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European Union law – Regulation (EC) 883/2004 – approach in Hudziński does not apply to sickness benefits The claimant, a Lithuanian national, received a retirement pension from Lithuania and a state pension credit as a dependent relative of her son, who had a right to reside in Great Britain. Her claim for attendance allowance (AA) was refused by the Secretary of State under section 65(7) of the Social Security Contributions and Benefits Act 1992, on the basis that Lithuania was the competent State to pay sickness benefit for the purposes of Regulation (EC) 883/2004. The First-tier Tribunal (F-tT) allowed the claimant’s appeal but set aside its decision and referred the case to the Upper Tribunal (UT) for decision. Among the issues before the UT was the proper application of Regulation (EC) 883/2004, the decisions of the Court of Justice of the European Union and the effect of section 65(7).
Held, confirming the Secretary of State’s decision, that:
Regulation (EC) 883/2004 has to be interpreted in accordance with general principles of law including the principle of certainty and the requirement that there must be no disproportionate effect on the predictability and effectiveness of the Regulation: Hudziński v Agentur für Arbeit Wesel-Familienkasse, C-611 and 612/10, EU:C:2012:339,  3 CMLR 23. It was designed to provide generally for the law of a single State to govern entitlement to a particular class of benefits, subject to coordination (not harmonisation), and there was no obligation on States to make any particular level of provision for a given class of benefit (paragraphs 29 to 31);
States may choose to make provision when they are not the competent State but this was conditional on the additional provision not being inconsistent with the coordination principle on which Regulation (EC) 883/2004 was based. It followed that payment by non-competent States must not disproportionately affect the predictability and effectiveness of the coordination rules before any possibility of overriding a provision like section 65(7) arose (paragraphs 33 to 34);
attendance allowance, being a sickness benefit, was generally subject to the rule against overlapping in Article 10: see Article 54. Limiting the application of the Hudziński approach to cases in which Regulation (EC) 883/2004 anticipates that overlapping may be appropriate reflected the current state of the case law, and provided a rational basis to distinguish the cases where it applied from those where it did not, it respected the scope and structure of the Regulation, and it prevented a drift into harmonisation. In these circumstances, Great Britain was not precluded from making provision in the form of section 65(7) (paragraph 42).