25 November 2014
On 11 November, the Court ruled in Dano that Member States can deny social assistance to EU citizens who do not work and are not looking for a job in the receiving state. That decision was applauded by both Germany and the UK. According to Cameron, the Court’s decision was “simple common sense”. But was it really?
By Annette Schrauwen
“Can the status of EU citizenship be relied upon against the economic difficulties of modern life?” This question marks the beginning of an advisory Opinion in a case before the European Court of Justice (the Court) involving German pensioners claiming a compensatory supplement in Austria, that was decided last year. [C-140/12, Brey] That decision did not receive as much media coverage as the decision in the Dano case did.
In this latter case, Elisabetta Dano, a Romanian living with her sister in Germany since 2010, is portrayed as the social benefit tourist par excellence. She has never worked in Germany and apparently was not looking for work. She applied for a social benefit and the German authorities refused her application. She challenged the refusal on grounds of EU law, notably free movement of persons and non-discrimination on the basis of nationality. Upon questions from the national judge, the CJEU ruled that Member States can exclude EU citizens in the position of Elisabetta Dano from access to the specific social benefits that Ms Dano had requested.
While the result of the case may be perfectly convincing from the point of view of the need to preserve the national solidarity collective, it is interesting to take a step beyond the result and look at the reasoning of the Court in this particular case and its contribution to the conceptual evolution of EU citizenship.
In the early citizenship cases on access to social benefits in host countries, the Court showed some creative interpretation resulting in economically inactive EU citizens being able to invoke the prohibition of discrimination on grounds of nationality of article 18 TFEU. According to this case law EU citizens find themselves within the scope of application of the Treaties whenever they reside in a Member State other than that of their nationality, no matter whether the basis of their residence is EU law, national law or international law. In Trojani, the Court ruled that, once it is ascertained that economically inactive citizens are in possession of a residence permit, they may rely on the prohibition of discrimination on grounds of nationality in order to be granted a social assistance benefit. This interpretation no longer stands, since the Court in Dano took the view that both non-discrimination provisions article 24 of Directive 2004/38 and article 4 of Regulation 883/2004, as specific expressions of the non-discrimination principle of article 18 TFEU, do allow Member States to exclude all economically inactive EU citizens from certain social assistance benefits (notably those who guarantee a minimum subsistence income) when they don’t have a right to residence based on article 7 of Directive 2004/38. Thereby the Court seems to respect the EU legislature’s choice to narrow down the personal scope of application of the Treaties with respect to social assistance, and reserves the right to equal treatment only to those citizens who are either economically active, students, or do have sufficient financial means while economically inactive.
A consequence of the reasoning of the Court is that a proportionality test of the national legislation is no longer necessary. Previous case law regarding access to social benefits of economically inactive citizens allowed Member States to distinguish between nationals and non-nationals only if the distinction was based on objective considerations that are independent of the nationality of the persons concerned and proportionate to the legitimate aim of the national provisions. Under that case law, it is permissible to prevent assistance to economically inactive citizens from other Member States from becoming an unreasonable burden and therefore limit it to those who have demonstrated a certain degree of integration into the host society, as long as the rules to establish that degree of integration are proportionate. Since Dano, that test is no longer relevant for economically inactive citizens unless they have obtained a residence right based on article 7 of Directive 2004/38. It presupposes that they have or once had sufficient financial means and comprehensive sickness insurance, the assessment of which is to be made in accordance with the proportionality principle.
The Court could have brought the German legislation in line with the ‘genuine link’ and proportionality test. It could have argued that national legislation in principle can exclude nationals of other Member States from social assistance on the basis of the lack of a genuine link with the host society. A criterion whereby those who never looked for a job nor were planning to do so is demonstrating the lack of a genuine link and is proportionate in order to protect the viability of the host state’s social assistance system. Had the Court argued this way, the same test would have applied to all EU citizens, irrespective of their financial history. Though it would not have made any difference for Ms Dano’s claim to social assistance, in my view it would have done more justice to the fundamental status of EU citizenship than a financial means test based on secondary legislation.
Respect for reasonable national limits to social benefit access seems a matter of simple common sense. Yet, such limits may also have an undesirable side-effect. After all, enforcing these limits by applying a different test to those who never had sufficient financial means as compared to those who once did may send the message that the fundamental status of EU citizenship brings only protection to those who can afford it.
Annette Schrauwen holds a chair in European integation, in particular citizenship law and history, at the Amsterdam Centre for European Law and Governance. Her personal page can be accessed here.