Professor Steve Peers, University of Essex

The Court of Justice of the European Union (CJEU) issued a significant ruling in the case of Dano, which dealt with the ability of EU citizens to access social welfare benefits when they relocate to another Member State. The Court’s interpretation of the laws in this case (and other rulings earlier this year involving EU citizens with criminal histories) suggests a stricter approach, possibly reflecting the ongoing political discussions regarding the free movement of EU citizens. However, some aspects of these matters require further clarification through future legal precedents.

The Ruling

This case involved Mrs. Dano, a Romanian citizen who sought jobseeker’s benefits in Germany. She had not been employed in Germany, nor was she actively seeking work.

The benefit she sought is categorized as a ‘special non-contributory benefit’ according to the EU regulation on social security coordination. Additionally, the EU Citizens’ Directive states that EU citizens are generally entitled to equal treatment concerning benefits in another Member State, with exceptions during the initial three months, for jobseekers, or those pursuing student grants before residing for five years.

The CJEU clarified that these exceptions to equal treatment did not apply to Mrs. Dano. However, the Court also ruled that she was ineligible to invoke the equal treatment principle because she didn’t meet the criteria for protection under the Citizens’ Directive in the first place.

This Directive applies to employed and self-employed individuals, students, and individuals with sufficient resources. While Article 8(4) of the Directive suggests some flexibility in defining “sufficient resources,” the Court definitively stated that Mrs. Dano did not meet this requirement. The Court emphasized that this requirement aims to prevent economically inactive EU citizens from relying on the host Member State’s welfare system for their livelihood.

Although past judgments had, based on the Treaties’ equal treatment principles, suggested that EU citizens without financial means might still be eligible for benefits, the Court ruled in this instance that unequal treatment was an ‘inevitable consequence’ of existing EU regulations.

Finally, the Court determined that the EU’s Charter of Fundamental Rights did not apply in this situation, as rules governing access to specialized social security benefits fall outside the scope of the relevant regulation.

Commentary

Earlier this year, the CJEU ruled in the cases of G and Onuekwere that time spent in prison in a host Member State could not be counted towards the five-year residency requirement for permanent residency or the ten-year requirement for enhanced protection against expulsion for EU citizens. These rulings came shortly after the transitional period for the free movement of Romanian and Bulgarian citizens ended, amidst considerable public discourse in the UK regarding the free movement of EU citizens.

This discourse has only intensified since. The Court’s judgment in Dano marks a departure from previous case law, clearly denying access to benefits for individuals who haven’t been employed and aren’t seeking employment. Notably, the Court defers to the EU legislature in this ruling, accepting the limitations on benefit access outlined in the EU Directive. This differs from the Court’s previous stance, which asserted that any legally residing EU citizen could generally claim equal treatment in accessing benefits based on the Treaties (For more on the historical context, see this separate blog post).

As the EU legislature now governs access to benefits for EU citizens, revising these rules is simpler. Amending the Citizens’ Directive only requires a proposal from the Commission, a qualified majority vote in the Council, and the European Parliament’s consent. If benefit access were still determined by the Treaties, altering these rules would necessitate a Treaty amendment, requiring unanimous agreement from all Member States and ratification by their national parliaments. This judgment, therefore, simplifies potential renegotiations of EU free movement regulations on this matter, and more broadly, any renegotiations of the UK’s EU membership.

However, this ruling doesn’t clarify what limitations could be placed on jobseekers, former workers, or students seeking grants. It also doesn’t affect the strong obligation to provide equal treatment to those who are employed. As recently as June, the CJEU emphasized in the Saint-Prix case (discussed here) that it, not the EU legislature, would define “worker,” including former workers (and based on previous case law, jobseekers).

Moreover, the judgment doesn’t directly address the potential expulsion of individuals like Mrs. Dano, nor does it consider denying her re-entry. The Citizens’ Directive significantly restricts the former and prohibits the latter (For further analysis on whether this judgment affects the expulsion of unemployed EU citizens, see this separate blog post).

Therefore, the ruling doesn’t tackle some key issues within this debate. It also couldn’t address whether a Member State could impose quotas on workers from other Member States, as this is undoubtedly illegal under current EU law.

Despite these limitations, the Court’s judgment sends a strong signal that Member States can take action against the most overt forms of benefit tourism. The judgment’s tone implies that the CJEU judges are attuned to the current political climate.

Barnard and Peers: chapter 13, chapter 16