In this blog post, Reuben Andrews of Monckton Chambers discusses pre-settled status and welfare benefits.
Entitlement to certain welfare benefits (including, Universal Credit, Pension Credit, Child Benefit, and social housing and homelessness assistance) is dependent upon inter alia a prospective claimant exercising a qualifying right to reside in the UK.
After 31 December 2020 (Implementation Period Completion Day (“IPCD”)), one way that EU nationals present can reside lawfully in the UK is by possessing pre-settled status (“PSS”) under the EU Settlement Scheme (“EUSS”), which confers limited leave to remain in the UK. This blog post considers the position of EU nationals with PSS seeking to claim the above-mentioned welfare benefits post-IPCD.
The issue has been the subject of multiple cases (including the recent case of Fertre v Vale of White Horse District Council [2025] EWCA Civ 1057 (“Fertre”). Taken together, these cases establish a set of core principles while raising further questions.
Background
In general, an EU national seeking to claim welfare benefits in the UK before IPCD would had to have: (i) resided in the UK for more than three months, and been economically active or self-sufficient; or (ii) resided lawfully in the UK for five years.
A more detailed, but still simplified, explanation of this situation is as follows.
First, the right of EU nationals to move and reside freely within the EU (Art. 21(1) Treaty on the Functioning of the European Union (“TFEU”)) is subject to the limitations and conditions laid down in inter alia Directive 2004/38, the Citizens’ Rights Directive (“CRD”). As such, there are, broadly, three rights of residence that could be obtained by EU nationals residing in the UK (Art. 14 CRD):
- An initial right to reside for up to three months (Art. 6(1) CRD), provided the EU national does not become “an unreasonable burden on the social assistance system of the host Member State” (Art. 14(1) CRD).
- A conditional right to reside after three months (Art. 7(1) CRD). The conditions are, broadly, that an EU national must be either: (i) economically active (or retains such status under Art. 7(3) CRD); (ii) in possession of comprehensive sickness insurance (“CSI”) and self-sufficient; or (iii) certain family members of an EU national who meets either of the prior conditions (even if those family members are not an EU national; Art. 7(2) CRD).
- A permanent right to reside after lawful residence in the Member State for a continuous period of five years (Art. 16(1) CRD).
Secondly, as a result of the right to equal treatment set out in Art. 24(1) CRD, an EU national residing in a Member State will be entitled to equal access to welfare benefits, but only if they have a right of residence under the CRD (Case C-333/13 Dano v Jobcentre Leipzig EU:C:2014:2358, §69). However, there is a derogation set out in Art. 24(2) CRD for EU nationals residing under Art. 6 CRD. Although Member States could voluntarily extend equal access to welfare benefits to such EU nationals under Art. 37 CRD, UK welfare benefits excluded such EU nationals.
After IPCD, EU law ceased to have effect in the UK, except in the case of inter alia provisions of EU law given effect in domestic law through the Withdrawal Agreement (“WA”). For EU nationals arriving in the UK post-IPCD, therefore, the UK’s ordinary immigration rules apply. For EU nationals who arrived in the UK before IPCD, however, the picture is as follows.
First, such EU nationals could apply to the EUSS between 30 March 2019 and 30 June 2021 (except in the case of late applications with “reasonable grounds” for missing the deadline). The only requirement was to have been physically present in the UK before IPCD – an applicant does not have to have satisfied the CRD. If successful, an applicant was granted one of two immigration statuses:
- Settled Status. Applicants to the EUSS who had lived in the UK continuously for five years or longer were granted settled status. Settled Status confers indefinite leave to remain in the UK.
- Pre-settled Status. Applicants to the EUSS who had lived in the UK continuously for less than five years were granted PSS. PSS confers a limited right to remain in the UK for five years, after which point an applicant can be granted settled status provided certain requirements are met.
Secondly, Title II of Part Two of the WA retains the rights of residence set out in Art. 21 TFEU and the CRD (Art. 13 WA), and contains a right to equal treatment substantially identical to Art. 24 CRD for those residing in the UK “on the basis of” the WA (Art. 23 WA). In order to access these rights, an EU national must:
- have successfully applied to the EUSS. This is because the EUSS is the mechanism by which the UK has implemented Art. 18(1) WA, which allows the UK to require relevant EU Nationals to “apply for a new residence status which confers the rights under [Title II of Part Two of the WA]”.
- fall within the personal scope of Part Two of the WA. The classes of persons within the personal scope are set out at Art. 10(1) WA. For our purposes, the most important class of persons is that at Art. 10(1)(a) WA, which includes EU nationals who have: (i) “exercised their right to reside in the United Kingdom in accordance with Union law before [IPCD]” and(ii)“continue[d] to reside [in the UK] thereafter” (Art. 10(1)(a) WA).
Although waiving the requirements of the CRD for the grant of PSS appears generous, the UK government quickly amended certain welfare benefits regulations to ensure that EU nationals with limited leave to remain under PSS, but who did not meet the more demanding criteria in the WA (i.e., the retained CRD conditions), would not have qualifying rights of residence in respect of certain welfare benefits – for instance, Universal Credit (The Social Security (Income-related Benefits) (Updating and Amendment) (EU Exit) Regulations 2019).
The bifurcation of rights operates in spite of the fact that both cohorts of EU nationals – (i) those who have PSS only and (ii) those who have PSS and who meet the retained CRD conditions – received identical documentation telling them that their EUSS application was successful. Crucially, this documentation did not allude to any differences in these cohorts’ entitlement to state support. The legality of this two-tier system of residence rights is the subject of subsequent case-law.
Case-law pre-Fertre
In Case C-709/20 CG v Department for Communities in Northern Ireland EU:C:2021:602 (“CG”), a pre-IPCD case, the Court of Justice of the European Union (“CJEU”) considered whether the exclusion of EU nationals with only PSS from Universal Credit is compatible with Art. 18 TFEU (which prohibits nationality-based discrimination):
The CJEU found against the claimant, holding that she could not rely upon Art. 18 TFEU, because: Art. 18 TFEU can only be relied upon in the absence of more specific rules of EU law in respect of non-discrimination; and Art. 24 CRD constitutes a more specific rule (§§63-66). As such, the correct non-discrimination right was Art. 24 CRD. However, the Court held that the claimant could not rely on Art. 24 CRD in practice because Art. 24(1) CRD only applies to EU nationals residing in host Member States “on the basis of” the CRD. However: she did not meet the conditions of Art. 7 CRD (§§76-80); and (ii) a person residing under the limited leave to remain conferred by PSS is not residing “on the basis of” the CRD, because the requirements of PSS are more generous than the requirements of the CRD (and so PSS is a rule of domestic law, and not of EU law) (§§81-83).
Despite this, given that the claimant in this case would have been made destitute had she not been granted Universal Credit, the CJEU took it upon itself to consider the role of the Charter of Fundamental Rights of the European Union (“Charter”). The CJEU stated that: (i) in granting limited leave to remain under PSS, the UK recognised the right of EU nationals to move and reside freely within the EU under Art. 21(1) TFEU; and (ii) therefore, the grant of limited leave to remain under PSS constitutes an implementation of the TFEU, such that the UK is obliged to comply with the Charter when making decisions within the scope of that implementation (e.g., when deciding an application for social assistance made by an EU national with PSS) (§§87-88).
As such, before refusing social assistance to those in the claimant’s position, the UK government must first ensure that that relevant EU national’s Charter rights would not be placed at risk by such a refusal. The CJEU raised the following three specific rights: (i) Art. 1 Charter (the obligation to respect and protect human dignity); (ii) Art. 7 Charter (the right to respect for one private and family life); and (iii) Art. 24 Charter (the right of children, including the right to the protection and care which is necessary for their well-being) (§§89-92).
The timing of the decision in CG meant that it pre-determined the Supreme Court’s decision on an identical question in Fratila v Secretary of State for Work and Pensions [2021] UKSC 53 (where the Court of Appeal had previously found that the two-tier system of residence rights was in breach of Art. 18 TFEU). However, although CG was adopted by the UK judicial system, it was not adopted by the UK government, which appeared to ignore the need to consider the Charter when refusing access to welfare benefits to those with PSS.
In Secretary of State for Work and Pensions v AT [2023] EWCA Civ 1307 (“AT”) (a case previously discussed by Clíodhna Kelleher on this blog), the Court of Appeal rejected the UK government’s arguments that: (i) the Charter obligations discussed in CG only applied pre-IPCD; and (ii) that, if the obligations continued to apply, they required, effectively, no action from the UK government. Importantly, it held that the WA incorporates the right to move and reside freely within the EU under Art. 21 TFEU (via Art. 13 WA) (§94), and that this right of residence, which engages the Charter, “pre-dated but also subsists beyond the transition period” (§§97-99). In other words, EU nationals with PSS only can continue to rely on the Charter protections outlined in CG.
Fertre
CG and AT left open a number of questions. First, if EU nationals with PSS have a subsisting right to reside under Art. 21 TFEU (CG), which is retained in / protected by the WA (AT), can EU nationals with PSS but no other rights under the WA rely on the right to equal treatment under Art. 23 WA in order to access to welfare benefits? Secondly, does PSS itself not grant a right of residence under the WA, given that it is meant to be the access route to the WA (and the EUSS was created to implement Art. 18(1) WA)?
These questions were considered in Fertre in the context of the exclusion of EU nationals with PSS only from housing assistance. The appellant made three arguments, all of which were rejected by the Court of Appeal.
First, the appellant argued that an EU national with PSS who did not meet the conditions of the CRD nonetheless has a right to reside under Art. 13(1), because: (i) Art. 13(4) WA permits the limitations and conditions set out in Art. 13(1) WA to be altered in favour of EU nationals; and (ii) the UK government had effectively used this discretion by creating PSS and choosing to implement more generous eligibility criteria than required by the WA (§§86-87). The Court of Appeal did not agree. It considered that the discretion set out Art. 13(4) WA was intended to deal with edge-cases, and did not function as a wide-scale exception to the requirement to comply with the CRD enshrined in Art. 13(1) WA (§§92-93, §98).
The Court of Appeal also rejected the appellant’s reliance on AT. Although the Court of Appeal endorsed AT, it distinguished that case on the basis that AT concerned rights under the Charter and not rights of residence under the CRD (§§88-89). In essence, therefore, the Court of Appeal held that the continuing Art. 21 TFEU right recognised in CG does not confer any enforceable rights of residence under the WA, even if it does confer protection under the Charter.
Secondly, the appellant relied on Art. 18(1) WA, which permits the UK to create “a new residence status which confers the rights under [Title II of Part Two of the WA]”. The appellant argued that since the EUSS was created pursuant to Art. 18(1) WA, PSS is therefore a “new residence status which confers” the relevant rights of residence on EU nationals (§101). The Court of Appeal instead found that Art. 18(1) WA is a purely administrative provision dealing with the grant of an immigration status, PSS. PSS is therefore a gateway to, but not tantamount to, the conferral of rights under the WA (§111, §§113-116).
Thirdly, the appellant argued that the requirement to “resid[e] on the basis of this Agreement” in order to enjoy the right of equal treatment under Art. 23 WA should be interpreted to include those residing in the UK on the basis of PSS (§118). Although the Court of Appeal went on to discuss numerous aspects with this claim, its primary argument was that because it had already found that those residing in the UK solely on the basis of PSS were not residing in the UK on the basis of the WA, the appellant’s arguments under Art. 23 WA could not succeed (§120).
The Court of Appeal’s decision, which entrenches the separation between EU nationals with PSS and those with enforceable rights of residence under the WA, raises a further question: is it possible for EU nationals to have PSS, but to nonetheless fall outside of the personal scope of the WA? If so, what rights do such EU nationals have?
The logical conclusion of Fertre is that such a group of EU nationals does exist. While the EUSS implements Art. 18(1) WA, the terms for granting PSS are wider than the terms set out in Art. 10 WA. In theory, therefore, PSS can be granted to those who do not satisfy the criteria of Art. 10 WA. Following Fertre the more generous domestic implementation of Art. 18(1) WA cannot unilaterally change the change the criteria for Art. 10 WA (Fertre, §96). In other words, the personal scope set out under Art. 10 WA remains more restrictive than the grant of PSS.
This question has practical value because, the position of the Department for Work & Pensions (“DWP”), is that it is possible for EU nationals who have PSS to fall outside the personal scope of the WA, and that such EU nationals cannot rely on the Charter (ADM 06/24, §12). This is presumably because, following AT, the Charter is retained in Art. 13 WA, which is within Title II to Part Two of the WA.
Although Clause 42 of the Border Security, Asylum and Immigration Bill, if passed, will permit EU nationals with PSS to be able to enforce the rights set out in the WA regardless of whether they fall within Art. 10 WA, for cases before the Bill is passed, it seems doubtful that an individual with PSS would fall outside of Art. 10 WA for the following reasons.
The vast majority of EU nationals with PSS will satisfy the first aspect of Art. 10(1)(a) WA (to have “exercised their right to reside in the United Kingdom in accordance with Union law before [IPCD]”) because, by virtue of Art. 6 CRD, such EU nationals would have enjoyed an initial right to reside in the UK for three months upon entry. Only those who lacked a valid identity card or passport would fail to satisfy this criterion.
The second aspect of Art. 10(1)(a) WA – to continue to reside in the UK after having exercised an EU law right of residence – is more ambiguous. On the plain wording, all that is required is for an EU national to actually reside in the UK, regardless of whether doing so was “in accordance with Union law”. It may be the case that the DWP is applying a different interpretation; namely, that the continued residence must be on the basis of the right of residence required of the first aspect of Art. 10(1)(a) WA.
However, such an interpretation involves inserting words into Art. 10(1)(a) WA that result in draconian consequences. For instance, someone who inadvertently loses their right of residence under the CRD just prior to IPCD (e.g., a previously self-sufficient person who suffers financial downturn due to unexpected circumstances) would be locked out of accessing the whole of the WA, even though they remain factually resident in the UK, and the UK has taken no steps to remove them.
The plain wording interpretation avoids these situations, and does not involve inserting words into Art. 10(1)(a) WA. It also reflects the situation before and after IPCD: in both of these periods, losing a right of residence is not permanent, provided the EU national in question resumes compliance with Art. 7 CRD. Under the DWP’s interpretation, therefore, an EU national who ceased to be self-sufficient on 1 December 2020 would be within the personal scope if they got a job before 31 December 2020, but not if they got a job on 1 January 2021. Even though an EU national who ceased to be self-sufficient and gained a job wholly after IPCD would remain in the personal scope of the withdrawal agreement.
In the event that the narrower interpretation of Art. 10(1)(a) WA prevails, there is a respectable argument that the effect of CG at §§87-88 is that an EU national residing in the UK prior to IPCD, who has been granted PSS but who does not comply with the CRD, nevertheless exercises a right to reside “in accordance with Union law” because PSS necessarily recognises and implements Art. 21(1) TFEU (on the basis that the wording “in accordance with” is more permissive then the wording “on the basis of”).
Conclusion
In summary, the current case-law divides EU nationals into roughly three groups.
First, EU nationals with PSS who satisfy Art. 13(1) WA (including, therefore, the requirements of the CRD) will have a valid right of residence in respect of welfare benefits. This requires an EU national to either be: (i) economically active; or (ii) self-sufficient and in possession of CSI. In practice, however:
- The operative question for those who are not economically active is whether they are self-sufficient. This is because the CJEU has now confirmed that a person possesses CSI if they are eligible for NHS treatment (Case C‑247/20 VI v HMRC EU:C:2022:177, §69), and this result has been applied domestically (see, Secretary of State for Work and Pensions v VB and AD [2024] UKUT 212 (AAC), §52 (“VB”)).
- If an EU national who is not economically active is self-sufficient, they will fall within Art. 13 WA and can theoretically claim welfare benefits. However, the Catch-22 is that if they need to claim welfare benefits, there will be a question about their self-sufficiency (albeit, it does not follow that a previously self-sufficient EU national who claims social assistance must, by virtue of doing so, cease to be self-sufficient: VB §55). This is the same difficulty that faced EU nationals pre-IPCD.
Secondly, EU nationals with PSS who do not satisfy Art. 13 WA will only be able to access welfare benefits if the refusal of such benefits would result in an “actual and current risk of violation” to their Charter rights.
The obligation on the UK government is to prevent an “actual and current risk of violation of their fundamental rights” – as such, the obligation arises before an EU national is destitute (AT, §154). Once the risk arises redress must be immediate: it is not averted by the possibility of other welfare benefits (unless those benefits are immediately available), or by a right to challenge the decision refusing social assistance (AT, §§156-157). The Upper Tribunal judgment in AT suggests that an ability to work will prevent there being any actual and current risk of violation (Secretary of State for Work and Pensions v AT [2022] UKUT 330 (AAC), §117).
In AT, the Court of Appeal held that the facts of CG provide the “benchmark against which Article 1 [Charter] is to be applied” (AT, §113, §175). CG and AT both involve women with a young child or children, who following incidents of domestic violence incident move to women’s refuges and are left without resources to provide for the basic needs of themselves and their children (AT, §§7-9, §64). Only those in comparably undignified circumstances – having regard to their inability to meet basic needs for food, housing (and heating), clothing, and hygiene – can rely on the Charter.
Although CG and AT concern Universal Credit, there is no reason in principle why the Charter could not be relied upon where other welfare benefits are refused – for instance, social housing and homelessness assistance. Given the basic needs set out in AT, it may be the case that those seeking homelessness assistance would be particularly able to show that, at the least, they are unable to access housing, heating and hygiene.
While an EU national in this situation will likely also be able to rely on Art. 3 of the European Convention on Human Rights (“ECHR”) (see, e.g., R (Limbuela) v Secretary of State for the Home Department [2005] UKHL 66), AT makes clear that Art. 1 Charter is not co-extensive with Art. 3 ECHR. However, the Court of Appeal also: (i) recognised that in many cases (including AT) there will be significant overlap between the two rights (AT, §§112-113); and (ii) declined to rule on whether, and to what extent, there is “any daylight” between the two rights (AT, §179) (albeit, it acknowledged that the threshold for Art. 1 Charter might be lower than that of Art. 3 ECHR; AT, §128(v)). Thus, the full breadth of this distinction is yet to be understood.
Thirdly, EU nationals without PSS (or settled status) and without rights under the WA (e.g., those who arrived in the UK post-IPCD) will not be able to access welfare benefits. Such EU nationals will likely have no recourse to public funds.
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