The UK is also embroiled in a long-running legal dispute with the EU over the UK's habitual residence test, which limits benefit claims by new arrivals.

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Over the past year officials have been able to "use more detailed information to produce a much more accurate figure of the possible impact of removing the habitual residence test, " he said.

BBC: UK Politics

But it was facing a legal challenge from the European Commission, "due to the fact that our habitual residence test says people must prove they live here habitually before they can get benefit access", Mr Duncan Smith said.

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If someone from one EU member states dies in an EU state that is not their home country, inheritance issues would be dealt with under the law of the member state where they last had their "place of habitual residence".

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"The European Commission wants to end the habitual residence test and as a result I believe we would have to pay benefits to EU migrants as and when they arrive, rather than proving that they've been here and working and have a residency, " said Mr Duncan Smith.

BBC: UK Politics