Benefits stand-off between UK and Brussels

Brussels has threatened to take legal action unless the “right to reside” test is dropped.

A Commission statement said the government had two months to tell Brussels what it was doing to bring domestic social security rules in line with EU requirements.

“Otherwise, the Commission may decide to refer the UK to the EU’s Court of Justice,” it said.

Employment Minister Chris Grayling said: “This is a very unwelcome development. It’s obviously right that we support those who work and pay their taxes here, but it’s clearly completely unacceptable that we should open our doors to benefit tourism.

“I’m really surprised that the European Commission has chosen to go into battle on this very sensitive issue, when there are clearly far more pressing problems to solve in Europe.”

Conservative MEP Julie Girling criticised the move as an interference by “unelected bureaucrats” in UK domestic policy.

Benefits tourism

Ms Girling, the Tory spokesman on employment and social affairs in the European Parliament, went on: “British taxpayers will want to know why their hard-earned money should now be directed straight into the pockets of any EU national who chooses to come here and make a claim.

This can only lead to a boom in benefits tourism. Conservative MEP Julie Girling

“This can only lead to a boom in benefits tourism. And with our generous system, Britain will be destination of choice.”

Under UK rules a range of benefits such as child benefit, child tax credit, state pension credit, jobseekers’ allowance and unemployment support allowance, are only given to those with a “right to reside”.

That is automatic for UK nationals, but residents from other EU countries have to pass a “right to reside” test. This, says the Commission, means the UK is indirectly discriminating against other nationals, in breach of EU social security co-ordination rules under which EU citizens have the same rights and obligations as nationals of their host country.

The Commission cites the example of a worker who moved to the UK from Italy in 2009 after living in Italy for 20 years.

She worked in the UK for an Italian company for two years until April 2009, paying taxes and national insurance contributions until she was made redundant.

And yet, said the Commission, her claim for income-based jobseekers’ allowance was refused on the grounds that she did not have a right to reside in the UK.