By Dion Kramer
In November 2014 the Dano judgment attracted unusual public attention, not least because of its importance for UK Prime-Minister David Cameron’s campaign against the phenomenon of ‘welfare tourism’. Although political and administrative attention has been redirected towards the mounting refugee crisis, scholars, administrators and some politicians have been eagerly awaiting the CJEU’s Alimanovic judgment in the sensitive field of EU citizens’ right to equal treatment as regards access to national welfare benefits. Dano made clear that Member States may reject claims to social assistance by EU citizens who have no intention to work and cannot support themselves. Alimanovic gave the Court the opportunity to clarify the application of this principle in the more complicated factual situation of an EU citizen who applies for social benefits after having worked for 11 months. In its bid to contribute to ‘legal certainty’ and ‘transparency’, Member States will for sure welcome the Court’s judgment, but the legacy of Brey still complicates the desired carte blanche for national authorities to refuse any claim to social assistance by indigent EU citizens.
The case concerns the entitlement of Nazifa Alimanovic and her three German born children, all possessing the Swedish nationality, to German social welfare benefits. These welfare benefits include Arbeitslosengeld II, Germany’s subsistence allowance for the long-termed unemployed, and social allowances for beneficiaries unfit to work. In contrast with the Dano case, in which the EU citizen in question had never worked and was not seeking work, mother Alimanovic and her oldest daughter did have temporary jobs between June 2010 and May 2011 in Germany. As a result, they received social benefits from 1 December 2011 to 31 May 2012, after which the ‘Job Center’, the responsible German authority, withdrew their grant.
According to the Job Center, mother and daughter Alimanovic lost their ‘employee’ status half a year after becoming involuntarily unemployed. Consequently, they could be refused the benefits on the basis of the German provision which excludes workseekers from entitlement to social assistance benefits. Uncertain about the valid transposition of European law into domestic legislation, the Bundessozialgericht (Federal Social Court) referred preliminary questions to the Court of Justice which essentially narrowed them down to the question of whether work-seekers enjoy a right to equal treatment with regard to access to social assistance.
Importantly, the Court follows the factual findings of the referring court, that the rights of residence of mother and daughter Alimanovic arise solely out of their status as job-seekers. The Court also classifies the benefits at issue as ‘social assistance’ within the meaning of Article 24(2) of Directive 2004/38 (‘Citizenship Directive’), as their predominant function is to cover the minimum subsistence costs necessary to lead a life in keeping with human dignity. Answering the main question, the Court starts with recalling its finding in Dano that a Union citizen can only claim equal treatment with regard to social assistance on the basis of Article 24(2) of the Citizenship Directive if his residence complies with the stated conditions. The Court repeats that an objective of the Directive is to prevent Union citizens from becoming an unreasonable burden on the social assistance system of their host member State (paras. 49-50).
It then immediately turns to the question of lawful residence of the Alimanovic family. In reference to Vatsouras and Koupatantze, the Court holds that according to Article 7(3)(c) of the Directive the category of Union citizens who become involuntarily unemployed within their first 12 months of residence retain their status as workers for six months and may, for this period, have the right to social assistance on the basis of article 24(1) (para. 53-54). After this six-month period, however, it may very well be that Union citizens retain their right to residence as work-seekers but the derogation of article 24(2) allows Member States not to grant them social assistance (para. 57).
In marked contrast to its earlier Brey judgment, the Court states that in the present circumstances no proportionality test in the form of an individual assessment of the person concerned is required (para. 59). Instead, the Court finds that by ‘establishing a gradual system’ as regard the retention of the worker status which seeks to safeguard the right of residence and access to social assistance, the Citizenship Directive itself already ‘takes into consideration various factors characterizing the individual situation of each applicant for social assistance and, in particular, the duration of the exercise of any economic activity’ (para. 60).
According to the Court, the German legislation that grants a right to social assistance for a period of six months after the cessation of employment, would ‘guarantee a significant level of legal certainty and transparency while complying with the principle of proportionality’ (para. 61).And while the single claim of the Alimanovic family would not be an unreasonable burden on Germany’s system of the benefits at issue, the accumulation of all the individual claims would be bound to do so (para. 62). In other words, the German authorities were not in breach of EU law when rejecting Alimanovic’s claim for Arbeitslosengeld II for longer than six months.
Equal Treatment or Lawful Residence First? Completing the Reversal of Order
First of all, the Court appears to confirm the reversal of its legal reasoning with regard to claims to social assistance by EU citizens that already became visible in Dano. Following the landmark claim in Grzelczyk that ‘Union citizenship is destined to be the fundamental status of nationals of the Member States’, the Court had so far ruled that those who find themselves in the same situation enjoy, in principle, the same treatment in law irrespective of their nationality. Measures taken as part of exceptions and limitations to this main principle may be legitimate, but never become the automatic consequence of a claim to the host Member State’s social assistance system.
In Alimanovic, however, the Court confirms its finding in Dano that so far as concerns access to social benefits, a Union citizen can claim equal treatment only if his residence in the territory of the host Member State complies with the conditions for lawful residence of the Citizenship Directive. But whereas in Dano the Court still refers to the ‘fundamental status’ of Union citizenship and explicitly affirms Article 24(2) as an exception to the fundamental principle of non-discrimination, Alimanovic confirms this symbolic reversal by skipping any reference to Union citizenship and straightly moving to residence conditions (paras. 49 – 51). In the Grzelczyk line of cases, any claim to social assistance by an EU citizen would have to be considered in the light of equal treatment by national authorities, although this claim could have consequences for the right of residence. Alimanovic, by contrast, confirms that for social assistance the right to equal treatment depends on an assessment of the Union citizen’s lawful residence. This reversal of order is not only important at the symbolic level, but may have implications for administrative procedures and the division of competences between national immigration and welfare authorities.
Alimanovic versus Brey: an Individual Assessment?
The most fascinating aspect of the judgment is the curious position of the ‘individual assessment’. As the Advocate-General points out in his opinion, the German measure may be an appropriate, albeit restrictive, transposition of Article 7(3)(c) of Directive 2004/38, but its automatic consequences for entitlement to social assistance seem at odds with the requirements formulated in Brey. The Court was quite explicit in paragraph 77 of its Brey judgment that a mechanism that automatically bars economically inactive Union citizens from receiving a particular social security benefit would not enable the competent authorities to carry out ‘an overall assessment of the specific burden which granting that benefit would place on the social assistance system as a whole by reference to the personal circumstances characterising the individual situation of the person concerned’.
In Alimanovic, however, the Court departs from the A-G’s opinion by not requiring such an individual assessment in this case. Apparently, an ‘automatic exclusionary mechanism’ is allowed when this individual assessment is internalised within the measure: by taking into consideration ‘various factors characterising the individual situation of each applicant for social assistance and, in particular, the duration of the exercise of any economic activity’, the Citizenship Directive is itself considered to establish a gradual system as regards the retention of the status of worker which seeks to safeguard the right of residence and access to social assistance. Moreover, the Court confirms that the accumulation of all individual claims by, assumingly, workseekers who worked less than a year to Arbeitslosengeld II would be an unreasonable burden on the German social assistance system.
Here it appears that the Court attaches weight to the factual finding that the right to residence of mother and daughter Alimanovic was solely based on their status as ‘workseeker’ on the basis of Article 14(4) of the Citizenship Directive. The Court assumes that there is no need to assess the right of residence of the Alimanovic family in the light of Article 7(1)(b), as was the case in Brey. For this category of Union citizens, possessing sufficient resources not to become an unreasonable burden on the social assistance system is a requirement for lawful residence, which subsequently grants equal treatment with regard to social benefits (para. 72 Brey). As a result, a combined reading of Alimanovic and Brey leads to the conclusion that national competent authorities are not fired from the obligation to carry out an individual assessment on the basis of Article 7(1)(b). It also leads to the alarming observation that the Court accepts the existence of a category of EU citizens who enjoy a right of residence but have no access to minimum subsistence benefits.
Objectivizing the ‘Unreasonable’ Burden of the Union Citizen
By accepting the existence of an objective ‘gradual system’ as regards the right of residence and access to social assistance it is clear that with Alimanovic the Court is opting for legal certainty and transparency. Although it could be argued that this finding does justice to the intentions and objectives of the legislator, the Court’s discussion of the principle of proportionality is far from convincing.
Although it seems reasonable how the Court finds that the Citizenship Directive establishes a ‘gradual system’ by taking account of ‘the duration of the exercise of any economic activity’, it is harder, not to say impossible, to see how the Directive takes account of ‘factors characterising the individual situation of each applicant for social assistance’ (para 60). As follows from earlier case law (as translated into guidelines by the Commission in COM(2009) 313 final), when assessing whether the residence of an individual constitutes an unreasonable burden on its social assistance system, national authorities are required to take account of ‘social factors’ such as the level of connection of the EU citizen with the society of the host Member State and any considerations pertaining to age, state of health, family and economic situation. The fact that mother Alimanovic was born in Bosnia and Herzegovina and her children were born in Germany between 1994 and 1999 hints at her possible history in Germany as a refugee, escaping the violent conflict in her home country. These circumstances may potentially reflect a connection with German society and hint at the existence of family relations, circumstances which can impossibly be taken into account by the Directive.
Finally, the very fact that the Court considered the ‘gradual system’ with regard to the retention of worker status compatible with the principle of proportionality, gives rise to a crude observation. Whereas Article 7(3)(c) provides for a retention of worker status for six months after employment for less than a year, Article 7(3)(b) provides in principle for the unlimited retention of the worker status after employment for more than a year. If the words of the Court are taken literally, it follows that if mother and daughter Alimanovic had only worked one month longer, Germany should have granted them unlimited access to social assistance, a measure which should be considered equally proportionate according to the new logic of the Court. What a difference a month can make!