRD distinguishes between those who are working and those who are not (para 75). It was therefore permissible for Germany to refuse social benefits to economically inactive EU citizens who had exercised their right of free movement but who lacked sufficient resources to claim a right of residence (para 78). The unequal treatment between such EU citizens and nationals of the host Member State was recognised by (and was the “inevitable consequence of”) the CRD (para 77):

“As the Advocate General has observed … any unequal treatment between Union citizens who have made use of their freedom of movement and residence and nationals of the host Member State with regard to the grant of social benefits is an inevitable consequence of [the CRD]. Such potential unequal treatment is founded on the link established by the Union legislature in art.7 of the Directive between the requirement to have sufficient resources as a condition for residence and the concern not to create a burden on the social assistance systems of the Member States”

The Court’s conclusion was that Germany was entitled to refuse social benefits to this applicant, who was economically inactive (para 82).

The third case is Case C-67/14 Jobcenter Berlin Neukölln v Alimanovic [2016] 2 WLR 208. That case concerned Swedish nationals who came to Germany. They originally found work but that lasted for less than a year. They continued looking for work and were paid benefits by the German state. Those benefits were withdrawn after they had been unemployed for more than six months. The applicants successfully appealed but on further appeal by the German state authorities, a question was referred to the CJEU. The Court recognised that an EU citizen could only claim equal treatment with nationals of the host Member State under Article 24 of the CRD if their residence in the territory of the host Member State complied with the conditions of the CRD (para 49). That limitation on the rights of EU citizens was consistent with the objective that EU citizens who are nationals of another Member State should not become an unreasonable burden on the social assistance system of the host Member State (paras 50 and 62). Germany was entitled to refuse social assistance to the applicant and others in her position, consistently with the derogation in Article 24(2) (para 63).

The fourth case is Case C-709/20 CG v Department for Communities in Northern Ireland [2021] 1 WLR 5919. The applicant had dual Croatian and Netherlands nationality. She moved to Northern Ireland. On 4 June 2020 she obtained PSS. She never carried out any economic activity in the UK and lived with her partner in Northern Ireland until she moved to a women’s refuge. She had no resources to support herself or her children. On 8 June 2020, she applied for Universal Credit but her application was refused on the basis of regulation 9(3)(d)(i) of the Universal Credit (Northern Ireland) Regulations 2016 which treated those who had limited leave to remain in the EU by virtue of Appendix EU as persons who did not have a right to reside in and were not habitually resident in the UK. She appealed to the tribunal. She relied on Article 18 TFEU to contend that reg 9(3)(d)(i) was discriminatory. The tribunal referred a question to the CJEU. The reference was made on 30 December 2020, during the transition period when the CJEU retained jurisdiction (see the Court’s analysis at paras 45-52 and 59).

The Court held that the applicant, an EU citizen, was resident in the UK on the basis of national law (para 56). She had moved to the UK in exercise of her right of free movement (para 57) and was “within the scope” of EU law (para 58) and was entitled to rely on Article 21 of the TFEU (right of free movement) (para 58). She was also entitled “in principle” to rely on Article 18 TFEU (non-discrimination) (para 64), but the principle of non-discrimination was given specific expression in Article 24 of the CRD in relation to EU citizens who exercise their right to move and reside within the territory of other Member States (para 66) and the question of discrimination in her case had to be addressed by reference to Article 24 of the CRD (paras 67 and 72). Universal Credit was to be categorised as “social assistance” within the meaning of Article 24(2) of the CRD (para 71). Because the applicant had been resident in the UK for more than three months, was economically inactive and lacked sufficient resources to support herself, she did not meet the conditions laid down in Article 7 of the CRD (para 76). It followed that the UK was entitled to refuse to grant her social benefits (para 78) and she was not entitled to rely on the principle of non-discrimination in Article 24(1) of the CRD (para 80). Further, the applicant’s right of temporary residence was granted under national law and without conditions as to resources; given that this was a matter of national law, she could not invoke the principle of non-discrimination in EU law (para 81); the domestic provisions were more generous than was required under EU law, which was permitted by Article 37 of the CRD (para 82), but that more generous grant was not “on the basis of” the CRD and those rights were not incorporated into the scheme of the Directive (para 83).

Given the importance of CG to the arguments advanced in this appeal, I cite paragraphs 81 - 83 in full:

… CG has a right of temporary residence, under national law, which was granted without conditions as to resources. If an economically inactive Union citizen who does not have sufficient resources and resides in the host member state without satisfying the requirements laid down in [the CRD] could rely on the principle of non-discrimination set out in article 24(1) of that Directive, he or she would enjoy broader protection than he or she would have enjoyed under the provisions of that Directive, under which that citizen would be refused a right of residence.

In addition, it must indeed be noted that national provisions which, like the provisions at issue in the dispute in the main proceedings, grant a right of residence to a Union citizen, even where all the requirements laid down by [the CRD] for that purpose have not been met, fall within the scenario referred to in article 37 of that Directive, to the effect that that Directive does not preclude the law of the member states from establishing more favourable rules than those laid down by the provisions of that Directive.

Such a right of residence cannot however be regarded in any way as being granted “on the basis of” [the CRD] within the meaning of article 24(1) of that Directive. The court has held that the fact that national provisions concerning the right of residence of Union citizens, that are more favourable than those laid down in Directive 2004/38, are not to be affected does not in any way mean that such provisions must be incorporated into the system introduced by that Directive and it has concluded, in particular, that it is for each member state that has decided to adopt a system that is more favourable than that established by that Directive to specify the consequences of a right of residence granted on the basis of national law alone (Ziolkowski v Land Berlin (Joined Cases C-424/10 and C-425/10) [2011] ECR I-14035; [2014] All ER (EC) 314, paras 49 and 50).”

In maintaining more favourable rules, the Member State was not implementing the CRD but was recognising the right of an EU national to reside pursuant to Article 21 of the TFEU (the right of free movement) (para 87). That was an implementation of rights under the TFEU which meant that Member States were obliged to comply with the provisions of the Charter of Fundamental Rights of the EU (2000 C 384/01, the “Charter”) (para 88). The national authorities were therefore required to check that a refusal to grant benefits to an EU citizen who was legally residing on the basis of national law in that State did not violate that person’s fundamental rights as enshrined in the Charter (para 93).

Propositions drawn from the cases

I draw the following propositions, relevant to this appeal, from those cases:

An EU citizen can claim equal treatment in respect of social assistance only if his or her residence in the host Member State complies with the terms of the CRD; the principle of non-discrimination in the TFEU is given more specific expression in Article 24 of the CRD (Dano, CG).

A distinction is to be drawn between national rules and EU law rules of residence (Ziolowski, Dano, CG).

National rules can be more generous than the EU law system, but if a Member State introduces a national rule that is more generous, that rule remains a rule of domestic law and is not imported into EU law (Ziolowski, CG).

PSS is a more generous rule than the CRD requires, because the grant of PSS is not dependent on the applicant having sufficient resources to support themselves; PSS is a domestic law rule; the grant of PSS is not “on the basis of” the CRD (CG).

Member States are entitled to refuse social benefits to economically inactive EU citizens who have exercised their right of free movement to live in that Member State, but who do not have a right of residence under Article 7 of the CRD because they are not complying with its conditions (Dano, CG).

Such a refusal is not prohibited in EU law, even though the treatment is not equal as between EU citizens and nationals of the Member State in a similar situation (Dano, Alimanovic, CG).

Where a Member State has implemented a more generous rule, it is obliged to respect the Charter, ensuring that the fundamental rights of those who benefit from the more generous rule are not violated by the refusal of social benefits (CG).