Judgement of the European Court of Justice 15 September 2015 Alimanovic C‑67/14

Overview I. Introduction II. Previous Ruling III. Facts IV. Questions of the Federal Social Court V. Opinion of the Advocate General VI. Ruling of the ECJ VII. Conclusion VIII. Consequences of the judgement

I. Introduction Financial assistance to EU citizens from another MS Scope of the fundamental right to free movement Protection of the citizen‘s financial situation and dignity

II. Previous ruling: Dano MS may refuse to grant social assistance to Union citizens Scope: Citizens who enter the MS’ territory without intending to find a job and without being able to support themselves on their own

III. Facts (1) Ms. Alimanovic and her three children are Swedish citizens Children born in Germany Moving back to Germany in 2010

Financial support from 1st December 2011 to 31st May 2012 (ALG II) III. Facts (2) Ms. Alimanovic and her oldest daughter worked between June 2010 and May 2011 in different short-term jobs Unemployed since May 2011 Financial support from 1st December 2011 to 31st May 2012 (ALG II)

III. Facts (3) Jobcenter Berlin suspends the grant of benefits due to change of legal circumstances Reason: German government had issued a reservation on 19th December 2011

Reservation ‘The Government of the Federal Republic of Germany does not undertake to grant to the nationals of the other Contracting Parties, equally and under the same conditions as to its own nationals, the benefits provided for in Book Two of the Social Code — Basic Income Support for Jobseekers — in the latest applicable version’.

III. Facts (4) Annulment of the decision of the Jobcenter Berlin through the Sozialgericht Berlin (Social Court) Reason: Art. 4 of Regulation No 883/2004 prohibits any discrimination against Union citizens in relation to the nationals of the Member State concerned with regard to the special non-contributory cash benefits Position of Jobcenter: Job-seekers may be refused the grant of social assistance because art. 24(2) of Directive 2004/38 states the freedom of choice of the MS Position of Bundessozialgericht (Federal Social Court): Ms Alimanovic and her daughter Sonita could no longer rely on a right of residence as workers  Consequence: Preclusion from claiming subsistence allowances for the long-term unemployed 

IV. Questions of the Federal Social Court (1) 1. Does the principle of equal treatment apply also to the special non-contributory cash benefits?  2. If the first question is answered in the affirmative: May the principle of equal treatment be limited by provisions of national legislation that do not in any circumstances allow access to those benefits in the case in which the right of residence of the citizen of the Union in another Member State arises solely out of the search for employment and, if so, to what extent may that principle be so limited?

IV. Questions of the Federal Social Court (2) 3. Does Article 45(2) TFEU, in conjunction with Article 18 TFEU, preclude a provision of national law that does not in any circumstances allow the grant of a social benefit, intended to ensure subsistence and to facilitate access to the labour market, to citizens of the Union who, as job-seekers, may invoke the exercise of their right of free movement when they enjoy a right of residence arising solely out of the search for employment, irrespective of a link to the host Member State?

V. Opinion of the Advocate General (1) “Art. 24(2) of Directive 2004/38 must be interpreted as precluding legislation of a Member State, which, automatically and without individual assessment, excludes from entitlement to certain ‘special non-contributory cash benefits’[…] nationals of other Member States who are seeking employment in the territory of the host Member State after entering that labour market, although those benefits are granted to nationals of the host Member State who are in the same situation.” The MS cannot treat EU citizens and citizens of the host MS in a different way Requirement of an individual examination

V. Opinion of the Advocate General (2) If a real link between citizen and MS exists, an automatic exclusion from the benefits shall be prevented Comparison: The court has permitted in the past that certain benefits require integration in the host MS A real link between the applicant and the MS is demonstrated by the fact that the EU citizen has worked in the MS in the past or genuinely sought for work

VI. Courts judgement (1) 3. Question: Does the primary EU law preclude a provision of national law which ensures subsistence and facilitates access to the labour market but does not allow the grant of a social benefit to job seeking EU Citizens […]? Condition: Social benefit intends to facilitate access to the labour market Subsumtion: The predominant function of the benefits is to cover the minimum living costs Result: As the benefit must be characterized as social assistance there is no need to answer the third question 1. Question: Does the principle of equal treatment apply also to the special non-contributory cash benefits?  Later withdrawn due to the Dano decision which says that the principle of equal treatment usually applies to special non-contributory cash benefits but derogations stay possible under certain circumstances.

VI. Courts judgement (2) 2. Question: May the principle of equal treatment be limited by provisions of national legislation that exclude EU citizens, whose right of residence is only based on their motivation to find a job, from the benefits? Equal treatment of a Union citizen with nationals of the MS can only be claimed if his residence in the territory of the host Member State complies with the conditions of Directive 2004/38 (judgment in Dano, C‑333/13, EU:C:2014:2358, paragraph 69) Reason: Otherwise nationals of other Member States would become an unreasonable burden on the social assistance system of the host MS Condition: Applicability of the principle of equal treatment Lawfulness of the residence on the territory of the host MS: Two legal possibilities

VI. Courts judgement (3) 1. Alternative: Right of residence could be based on art. 7(3)(c) of Directive 2004/38 If the worker is “in duly recorded involuntary unemployment after completing a fixed-term employment contract of less than a year or after having become involuntarily unemployed during the first 12 months and has registered as a jobseeker with the relevant employment office”, he retains the status of worker for no less than six months Problem: At the time of the refusal Ms Alimanovic and her daughter no longer retained that status because they were only regarded as a workers until six months after the last employment in May 2011 (Bundessozialgericht)

VI. Courts judgement (4) 2. Alternative: Right of residence could be based on art. 14(4)(b) of Directive 2004/38 Union citizens who have “entered the territory of the host Member State in order to seek employment may not be expelled for as long as they can provide evidence that they are continuing to seek employment and that they have a genuine chance of being engaged”. This would usually entitle the EU citizens to equal treatment in the host MS Exception: Derogation in art. 24 (2) constitutes the right of a MS not to grant the assistance “By way of derogation from paragraph 1, the host Member State shall not be obliged to confer entitlement to social assistance”.

VI. Courts judgement (5) Usually need for individual assessment by the MS (judgment in Brey, C‑140/12, EU:C:2013:565, paragraphs 64, 69 and 78) But Directive 2004/38 itself takes into consideration various factors characterising the individual situation of each applicant for social assistance Legal certainty and transparency of the Directive  Criterion: Period of six months after the end of employment during which the right to social assistance is retained Enables the concerned persons to know their rights and obligations Proportionality: Adequate consideration and balance of all interests Creation of an unreasonable burden Article 14(1) of Directive 2004/38: “Union citizens and their family members shall have the right of residence provided for in Article 6, as long as they do not become an unreasonable burden on the social assistance system of the host Member State.” The assistance which is granted to a single applicant can hardly be described as an ‘unreasonable burden’ for a Member State, within the meaning of art. 14(1). But the accumulation of all the individual claims which would follow would reach such a level.

VII. Conclusion Article 24 of Directive 2004/38 must be interpreted as not precluding legislation of a Member State under which nationals of other Member States who are in a situation such as that referred to in Article 14(4)(b) of that directive are excluded from entitlement to certain ‘special non-contributory cash benefits’ within the meaning of Article 70(2) of Regulation No 883/2004, which also constitute ‘social assistance’ within the meaning of Article 24(2) of Directive 2004/38, although those benefits are granted to nationals of the Member State concerned who are in the same situation. Result: No applicability of the principle of equal treatment due to the lack of a right of residence

VIII. Consequences of the judgement Dano: Assistance can be denied if the citizen only enters the MS in order to receive benefits Alimanovic: Assistance can even be denied if citizens seek for work EU citizenship aims to offer equal conditions and the possibility of social inclusion throughout the European Union By limiting the chances of a EU citizen to be granted social assistance in another MS, the right of free movement is being affected Right of free movement can only be realised by wealthy EU citizens Consequence: The citizen is allowed to stay in the MS (free movement) but is not entitled to financial support which could offer a minimum living standard Problem: Exclusion instead of social and economic inclusion Less identification with the European idea and less support from the EU citizens Conflict: Economic burden for the MS vs. free movement of persons

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