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Do EU citizens have a right to welfare tourism?

Do EU citizens have a right to welfare tourism?

In its recent Dano decision, the Court has sent a strong signal that EU citizenship does not open the door to unlimited social welfare tourism.

In its recent Dano decision, the Court has sent a strong signal that EU citizenship does not open the door to unlimited social welfare tourism. However, previous case law indicates that jobseekers applying for social benefits enjoy a broader right to equal treatment.

The eagerly awaited Dano decision, handed down by the Court of Justice of the European Union (CJEU) on 11 November 2014, easily made it into the international press even outside the European Union (e.g. the New York Times and the Swiss Neue Zürcher Zeitung. The judgment was generally hailed as a signal indicating that Union citizenship does not include the right to welfare tourism within the EU.

At first sight, the issue appears simple. Ms Dano, a Romanian single mother with little education, has been living in Germany for a number of years as an unemployed person. She has never been employed and also did not look for employment in Germany. She went to court because she was denied certain financial benefits by the state. Now, everyone familiar with even just the basics of Union citizenship law, in particular Directive 2004/38 , knows that persons who are not economically active enjoy a right to reside in another EU Member State only if they have comprehensive sickness insurance and sufficient means to cover the costs of living. Whilst there is a certain degree of financial solidarity between the Member States, e.g. where a person’s financial difficulties are only temporary, it seems clear that someone in Ms Dano’s situation does not meet the above conditions. This in turn means that there is no right to equal treatment with the nationals of the host state, since under Art. 24(1) of Directive 2004/38 this is conditional upon the person’s enjoying the right of residence under the directive.

However, the matter is complicated by the fact that certain social benefits simultaneously fall under the EU’s coordinating social security law. Like Directive 2004/38, Regulation 883/2004 contains an equal treatment provision (Art. 4) but, unlike the directive, that provision does not mention any residence condition. In Germany in particular, this has led to a debate on whether the regulation provides for a broader right to equal treatment than the directive. Dano shows that this is not necessarily the case. At issue was a special non-contributory cash benefit, which, according to Art. 70(4) of the regulation, is to be provided in the Member State of residence “in accordance with its legislation”. Accordingly, there is nothing to prevent the condition of a right to residence under Directive 2004/38. Already in Brey the Court had emphasized the merely coordinating, rather than harmonizing, nature of Regulation 883/2004.

One very important issue remains open, though. Ms Dano also tried to rely on the rights of jobseekers under EU law. Apparently, the national court did not see her as such. Legally speaking, this might have been the most promising avenue, since in the specific case of social benefits intended to facilitate access to employment the right to equal treatment is derived directly from Art. 45(2) TFEU, rather than from Directive 2004/38, which means that the limits under Art. 24(2) of the Directive do not apply (e.g. Vatsouras). Here, everything would appear to depend on who is, properly speaking, a jobseeker.

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