Neutralisation for EU citizens

Hi,

I've been living in the UK for 6 years now. I am thinking about applying for permanent residency this year. I'm an EU citizen. my question is:
1, do I need to apply for permanent residency to qualify for neutralisation?
2, I had some periods in the last five years, when I didn't work, I didn't claim any benefits, etc. How would I be able to prove that I was exercising my Treaty rights?

thanks a lot