NHS constitutes comprehensive sickness insurance under EU free movement law
VI v. Commissioners for Her Majesty’s Revenue and Customs (Case-247/20)
On 10 March 2022, the Court of Justice of the European Union (CJEU) gave its decision in the case of VI. The case is important because it challenges the UK Government’s interpretation of what is meant by comprehensive sickness insurance in relation to rights of residence for benefit claims. Law Centre NI represented VI before the European Court.
VI is a third country national who lives in Northern Ireland with her husband and children. VI’s son, B, was born in Northern Ireland in June 2004 and holds Irish nationality.
VI’s case concerns her claims for Child Tax Credit and Child Benefit. VI and her husband, who is also a third country national, were self-sufficient during the period of VI’s claims. VI’s husband worked throughout the period and VI began to work herself in April 2016. However, VI and her family did not hold comprehensive sickness insurance, i.e., private health insurance, at all times during the period of claim.
HMRC decided that during the times that the family did not hold private health insurance, VI did not have a right to reside for the purpose of entitlement to Child Tax Credit and Child Benefit. HMRC decided that VI had been overpaid.
As B is an Irish national living in the UK, EU law on the right of EU citizens and their families to move and reside between EU countries is relevant to VI’s case. When HMRC made its decision in VI’s case in March 2020, the UK was in the Brexit transition period and EU law continued to apply in the UK.
The relevant provisions of EU law are as follows:
Directive 2004/38/EC (‘the Citizens’ Rights Directive’)
The Citizens’ Rights Directive lays down the conditions under which EU citizens and their families can exercise their right to move and reside in EU Member States.
Article 6 of the Directive provides that EU citizens who move to the UK have an initial right of residence for up to three months.
Article 7(1) provides for a right of residence of more than three months in certain cases. It states:
‘1. All Union citizens shall have the right of residence on the territory of another Member State for a period of longer than three months if they:
a. are workers or self-employed persons in the host Member State; or
b. have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State;
c. are enrolled at a private or public establishment, accredited or financed by the host Member State on the basis of its legislation or administrative practice, for the principal purpose of following a course of study, including vocational training; and
– have comprehensive sickness insurance cover in the host Member State and assure the relevant national authority, by means of a declaration or by such equivalent means as they may choose, that they have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence; or
d. Are family members accompanying or joining a Union citizen who satisfies the conditions referred to in points (a), (b) or (c)’.
Article 7(2) of the Directive provides for a right of residence for family members, who are third country nationals. It states:
‘The right of residence provided for in paragraph 1 shall extend to family members who are not nationals of a Member State, accompanying or joining the Union citizen in the host Member State, provided that such Union citizen satisfied the conditions referred to in paragraph 1(a), (b) or (c).’
‘Family members’ is defined in Article 2 of the Directive. It includes an individual’s spouse, partner, children who are under 21 and dependent, and dependent direct relatives in the ascending line, such as a dependent parent.
Non-dependent parents are not included in the definition of family member under the Directive. However, it is settled EU case law (Zhu and Chen, C-200/02, EU:C:2004:639) that the primary carer of an EU citizen also has a right to reside in a Member State regardless of the parent’s nationality. The rationale is that a child would be prevented from exercising their right to reside if their parent with care could not also reside in the Member State to look after them.
Once an EU citizen has been resident in a Member State for five years, they have a permanent right to reside under EU law. Article 16(1) of the Citizens Rights Directive states:
‘1. Union citizens who have resided legally for a continuous period of five years in the host Member State shall have the right of permanent residence there. This right shall not be subject to the conditions provided for in Chapter III.’
Article 16(2) provides that family members of an EU citizen who have resided for more than five years are also entitled to a right of permanent residence.
‘2. Paragraph 1 shall apply also to family members who are not nationals of a Member State and have legally resided with the Union citizen in the host Member State for a continuous period of five years.’
The reference in Article 16(1) to ‘This right shall not be subject to the conditions provided for in Chapter III’ indicates that a permanent right of residence is not subject to the conditions in Article 7(1)(b). In other words, an EU citizen and their family do not have to be self-sufficient or have in place comprehensive sickness insurance once a permanent right to reside is obtained.
Immigration (European Economic Area) Regulations 2006 and 2016
The Immigration (European Economic Area) Regulations 2006 and 2016 implement the Citizens’ Rights Directive into UK law.
Regulation 14(1) provides that a ‘qualified person’ has a right to reside in the UK for as long as they remain a qualified person. ‘A qualified person’ is defined in Regulation 6(1) of the Regulations and includes a ‘self-sufficient person’.
Regulation 4(1)(c) defines a ‘self-sufficient’ person as a person who has:
‘(i) sufficient resources not to become a burden on the social assistance system of the UK during the person’s period of residence; and
(ii) comprehensive sickness insurance cover in the UK.’
The UK Government and Courts have interpreted ‘comprehensive sickness insurance’ so as not to include the free medical cover provided by the NHS (Ahmad v Secretary of State for the Home Department  EWCA Civ 988). This approach was subject to infringement proceedings by the EU Commission against the UK in 2012.
Regulation 15(a) provides that an EU citizen who has resided in the UK for a continuous period of five years has a permanent right to reside in the UK. Regulation 15(1)(b) extends that right to their family members.
Regulation 16 provides that a primary carer of an EU citizen has a derivative right to reside as long as the EU citizen in question meets the following criteria:
(i) is under the age of 18;
(ii) resides in the UK as a self-sufficient person; and
(iii) would be unable to remain in the UK if the person left the UK for an indefinite period.
‘Self-sufficiency’ under Regulation 16 has the same meaning as under Regulation 4(1)(c), i.e., requires comprehensive sickness insurance cover.
How did VI’s case end up before the Court of Justice of the European Union?
When HMRC decided that VI had been overpaid Child Tax Credit and Child Benefit, and tried to recoup the overpayment, VI appealed.
The Appeal Tribunal recognised that VI’s case raised a point of EU law and decided to refer her case to the CJEU. This process is known as a ‘preliminary reference’. A preliminary reference is an opportunity for a court in a Member State to seek clarification from the CJEU as to the correct interpretation of EU Law. Article 86 of the Withdrawal Agreement provides for the CJEU to give preliminary rulings on requests made by the UK courts before the end of the Brexit transition period.
In its questions to the CJEU, the Appeal Tribunal wanted to ascertain the extent to which VI and B were required to have comprehensive sickness insurance to have a right to reside for benefit purposes, and whether the cover they had in place was sufficient.
In summary, the questions for the European Court were:
- Once B obtained permanent residence in the UK, did he need to have in place comprehensive sickness insurance for himself and his family for VI to have a right to reside for benefit purposes, and
- In the period before B obtained permanent residence in the UK, did he need to have in place comprehensive sickness insurance for himself and his family for VI to have a right to reside for benefit purposes?
The Court of Justice of the European Union’s decision
The CJEU decided that once B had been in the UK for five years, by August 2011 at the latest, and secured a right of permanent residence, Article 16 of the Directive meant that neither he nor his family had to be self-sufficient or have in place comprehensive sickness insurance to have a qualifying right to reside for benefit purposes.
However, before B obtained a right of permanent residence in the UK, he and his family had to satisfy the requirements of Article 7(1)(b) of the Directive to have a right to reside for benefit purposes. In other words, they had to be self-sufficient and have in place comprehensive sickness insurance.
The Court went further. It decided that the free cover provided by the NHS does in fact constitute comprehensive sickness insurance for the purpose of Article 7(1)(b). At paragraph 69, the Court states:
‘[A]lthough the host Member State may, subject to compliance with the principle of proportionality, make affiliation to its public sickness insurance system of an economically inactive Union citizen, residing in its territory on the basis of Article (7)(1)(b) of [the Citizens’ Rights Directive], subject to conditions intended to ensure that that citizen does not become an unreasonable burden on the public finances of that Member State, such as the conclusion or maintaining, by that citizen, of comprehensive private sickness insurance enabling the reimbursement to that Member State of the health expenses it has incurred for that citizen’s benefit, or the payment, by that citizen, of a contribution to that Member States’ public sickness insurance system (judgment of 15 July 2021, A (Public health care), C-535/19, EU:C:2021:595, paragraph 59), the fact remains that, once a Union citizen is affiliated to such a public sickness insurance system in the host Member State, he or she has comprehensive sickness insurance within the meaning of Article 7(1)(b).’
In other words, although the UK can set proportionate conditions, such as requiring an individual to reimburse the NHS for medical costs or contribute to the NHS through tax or national insurance, once an individual is registered with and availing of the NHS, they have comprehensive sickness insurance in place for the purpose of Article 7(1)(b). They do not need to have private health insurance to have a qualifying right to reside for benefit purposes.
At paragraph 70, the Court decided that in a case, such as VI’s, where one parent has worked and paid tax to the Member State, it would be disproportionate to deny the child or their parent a right to reside on the sole ground that they did not have private health insurance in place. The Court decided that availing of the free cover provided by the NHS did not constitute an unreasonable burden on UK public finances.
What does this mean for EU citizens in Northern Ireland?
The repercussions of the Court’s decision are not yet fully known.
For cases based on facts that arose before the end of the transition period, the decision is important. First, there is definitely no requirement for private health insurance once permanent residence has been obtained.
Secondly, for EU citizens without permanent residence, i.e., pre-settled status, the NHS constitutes comprehensive sickness insurance. This opens up the options for pre-settled EU citizens to establish a right to reside for benefit purposes. If such a claimant had a claim for benefits rejected on the ground that they do not have private health insurance in place, it is arguable that the claim was wrongly decided.
Some commentators have suggested that EU citizens who were materially disadvantaged by the UK’s requirement to have private health insurance, for example by having to pay insurance premiums, may be able to claim damages from the UK. It is probable that strict time limits will apply to any such claims.
The decision may have limited impact on cases arising after the end of the Brexit transition period. Although, Northern Ireland might be in a slightly different position to the rest of the UK in this regard.
The CJEU’s decision may have consequences in Northern Ireland that it does not have in the rest of the UK. Arguably, Article 2 of the NI Protocol combined with the Good Friday Agreement mean that any advantages of EU law that applied before Brexit must not be diminished in Northern Ireland post Brexit. This may mean not just that EU citizens in Northern Ireland are better placed to claim compensation for material damage they suffered due to the UK’s misinterpretation of comprehensive sickness insurance, but also that they can continue to rely on the decision in VI to protect their rights to social security after Brexit.
For advice and assistance on any of the issues covered in this Case Note, contact Law Centre NI’s Social Security Hub on (028) 90244401 or email@example.com.
 Not an EU or UK national.
 The UK left the EU at 23.00 on 31 January 2020. The Brexit transition period lasted until 31 December 2020.
 Article 127 of the Withdrawal Agreement provides that during the transition period, EU law is to be applicable in the UK, produce the same legal effects as in the EU and is to be interpreted and applied in the same way as in the EU.
 Article 267 Treaty on the Functioning of the European Union.
 Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, 19 October 2019 GEN (publishing.service.gov.uk)
 A third question relating to the reciprocal arrangements on health care between the UK and Republic of Ireland was deemed inadmissible by the CJEU.
 ‘UK wrongly insisted on Comprehensive Sickness Insurance for years, EU court finds’, Professor C. O’Brien, 15 March 2022.
 ‘C-247/20 VI v. The Commissioners for Her Majesty’s Revenue and Customs and the implications of preliminary references during the transitional period: a case study in legal complexity’, E. Frantziou and C. Murray, 17 March 2022.