The European Court of Justice ruled on a reference by the Social Security Commissioner, Belfast, on the interpretation of EC Regulation 1408/71 on the application of social security schemes to employed, self-employed persons and members of their families moving within the Community.
Rose Hughes lives with her husband and three children in the Irish Republic. Her husband, a national of the United Kingdom, works in Northern Ireland. Mrs Hughes applied to the authorities in Northern Ireland for family credit, a weekly non-contributory cash benefit granted to families with limited means under the Social Security (Northern Ireland) Order 1986 and the Family Credit (General) Regulations (Northern Ireland) 1987.
The application was rejected by the adjudication officer and the Enniskillen Social Security Appeal Tribunal on the ground that Mrs Hughes did not satisfy the residence condition in the 1986 Order.
THE EUROPEAN COURT OF JUSTICE said that the first question raised was: was family credit a social security benefit within the meaning of article 4(1)? By article 4(1) the regulation extended to all legislation of the member states concerning the branches of social security listed in article 4(1)(a) to (h), whereas under article 4(4) the regulation did not apply to 'social and medical assistance'.
The distinction between benefits excluded from the scope of the regulation and those which fell within it was based essentially on the constituent elements of the particular benefit, in particular its purposes and the conditions on which it was granted, and not on whether a benefit was classified as a social security benefit by national legislation.
A benefit might be regarded as a social security benefit in so far as it was granted, without any individual and discretionary assessment of personal needs, to recipients on the basis of a legally defined position and provided that it concerned one of the risks listed in article 4(1).
Applying those criteria to family credit, the provisions governing the grant of family credit conferred upon recipients a legally defined right. Although family credit was granted or refused solely on the basis of the claimant's assets, income and the number and age of his dependent children, it did not follow that the grant of the benefit was dependent on an individual assessment of the claimant's personal needs, which was a characteristic feature of social assistance.
The criteria applied were objective, legally defined criteria which, if met, conferred entitlement to the benefit.
Family credit encouraged workers who were poorly paid to continue working and was also intended to meet family expenses. By virtue of the latter function family benefit fell within the category defined in article 1(u)(i) and related to the risk in article 4(1)(h).
The fact that the grant of the benefit was not subject to any contribution requirement did not affect its classification as a social security benefit.
A benefit which was granted automatically to families meeting certain objective criteria, relating in particular to their size, income and capital resources, must be considered a family benefit for the purposes of article 4(1)(h).
The second question was: if family credit was a social security benefit, where an employed person was subject to the legislation of one member state (A), was such person's spouse entitled under article 73 of Regulation 1408/71 to receive in respect of members of that employed person's family residing in another member state (B) family benefits provided by the legislation of member state A where such a spouse was and had been been neither resident nor employed in member state A?
By article 73 an employed or self-employed person subject to the legislation of a member state was entitled in respect of the members of his family who were residing in another member state, to the family benefits provided for by the legislation of the former state, as if they were residing that state.
The spouse of an employed person could claim a derived right to family benefits under article 73 provided he or she was a member of the family of a worker who fulfilled the conditions in article 73 and provided also that under national legislation the family benefits were provided for family members.
Since article 73 did not require that the worker's spouse should also work in the member state whose legislation was applicable, but referred specifically to the case where a worker's family resided in another member state, it was immaterial for the purposes of the grant of a derived right to family benefits that the worker's spouse had never been resident or employed in the member state whose legislation was applicable.
Where an employed person was subject to the legislation of a member state and lived with his family in another, his spouse who had never been resident or employed in the state in which the worker was employed might rely on article 73 to claim a derived right to receive family benefits for the members of the worker's family from the competent institution of that state, provided that the worker fulfilled the conditions in article 73 and provided also that under national legislation the family benefits concerned were provided for family members.