Social Assistance for Economically-Inactive Citizens within the EU s Market

Transcription

1 Social Assistance for Economically-Inactive Citizens Charles Edward O Sullivan Social Assistance for Economically-Inactive Citizens within the EU s Market State Model Charles Edward O Sullivan* European Union law has consistently left social programmes such as those that provide income support and welfare payments as the sole purview of the Member States. Where the Union has intervened legislatively, it has done so only in a coordinating capacity, and by primarily focusing on the rights of workers to access social security payments, rather than those which could be considered social assistance. Although legislation such as Directive 2004/38/EC, and the Treaty rights stemming from Union citizenship have expanded the right to welfare payments outwards to include social assistance for the economically-active worker, it has never sought to enfranchise those who are wholly economically-inactive and do not engage with the labour market of their host State in any way. This article seeks to explore how the recent line of precedent, beginning with Brey, has shed light on this fact, and demonstrated the Union s affinity with the Market State model, wherein citizens receive rights commensurate with their level of economic activity. Ultimately it argues that, despite some expansion of the right to social assistance taking place at the margins for those who have less obvious ties to the labour market, EU law has never sought to include the wholly inactive within its material scope, and cases such as Dano, and Alimanovic in particular have merely restated this Market-driven bias in its most literal form. Introductory Remarks Historically speaking, the EU has not engaged in creating a European-wide social security and assistance system. This is in large part due to the fear that interfering with the welfare systems of its constituent Member States would be untenable. In 1956 for example, the Ohlin Report 1 specifically recommended that the EU actively retreat from greater social integration, or the creation of a supranational social framework, leaving social rights and welfare state systems to the exclusive purview of the Member States. Even now, Article 2 et seq of the Treaty on the Functioning of the European Union (TFEU) divides the EU s constitutional competences into exclusive, 2 shared, 3 and supporting roles, 4 with social policies being placed between the latter two categories and based upon the willing coordination between Member States. 5 In this respect, the current EU legislation relating to welfare payments and access to them has been created under Articles 45 and 48 TFEU, which govern the free movement of economically-active workers and has only sought to coordinate how such persons access welfare payments. No parallel competence can be said to exist under Articles 18 and 20 TFEU in relation to the rights of Union citizens and would allow for equal access for the economically-inactive. This asymmetry highlights the difficulties when economic competences are continually conferred on the EU whilst social policy remains the remit of the Member States: those who fall outside of the Market will also potentially fall outside the scope of EU law even where they have exercised the freedom of movement. This article will look specifically at the ability of the economically-inactive to access social assistance payments under EU law, and how this specific area brings the EU more closely in line with the Market State model. Despite the fact that the European Union exists as an entity outside of States and does not conform to the strict definition of the same, it is capable of falling within Almond s definition of a political community 6 as it has the potential to: regulate behaviour; extract capital; it possesses a * IRC funded PhD Candidate, Maynooth University. 1 International Labour Office, Social Aspects of European Economic Co-operation 74 INT'L LABR. EV9.9 (1956). 2 Article 3 TFEU. 3 Article 4 TFEU. 4 Article 6 TFEU. 5 Article 5 TFEU. 6 Gabriel Almond, A Discipline Divided (Sage Publishing, 1990). December

2 I r i s h J o u r n a l o f E u r o p e a n L a w V o l u m e 1 9 I s s u e 1 redistributive element; recalibrate its own structures to new challenges; and enshrines values. As such, it can be considered 'State-like' and its constitutional competences and structures can be assessed in this light. Rather than viewing society as being based on the universal development of individuals and on their subordination of their communal, social productivity as their social wealth, 7 the Market State is one where the market has been adopted as a purely technical means of allocating goods and services without consideration of its deeper social and economic implications. 8 In a Market State, intervention within the economy will be focused on ensuring effective competition, regulation will be targeted rather than being 'burdensome', and healthcare, education and other public goods will be subject to market competition. This normative regime therefore avoids attaching value to the individual based on their personhood and intrinsic value to society, and instead focuses on those who fit within the narrower technical definition of the citizen who contributes to society through their economic activity. Individuals who do not conform are predominantly excluded as the Market is incapable of addressing their needs, or the State places an emphasis on individual agency over the structural barriers that may impede them and their exclusion stems from personal failures. Polanyi argues that a better model would be an always integrated economy, wherein the Market may help fulfil the objective of ensuring the human dignity of citizens cannot be more than a means to an end. 9 The presumption of a self-regulating or separate market from the political and social factors that give rise to that market is for the author, anathema to society itself. 10 As such, the Market State can be viewed as the society and structures which would underpin Everson s view of the Union citizen as being a market citizen. 11 Social assistance payments are broadly considered to be non-contributory, subsistence payments over which the Member States retain a wide discretion in how they are granted to individuals. Within the EU framework, a right to social assistance is extended to economically-active workers, those connected to them, or those who retain a residual status post-employment. No such right exists for those who fall outside of the Market. The recent cases of Brey, 12 Dano, 13 and Alimanovic 14 have cemented this conception of social assistance, reiterating how ingrained the Market has become in constructing the relationship between the EU and its citizens. In order to establish how the EU s social assistance framework conforms with the Market State, this article will be structured as follows. Section One will define social assistance, as well as the current legislation and judicial decisions that underpin it. Then, it will explore the decision of the Court of Justice of the European Union (CJEU) in Brey, which limited the ability of Member States to refuse access to social assistance where they are in need of it, and argue that whilst this was a step forward, it did not undermine the Market-based conception of the right to welfare payments in a normative sense. Section Two will look at both Dano and Alimanovic, and suggest that the literal readings adopted by the Court in these instances demonstrate that where the CJEU must apply its jurisprudence to the economicallyinactive directly, the Market State model is much clearer. The third section will subsequently look at how the Charter of Fundamental Rights (hereinafter, the Charter) was largely ignored by the Court in all three cases, despite the potential scope this may lend the Court to render more progressive decisions in favour of those who are most vulnerable and may be dependent on access to social assistance. Finally, the article will conclude by discussing how these decisions have been applied in further disputes, with the severity of a Market-based approach being rendered explicit. The exceptional case of Brey notwithstanding, both Dano and Alimanovic highlight that EU law arguably remains underpinned by a certain hierarchy which places the economically-active above their inactive 7 Karl Marx, Grundrisse (Martin Nicolaus tr, Penguin, 1973), David McNally, Against the Market: Political Economy, Market Socialism, and the Marxist Critique (Verso Books, 1993), 172. Although McNally in this instance refers to the unquestioning adoption of the Market by Social Democrats over time, it still demonstrates the view of the Market by its advocates. Advocates of the Market either knowingly or unknowingly would argue for the existence of the Market State in that it is the natural consequence of Market principles. 9 Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (Beacon, 2001). 10 ibid 3 and Michelle Everson, The legacy of the market citizen in Jo Shaw & Gillian More (ed), New Legal Dynamics of European Union (Clarendon, 1995), Case C-140/12 ECLI:EU:C:2013: Case C-333/13 ECLI:EU:C:2014: Case C-67/14 ECLI:EU:C:2015:597. [2016] 19 (1) IJEL 65

3 Social Assistance for Economically-Inactive Citizens Charles Edward O Sullivan counterparts. The Market State as applied in the majority of the case law, is now merely being made explicit. The consequences of this is that the EU is firmly establishing as an entity which enshrines the rights of those who contribute on a continuous basis to the economy of their host Member State to the detriment of the vulnerable. 1. The Right to Social Assistance under EU Law Welfare payments under EU law are primarily organised into three categories: social security, social assistance, and non-contributory special social benefits. 15 In other circumstances, the Court has referred to social advantages more broadly, 16 which can apply to both social security and social assistance depending on the particular circumstances and characteristics of the relevant payment. This overlap has led to some confusion 17 over what differentiates one category from another. One of the most common definitions of social assistance classifies such payments as being often a local or regional payment, payable in many cases on a somewhat discretionary basis, based on an assessment of need of the person (and his or her wider family or household), and set at a level to provide a minimum income in the particular country or region. 18 The Court of Justice has largely agreed with this conception, believing social assistance to involve an individual assessment of the claimant's personal needs is a characteristic feature of social assistance, 19 as well as finding the discretionary, non-contributory nature to be key factors. 20 Social assistance payments may however be brought under social security as was the case in Hughes, meaning that the non-contributory nature of the payment is not of paramount importance. 21 Thus, what remains within the category of assistance payments is often what cannot be considered to fall within social security by fulfilling one of the stated objectives of this category. A legislative right to social assistance for economically-active workers is included in Directive 2004/38/EC, 22 otherwise known as the Citizens Rights Directive, 23 which supports Regulation 883/ Such payments are however considered to be outside of the material scope of Regulation 883/2004, and this is specifically incorporated into Article 3(5) which holds that it shall not apply to social and medical assistance or to benefit schemes for victims of war or its consequences. Instead, 15 Article 70 of Regulation 883/2004 on the Co-ordination of Social Security Systems OJ L166/1 of Case C-310/91 Hugo Schmid v Belgiand State, represented by the Minister van Sociale Voorzorg ECLI:EU:C:1993:221 [1993] ECR I-3011 found Disability Allowances were social benefits and Case C-249/83 Vera Hoeckx v Openbaar Centrum voor Maatschappelijk Welzijn, Kalmthout ECLI:EU:C:1985:139 [1985] ECR 973 held that a subsistence benefit was a social advantage as well as social assistance. Social advantage is mentioned specifically in Article 7(2) of Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on freedom of movement for workers within the Community [1968] OJ L257/2. 17 Frans Pennings, European Social Security Law (5th ed Intersentia, 2010), M Cousins, Social security, social assistance, and "special noncontributory benefits": the never-ending story (2007) 9(1) European Journal of Social Security 1 < accessed 1 March This definition of or distinction existing between the two categories is broadly supported by others such as Charles Fombad, 'An overview of the constitutional framework of the right to social security with special reference to South Africa' (2013) 21 African Journal of International & Comparative Law Case C-78/91 Hughes ECLI:EU:C:1992:331 [1992] ECR 839, para Case 187/73 Odette Callemeyn v Belgian State ECLI:EU:C:1974:57 [1974] ECR 553, paras Ibid, para Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC (OJ L158, ) [2004] OJ L229/ This Directive was in reality preempted by Council Directive 90/364/EEC of 28 June on the right of residence ([1990] OJ L180/26); Council Directive 90/365/EEC of 28 June 1990 on the right of residence for employees and self-employed persons who have ceased their occupational activity ([1990] OJ L180/28); and 93/96/EEC of 29 October 1993 on the right of residence for students ([1993] OJ L317/59), in granting a right to residence to different categories of EU migrants/citizens. However, these do not wholly relate to the provision of social security and social assistance, nor do they illustrate the more important normative shift towards creating a uniform Directive for all Citizens irrespective of which category they fall into. 24 Corrigendum to Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ L 166, ) [2004] OJ L200/1. December

4 I r i s h J o u r n a l o f E u r o p e a n L a w V o l u m e 1 9 I s s u e 1 this right is extended to economically-active persons under Article 7(3) of the Directive for a period of 6 months where they have engaged in employment for less than one year, 25 after which point the host Member State can revoke any such payment but the citizen may not lose their right to reside. 26 Where a citizen engages in continuous employment for a period of one year or more and continues to comply with the conditions of residency established under the Directive, they retain a potentially indefinite right to equal treatment in relation to social assistance. 27 In both instances, this is due primarily to the individual s retention of their status as a worker, not as a citizen. No substantive right to social assistance is extended to those who cannot or do not engage with the labour market in some way. This therefore reiterates that the Union is predominantly focused on those that have economic value, and are incapable of addressing the needs of those who fall exclusively outside of the market, in line with the Market State model. In order to access a social assistance payment, an EU citizen must also demonstrate their residency within their host State. Regulation 883/2004 outlines that this amounts to being habitually resident, 28 it does not substantively engage with what this means in practical terms. This is largely due to the presumption that where an individual is engaged in work, or has demonstrated a degree of integration, a Union citizen s residency is presumed. 29 Consequently, those who are entitled to social security by virtue of their economic activity or retention of their worker status have a far lower burden placed on them in demonstrating residency from a procedural standpoint. Directive 2004/38 includes a specific limitation on the removal of citizens where they simply attempt to draw a social assistance payment within their host State, 30 albeit whilst also emphasising that the right to residence is dependent upon individuals not becoming an undue burden on the financial resources of their host State. 31 This would arguably infer that drawing from social assistance funds on a shortterm basis cannot necessarily be considered grounds for expulsion. It does however fail to define what constitutes an undue burden in substantive terms, meaning that the Court of Justice have subsequently had to grapple with the scope of this concept, as those who can be considered a burden may be subject to expulsion orders. Consequently, in Brey, the Court of Justice sought to clarify at what point an economically-inactive citizen becomes an undue burden, and how it would operate in tandem with the right to residence under Directive 2004/38. The applicant was a German pensioner who was refused a supplementary benefit in Austria due to his inability to establish his lawful residence under Article 7(1) of the Directive. The benefit was considered by the Austrian authorities to be a non-contributory benefit akin to social assistance, for which Member States could restrict access. He was ultimately refused residence based on his having attempted to claim this same assistance payment. If this had been allowed to stand, it would arguably have allowed Member States to determine an applicant to be an undue burden by virtue of having applied for a social assistance payment, despite Article 14(3) of Directive 2004/38 providing a clear answer to this question. If it is unacceptable to remove an individual from a Member State for attempting to access its social assistance system, it should be equally unacceptable that the same individual should be deprived of a right of residence, particularly given that such a right carries constitutional protections. The Court ultimately agreed, and held that any national legislation or rules which allow for residence to be revoked based purely on making a claim for social assistance is incompatible with Directive 2004/38. The competent national authority in deciding whether a Union citizen constitutes an undue burden must consider: (i) the duration of the applicant s residence; (ii) the amount of the benefit she/he would receive; and (iii) the period for which the benefit would be available. 32 Perhaps more importantly, however, the 25 Directive 2004/38/EC (n 22), Article 7(3)(c). 26 Ibid, Article 24(1). 27 Ibid, Article 7(3)(b). 28 Regulation 883/2004 (n23), Article 1(j). 29 Case 76/76 Silvana di Paolo v Office national de l'emploi ECLI:EU:C:1977:32 [1977] ECR 315, para 19 - In fact, whenever a worker has a stable employment in a Member State there is a presumption that he resides there, even if he has left his family in another State. 30 Directive 2004/38/EC, Article 14(3). 31 Directive 2004/38/EC, Article 7(1)(b). 32 Brey (n 12), paras [2016] 19 (1) IJEL 67

5 Social Assistance for Economically-Inactive Citizens Charles Edward O Sullivan Court argued that the Directive necessitates that a proportionality test be conducted, factoring in such considerations, before any refusal is made on whether or not the applicant should be granted a social assistance payment. 33 The conclusion reached by the CJEU is capable of being rationalised from two opposing schools of constitutional and legislative interpretation. On the one hand, the idea of a proportionality test is included within Directive 2004/38 in Articles 8(4), 14(3) and Recital 16, meaning that although this expansion is potentially significant, it is not rewriting the scope of the Directive itself. It is instead, simply expanding the test to include those who, despite having no current or residual status as an economically-active person, have a genuine need. Further, these persons should in principle be covered by the material scope of Directive 2004/38 if its genuine intention is to extend the principle of non-discrimination in such matters to all EU citizens. This kind of interpretative emphasis seeks to expand the existing social elements within the EU's constitutional order not by assuming a new competence, but by limiting the ability of Member States to refuse access. It is a form of negative integration that serves a social purpose. Similar expansions are also evident in cases such as Grzelczyk, 34 which held that the principle of non-discrimination based on nationality meant a French student could not be prima facie barred from accessing a Belgian subsistence payment due to his lack of worker status. Finding in favour of the applicant, the CJEU held that an automatic inability to lodge a claim was discriminatory under the principles of Union citizenship (Articles 18 and 20 TFEU). The Court also held that students would need to meet the same conditions as EU workers and nationals in order to obtain the necessary social assistance payment. As such, it removed an initial barrier to accessing the payment rather than ensuring a greater likelihood that citizens may obtain it. Grzelczyk can be considered part of a longer causal chain of precedence including Antonissen, 35 Collins, 36 Ioannidis, 37 and Vatsouras, 38 which grant jobseekers access to social assistance (within the standard limits) based on their economic activity. 39 Both students and job-seekers can be considered potential economic actors, 40 and this particular emphasis on economic value is consistent with the Market State model. Thym argues that even at its most potent, the evolving strain of constitutionalism surrounding the rights resulting from Union citizenship create different rules for different categories of citizens, 41 with Nic Shuibhne holding economic activity to be substantive with these categorisations. 42 These Treaty rights were not mentioned outright within the Brey judgment, but were consistently referred to through the judgments such as those outlined above. In this way, the Court used these same judgments as a further interpretative element without directly invoking either Article 18 or 20 TFEU themselves. Yet those who are wholly economically-inactive cannot be reconciled with this causal chain, as they cannot be placed on the same level Thym and Nic Shuibne s hierarchy of citizenship by design. To do so would be to upend what is enshrined within the EU s legal order, as Grzelcyk et al merely expand the margins of the Union s welfare competence, rather than adopting a new one by enfranchising the wholly economically-inactive. The Union s lack of a legislative competence in respect of either social 33 Ibid, paras Case C-184/99 Rudy Grzelczyk v Centre public d'aide sociale d Ottignies-Louvain-la-Neuve ECLI:EU:C:2001:458 [2001] ECR I Case C-292/89 The Queen v Immigration Appeal Tribunal, ex parte Gustaff Desiderius Antonissen ECLI:EU:C:1991:80 [1991] ECR I Case C-138/02 Brian Francis Collins v Secretary of State for Work and Pensions ECLI:EU:C:2004:172 [2004] ECR I Case C-258/04 Office national de l'emploi v Ioannis Ioannidis ECLI:EU:C:2005:559 [2005] ECR I Joined cases C-22/08 and C-23/08 Athanasios Vatsouras and Josif Koupatantze v Arbeitsgemeinschaft (ARGE) Nürnberg 900 ECLI:EU:C:2009:344 [2009] ECR I Anastasia Iliopoulou-Penot, 'Deconstructing the former edifice of Union citizenship? The Alimanovic judgment' (2016) 53(4) Common Market Law Review 1007, Michael Dougan, Free movement: the Workseeker as citizen (2001) 4 Cambridge Yearbook of European Legal Studies Daniel Thym, The elusive limits of solidarity: residence rights of and social benefits for economically inactive Union citizens (2015) 52(1) Common Market Law Review 17, Niamh Nic Shuibhne, Limits rising, duties ascending: the changing legal shape of Union citizenship' (2015) 52(4) Common Market Law Review 880, 890. December

6 I r i s h J o u r n a l o f E u r o p e a n L a w V o l u m e 1 9 I s s u e 1 security or assistance under Articles 18 or 20 for economically-inactive citizens means that the fundamental nature of citizenship can only achieve so much in this specific area, and therefore for a very limited scope. It is possible that the applicant in Brey may benefit from his previous economic activity, and that this is the implied caveat which allows the expanded jurisprudence on citizenship to apply to him, but the Court does not appear to limit its judgment to this subset of persons. Similarly, the ability to interpret the legislation in this area is also limited in respect of the wholly inactive, as Article 14(3) of Directive 2004/38 merely restricts the circumstances within which a Member State could expel a citizen of another Member State from their territory or remove their right to residence where they have lodged a claim for such payments. The Member State in question will still retain its discretion to grant the social assistance payment in question where they are wholly inactive. Where they choose to do so and it exceeds a short or reasonable period of time, after taking into consideration their degree of integration or residence, they may then consider them an undue burden. Article 7(3) would also only be engaged where citizens have a right based on the retention of their status as a worker, or where their host State for a reasonable period allows them after that right has elapsed to enjoy a discretionary payment. Consequently, even where both Article 7(3) and 14(3) are read in conjunction, it cannot overrule the discretion of the host State in the granting of such payments to the wholly economically-inactive. They would as such preclude the EU from extending equal treatment for welfare payments to social assistance, which Brey presumptively does. 2. Social Assistance in Dano and Alimanovic: Restating Past Principles? Dano 43 saw the Court of Justice examine a very particular set of circumstances relating to wholly economically-inactive persons. The first-named applicant was a Romanian woman living in Germany with her son and sister, the latter of whom provided for Ms Dano and her son. She was twice denied a mixed social security/assistance benefit for job-seekers, which under German law was not to be granted to Union citizens acting as job-seekers or who entered the territory in order to make a social assistance claim. A core issue within the case was whether or not someone who is not actively seeking employment and has no immediate intention to is entitled to receive such a payment. The Social Court of Leipzig later made a preliminary ruling to the CJEU questioning, among other things, if this violated the nondiscrimination principle under Article 18 TFEU and Directive 2004/38. The eventual judgment held that non-discrimination will only apply where the conditions within Directive 2004/38 have been complied with, namely that in the period of residency between 3 months and 5 years a citizen must have adequate resources and cannot constitute an undue burden on the host Member State s financial and social resources. The latter condition, unlike in Brey, argues that where an economically inactive citizen moves to a secondary Member State with the intention of drawing social assistance, their financial resources should be considered rather than the benefit to be claimed or the need for it. Similarly, the Treaty rights of citizens are limited by the secondary legislation, and in this way they cannot confer additional rights in relation to social assistance. Their interpretative potential is in such circumstances limited by the EU s competence in relation to assistance payments. This addendum has been viewed as a qualification on the perceived danger of social tourism, ie moving to another Member State with no intention of engaging in economic activity. However, the case should have arguably have hinged upon whether or not she could have been considered a job-seeker when she was not seeking work and had no intention to work in the near future, that it would violate the principle of equal treatment for EU citizens in Article 18 to TFEU, and/or whether or not it could be considered a social security payment rather than a mixed payment based on its specificity and its pursuit of the objective stated in Article 3(1)(h) of Directive 2004/38. Instead, the Court used the opportunity to deal with the balancing test created in Brey by other means, significantly diluting it in the process. 43 Dano (n 13). [2016] 19 (1) IJEL 69

7 Social Assistance for Economically-Inactive Citizens Charles Edward O Sullivan Similarly, despite distinguishing Dano from Brey, Ms Dano s needs were no longer at issue. This is in spite of the applicant being low-skilled, and possessing a very basic level of spoken and written German language comprehension. Finally and quite interestingly, Ms Dano s unequivocal right to reside as granted by the German authorities and the two other forms of social assistance payments she was in receipt of were not considered by the Advocate General, although it was alluded to by the Grand Chamber. 44 A point put forward by the Advocate General and Court was that this shift away from the balancing test established in Brey was instead a return to the spirit of Directive 2004/38/EC, and a determination of the intention of the economically-passive individual in question for moving to a secondary Member State and drawing social assistance payments. The Court further discusses the idea of social tourism as the intention to move solely to obtain another Member State s social assistance, and that the express purpose of Article 7 of Directive 2004/38 is to restrict access to these individuals. 45 Rutledge similarly believes that in Dano the evidence of social tourism is fairly blatant and that EU law continues to provide protection for genuine work seekers who have established a genuine link with [a Member State]. 46 Yet research on the concept of benefit or 'social 'tourism' highlights that migrants are unlikely in almost all circumstances to draw social benefits in sufficient numbers so as to endanger public finances. 47 In fact a German study found that migrants were no more likely to participate in welfare schemes than national citizens, and where they did, it was likely due to the lower levels of wages they attract. 48 This has also been widely supported elsewhere. 49 This kind of discourse has however become increasingly common internationally, and it is possible that they Court were indirectly influenced by these factors. Such discourse was common even prior to Brey, and the Financial Crisis had also occurred some prior to this. They may have been contributing factors, but it is not possible to suggest that they were directly utilised in this instance. The social tourism argument again becomes a vehicle through which the Court was able to restate the exceptional nature of Brey, and reassert the dominant Market State method of interpretation as well as the literal intent of the legislation. Grzelczyk and its sister cases have shown that in relation to social assistance, the CJEU sees the specific and exceptional' 50 instances in which it can intervene based on the right to Union citizenship as those where the applicant has either a current or potential economic value. Verschueren also highlights that prior to Brey, the CJEU confirmed that multiple articles within Directive 2004/38 are 44 Ibid, paras Dano (n 13), para Desmond Rutledge, Dano and the exclusion of inactive EU citizens from certain non-contributory social benefits (Free Movement, 19 November 2014) < accessed 02/02/ Nannestad argues that migrants face specific costs and other barriers which will potentially lead them to try and maximise their income through the use of social transfers/social assistance benefits, but this rather problematically assumes again that migrants will be the most likely to supplement their income with state-funded and administered social programmes and potentially be dependent on such benefits to do so - Peter Nannestad, Immigration and the welfare state: a survey of 15 years of research (2007) 23 European Journal of Political Economy Edward Castronova, Hilke Kayser, Joachim Frick, & Gert Wagner, Immigrants, natives and social assistance: comparable take-up under comparable circumstances (2001) 35(3) The International Migration Review Many studies actually suggest immigrants will be less likely. See Hebert Brücker, Gil S. Epstein, Barry McCormick, Gilles Saint-Paul, Alessandra Venturini, & Klaus F Zimmermann, Managing migration in the European welfare state, in Tito Boeri, Gordon Hanson & Barry McCormick (ed), Immigration Policy and the Welfare System (Oxford University Press, 2002); Alan Barrett, & Yvonne McCarthy, Immigrants in a booming economy: analysing their earnings and welfare dependence (2007) 21(4/5) Labour 789; Alan Barrett & Yvonne McCarthy, Immigrants and welfare programmes: exploring the interactions between immigrant characteristics, immigrant welfare dependence and welfare policy, (2008) 24(3) Oxford Review of Economic Policy 542; and Virpi Timonen & Martha Doyle, In search of security: migrant workers understandings, experiences and expectations regarding social protection in Ireland (2008) 38(1) Journal of Social Policy Case C-34/09 Ruiz Zambrano ECLI:EU:C:2011:124 [2011] ECR I-1177; Case C-439/09 McCarthy EU:C:2011:277 [2011] ECR I-03375; Case C-256/11 Dereci and Others EU:C:2011:734 [2011] ECR 000; Case C- 86/12 Alokpa EU:C:2013:645. 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8 I r i s h J o u r n a l o f E u r o p e a n L a w V o l u m e 1 9 I s s u e 1 specifically designed to prevent citizens resident in a secondary Member State from becoming an undue burden on the financial resources of their host State. 51 Ultimately, regardless of the specific basis upon which the Court made this decision, the consequence of the judgment in Dano is that regardless of her needs, Ms Dano is incapable of relying on EU law as it is neither constitutionally nor legislatively capable of accommodating her in its current incarnation. The same fundamental issues were again raised in Alimanovic, which took an equally restrictive view of access to social assistance by economically-inactive citizens in a secondary, host Member State. This case concerned a Swedish woman and her three German-born children (though they bore Swedish citizenship) who attempted to access German social benefits. Included within these was a social assistance payment aimed at the long-term unemployed. Both Alimanovic and her eldest daughter had been temporarily employed for a period of roughly eleven months before becoming unemployed. Both applicants were granted the social assistance benefit in question for a period of 6 months, after which they were informed that their period of entitlement had ended. The central question in this instance, was whether or not EU law necessitated that Union citizens be entitled to equal treatment in the provision of social assistance payments based on the provisions of Directive 2004/38. The Court of Justice ultimately held that, in line with Dano, the right to equal treatment in the provision of social assistance only arises under the Directive where they have fully complied with the residency conditions, and that these are designed to ensure that no individual becomes an undue burden on the financial resources of their host Member State. 52 It also found that the payment in question fell within the category of social assistance as defined by Article 24(2) of Directive 2004/38, and as neither Alimanovic or her daughter had been continuously employed for a period of twelve months or more, they were only entitled to equal treatment in the provision of the benefit for a six month period under Article 7(3)(c) and 24(1) of the Directive. In this respect, the German authorities acted within their discretion to terminate the benefit after the six month period had elapsed, and EU law on this matter had been formally complied with. 53 The Court of Justice even went so far as to suggest that the Brey proportionality test would not apply in circumstances such as this, 54 despite the Court in Brey clearly stating that tests which create immediate consequences for access to social assistance are at odds with the principle of proportionality. 55 This was rationalised on the basis that whilst the Alimanovics claims would not constitute an undue burden on the State, the cumulative effect of narrowing Germany s discretion in this matter would. 56 Alimanovic arguably raises a key issue within the previously highlighted line of precedent on extending social assistance to potentially economically-active citizens. On the surface, job-seekers should be entitled to receive social benefits, including social assistance payments, in a comparable manner to national citizens based on the principle of non-discrimination. If this is to be taken literally, so long as the applicants continued to actively seek employment, the entitlement should remain. As with Grzelczyk and the remaining case law on job-seekers however, the Court emphasised in this instance that it is continually subject to other criteria and does not exist in isolation. Ms Alimanovic and her eldest daughter had both been receipt of this social assistance payment for a period of six months, and it is 51 Herwig Verschueren, Preventing benefit tourism in the EU: a narrow or broad interpretation of the possibilities offered by the ECJ in Dano? (2015) 52 Common Market Law Review 363, 366 citing Joined Cases C-424 & 425/10, Ziolkowski and Szeja, EU:C:2001:866, para Alimanovic (n14), paras Ibid, paras. 53, 54, Ibid, para Brey (n12), para Ibid, para. 62. [2016] 19 (1) IJEL 71

9 Social Assistance for Economically-Inactive Citizens Charles Edward O Sullivan therefore possible to reconcile the Court's finding based on both applicants being given a reasonable period within which to find employment and the exhaustion of Articles 7(3)(c) and 24(1) of Directive 2004/38. This is supported by Saint Prix 57 to a large degree, which despite holding that the rights of workers under Article 45 TFEU are non-exhaustive, any protections which affix to the worker in question do so only for a reasonable period. Equally important is that the Court of Justice makes no reference to the notion of citizenship, marking a potential symbolic shift away from this line of precedent entirely. Dano saw the Court render Articles 18 and 20 TFEU non-applicable, whereas the subjects in Alimanovic did not even receive this same consideration. This may simply be due to the Court's use of Dano as a justification for the ruling in Alimanovic: if the latter immediately follows its predecessor in the same causal chain of precedent, it may have been implied and did not as such require a restatement. Kramer does however highlight the practical significance of this reassertion of the Market State model in its more literal form. In his estimation, it will ultimately lead to circumstances where one month or thirty days can cause one s right to social assistance to reduce from the potentially indefinite to six months, 58 as a literal reading of Directive 2004/38 would suggest. Similarly, he emphasises that at one point Alimanovic was herself a Bosnian refugee residing within Germany, and that the overall lack of consideration for her personal circumstances and likely familial and social links within the State is additionally punitive. Yet the case should be viewed as a continuation of the long line of precedent which allowed a greater number of persons to make social assistance claims so long as they were workers, linked to workers, or retained their personal status as such. Both Dano and Alimanovic simply see the CJEU dealing with a different kind of applicant than they have predominantly concerned itself with in the past. 3. Invoking the Charter in Social Assistance Case Law The Charter has acquired constitutional status by virtue of Article 6(1) TFEU, which states that: The Union recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights of the European Union of 7 December 2000, as adapted at Strasbourg, on 12 December 2007, which shall have the same legal value as the Treaties. It acts as a Bill of Rights for the Union, but only applies to cases where Member States implement Union law, and accordingly cannot apply to wholly national or internal situations. 59 In relation to social security and assistance, there are express rights to both of these in Articles 34(1) and 34(3) of the Charter respectively. These will however only apply in so far as EU law deals with social security and assistance ie where a Union citizen moves from one Member State to another and that secondary host State is implementing EU law. The justiciability of these Articles have often been in doubt. One of the fundamental issues in this respect is if these are to be considered recognisable rights, or mere principles. Article 51(1) of the Charter emphasises that Member States and the Union shall therefore respect the rights, observe the principles and promote the application thereof in accordance with their respective powers. 60 The distinction between these two categories has proven 57 Case C-507/12 Saint Prix EU:C:2014: Dion Kramer, Had They Only Worked One Month Longer! An Analysis of the Alimanovic Case [2015] C-67/14 (European Law Blog, 29 September 2015) < accessed 03/02/ Case C-45/12 Office national d allocations familiales pour travailleurs salariés (ONAFTS) v Radia Hadj Ahmed ECLI:EU:C:2013:390 It must be recalled that the fundamental rights guaranteed in the legal order of the European Union, including the Charter, are applicable in all situations governed by European Union law, but not outside such situations. 60 Charter of Fundamental Rights, Article 51(1). December

10 I r i s h J o u r n a l o f E u r o p e a n L a w V o l u m e 1 9 I s s u e 1 to be quite elusive, but appears be influenced by the remainder of Article 51 which emphasises that no new competences can be conferred upon the Union, and that the application of the Charter must at all times respect the principle of subsidiarity. Due to the diffuse nature of the Union s competences in this field generally, and that a competence in the specific area of social assistance is never clearly established, it is possible that the Union is ensuring that it cannot exceed its established role in these material fields. For O Leary, the rights to social security and assistance must be considered as principles and not rights, 61 and impose a lower burden on the EU and its Member States by virtue of this distinction. This has been supported by the Union s own explanatory set of guidelines on the Charter which specifically refers to 34(1) as a principle. 62 Similarly, one of the few cases that has expressly considered Article 34 of the Charter, Kamberaj, 63 saw the Court of Justice emphasise that this category of social rights and how they are implemented is a matter for national and not EU law. 64 Its usage within judgments before the CJEU has therefore been quite limited, with the Court choosing instead to engage with other Articles, such as those on the rights of the elderly, 65 the right to non-discrimination, 66 the right to property, 67 dignity and equality. 68 This may be due in part to the lack of references being sent to the Court by national Courts and Tribunals that do not contain questions pertaining directly to the Charter. It is possible that the Court could use Article 34 in cases dealing with social assistance as a further interpretive tool that brings into the case to underscore the questions that are specifically asked of it, and by extension, allow it to gradually erode national barriers to access for persons within the bounds of its ascribed competences. Brey for instance saw neither the national referring authority question the application of the Charter, nor the Court attempt to invoke it, although it did bring in Treaty rights through its analysis of the relevant legislation in much the same way that it could have made reference to the Charter. In Dano, the emphasis placed on Directive 2004/38/EC is much stronger than that of the Charter and her Treaty rights as a Union citizen. On the applicability of the Charter, the Court argues that this is a matter which falls outside of EU law, as it pertains to Ms Dano s satisfaction of the national requirements for the particular payment she seeks to access. Yet the questions directed to the CJEU refer exclusively to Union law, her free movement, and the conditions under which she can access a welfare payment in a secondary State. To suggest that this is a purely national matter seems disingenuous and contrary to established norms. If the Court had instead suggested that the Article can only be used as a principle 61 Siofra O Leary, Solidarity and Citizenship Rights in EU Law and the Welfare State in Grainne de Burca (ed), In Search of Solidarity (Oxford, 2005), Explanations Relating to the Charter of Fundamental Rights (2007/C 303/02): The principle set out in Article 34(1) is based on Articles 153 and 156 of the Treaty on the Functioning of the European Union, Article 12 of the European Social Charter and point 10 of the Community Charter on the rights of workers. The Union must respect it when exercising the powers conferred on it by Articles 153 and 156 of the Treaty on the Functioning of the European Union. The reference to social services relates to cases in which such services have been introduced to provide certain advantages but does not imply that such services must be created where they do not exist. 63 Case C-571/10 Servet Kamberaj v Istituto per l Edilizia sociale della Provincia autonoma di Bolzano (IPES) and Others ECLI:EU:C:2012: Since both Article 11(1)(d) of Directive 2003/109 and Article 34(3) of the Charter refer to national law, it is for the referring court, taking into account the integration objective pursued by that directive, to assess whether housing benefit such as that provided for under the provincial law falls within one of the categories referred to in Article 11(1)(d), the Autonomous Province of Bolzano arguing that that is not the case. (Ibid, para 84.) 65 Case C-388/09 Joao Filipe da Silva Martins v Bank Betriebskrankenkasse - Pflegekasse ECLI:EU:C:2011:439, Para Case C-212/06 Government of the French Community and Walloon Government v Flemish Government ECLI:EU:C:2008:178 [2008] ECR I-1683, para Case C-443/11 Jeltes and Others ECLI:EU:C:2013:22, para Dano (n 13). [2016] 19 (1) IJEL 73

11 Social Assistance for Economically-Inactive Citizens Charles Edward O Sullivan in such matters, and is therefore incapable of being used proactively to confer on her new rights, this would have been consistent with the existing case law, relevant legislation and application of the Charter in such cases. The disapplication of its provisions in full sets a far more dangerous precedent. By comparison, the utilisation of the Charter was not considered in Alimanovic. This may nonetheless be due to the referring Court including no question based on its application. It is likely however that if the Court of Justice had been confronted with this as an issue, it would have ruled on identical grounds to Dano due to the specific category of payments being dealt with. In this respect, it may have been better that it was omitted than for it to be misapplied once more and dilute its interpretive potential. The Future of Social Assistance under EU Law Both Dano and Alimanovic underline the Market State model employed by the EU s institutions in their legislative capacity and the CJEU in its role as constitutional adjudicators. This model, which emphasises the value of the economically-active over their inactive counterparts, has been relatively consistent throughout the development of the Union, but is now being made more explicit as the Court has had to deal directly with the economically-inactive and not those who it has historically sought to enfranchise: marginal and less-clearly defined categories of workers, students and job-seekers. The applicants in Alimanovic have the potential to be considered a job-seeker, but had arguably exhausted their entitlement based on the literal meaning of Directive 2004/38 and the line of precedent on this issue. In spite of this, predicting the future development of the Court s jurisprudence in this area remains difficult. Verschueren, although agreeing that Dano in particular is simply re-stating previous legal principles, also believes that this may in a practical sense signal the end of internal migration for poorer classes of EU citizens. 69 For those who become stranded in another Member State without a basic right to social assistance, Dano effectively provides no further remedy. 70 This is particularly pertinent given Ms Dano s loss of her right to residence forcing her to become an irregular migrant. Alimanovic, which applies to those who lose their status as workers rather than those who never possessed it, similarly demonstrates that, where that status lapses, precarious or irregular workers will be left without any recourse to their host Member State s finances unless the State uses its discretion to do so. The more recent case of Garcia-Nieto 71 illustrates that the Court is unlikely to alter its interpretative emphasis and move away from the Market State model. There, the Court reaffirmed that social assistance payments would not be available to a Union citizen within their first three months of residence. In their fervour to ensure that the law is consistent in this area, the Court of Justice did not consider that the subject of this case was a non-marital spouse of a worker, and this may impact on the enjoyment of their rights as a family. As with Dano and Alimanovic, there was no question of whether or not a right to non-discrimination applied to the applicants. Equally troubling is the Court's allusion to 'social benefits rather than social assistance payments in Dano. 72 This allows the CJEU to withdraw social security benefits from poorer, economically-inactive citizens where they do not meet the residency requirements established in Directive 2004/ The 69 Verschueren, Preventing benefit tourism in the EU: a narrow or broad interpretation of the possibilities offered by the ECJ in Dano? (n 51). 70 Gihjsbert Vonk, EU-Freedom of Movement: No Protection for the Stranded Poor (European Law Blog, 25 October 2014) < accessed 03/02/ Case C-299/14 Garcia Nieto and others EU:C:2016: Dano (n 13), paras 74, 77, Verschueren, Preventing benefit tourism in the EU: a narrow or broad interpretation of the possibilities offered by the ECJ in Dano? (n 51), 378. December