A Slovakian national resident in the UK claimed the child element of universal credit for her son living in Slovakia, arguing it was an exportable ‘family benefit’ under the EU Coordination Regulation. The Supreme Court held that the child element is not a separate benefit but an integrated component of UC, which as a whole falls outside the Coordination Regulation. Appeal dismissed.
Background
Ms Michaela Simkova, a Slovakian national with a permanent right to reside in the United Kingdom, claimed universal credit (‘UC’) including the child element in respect of her son, Markus, who resided with his grandparents in Slovakia. Under domestic law, entitlement to the child element requires the child to ‘normally live with’ the claimant (regulation 4(2) of the Universal Credit Regulations 2013). Because Markus lived in Slovakia, Ms Simkova could not satisfy this condition. She was initially awarded the child element on 25 September 2017, but this decision was revised on 17 October 2019 and the entitlement withdrawn.
Ms Simkova argued that the child element of UC constituted a ‘family benefit’ within the meaning of article 3(1)(j) of the EU Coordination Regulation (EC) No 883/2004, which would trigger the exportability provisions in articles 7 and 67 of that Regulation, deeming Markus to reside with her for the purposes of the domestic legislation. The Secretary of State for Work and Pensions (‘SSWP’) maintained that the child element was not a family benefit within the meaning of the Coordination Regulation, and that UC must be characterised as a single composite benefit that falls outside the scope of the Regulation entirely.
The Upper Tribunal allowed the SSWP’s appeal from the First-tier Tribunal, and the Court of Appeal (Lewison, Green and Laing LJJ) dismissed Ms Simkova’s further appeal. Permission to appeal to the Supreme Court was granted on 9 October 2024.
The Issue(s)
The central question was whether the child element of UC is a ‘family benefit’ within the meaning of article 3(1)(j) of the Coordination Regulation, such that the exportability provisions of that Regulation would apply. This turned on the logically prior question: does EU law require the child element to be assessed as a separate, free-standing benefit for the purposes of characterisation under the Coordination Regulation, or must UC be treated as a single composite benefit?
The appellant’s key arguments
Ms Simkova advanced several arguments. First, she relied on the analogy with child tax credit (‘CTC’), which was a free-standing benefit classified as a family benefit under the Coordination Regulation, and which UC was designed to replace. Secondly, she argued that the terms of the Coordination Regulation are autonomous EU concepts, and reliance on the domestic legislative structure of UC would allow a Member State to circumvent the protections afforded by the Regulation simply by restructuring its benefits system. In support of this, she relied on the CJEU’s decision in Lachheb (Case C-177/12). Thirdly, she contended that there was an emerging doctrine of severance in CJEU case law under which different components of a single benefit could be separately characterised, relying in particular on the Annex IIa case (Case C-299/05) and Bartlett (Case C-537/09). Finally, she invited the Supreme Court to make a reference to the CJEU under article 158 of the Withdrawal Agreement.
The respondent’s key arguments
The SSWP argued that UC is a single, unitary benefit under domestic law; one cannot claim the child element in isolation. It is an anti-poverty measure addressing a wide range of needs, many of which are not aimed at risks within the Coordination Regulation. The child element is deeply integrated into the composite scheme and cannot be severed for separate characterisation. The SSWP further argued that a doctrine of severance would be unworkable and was not supported by the case law.
The Court’s Reasoning
The nature of UC as a single composite benefit
The joint judgment of Lord Lloyd-Jones and Lady Rose (with whom Lord Sales, Lord Hamblen and Lord Richards agreed) began by examining the statutory structure of UC. They emphasised that UC is a single benefit comprising a standard allowance to which further amounts may be added depending on household circumstances. A claim must be made for UC itself; it is not possible to claim any additional element in isolation. As Lord Lloyd-Jones and Lady Rose stated:
UC is, therefore, a single benefit comprising a standard allowance payable to all who are eligible to which may be added further amounts, depending on the circumstances of the particular household. A claim has to be made for UC. It is not possible to make a claim for any of the additional amounts in isolation. The unitary nature of UC is readily apparent.
They adopted the description of UC given by Andrews LJ in R (Salvato) v Secretary of State for Work and Pensions [2021] EWCA Civ 1482, which emphasised that different elements of UC that feed into the overall calculation cannot be separated out without upsetting the system.
The two-condition test for social security benefits
The Court confirmed the well-established test from CJEU case law: a benefit is a coordinated social security benefit if (i) it is granted without individual and discretionary assessment of personal needs, on the basis of a legally defined position, and (ii) it relates to one of the risks expressly listed in article 3(1). While condition (i) was common ground, the Court held, citing Hoeckx (Case 249/83), that the benefit must be directed at one and only one of the listed risks. As stated in Hoeckx:
the list of risks contained in that paragraph is exhaustive and that as a result a branch of social security not mentioned in the list does not fall within that category even if it confers upon individuals a legally defined position entitling them to benefits.
The Court found that UC as a whole could not satisfy this second condition, as it was common ground that it is an anti-poverty measure addressing a wide range of needs not confined to any single listed risk.
Rejection of the CTC analogy
The Court accepted that CTC had been classified as a family benefit but noted:
the short answer to this submission is that CTC was a free-standing benefit. By contrast, it is clear from the scheme and detailed provisions of the WRA 2012 that the child element of UC is not a free-standing, independent benefit. It is deeply integrated into a generalised, composite benefits scheme and it is UC which constitutes the benefit which must be characterised for the purposes of the Coordination Regulation.
The Court further noted that the integration of the child element into UC was a matter of substance and not of presentation, and no suggestion of abuse had been made.
Rejection of the autonomous concepts argument and Lachheb
The Court accepted the established principle that Member States cannot direct the application of the Coordination Regulation simply by labelling benefits, and that the mechanism of payment is immaterial. However, they rejected the broader submission drawn from Lachheb:
Lachheb is not authority for the proposition that one can ignore the structure of the benefit in domestic legislation or the way it is administered. As we have already explained, the Coordination Regulation is a coordinating measure, not a harmonising measure and the Member States retain a large degree of discretion as to how generous their benefit system will be and to whom benefits will be awarded, provided that there is no discrimination on the grounds of nationality.
Rejection of the emerging doctrine of severance
The Court examined the CJEU decisions in Newton, Hughes, Bartlett and the Annex IIa case. As to Newton and Hughes, the Court held these concerned characterisation of a benefit’s dual functions or its treatment for different classes of claimants, not severance of components of a single benefit. As to Bartlett:
We do not accept Mr de la Mare’s contention that the CJEU’s judgment in Bartlett establishes that each component of a benefit must be assessed separately to determine whether it is exportable. That submission seeks to draw too broad an inference from the judgment. Bartlett was a pragmatic decision by the Court in response to a very particular difficulty created by the list in Annex IIa.
The Court also distinguished the structure of DLA from UC, noting that DLA’s two components had separate criteria and could be claimed independently, unlike the elements of UC. Agreeing with Green LJ in the Court of Appeal, Lord Lloyd-Jones and Lady Rose stated:
a doctrine of severance, such as is contended for, would be a controversial and complex policy and would, from the perspective of legislative drafting, have been set out comprehensively and explicitly, were it to exist at all.
They further agreed that if such a doctrine existed, it could not logically be limited to family benefits and would require disaggregation across all branches of social security — a result unsupported by any case law.
Reference to the CJEU
The Court declined to make a reference to the CJEU under article 158 of the Withdrawal Agreement. Without deciding the contested questions of power to make such a reference, the Court held as a matter of discretion that a reference was unnecessary given the clarity of its conclusions.
Practical Significance
This judgment is of considerable practical importance for the coordination of social security benefits post-Brexit and for the characterisation of composite welfare benefits under the Coordination Regulation. It establishes clearly that where a Member State’s domestic legislation creates a single, unitary benefit with integrated elements addressing multiple risks, the benefit must be characterised as a whole for the purposes of the Coordination Regulation. Individual elements cannot be severed and separately classified to invoke the exportability provisions. This prevents the use of the Coordination Regulation to override domestic eligibility conditions for components of composite benefits like UC where the child does not reside with the claimant. The decision also confirms the limits of the autonomous EU concepts principle: while Member States cannot manipulate classification through labelling, the substantive structure of benefits in domestic law remains determinative. The Court’s refusal to recognise an emerging doctrine of severance has broader implications, precluding arguments that any element of a composite benefit might be separately exportable under the Coordination Regulation.
Verdict: The appeal was dismissed. The Supreme Court unanimously held that the child element of universal credit is not a free-standing ‘family benefit’ within article 3(1)(j) of the Coordination Regulation but is an integrated component of universal credit, which as a composite benefit falls outside the scope of the Coordination Regulation. Ms Simkova was therefore not entitled to the child element of UC in respect of her son residing in Slovakia.
Source: Simkova v Secretary of State for Work and Pensions [2025] UKSC 41
