The question of whether restrictions should be placed on the rights of EU migrants to access social welfare benefits in other EU countries has been a controversial issue in several Member States. Steve Peers assesses a ruling delivered by the Court of Justice of the European Union on 11 November which established that Germany was correct to deny an unemployed Romanian woman access to a particular allowance aimed at job seekers. He writes that while the judgment does not address some of the wider issues in the debate, it nevertheless sends a clear message that EU states can implement measures to tackle the perceived problem of ‘benefit tourism’.

On 11 November, the Court of Justice of the European Union (CJEU) delivered a pivotal judgment in the case of Dano, concerning access to social welfare benefits by EU citizens who move to another Member State. The Court’s approach to the issues in this case (and other judgments on EU citizens with criminal convictions, decided earlier this year) is stricter than usual, so we can deduce from this that it is taking account of the broader political debate on the free movement of EU citizens. However, some aspects of the issues remain to be clarified in later case law.

The judgment

Mrs Dano is a Romanian citizen who applied for job seekers’ benefits in Germany. She has not worked in Germany, and is not looking for work either. The type of benefit she was applying for is a ‘special non-contributory benefit’ under the EU regulation on social security regulation. Also, the EU citizens’ Directive provides that EU citizens are entitled to equal treatment regarding benefits on the territory of another Member State, except during their first three months of entry, if they are job-seekers or if they are seeking student grants before five years of residence.

European Court of Justice building, Credit: Gwenael Piaser (CC-BY-SA-NC-3.0)

European Court of Justice building, Credit: Gwenael Piaser (CC-BY-SA-NC-3.0)

The CJEU said that these exceptions to the equal treatment rule did not apply to Mrs Dano. However, the Court then ruled that she could nevertheless not invoke the equal treatment rule, since she did not qualify to be covered by the citizens Directive in the first place.

The Directive applies to workers, self-employed people, students and others who have sufficient resources. While Article 8(4) of the Directive seems to provide for some flexibility as regards what might be considered sufficient resources, the Court definitively ruled that Mrs Dano did not have them. Indeed, the Court ruled firmly that the requirement in question ‘seeks to prevent economically inactive Union citizens from using the host Member State’s welfare system to fund their means of subsistence’.

While previous judgments had relied upon the equal treatment rules in the Treaties to suggest that impecunious EU citizens might still be entitled to benefits, in the 11 November judgment the Court ruled that unequal treatment was an ‘inevitable consequence’ of the EU rules. Finally, the Court ruled that the EU’s Charter of Fundamental Rights was not applicable, since the rules on access to special social security benefits fall outside the scope of the relevant regulation.

Implications of the ruling for free movement in the EU

Earlier this year, the CJEU ruled in the cases of G and Onuekwere that EU citizens who were sentenced to prison in a host Member State could not count the period of imprisonment either towards the five-year period needed to qualify for permanent residence in the host Member State or the ten year period needed to qualify for further enhanced protection against expulsion. The judgments were delivered shortly after the transition period on the free movement of Romanians and Bulgarians ended, at a time of great public debate about the free movement of EU citizens in the UK.

That debate has increased further since. The Court judgment in Dano provides a clear rejection, as compared to the prior case-law, of access to benefits by those who have never worked and who are not looking for work. In particular, in this judgment the Court now defers to the EU legislature and accepts the limits on access to benefits set out in the EU Directive, rather than insist (as it did before) that any legally resident EU citizen can in principle claim equal treatment as regards access to benefits based on the Treaties (on this point, see further the separate blog post on the historical context of the judgment).

Since the EU legislature is now in charge of access to benefits by EU citizens, it is easier to amend the relevant rules to tighten them up, since amending the citizens’ Directive would only need a Commission proposal and a qualified majority vote in the Council and agreement of the European Parliament. If access to benefits were still defined by the Treaties, then only a Treaty amendment could change the relevant rules, requiring agreement of all Member States and ratification by national parliaments. The judgment has therefore facilitated a possible renegotiation of the EU free movement rules on this issue, and more broadly a renegotiation of the UK’s membership of the EU.

However, it leaves open the question of what restrictions might be placed on job-seekers or former workers’ access to benefits or students’ access to grants. Nor does it impact upon the strong obligation to give equal treatment to those who are working. Furthermore, the judgment doesn’t as such address the possible expulsion of individuals in Mrs Dano’s situation, still less the prospect of denying her re-entry. As I have pointed out before, the citizens Directive places considerable constraints on the former, and does not permit the latter (see also my discussion on the question of whether this judgment affects the expulsion of unemployed EU citizens).

So the ruling doesn’t address some of the key issues in the debate. Nor could it address the question of whether a Member State could introduce quotas for workers coming from other Member States. That is clearly illegal under EU law as it now stands. Having said that, the Court’s judgment sends a clear message that Member States can act against, at the very least, the most blatant types of benefit tourism. The tone of the judgment suggests that the CJEU’s judges, as Americans say, read the morning papers.

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Note: A version of this article originally appeared at Steve Peers’ blog, EU Law Analysis, and gives the views of the author, not the position of EUROPP – European Politics and Policy, nor of the London School of Economics.

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About the author

Steve PeersUniversity of Essex
Steve Peers is Professor of European Union and Human Rights Law at the University of Essex. His research interests include EU constitutional and administrative law, including human rights law, along with EU justice and home affairs law, the free movement of EU citizens, EU external relations law, EU employment law, data protection law and world trade law.

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