Benefits and EU law – the law behind the story – Helen Longworth

Author Helen

Author Helen

There is a social scandal emerging from the doctrine of freedom of movement. Workers are encouraged to move across the EU to meet the needs of employers at the lowest end of the market. They are subsidised by welfare programmes that claim to promote work but really promote low pay. Such were the sentiments expressed by some of the panel by the end of a discussion on Benefits and EU law held under the aegis of the Jean Monnet Chair in EU Law at City University.

The conversation, part of a series run by the University, was intended as an interactive debate on a topical issue in EU law, specifically benefits. The panel was chaired by Panos Koutrakos, Professor of EU Law and Jean Monnet Chair in EU Law at City University. He was joined by Professor Damian Chalmers, London School of Economics, Jacqueline Minor, Head of EU Commission Representation in UK, Professor Niamh Nic Shuibhne, University of Edinburgh, and Professor Philippa Watson, City Law School and Essex Court Chambers.

The scope of discussion was enormous, from the philosophical level questions of: “What is EU citizenship?” and “Where are the edges of the doctrine of freedom of movement?” to detail, such as “how could the UK stop remittances of child benefit from EU parents working in the UK to their children living in another member state?” At the centre of it all was the recent ruling of the European Court of Justice (CJEU) in Case C 333/13 Elisabeta Dano, Florin Dano v Jobcenter Leipzig.

But first, Ni Shuibne outlined the basic principles.

Benefits are an area that is not harmonised, nation states have the ability to manage their own systems as long as they don’t conflict with freedom of movement. For the purposes of claiming benefits in a host member states, EU citizens are split in to three categories: economically active people who have the same rights as any other citizen working in that country; those who are not economically active but seeking work who cannot receive benefits for three months after arrival and then should have access to those specific benefits that facilitate access to work; and those who are not economically active nor seeking work.

This final group only have the right to reside in another EU country after three months if they have sufficient means and sickness insurance not to become a burden on the host state. After five years uninterrupted residency everyone can claim a permanent right to residency. So there is a gap for those people between 3 months and five years. The question of what responsibilities host member states have to such people during that gap has been unclear. There was no obligation to provide assistance, but neither could the need for assistance be an automatic grounds for removing a citizen.

EU benefits
Then Watson outlined the Dano case see Press Release. The case was an Art. 267 ruling heard by the Grand Chamber. It concerned Ms Dano, a Romanian national who had lived with her sister in Germany on and off for several years, last entering on 10th November 2010. Her son Florin was born in Germany in 2009. The family relied on her sister for their material needs and she wasn’t seeking work. Germany provides subsistence benefits to nationals seeking work.

Ms Dano applied for these benefits in September 2011 and was rejected, and rejected a second time in January 2012. In July 2012 she brought an action before the Social Court Leipzig, who made the Art 267 TFEU reference.

They asked, in short, if non-nationals who haven’t yet gained a permanent right to residence and who are not seeking work can be excluded from subsistence benefits meant for job seekers.

The court ruled that Member States can exclude such people, and that it is still a matter of national, rather than EU, jurisdiction.

The ruling was based on the principle of not becoming a burden, which is very important, and is balanced against the principle of non-discrimination. [see also the European Law and Free Movement blogs for more commentary on the case].

A few days after the case, UK Prime Minister David Cameron outlined the reforms of the benefits systems he wants to make. They are 1) denying all in work and child benefits for the first four years of residence, and 2) preventing remittances to children who have remained overseas. Under the ostensive question of “can he do either of these things easily” the panel plunged into a debate on the very concept of an EU citizen.

Despite appearing to be the basis of fundamental rights, when it comes to work and welfare, there are a hierarchy of citizens depending on economic status. Chalmers and Nic Shuibne debated whether the changes required needed treaty change or merely secondary legislation (with their differing requirements and voting procedures) briefly before the discussion bounced into an acknowledgement that there is a distinction between legally and politically feasible (See Chalmers’ work on Open Europe).

This political question, what are the movement rights of those who aren’t working, is resounding throughout Europe. Germany has Dano, the UK has Cameron’s ideas, Belgium has sent letters to non-economically active non-nationals saying benefits will be stopped. Watson wondered if there is anti-Roma discrimination at the heart of this, we know that there are many more French nationals in the UK than Romanians, and UK nationals overseas claim more than non-UK nationals do here yet that doesn’t seem to be presented regularly in the political sphere. Nic Shuibne wondered if there is a real risk of throwing away fifty years of work on equal treatment to alleviate current anxieties. For Watson, responding to the idea of reducing access to in work benefits, there was a danger of erosion of the foundations of the whole EU community, as those working next to each other suddenly have different benefit entitlements based purely on their country of birth. For Minor the question of child benefit remittances is odd, it’s small change really, compared to the whole welfare budget. Plus are benefit rights really the draw? Or is it a stint learning the English language that can transport someone around the world that is a bigger pull? Is the political debate even thinking about the right issue?

And so we reach the scandal that the debate concluded with, why is the lowest end of the UK workforce on benefits anyway? People are part of the foundations of the economic project. They are a resource, yet here are subsidised in a way that would probably be questioned as a form of state aid if it were given on goods or services.

Europe of course has two reasons to exist. It is an economic project but it is also at its very heart a peace project. Conflict arises when political points are scored on ethnic differences, wealth inequality, such as that caused by encouraging people to move from their own land to subsidised low paid employment far from home, creates community tensions that are hard to break down. [see Wilkinson and Pickett’s work as a starting point for this idea]. It seems that in Dano, the Court at least has recognised that, at the moment at least, leaning too heavily on the foundations of Europe may be enough to make them crack.

Many thanks to Helen Longworth, GDL student at City, for this detailed review of the Benefits and EU Law event on 26th January 2015.

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