Legal Briefing: Important Changes in understanding of the Competent State.

Summary

Over recent years, the Department for Communities (DfC) has changed how it determines which state is “competent” to pay certain cash sickness benefits, including:

• Attendance Allowance
• Carer’s Allowance
• Disability Living Allowance (Care component)
• Personal Independence Payment (Daily Living component)

Previously, DfC refused payment if claimants received a “pension” from another EEA state. However, case law has clarified that this is not determinative. Article 11 of EU Regulation 883/2004 sets out that:

• Employment, civil service, or unemployment benefits usually dictate competence.

• If none apply, the state of residence is responsible.

A binding judgment in Northern Ireland (SP v DfC, Sept 2023) confirmed that the UK can be competent for paying PIP daily living, even where a claimant receives an Invalidity Pension from another state. Despite this, DfC delayed applying the decision until August 2025, disadvantaging many claimants.

Headnote

The UK is a Competent State for payment of the daily living component of PIP to the resident in Northern Ireland, despite the claimant also receiving an Invalidity Pension from the Republic of Ireland.

Background

The Applicant was born in Northern Ireland and was a UK national. The Applicant had severe disabilities and worked in Northern Ireland for some years and then worked in the Republic of Ireland for nine months. Thereafter, the Applicant stopped work due to her severe disabilities. The Applicant was awarded an Invalidity Pension (IP) by the Republic of Ireland as she was permanently incapable of work and met the contribution conditions.

The Applicant then returned to live in Northern Ireland and retained the entitlement to the Invalidity Pension paid by the Republic of Ireland. This was because the Invalidity Pension fell within Article 7 of EU Regulation 883/2004 – the cash benefit ‘exportability’ rules.

In Northern Ireland, the Applicant made a claim for and was awarded DLA, including the daily living and mobility component. In 2018/19 the Applicant made a claim for PIP as her DLA award was coming to an end. The Applicant met the conditions for an award of PIP – both the daily living and mobility component but the Department of Communities decided that the UK was not the competent state for payment of sickness benefits under the provision of Article 11 of EU Regulation 883/2004.

The Applicant requested a reconsideration, but the decision was not revised, and the Applicant was unsuccessful in an appeal. Sadly, the Applicant died, and her appointee applied to the Social Security Commissioner for leave to appeal.

Legal Issue

The Commissioner had to decide whether the UK is the competent state for the payment of PIP to the Applicant as a cash sickness benefit for the purposes of Chapter 1 of Title III of Regulation (EC) 883/2004, in the context of Article 11 of EU Regulation 88/2004 which requires Applicants to be subject to the legislation of a single Member State only.

Regulation 883/2004 Article 11 provides:

General rules

1.  Persons to whom this Regulation applies shall be subject to the legislation of a single Member State only. Such legislation shall be determined in accordance with this Title.
2. For the purposes of this Title, persons receiving cash benefits because or as a consequence of their activity as an employed or self-employed person shall be considered to be pursuing the said activity. This shall not apply to invalidity, old-age or survivors’ pensions or to pensions in respect of accidents at work or occupational diseases or to sickness benefits in cash covering treatment for an unlimited period.
3. Subject to Articles 12 to 16:

(a) a person pursuing an activity as an employed or self-employed person in a                     Member State shall be subject to the legislation of that Member State;

(b) a civil servant shall be subject to the legislation of the Member State to which the administration employing him is subject;

(c) a person receiving unemployment benefits in accordance with Article 65 under the legislation of the Member State of residence shall be subject to the legislation of that Member State;

(d) a person called up or recalled for service in the armed forces or for civilian service in a Member State shall be subject to the legislation of that Member State;

(e) any other person to whom subparagraphs (a) to (d) do not apply shall be subject to the legislation of the Member State of residence, without prejudice to other provisions of this Regulation guaranteeing him benefits under the legislation of one or more other Member States.

Decision

The Commissioner allowed the appeal, with the effect that the UK is competent for the payment of the daily living component of PIP to the Applicant. (para 3).

The Commissioner accepted:

• That the Applicant engaged the scope of Regulation 883/2004 (Article 2) as she had been subject to the legislation of one or more Member States.
• The Applicant fell within the material scope (Article 3) as the case involved distinct sickness benefits and invalidity benefits.
• The Applicant was covered by the exportability provisions of Article 7 to enable payment of IP by the Republic of Ireland after she returned to Northern Ireland.

The Commissioner then had to decide if the UK was the competent state for paying sickness benefit in the context of Article 11 which requires claimants to be subject to the legislation of a single Member State.

The Commissioner decided that the UK competence to pay sickness benefits was not prevented by the Applicant’s entitlement to an Invalidity Pension from another Member State:

53. …By Article 11(2), it is clear that the appellant does not fall to be considered as receiving cash benefits because or as a consequence of their activity as an employed or self-employed person and therefore considered to be pursing the said activity. This is because this category does not apply to invalidity, old age or survivors pensions.’

The Commissioner further considered that Article 11(3)(a) – (d) relating to groups including those who are employed or self employed persons in a Member State or receiving unemployment benefits under the legislation of the Member State of residence, do not apply:

54. …The appellant does not fall into any of those categories. It appears to me therefore that she falls into the category in 11(3)(e), namely “any other person to whom subparagraphs (a) to (d) do not apply”. Such persons “shall be subject to the legislation of the Member State of residence, without prejudice to other provisions of this Regulation guaranteeing him benefits under the legislation of one or more other Member States”.

The Commissioner determines that the expression ‘without prejudice to’ in Article 11(3)(e) means “without affecting”. Invalidity Benefit is exportable from the Republic of Ireland without any condition of residence. As the Commissioner understands it therefore, the appellant’s residence in the UK makes it the Competent State under Article 11(3)(e) and that this position is not affected by the appellant’s entitlement to IP from the Republic of Ireland (paras 55-56).

NOTE: The Department for Communities conceded the Competent State issue before the conclusion of the case and did not appeal against the judgment. Although DfC did not appeal against the judgment, it initially refused to implement it without providing an explanation. Law Centre NI represented many appellants that were disadvantaged by the failure to apply the SP judgment and have raised a maladministration complaint regarding the delay in implementing this binding judgment. As of August 2025 DfC has now started to implement the judgment.

Read the full case here

Headnote

The UK is a Competent State for payment of Carers Allowance for a dual UK/Swiss national who is resident in the UK and who family member is insured in another Competent State.

Background

The Appellant, “SE”, was a dual British and Swiss national, who is married to a dual British / Swiss national. They live in the UK. SE had not worked in the UK, although she had acted as a carer, for her children and had been paid Carers Allowance (CA).

SE’s husband was entitled to, and had been in receipt of, a disability pension from Switzerland since at least 1999.

On 18 October 2007, the ECJ gave its judgment in EU Commission v Council and Parliament of the EU (Case C-299/05), [2007] ECR I-8696, holding that CA (along with Disability Living Allowance (“DLA”) and Attendance Allowance (“AA”)) were cash sickness benefits.

SE subsequently submitted a further claim in respect of another child from November 2018 and DWP made a decision that SE was not entitled to CA because the UK is not the competent state for payment of cash sickness benefits. After an unsuccessful appeal, SE further appealed to the Upper Tribunal.

Legal Issue

The Upper Tribunal had to determine who was the competent state with responsibility for paying cash sickness benefit to SE.

Because of the circumstances of the case and the timeframes involved, the Upper Tribunal considered Regulation 883/2004 and its predecessor Regulation 1408/71 to determine the Competent State issue.

Upper Tribunal Judge Buley identified Article 11 as the key provision of Regulation 883/2004. As in the SP judgment, assistance was drawn from reference to the Court of Appeal’s decision Harrington v SSWP [2023] EWCA Civ 433. Although Harrington considered a different provision of Regulation 883/2004 the Tribunal outlined it provided a useful framework for the analysis of the provisions relevant to this case.

It was assumed by the upper tribunal that SE’s husband was a pensioner for whom the competent state was Switzerland. It was determined that SE was an “insured” person who satisfied the entitlement conditions of the Competent member state, which under Article 11(3)(e) was the UK. This is subject to any potential contrary provisions.

The question then becomes, as in Harrington, whether there is any provision in Title III of Regulation 883/2004 which “operates to take priority over the applicability of the legislation of the United Kingdom.

Judge Buley then proceeds to find that these other provisions and in particular Article 29 do not deliberately operate against Article 11(3)(e) to prevent payment of cash benefits in the state of residence (paras 78-96).

Judge Buley finds that the terms “without prejudice” in Article 11(3)(e) means that the domestic legislation will apply to the claimant without impacting on guaranteed entitlement under the legislation of other member states.

Judge Buley also makes reference to the SP v DfC judgment and highlights the DfC failure to explain its case and repeated change of position. It notes that Commissioner Stockman set out no reasoned conclusion as to the construction of Article 29 as the Commissioner did not have a cogent explanation of why the UK could deny competence under Title III. DfC had conceded the competent state issue. Although Judge Buley is not bound by the NI Commissioner he reaches the same conclusion.

Read the full case here