An EU court ruled Tuesday that Britain was within its rights to limit some welfare payments to European citizens, in a move that could provide a boost for the "Remain" camp ahead of the country's in/out referendum on EU membership.
The ruling comes nine days before the closely-watched referendum, with the latest opinion polls indicating a surge in voters wishing to leave the EU.
The European Court of Justice - the bloc's top tribunal - decided on Tuesday that Britain can restrict payments such as child benefits in certain cases, even though this indirectly discriminates against foreign EU citizens living in Britain.
The case dates to 2013, when the European Commission took Britain to court after receiving numerous complaints over its benefit criteria. The EU's executive argued that British welfare payment rules unfairly discriminated against other EU nationals living in Britain.
In most EU countries, it is enough to prove that you are habitually resident to qualify for the benefits in question. Britain, however, imposes an additional "right to reside" test that its own nationals usually meet automatically, while other EU citizens have to deliver further proof.
The aim is to prevent people from coming to Britain without the ability to support themselves, and then drawing on welfare. Unlike many other EU countries, Britain does not require people to pay into its social security system before receiving benefits.
The Luxembourg-based judges recognized that the extra requirement "gives rise to unequal treatment," but argued that this can be justified by the need to protect British finances.
The ruling relates predominantly to family welfare payments such as child benefit and child tax credits, which are funded from general taxation.
Welfare payments to EU migrants have helped fuel the debate in favour of so-called Brexit. As part of a deal aimed to keep Britain in the EU, Prime Minister David Cameron secured a "safeguard mechanism" that will restrict incoming workers' access to benefits for four years.
Tuesday's court ruling "vindicates" that approach, said commission spokesman Margaritis Schinas. "Free movement is a right to free circulation, not a right of free access to member states' benefit systems," he added.
The British tax office also welcomed the ruling. But Iain Duncan Smith, a Conservative rebel lobbying for Vote Leave, called it "proof positive that the unelected European Court of Justice is now supreme above our elected parliament."