Right to reside: stuck behind Fratila! What now?

What is ‘staying’?

The decision maker has a discretionary power under section 25 of the Social Security Act 1998 (SSA 1998) – described in DWP guidance as ‘deferring’ making a decision – when an appeal is pending in a test case. In addition, where benefit is already in payment and the possibility arises that a lesser amount of benefit would be found to be payable on revision or supersession were a test case to be decided a certain way, then while that test case is awaiting decision, there are powers to suspend the award (regulation 44(2)(c) of the Universal Credit (etc) (Decisions and Appeals) Regulations 2013).

Separate from that, the First-tier Tribunal has a power to delay making a decision until a test case has been decided, under regulation 5(3)(j) of the Tribunal Procedures (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008 (‘TP Rules’).

Guidance on Fratila and staying

DWP guidance on Fratila1 instructs decision makers to stay making decisions on UC where the issue involves entitlement to benefit for a period prior to the end of the transition period on 31 December 2020 where the claimant had no right to reside other than her/his pre-settled status under the European Union (EU) Settlement Scheme. If a decision maker becomes aware of an appeal raising the question of whether Fratila applies, the memo advises decision makers to invite the First-tier Tribunal to use its case management powers to stay proceedings and defer further action pending the outcome of the Fratila appeal to the Supreme Court. Although the guidance does not instruct decision makers to stay making decisions where the issue relates to a claim or award for a period after 31 December 2020, it seems that decision makers are staying in such cases if the claimant has relied upon Fratila.

The only exception to the above is in cases of a joint application where one claimant is eligible and the other is ineligible under the current regulations. To avoid denying benefit to the eligible claimant, the decision maker is instructed not to stay the case but to make a decision. This would result in a single-rate standard allowance being included in the UC calculation, so it would be necessary to appeal to protect the claimants’ entitlement.

The guidance states that if a claimant with pre-settled status has an alternative right to reside then her/his application should proceed as usual. However, advisers will be aware that decision making in this area can be mixed. There are many cases where the claimant has an arguable free movement right to reside (ie, not based on Fratila at all, such as worker status) but that has not been accepted by the decision maker and the case has been stayed. So what should an adviser do if her/his client’s case has been stayed behind Fratila, but s/he believes that her/his client has a free movement right to reside which should mean s/he can access benefit?2

The action that should be taken depends whether the case is stayed by the decision maker or the First-tier Tribunal.3

1. DWP decision has been stayed

The powers to stay making a decision and to suspend payment of benefit while a test case is pending are discretionary – the decision maker does not have to use these powers. The DWP can be requested to lift the stay and make a decision on the ground that there is an arguable free movement right to reside.

If the decision maker can be persuaded that there is in fact a free movement right to reside, or even that, for some of the period at issue, there is such a right to reside, then there is no longer a power to stay or to suspend payment. The difficulty arises in cases where the decision maker is not persuaded to that effect but there is an arguable case the decision maker is wrong. In such a case, the decision maker should be asked to give a negative outcome decision. This will then allow the claimant to pursue an appeal. Providing evidence of hardship may help persuade the decision maker that giving a negative decision is appropriate – see below.

There is no right of appeal against a decision to stay (or a refusal to lift a stay).4

Claimants should first contact the DWP setting out what their free movement right to reside is, and any hardship they may experience if the stay were to continue, providing relevant evidence. If this does not result in a decision, then sending a pre-action judicial review letter may achieve the required result. The grounds could be, firstly, that there is no power to stay because the claimant has a free movement right to reside. As an alternative ground, it can be argued that it is inappropriate to use the power to stay where there is at least an arguable free movement right to reside which an First-tier Tribunal might accept, as to do so has the effect of frustrating a right to have that point decided by an independent tribunal, and further that if the First-tier Tribunal did not accept that point, it would itself have a power to stay.

It is also important to consider whether the claimant would now be entitled to benefit even if this would not have been the case at the time that the decision was suspended – eg, the claimant has since become a worker. In these cases, a decision could result in a closed period supersession awarding benefit on an ongoing basis.5

2. Appeal has been stayed

Where a case is stayed but there is an arguable free movement right to reside and hardship, then advisers should ask the tribunal to deal with their client’s argument as a preliminary issue under rule5(3)(e) of the TP Rules. If the tribunal decides that there was a free movement right to reside, it can issue a decision. If the tribunal decides that there was not such a right to reside, it can continue the stay on deciding the appeal until the outcome of the appeal to the Supreme Court in Fratila is known. (The tribunal could perhaps issue an interim decision on the free movement right to reside point, which could then be subject to further appeal to the Upper Tribunal).

If a claimant would now, as a result of a change since the date of decision under appeal, have a free movement right to reside (eg, s/he has become a worker) so that s/he would now be entitled to benefit, then a new claim for benefit may ensure that some benefit is paid pending the outcome of the appeal.

Hardship guidance

Hardship may result where the amount of benefit is significant, or the lead case will not be resolved for some considerable time6 Hardship may be less likely if the claimant lives with relatives and more likely if s/he has housing costs.7