Entitlement to social assistance

In case C-333/13 Dano (Grand Chamber, 11 November 2014), Ms Dano was a Romanian national, who moved to Germany where she lived with her sister. She did not work or seek work. She received child benefit payments. She applied also for ‘jobseeker’s benefit’, which was refused. The German court found this refusal was consistent with German law, but it referred to the Court of Justice of the European Union (CJEU) the question of whether it was consistent with non-discrimination under EU law.

In considering this question, the court began with some stirring statements of principle: citizenship of the union is “destined to be the fundamental status of nationals of the member states”, and the right of equal treatment for all those similarly situated ratione materiae is a fundamental right of citizenship. The cynic might predict where the court was heading; but, on this occasion at least, wrongly.

Economically inactive

The CJEU observed that the scheme of Directive 2004/38, which deals with rights of residence was as follows. First, there is an unqualified right to enter a member state for three months or to seek work. But (a) that was not Dano’s case (she had been in Germany for more than three months, and was not seeking work), and (b) even if she had been, the directive would have allowed Germany to refuse “social assistance” payments, ie benefits designed to secure minimum levels of subsistence.

Second, there are various rights of residence, for workers and for the self-employed, etc. But, until they have lived in a member state for at least five years, the economically inactive are not entitled to reside in the host state unless they can avoid becoming an unreasonable burden on the social assistance system of the host state. It necessarily follows, said the court, that such persons can legitimately be denied social assistance benefits.

This makes sense. It would be quite pointless, one might think, to refuse to grant a right of residence to economically inactive persons who will otherwise become a burden on the social assistance system, and yet to insist that they be given social assistance. In effect, that course would force member states to deport the persons concerned and to pay them benefits until they were deported. No good would come of that.

Right of residence

There was, however, a fly in the ointment. Indeed, several flies. First, Regulation 883/2004, which deals with social security, seemed to make social assistance payments dependent on “residence”, and not specifically on the right to reside. The CJEU neatly sidestepped this issue, regarding residence as meaning “residence enjoyed by right”. There is also some case law (case C-456/02 Trojani) which could be read as holding that an EU citizen must be treated as if she resided as of right so long as she is in possession of a residence permit that has not in fact been revoked.

The CJEU did not discuss this case law in its judgment. But the answer seems clear: in the light of the clear terms of Directive 2004/38, which post-dates Trojani, entitlement to social assistance is tied to the right of residence itself, and not to any formality associated with it.

Finally, the court dealt briskly with a claim that the position could be affected by the charter, holding in effect that since the grant of benefits was, in this case, a matter for national law alone, the charter did not apply. Indeed, it went so far as to decline jurisdiction to answer the question.

Thus the court takes a narrow view: if the member state is acting within an area where EU law gives it freedom to choose, the charter is inapplicable. Even if EU law forms a doughnut around member state sovereignty, within the hole the state’s freedom of action remains untrammelled by the charter, or by the CJEU’s jurisdiction in that respect. SJ

Paul Stanley QC is a barrister practising from Essex Court Chambers