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Realise that this was not solicited but thought i might try and shed some light on the "self-sufficiency and unreasonable burden test".
The new right to reside test, on the face of it, merely requires someone to show they have residence rights, e.g. by proving ctizenship, through the immigration rules or through EU law. Workers etc have a right to reside by virtue of Article 39 EC and Regulation 1612/68 - others may get it through other regulations and directives for example retired workers through Reg 1251/70.
The problem for the economically inactive EU citizen is that where no other EU rights exist, they are dependent on Article 18 EC for their right to reside. While this gives them a directly effective right to reside, it is contingent on their not being a "burden" on the host state's welfare system, because of the residency directives(Directive 90/364, Directive 90/365 & Directive 93/96). When assessing the inactive EU citizen's right to reside and therefore right to benefit, the DWP are assessing whether that person complies with the residence directives
Claiming benefit does not automatically make someone a burden on the host state. The host state must show that they are an "unreasonable burden". (C-184/99 Grzelczyk <2001> ECR I-06193) When determing whether a person is an unreasonable burden, a balance has to be drawn between the legitimate interests of a member state in protecting their public finances, and the acceptance of solidarity between the nationals of Member States.
The problem is the dearth of case law on what factors lead to Member States having to show their solidarity to one anothers nationals. What in effect constitutes an unreasonable burden? As far as i know there are only 3 cases that deal directly with this point: C-200/02 Chen & Zhu (opinion of AG), C-413/99 Baumbast & C-184/99 Grzelczyk - (if anyone knows of others i would be grateful to know of them)
They provide little guidance on what an unreasonable burden is: in Baumbast and Chen there was virtually no burden at all on the host state (the UK). There is also an indication from the advocate general in Collins (which was not followed by the court) that the Grzelczyk and Baumbast decisions were made because the claimants were deserving cases.
What we can say from these cases is that when assessing whether someone is an unreasonable burden, the DWP should have regard to
1. the likelihood that any claim for benefit will be temporary
2. the period of time someone has lived in the host state before claiming (i.e. before becoming a burden)
3. the ECJ also implied (in Baumbast at para 91) that any decisions relating to this area should be taken in accordance with Community law and the general principles of that law. This could be interpreted as including the European Convention on Human Rights. Any argument would not be that there was a breach of human rights but rather that human rights considerations should be a factor in any determination (i.e. family links - implications of return to former country)
Those who fail the domestic right to reside test do not lose their right to reside, ironically they can be seen to retain their right to reside by being refused benefit (i.e they are not a burden). Once refused it is difficult to see how a repeat claim as in the pre-exisiting HRT will work.
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