The CJEU Has Backed Curbs on ‘Benefit Tourism’ but Unanswered Questions Remain over the Free Movement Rights of EU Citizens

Written by | Saturday, January 24th, 2015

Steve Peers (LSE European Politics and Policy Blog)

On 11 November, the Court of Justice of the European Union (CJEU) delivered a pivotal judgment in the case of Dano concerning access to social welfare benefits by EU citizens who move to another Member State. The Court’s strict decision contributed to the debate on the free movement of EU citizens. CJEU ruled that Elisabeta Dano, a Romanian citizen living in Germany, who does not work nor seeks employment, does not qualify for a ‘special non-contributory benefit’ under the EU regulation on social security regulation.

Along with this benefit, the Union’s legislature – in particular the Directive 2004/38/EC concerning the right of the EU citizens to free movement – also stipulates that EU citizens are entitled to equal treatment with respect to benefits on the territory of another Member State, except during their first three months of entry, if they are job-seekers or if they are seeking student grants before five years of residence. According to CJEU, this Directive does not apply to the case of Mrs. Dano, though the equal treatment rule is still in place.

Whereas the Court had previously relied in similar cases upon the equal treatment rules, in the 11 November judgment, the Court ruled that unequal treatment was an ‘inevitable consequence’ of the EU rules and that the EU’s Charter of Fundamental Rights was not applicable to special social security benefits.

This judgment is shifting the conditions for an access to social benefits from contracts to the EU legislation adopted in Brussels. The modification of the necessary directives can thus be carried out smoothly via the legislation process. On the other hand, a change of the contracts would require ratification of all Member States. As a result, the facilitation of the process can benefit for example the British government which seeks to amend the right to free movement of persons.

However, it leaves open the question of what impact the Dano case might have on students and job-seekers, and possibly also on the equality of employees. Furthermore, the judgment doesn’t address the possible expulsion of individuals such as in Mrs Dano’s situation, and still less the prospect of denying her re-entry. Additionally, the verdict does not address possible quotas imposed on European migrants, which remain illegal. The Member States have nonetheless gained the right to act against the most visible cases of “social tourism”.

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