السبت , يونيو 13 2020

Tax credit plan 'could hit Britons'

Thousands of young Britons could lose the right to claim some benefits for four years as part of government plans to tighten the rules for EU migrants.

Introducing a four-year residency test for migrants is a key part of the UK’s negotiations of its EU membership.

But lawyers say applying such a test to migrants alone would breach EU laws, and the government is now considering extending the rule to all UK applicants, from the age of 18.

Ministers would not discuss the plans.

In a speech in November, Prime Minister David Cameron said: “Changes to welfare – to cut EU migration – will be an absolute requirement in the negotiation that I’m going to undertake.”

He urged EU leaders to accede to his “reasonable” proposals, the centrepiece of which is a demand that migrants arriving in the UK have to wait four years to get access to certain benefits, such as tax credits and child benefit.

‘Prohibited under EU law’

The four-year wait for migrants requires an EU treaty change to enact, which would have to be agreed by all 28 EU nations.

And government lawyers have now written to ministers setting out the legal difficulty of such a move.

The document – which has been seen by BBC News – said: “Imposing additional requirements on EU workers that do not apply to a member state’s own workers constitutes direct discrimination which is prohibited under current EU law.”


David Cameron said welfare changes will be an “absolute requirement” of the EU negotiation

The document goes on to say the case for restricting EU migrants’ access to certain benefits can be made using secondary legislation, but warned: “However, the legal arguments to do so are extremely weak”.

The government has therefore drawn up plans for all applicants for tax credits, including British citizens – a move that would largely affect people claiming working tax credits and housing benefits.

In order to receive the benefits, people would need to have been legally resident in the UK for four years.

The test would apply from the age of 18, meaning that anyone aged under 22 who had lived here all their life would not be eligible for tax credits.

The BBC understands ministers have considered starting the UK residency rule from childhood, but believe it would also be discriminatory under current EU laws.

Currently, about 50,000 UK citizens under the age of 22 receive tax credits, and most of them have children.

‘Not going well’

Tax credits are essentially a means of re-distributing income by paying money to families raising children and working people on low incomes.

The BBC has learned that the Work and Pensions Secretary Iain Duncan Smith has pushed for a harder line to be taken with migrants.

As well as the residency test, the Eurosceptic former Tory leader has pushed for EU nationals to have to work in the UK for four years before they become eligible for benefits.

A source said Mr Duncan Smith has always believed people should contribute to the welfare system before they take out.

Labour’s Stephen Timms said it sounded like EU negotiations were “not going well” and ministers were “waking up” to the fact they will not be able to deliver on their promises.

He told BBC Radio 4’s Today programme the government should try to implement a two-year limit, saying: “They might be able to get further with that.”


Note: 2014 shows provisional rolling quarterly estimates

Pushing for tougher benefit rules for EU migrants has been strongly opposed by the Polish government.

The country’s Europe minister, Rafal Trzaskowski told Newsnight last year proposals to discriminate on the grounds of nationality would be a “red line” issue for his country.

There is therefore nervousness in Whitehall about lobbying for the change ahead of parliamentary elections in Poland in October, in case they influence the outcome.

Applying any new rules solely to EU migrants, under existing European rules, risks being challenged in the courts by the European Commission under anti-discriminatory legislation.

Right to reside

The European Commission has already taken the government to court over its habitual residence test. The test ensures that only EU nationals with a “right to reside” in the UK can get certain benefits, such as income support, housing benefit and universal credit.

At a hearing in Luxembourg in June at the Court of Justice – the EU’s highest court – the Commission argued that the government “has created a situation of direct discrimination” by placing extra restrictions on EU nationals that do not apply to British citizens.

A government spokeswoman said: “We’ve already taken action to protect the benefits system and ensure that EU migrants come to this country for the right reasons and to contribute to the economy.

“Now we’re focused on re-negotiating our relationship with Europe and getting a better deal for Britons, and we won’t speculate on other options.”

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