Claiming benefits in a host EU MS (C-299/14 – in progress)

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The case, referred by a German court to the CJEU, questions the compatibility with EU law, and in particular with the principle of equality established by primary and secondary law, of the exclusion of certain EU citizens from entitlement to social benefits provided for by national legislation.

It relates to EU citizens who, during the first three months of residence in the territory of the host Member State (MS) claimed subsistence benefits, but were not considered workers or self-employed persons and could not be regarded as having retained that status pursuant to Art 7(3) of Directive 2004/38/EC.

The applicants in the main proceedings are Spanish nationals (father and son). Within the first three months of their residence in Germany they applied to the ‘Jobcenter’ for the subsistence benefits provided for in German law. The Jobcenter refused to grant those benefits founding its decision on national legislation and the fact that both claimants had resided in Germany for less than three months and that the father was neither a worker nor a self-employed person.

The referring court questions the compatibility with EU law of the complete exclusion of the applicants in the main proceedings from entitlement to subsistence benefits.

The judgment in this case, which is currently at Advocate General’s (AG) opinion stage, could shed some light into possible ways to manage EU immigration in MS where that is a major cause of concern.

Art 24 of the mentioned Directive is relevant as it allows for legal discrimination in the sense that “the host MS shall not be obliged to confer entitlement to social assistance during the first three months of residence or, where appropriate, the longer period provided for in Art 14(4)(b), nor shall it be obliged, prior to acquisition of the right of permanent residence, to grant maintenance aid for studies, including vocational training, consisting in student grants or student loans to persons other than workers, self-employed persons, persons who retain such status and members of their families”. However, this provision must be interpreted narrowly and in accordance with the provisions of the Treaty, including those relating to EU citizenship and free movement of workers.

Unequal treatment between EU citizens who have made use of their freedom of movement and residence and nationals of the host MS with regard to the grant of social benefits is ‘an inevitable consequence of Directive 2004/38 [on account of] the link established by the EU legislature in Art 7 of the directive between the requirement to have sufficient resources as a condition for residence and the concern not to create a burden on the social assistance systems of the MS’ [see paragraph 57 of the opinion].

Further, the principle of non-discrimination, laid down generally in Art 18 TFEU, is given more specific expression in Art 24 of Directive 2004/38 in relation to EU citizens who … exercise their right to move and reside within the territory of the MS. That principle is also given more specific expression in Art 4 of Regulation 883/2004 in relation to EU citizens … who invoke in the host MS the benefits referred to in Art 70(2) of the regulation [paragraph 64].

Since MS cannot require EU citizens to have sufficient means of subsistence and personal medical cover for a three-month stay, it is legitimate not to require MS to be responsible for them during that period. Otherwise, granting entitlement to social assistance to EU citizens who are not required to have sufficient means of subsistence could result in massive relocation liable to create an unreasonable burden on national social security systems.

But, and this is important, the Court has consistently held that it is ‘no longer possible to exclude from the scope of Art 45(2) TFEU (on free movement of workers) – which expresses the fundamental principle of equal treatment, guaranteed by Art 18 TFEU – a benefit of a financial nature intended to facilitate access to employment in the labour market of a MS’ (C-367/11 Prete). However, it is legitimate for a MS to grant such an allowance only after it has been possible to establish a real link between the job-seeker and the labour market of that State (C‑22/08 Vatsouras and C‑23/08 Koupatantze). Other factors, in addition to the search for employment, may be taken into consideration in assessing whether there is a real connection with the geographic market in question.

A priori, nationals of the MS seeking employment in another MS who have established real links with the labour market of that State can rely on Art 45(2) TFEU in order to receive a benefit of a financial nature intended to facilitate access to the labour market (see judgment in C‑22/08 and C‑23/08, paragraph 40).

As a consequence, national legislation establishing a condition that ‘prevents other factors which are potentially representative of the real degree of connection of the claimant with the relevant geographic labour market being taken into account … goes beyond what is necessary to achieve its aim’.

For the AG it is contrary to EU law and, more precisely, to the principle of equal treatment enshrined in Art 45(2) TFEU for the legislation of a MS, such as that at issue in the main proceedings, to automatically exclude a EU citizen from entitlement to a special non-contributory cash benefit, within the meaning of Art 70(2) of Regulation 883/2004 and which facilitates access to the labour market, for the first three months of his residence without allowing that citizen to demonstrate the existence of a genuine link with the host MS.

However, it is for the national competent authorities, including the national courts, to establish whether a link exists or not (not for the CJEU to decide). Some indicators capable of demonstrating the existence of such a link are: children’s education or close ties, in particular of a personal nature, created by the claimant with the host MS or the fact that the person concerned has, for a reasonable period, genuinely sought work, etc. The fact of having worked in the past, or even the fact of having found a new job after applying for the grant of social assistance, ought also to be taken into account.

We need to wait and see what the CJEU will rule on this occasion, but nothing seems to indicate it will not uphold the AG’s opinion.

Having said that, even if the opinion is upheld there is still room for MS to conclude that the “link with the host MS” does not exist and continue to apply different standards as allowed by art 24(2) of Directive 2004/38/EC. This seems to be a case more of principle rather than of substance which is, nevertheless, interesting to monitor.

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