EEA nationals who have resided in the UK for a continuous period of five years obtain the right permanently to reside in the UK  pursuant to  I (EEA) Regulation 15 2006. Family members who are not EEA nationals but have resided with an EEA national for a continuous period of five years also obtain the right.

Workers or self-employed persons who have ceased employment (and their family members) also acquire a permanent right of residence. A person who was a family member of a worker or self-employed person has a permanent right to reside if:

• the worker or self-employed person has died;

• the family member resided with him immediately before his death; and

• the worker or self-employed person had resided continuously in the UK for at least the two years immediately before his death or the death was the result of an accident at work or an occupational disease.

The nature of the permanent right to reside has been the subject of several recent decisions of the ECJ. In Secretary of State for Work and Pensions v Taous Lassal & CPAG, C-162/09, it was recognised that the permanent right to reside contained in Article 16 of the Directive did not appear in previous legislation. However, continuous periods of five years' residence completed before the Directive came into force on 30 April 2006, and in accordance with the earlier legislation, must be taken into account for the purposes of the acquisition of the right of permanent residence under Art.16. Absences fro the host Member State of less than two consecutive years which occurred before 30 April 2006, but after a continous period of five years' legal residence completed before that date, do not affect the acquisition of the right of permanent residence pursuant to Art.16.

The decision was followed by the ECJ decision in Secretary of State for Work and Pensions v Maria Dias, C-325/09 in July 2011. Time spent in the UK by Ms Dias when she had no right to reside but was in possession of a residence permit granted by the national authorities, did not constitute legal residence and therefore could not count towards the five years required for permanent residence under Art. 16 of the Directive. However, it may still be possible to argue that the holder of a valid residence permit is entitled to social assistance: see R (Bidar) v LB of Ealing and Secretary of State for Education and Skills, Case C-209/03 at [37], and Trojani v Centre Public d'Aide Sociale de Bruxelles (CPAS), Case C-456/02 at [43]-[46].

Also relevant is McCarthy v Secretary of State for Home Department, Case C-434/09. Mrs McCarthy held dual British and Irish nationality. She was born and had always lived in England where she married a Jamaican national who lacked leave to remain in the UK. The couple applied for but were refused residence permits as an EU citizen and the spouse of an EU citizen. The ECJ considered that all Union citizens who "move to" or reside in a Member State "other" than that of which they were nationals were beneficiaries of the Directive. However, the Directive could not apply to a Union citizen who enjoyed an unconditional right of residence due to the fact that he resided in the Member State of which he was a national. The residence to which the Directive referred was linked to the exercise of the freedom of movement of persons. The territorial scope of the right of residence and the right of permanent residence referred to the Member State to which a Union citizen "moves" in order to exercise their right of free movement. As Mrs McCarthy had never exercised her right of free movement and had always resided in the Member State of which she was a national, she was not covered by the concept of "beneficiary" for the purposes of Art.3(1) of the Directive. Accordingly, art.3(1) was to be interpreted as  meaning that the Directive was not applicable to a Union citizen who had never exercised his right of free movement, who had always resided in a Member State of which he was a national even if they were also a national of another Member State (see paras 32-43 of judgment).