MZ –v- Department for Social Development (IS) [2010] NICom 01
Decision No:  C13/07-08(IS)

SOCIAL SECURITY ADMINISTRATION (NORTHERN IRELAND) ACT 1992

SOCIAL SECURITY (NORTHERN IRELAND) ORDER 1998

INCOME SUPPORT

Appeal to a Social Security Commissioner
on a question of law from a Tribunal's decision
dated 10 January 2007 (arising out of a hearing held on 19 December 2006)

DECISION OF THE SOCIAL SECURITY COMMISSIONER

1.	This is an appeal by the claimant, with the leave of a Commissioner granted on 21 February 2008, disallowing an appeal from a decision-maker, to the effect that the claimant is not entitled to income support (IS) from and including 16 March 2006.  In light of the fact that circumstances have changed I have been informed that it is common case that the period that I am concerned about in this appeal is from 16 March 2006 until 5 February 2007.

2.	I arranged a hearing of the appeal at which the claimant, who was present, was represented by Mr Allamby, Solicitor, of the Law Centre (NI) while the Department was represented by Mr McNamara of Decision Making Services.  An interpreter was in attendance to ensure that the claimant could understand what was happening at the appeal hearing by translating the proceedings into Latvian (or Lettish).

3.	The claimant is a single man who is a Latvian national who came to Northern Ireland in July 2005.  He almost immediately commenced work as a share fisherman and worked in that capacity until November 2005.  As he was a share fisherman, his employment was in a self-employed capacity.  Accordingly his employment was not required to be registered under the Accession State Worker Registration Scheme.

4.	Unfortunately he was involved in a serious road traffic accident on 6 November 2005.  As a result of the accident he suffered a spinal cord injury and is now a tetraplegic, being paralysed from the chest downwards with limited movement of his arms and no movement in his hands.  On 16 March 2006, when the claimant was still in hospital, he claimed IS on the basis that he was incapable of work.  He informed the Department that he had arrived in the United Kingdom on 2 July 2005 to work as a share fisherman and that he planned to stay here permanently.  He also stated that he lived in rented accommodation with his sister and that he had a brother living in Londonderry.  In addition he stated that he had registered with a local doctor.

5.	His claim was disallowed on 23 June 2006 as the Department decided that, although he was actually habitually resident in the United Kingdom, he did not have a right to reside in the United Kingdom and was, therefore, a person from abroad with an applicable amount of nil.  Given his circumstances, he was only discharged from hospital to a nursing home in Crossmaglen, County Armagh in early October 2006.  He currently remains a wheelchair user.

6.	An appeal had been lodged on 11 July 2006.  The decision-maker, however, was not satisfied that the decision of 15 June 2006 was in fact a valid decision pursuant to Article 9 of the Social Security (Northern Ireland) Order 1998 and, therefore, a decision on the claim was made again on 2 October 2006.  The appeal ante-dates the decision-maker’s decision but there was no issue about the validity of the appeal in light of Commissioner’s decision R1/95(IS), at paragraph 6.

7.	The tribunal heard the appeal on 19 December 2006.  A decision notice dated 10 January 2007 was issued disallowing the appeal.  In addition written reasons were issued on 21 February 2007.  Leave to appeal was sought on behalf of the claimant but such leave was refused by the legally qualified member (LQM) on 20 March 2007.  However, following a direct application to a Commissioner, leave was granted on 21 February 2008 on the following grounds:

“It is arguable that the decision was wrong in law, in that,

(i)	the tribunal failed to apply the Immigration (European Economic Area) Regulations 2000 (SI 2000 No. 2326);

(ii)	the tribunal failed to apply regulation 21(3) of the Income Support (General) Regulations (Northern Ireland) 1987;

(iii)	the claimant/applicant might not have ceased to be “a qualified person” for the purpose of regulation 5(1) of the Immigration (European Economic Area) Regulations 2000 and might therefore have a right to reside for income support purposes.”

8.	At this stage of the decision it is helpful to set out the general tenor of the legislation either by setting it out verbatim (in comminuted form where appropriate) or summarizing it.

	The legislation that applied at the date of claim is as follows:
(i)	Section 123 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (the Act) sets out the general conditions of entitlement for income support.

(ii)	Section 131(2) of the Act provides that the power to prescribe applicable amounts for the purpose of calculating income support includes a power to prescribe a nil amount.

Paragraph 15 of Schedule 7 of the Income Support (General) Regulations (Northern Ireland) 1987 (the General Regulations) sets out that a “person from abroad” will be allocated a nil applicable amount.

(iii)	Regulation 21(3) of the General Regulations outlines the definition of a ‘person from abroad’.  It was amended from 1 May 2004 to introduce a right to reside test alongside the habitual residence test.  Regulation 21(3), in so far as it is relevant, is in the following terms:

	“21(3) Subject to paragraph … (3E), in Schedule 7— 
“person from abroad” means a claimant who is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland, but for this purpose no claimant shall be treated as not habitually resident in the United Kingdom who is — 

(a) a worker for the purposes of Council Regulation (EEC) No. 1612/68 or (EEC) No. 1251/70 or a person with a right to reside in the United Kingdom pursuant to Council Directive No. 68/360/EEC or No. 73/148/EEC or a person who is an accession State worker requiring registration who is treated as a worker for the purpose of the definition of ‘qualified person’ in regulation 5(1) of the Immigration (European Economic Area) Regulations 2000 pursuant to regulation 5 of the Accession (Immigration and Worker Registration) Regulations 2004;
…”
	The relevant 1 May 2004 amendment was inserted by a new 21(3E) which was in the following terms:
(3E) In paragraph (3), for the purposes of the definition of a person from abroad, no person shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland if he does not have a right to reside in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland.

(iv) Article 43 of the European Community Treaty provides for the right of establishment for the self-employed in the following terms:

“Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited.  Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.  Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 48, under the conditions laid down for its own nationals by the law of the contrary where such establishment is effected, subject to the provisions related to capital.”

(v)  Specific rights of residence for the self-employed and service providers are set out in Directive 73/148.  In particular, the Directive, in so far as it is relevant, is in the following terms:

“Article 1

The Member State shall, acting as provided in this Directive, abolish restrictions on the movement and residence of.

(a) nationals of a Member State who are established or who wish to establish themselves in another Member State in order to pursue activities as self-employed persons, or who wish to provide services in that State;

(b) nationals of Member States wishing to go to another Member State as recipients of services:

2.  Member States shall favour the admission of any other member of the family of a national referred to in paragraph 1 (a) or (b) or of the spouse of that national, which member is dependent on that national or spouse of that national or who in the country of origin was living under the same roof.
		…
		Article 3
1.	Member States shall grant to the persons referred to in Article I right to enter their territory merely on production of a valid identity card or passport.

2.	No entry visa or equivalent requirement may be demanded save in respect of members of the family who do have the nationality of a Member State.  Member States shall afford to such persons every facility for obtaining any necessary visas.

		Article 4
1.	Each Member State shall grant the right of permanent residence to nationals of other Member States who establish themselves within its territory in order to pursue activities as self-employed persons, when the restrictions on these activities have been abolished pursuant to the Treaty.

As proof of the right of residence, a document entitled “Residence Permit for a National of a Member State of the European Communities” shall be issued.  This document shall be valid for not less than years from the date of issue and shall be automatically renewable.

Breaks in residence not exceeding six consecutive months and absence on military service shall not affect the validity of a residence permit.

A valid residence permit may not be withdrawn from a national referred to in Article 1(1) (a) solely on the grounds that he is no longer in employment because he is temporarily incapable of work as a result of illness or accident.

Any national of a Member State who is not specified in the first subparagraph but who is authorised under the laws of another Member State to pursue an activity within its territory shall be granted a right of abode for a period not less than that of the authorisation granted for the pursuit of the activity in question.

However, any national referred to in subparagraph 1 and to whom the provisions of the preceding subparagraph apply as a result of a change of employment shall retain his residence permit until the date on which it expires.

2.	The right of residence for persons providing and receiving services shall be of equal duration with the period during which the services are provided.

Where such period exceeds three months, the Member State in the territory of which the services are performed shall issue a right of abode as proof of the right of residence.

Where the period does not exceed three months, the identity card or passport with which the person concerned entered the territory shall be sufficient to cover his stay.  The Member State may, however, require the person concerned to report his presence in the territory.

3.	A member of the family who is not a national of a Member State shall be issued with a residence document which shall have the same validity as that issued to the national on whom he is dependent.”

(vi)	The Immigration (European Economic Area) Regulations 2000 as amended (the 2000 regulations) set out the circumstances in which a self-employed person has a right to reside in the United Kingdom. In particular, the regulations provide as follows:

		“Regulation 14 Right of Residence

		(1)	A qualified person is entitled to reside in the United Kingdom, 
without the requirement for leave to remain under the 1971 Act, for as long as he remains a qualified person.

		(2)	A family member of a qualified person is entitled to reside in the United Kingdom, without the requirement of such leave, for as long as he remains the family member of a qualified person.”

		A qualified person is then defined in regulation 5 as follows:

	“Regulation 5 “Qualified Person”
(1) In these Regulations, “qualified person” means a person who is an EEA national and in the United Kingdom as – 

(a) a worker;

(b) a self-employed person;

(c) a provider of services;

(d) a recipient of services;

(e) a self-sufficient person;

(f) a retired person;

(g) a student; or

(h) a self-employed person who has ceased activity;

or who is a person to whom paragraph (4) applies.

(2) A worker does not cease to be a qualified person solely because:

(a) he is temporarily incapable of work as a result of illness or accident; or

(b) he is voluntarily unemployed, if that fact is duly recorded by the relevant employment office.

(3) A self-employed person does not cease to be a qualified person solely because he is temporarily incapable of work as a result of illness or accident.”

(viii) A “self-employed person” and “self-sufficient person” are, in turn, defined in regulation 3 of the 2000 regulations as follows:
	“3 (1) In these Regulations — 
(b) “self-employed person” means a person who establishes himself in order to pursue activity as a self-employed person in accordance with Article 43 of the E.C. Treaty, or who seeks to do so; 
	(e) “self-sufficient person” means a person who — 
(i) has sufficient resources to avoid his becoming a burden on the social assistance system of the United Kingdom; and
(ii) is covered by sickness insurance in respect of all risks in the United Kingdom;

	(5)	For the purposes of paragraph (1)(e) and (f) and paragraph (2) and (3) the resources of the person concerned and, where applicable, any family members are to be regarded as sufficient if they exceed the level below which social assistance might be granted under the United Kingdom benefit system to a United Kingdom national in the same circumstances.”
	(ix)  Following the opening of the labour market to Accession State Nationals from 1 May 2004 the 2000 regulations were augmented by the Accession (Immigration and Worker Registration) regulations 2004.  In particular, regulation 4 provides that:

“4.-(1)  This regulation derogates during the accession period from Article 39 of the Treaty establishing the European Community, Articles 1 to 6 Regulation (EEC) No. 1612/68 on freedom of movement for workers within the community and Council Directive (EEC) No.68/360 on the abolition of restrictions on movement and residence within the Community for workers of Member States and their families.

(2)  A national of a relevant accession State shall not be entitled to reside in the United Kingdom for the purpose of seeking work by virtue of his status as a work seeker if he would be an accession State worker requiring registration if he began working in the United Kingdom.

(3)  Paragraph (2) is without prejudice to the right of a national of a relevant accession State to reside in the United Kingdom under the 2000 Regulations as a self-sufficient person whilst seeking work in the United Kingdom.

(4)  An accession State worker requiring registration shall only be entitled to reside in the United Kingdom in accordance with the 2000 Regulations as modified by Regulation 5.”

	(x)	On 30 April 2006 the habitual residence test contained in regulation 21 of the Income Support (General) Regulations was amended to take into account the implementation of Council Directive 2004/38. Council Directive 2004/38 repealed Directive 73/148 EEC.  In addition, the Immigration (EEA) Regulations 2006 (the 2006 regulations) were introduced to reflect the introduction of Council Directive 2004/38.  These regulations replaced the 2000 regulations.
9.	The hearing of this appeal was not expedited in the usual way as it was specifically held back at the request of the representative of the claimant until September 2008 it was the representative’s intention to bring another appeal in relation to a related matter concerning the claimant to a Commissioner.  In addition an oral hearing fixed for 14 November 2008 was postponed at the last minute as there was a late request to facilitate the attendance and participation of the claimant.  Then, subsequent complications in relation to suitable hearing accommodation, suitable translation arrangements, as well as special arrangements to enable the disabled claimant to attend resulted in the hearing not taking place until 9 April 2009.  However, much work was carried out by the representatives since November 2008 which enabled the issues in the case to be clarified before the actual hearing.  Both representatives confirmed that the issue of habitual residence is the only relevant condition of entitlement in this case and, accordingly, the case before me proceeded on that basis.
10.	Both representatives accept that the claimant was self-employed during his time working as a share fisherman and that, while so working, he was a self-sufficient person for the purposes of the 2000 Regulations.  The Department’s contention is that this status was lost following the claimant’s most unfortunate accident.  The argument made on behalf of the claimant is that he retained this following status following the accident.
11.	The tribunal in reaching its decision clearly incorrectly applied legal provisions which were not in force at the date of the claimant’s claim, namely 16 March 2006.  The tribunal considered regulation 6(3) of the Immigration (European Economic Area) Regulations 2006 (the 2006 Regulations) which only came into force on 30 April 2006.  It is common case that the tribunal ought to have been considering the case in light of the earlier provisions, namely, those found in the 2000 Regulations.  Arising out of this basic error the tribunal further erred in considering and applying regulation 21AA of the Income Support (General) Regulations (Northern Ireland) 1987 (the 1987 Regulations).  Regulation 21AA was only inserted into the 1987 Regulations by regulation 2 of the Social Security (Persons from Abroad) (Amendment) Regulations (Northern Ireland) 2006, which also only came into operation from 30 April 2006.  Accordingly the legislation in force at the relevant date, 16 March 2006, was regulation 21(3) of the 1987 Regulations, which have been set out at paragraph 8 herein.
12.	Regulation 21AA, in so far as it is relevant, is, in comminuted form, in the following terms:
“(1)  “Person from abroad” means, subject to the following provisions of this regulation, a claimant who is not habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland.

(2)  No claimant shall be treated as habitually resident in the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland unless he has a right to reside in (as the case may be) the United Kingdom, the Channel Islands, the Isle of Man or the Republic of Ireland …”
…
(4)  A claimant is not a person from abroad if he is -
 …
(b)  a self employed person for the purposes of that directive; [2004/38/EC]
…”

13.	Mr Allamby has submitted that in reaching its decision after applying the wrong regulations, the tribunal did not merely make a technical error of law.  In the 2000 Regulations, the retention of “qualified person” status for a self-employed person during interruption of self-employment was regulation 5(3) which provided:
“A self-employed person does not cease to be a qualified person solely because he is temporarily incapable of work as a result of illness or accident.”

	However, in Mr Allamby’s submission the amended 2006 Regulations provided a different test, namely that set out in the modified provision for retention of self-employment status at regulation 6(3), which now provides that:

“A person who is no longer in self-employment shall not cease to be treated as a self-employed person for the purpose of paragraph 1(c) if he is temporarily unable to pursue his activity as a self-employed person as a result of the illness or accident.”

	The tribunal erred by applying regulation 6(3) of the 2006 Regulations rather than the relevant one, which was regulation 5(3) of the 2000 Regulations.

14.	Mr Allamby has submitted that the 2000 regulation test is whether or not the person is temporarily incapable of work as a result of illness or accident.  In contrast, the 2006 regulation test is one of temporary incapacity to pursue his activity as a self-employed person following an illness or accident.  He submits that this latter test is much narrower.  Accordingly, he contends that the tribunal applied both the wrong regulations and, arising out of that error, the wrong legal test to the claimant’s circumstances.  

15.	Mr Allamby, in support of his submission that it is important to apply the correct legal test, referred me to the Preamble to Directive 2004/38, and in particular to Recital 3 of the Preamble, which states:

“Union citizenship should be the fundamental status of nationals of the Member States when they exercise their right to free movement and residence.  It is therefore necessary to codify and review the existing Community instruments dealing separately with workers, self-employed persons, as well as students and other inactive persons in order to simplify and strengthen the right of free movement and residence of all Union citizens.”

	This was referred to by the European Court of Justice in a preliminary ruling from the High Court (Ireland) in Metock and others - v - Minister for Justice, Equality and Law Reform, Case C-127/08, where the Court stated at paragraph 59:

“The same interpretation must be adopted a fortiori with respect to Directive 2004/38, which amended Regulation No 1612/68 and repealed the earlier directives on freedom of movement for persons.  As is apparent from recital 3 in the preamble to Directive 2004/38, it aims in particular to ‘strengthen the right of free movement and residence of all Union citizens’, so that Union citizens cannot derive less [sic] rights from that directive than from the instruments of secondary legislation which it amends or repeals.”

	Mr Allamby submitted that, applying Metock, the test that applied to the claimant at the date of claim should have continued to apply for periods after the implementation of Directive 2004/38 as he should not derive fewer rights from the new Directive than applied previously.

16.	Mr McNamara, as stated earlier, accepted that the tribunal incorrectly applied legal provisions which were not in force at the date of the Department’s decision, namely regulation 21AA of the Income Support Regulations and the 2006 Immigration Regulations.  However, he submitted that the test that the tribunal actually applied accurately reflected the provisions that were repealed ie regulation 21(3) and (3E) of the Income Support Regulations and regulation 5 of the 2000 Immigration Regulations.  Accordingly, he submitted that the tribunal’s conclusion that the claimant is a person from abroad is not vitiated by the error.

17.	He submitted that the claimant cannot be regarded as, using the words of regulation 5(3) of the 2000 Regulations, as “temporarily incapable of work as a result of illness or accident” due to the most unfortunate severe physical limitations he experiences as a result of the very serious nature of his incapacity.  It is accepted that medical reports indicate that the claimant might be able to return to the workplace with relevant training and the appropriate support.  However, there is no indication as to when this might occur.

18.	Mr McNamara submitted that the purpose of regulation 5(3) is to protect self-employed persons in the event that they become unfit for work and the term “temporarily incapable of work” must be interpreted in this context.  Accordingly he submitted that the tribunal was correct in determining that, due to the length of time that had elapsed since the claimant’s accident and the fact that he would not be in a position to resume employment in the near future, he could not be regarded as “temporarily incapable of work”.

19.	Mr McNamara also submitted that regulation 5(3) pre-supposes that the person “temporarily incapable of work” will return to pursue his activity as a self-employed person.  Therefore regulation 5(3) is not relevant to the claimant who is only able to return to work as an employee.

20.	In the alternative Mr McNamara submitted that even if regulation 5(3) is to be interpreted in the widest possible way, the claimant, according to the tribunal’s specific finding as set out in its decision, “… will not be in a position to be employed in the near future, and that it will take him some considerable time, to acquire basic skills which would permit him to become employed in any new activity”.  Accordingly Mr McNamara submitted that the tribunal had in fact applied a test identical to that in section 5(3) of the 2000 Regulations (namely, whether or not the claimant is temporarily incapable of work as a result of illness or accident) and held, in light of the evidence available to it, that the claimant was not temporarily incapable of work as an employed person and, in any event, even if he had been or could be a self-employed person, he could not retain the status of a qualified person because his incapability to work was not temporary.  Therefore, even under the 2000 Regulations, and in light of the tribunal’s clear findings, he is not able to retain his status as a qualified person.  Accordingly he does not have a right to reside in the United Kingdom.

21.	Mr Allamby submitted that the tribunal erred in law by applying the post 30 April 2006 regulations, namely the Immigration (European Economic Area) Regulations 2006.  Mr Allamby submitted that the test that the tribunal ought to have applied, namely the 2000 regulation test was whether or not the claimant was temporarily unable to work as a result of illness or accident, not the 2006 regulation test which was one of temporary incapacity to pursue his activity as a self-employed person, following an illness or accident.  Accordingly the tribunal applied the wrong test to temporary incapacity.  Mr Allamby agreed that the tribunal might have come to the same conclusion if it had applied the correct test.  However, in his submission, that is not necessarily correct.  On the basis of the evidence before the tribunal, he submitted that the tribunal could well have come to a different conclusion if it had applied the correct test.  At the very least there is a sufficient element of doubt to say that it is more than a technical error of law.

22.	Mr McNamara submitted that the law did not change in 2006 with the introduction of the 2006 regulations.  The 2006 regulations merely clarified the position.

23.	Under both the 2000 and 2006 regulations, a tribunal must consider if a person has a right to reside.  In particular a tribunal must consider what the word 'temporarily ' means.  Mr McNamara stated that there was a major problem as there was no relevant authority to aid the tribunal (or me) in deciding what the definition of ‘temporarily’ should be.  However, the tribunal decided to give a common sense or ordinary meaning to the word.  It also consulted the Concise Oxford Dictionary, before coming to the conclusion that it could be defined as ‘for the time being’, ‘provisionally’, ‘momentarily’, ‘in the interim’, ‘in the short term’, or ‘briefly’.  Mr McNamara made the point that it is entirely clear that the tribunal did not conclude that the word ‘temporary’ meant ‘not permanent’.  Mr McNamara submitted that this particular approach of the tribunal cannot be faulted.

24.	In my view it is clear that the tribunal ought to have applied the 2000 Regulations, as opposed to the 2006 Regulations.  Under the 2000 Regulations (regulation 5(3)) a self-employed person, even at the height of the claimant’s case, will cease to be “a qualified person” if he is incapable of work, as long as it is not merely temporary incapacity.  Therefore, if Mr Allamby is correct, the tribunal has to consider the incapacity to work with both future employment or self-employment in mind – not just self-employment as under the 2006 Regulations.

25.	However, if one looks at the tribunal’s findings in its reasons, one finds the following immediately before its conclusions:

“The appeal tribunal has no doubt that the appellant will demonstrate the same degree of courage, motivation and determination in seeking to return to some form of employment.  It is clear to the appeal tribunal, however, that the appellant will not be in a position to be employed in the near future, and that it will take him some considerable time, to acquire basic skills which would permit him to become employed in any new activity.  The acquisition of self-employed status remains a longer term reality.

In summary, therefore, the appeal tribunal concludes that by the time of the appeal tribunal hearing, the appellant could not be said to be temporarily unable to pursue any activity as a self-employed person as a result of his accident.  If the appeal tribunal is wrong in that conclusion, it is of the view that when the appellant is in a position to resume activity as a self-employed person, which is not in the immediate future, he cannot be regarded in any intervening period as being ‘temporarily’ unable to do so.”

26.	Therefore did the tribunal in fact apply the wrong test?  It might have been considering the 2006 Regulations but the test it in fact applied is the one applicable under the 2000 Regulations as it specifically considered and made an appropriate findings that employment in the near future and beyond, self-employed or otherwise, is not a realistic prospect.  It might be correct to state that the tribunal stumbled on the correct test but, be as that may, it did apply the correct test.

27.	Therefore, I conclude that as the tribunal did, in fact, apply the correct test, it cannot be said, in my view, that its conclusion is in error of law.  I have considered whether it is appropriate in the circumstances to allow the appeal because the tribunal has erred in law by relying on the wrong legislation.  However, it is not an error of substance.  Accordingly the error cannot amount to an error in law for the purposes of the provisions of Article 15(8) of the Social Security (Northern Ireland) Order 1998.  Therefore I consider that it is appropriate to take a similar course of action to that taken by Mr Commissioner Mitchell QC took in Great Britain case CSDLA/257/96 (followed by me in C55/99-00(IB)).

28.	Accordingly I dismiss the appeal.

(signed)  J A H Martin QC

Chief Commissioner

4 January 2010