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Tuesday, November 11, 2014

What are the implications of today's ECJ ruling on EU migrants' access to benefits?

As we've said on many occasions, it is not only the UK that is having problems reconciling EU free movement with maintaining control over national welfare systems; Germany has recently tightened up its own domestic rules recently and the country also faced a legal challenge from a Romanian woman living in the country who claimed the right to receive German unemployment benefits - a case which was referred all the way up to the ECJ.

Essentially, the Dano case concerns the interpretation of existing rules around EU free movement and the extent to which EU migrants have a right to equal treatment with nationals of the host member state with regards to access to benefits,

The Court has finally issued its verdict today, ruling that:
"The [2004 free movement] directive thus seeks to prevent economically inactive Union citizens from using the host Member State’s welfare system to fund their means of subsistence. A Member State must therefore have the possibility of refusing to grant social benefits to economically inactive Union citizens who exercise their right to freedom of movement solely in order to obtain another Member State’s social assistance although they do not have sufficient resources to claim a right of residence.
It is also interesting that the Court has confirmed that certain non-contributory benefits are outside the scope of EU rules which guarantee equal treatment and non-discrimination. The UK and other national governments can therefore use this precedent to defend their restrictions on EU migrants’ access to non-contributory benefits (i.e. the ‘right to reside’ test which could be subject to an ECJ legal challenge).

It also states clearly that ‘special non-contributory benefits’ are a national competence – much of the dispute between the UK and Commission over the ‘right to reside’ test relates to the categorisation of certain UK benefits. This could be useful to the government but it is also true that the UK's case still rests on how the benefits they restrict are defined (i.e. do they fall under the label of 'special non-contributory benefits'), and whether the Commission and the ECJ agree, which we still don’t know yet.

In short – this is likely to be a helpful precedent for the UK and potentially a sign that the Commission/ECJ are prepared to back down over the ‘right to reside’ issue. But more fundamental changes on in-work benefits, which are increasingly important issues in this debate and particularly for the UK, will require changes to EU law - here we set out how this could be done while keeping the principle of free movement itself intact.


Anonymous said...

it was always meant to be freedom of workers movements only

Freedom Lover said...

Personally, I don't think this will make much difference. Especially in the Shengen area of the EU where there are no entry & exit stamps placed in passports to prove whether someone has genuinely been in Country A all the required 6 months or not. So, as so often happens, the only people who will be restricted are the honest ones, who mostly will be looking diligently for work anyway.

As always it is the scammers who will benefit from this. It's very easy to guess how they would do it, either in the country the benefit tourist has gone to & allegedly already stayed in for 6 months, or in their home country. False invoices for services, false work records, false rent books etc. Sometimes copied skillfully from authentic ones, sometimes not.

Sometimes using authentic addresses of people in the target country who are also in on the scam. Where sold? At agencies, or even on street corners depending on the vigilance of the police & desire for discretion by the purchaser. For the sophisticated crims in this game already existing is the "dark-net". This is the subscriber-only websites where false IDs, stolen credit card details etc can be acquired.

It seems that, not only will this ECJ judgement NOT make much difference in practice to benefit toursists getting undeserved subsidies through the unwise generosity of their host countries, but it'll create a major by-product. Or at least expand it where it exists already. What of? A whole fraud-based industry dedicated to enabling benefit tourists to continue 'gaming' the EU members' welfare systems.

But so what? That's the equivalent of economic activity. So up will go each nations' GNP - both home & host countries-, to reflect these scams. So that makes it all alright, then? Or does it?

Average Englishman said...

It'll make no nticeable difference at all. Simples.

Asian Wedding Horses UK said...

The EU Laws have been in place for this since 2004. Very clear and understandable.
The EU saw this would happen and back in 2004 passed Laws to prevent it happening. All the Government has to do is to enforce them.
No U2 means no entitlement to any Benefits at all. Not Rocket Science, so why don't the Job Centre enforce the Law? You need a U2 Certificate from your Claim Office to get Benefits in any other EU Country. You are not however entitled to Housing allowance nor Child Benefits under this regulation. Benefits under the below EU Regulation are payable at the same rate as in the claimants Country of origin. EC Regulation 883/2004 states. An unemployed person may move to another Member State in order to seek work while retaining entitlement to benefits for three months. The competent services or institutions may extend this period up to a maximum of six months. If the unemployed person does not return on or before the expiry of this period he/she loses all entitlement to benefits.
National authorities should assess the individual situation, taking into account a range of factors (amount, duration, temporary nature of difficulty, overall extent of burden on national assistance system).

Directive 2004/38/EC
If, on the basis of such an individual assessment, authorities conclude that the persons concerned have become an unreasonable burden, they may terminate their right of residence.
Job-seekers can export unemployment benefits from their home Member State for a minimum of three months while seeking work in another Member State, if they have first been registered as unemployed in their home Member State.
Note carefully. The Law says that benefits will be paid by the claimants own Country, not by the Country they have moved to.
After five years: EU citizens who have acquired the right of permanent residence are entitled to social assistance in the same way as nationals of the host EU country. No derogations are allowed under EU law.

Rik said...

Another angle not discussed much.
How likely is it that the ECJ would have ruled in the same way if there would not be massive opposition in several countries?
The judiciary might be independent but it is not living on Pluto.

Anonymous said...

it should be people coming here to work only--not to live and bring their extended families--and they should never get a british passport or votes

christhai said...

It is not significant.

So far as the UK is concerned, Merkel ordered Cameron to cheat the EAW through Parliament because Germany wants the UK under the thumb of the ECJ.

She told him that there would be a crumb for his "I will do something about Immigration" crusade and so she instructed the ECJ - to issue the conclusion offering not very much at second glance for protection against Immigrants.

Cameron agreed - Quid pro quo.

Denis Cooper said...

Of course the most fundamental implication which is being widely missed is this: immigration into the UK from the rest of the EU is under the control of the EU, and ultimately its Court of Justice, not under the control of the UK Parliament and government.

This week the lawyers on the EU's Court of Justice produce an interpretation of the EU treaties which might have the effect of very slightly diminishing immigration into the UK - hurrah for the common sense of the judges on the EU's Court of Justice! And doesn't this show that the EU is not beyond reform?

Next week the lawyers on the EU's Court of Justice produce another interpretation of the EU treaties, which conversely will have the effect of greatly increasing immigration into the UK - oh dear, the judges on the EU's Court of Justice are a bunch of eurofederalists, why do we have to accept what they say?

We only have to accept whatever they say because our Parliament has said that we must accept whatever they say, that's why; and that's how it will remain until we sweep out the rubbish (occasionally) occupying those green benches in the Commons and replace them with patriotic MPs whose primary loyalty is to this country and its people and not to the EU.

Tim O'Brien said...

The ECJ does not "control" immigration, it interprets EU law and the recent ruling merely indicates what all sensible people might have thought the law meant. In fact it seems, based on Asian Wedding Horses comment above that the law is likely to give even more powers to governments to limit benefits and rights for incoming workers (or non workers).

What is surprising is that all this was not already apparent to the UK government and that our own system was not adapted accordingly. Some changes have been made recently but it seems that the Conservative Party prefers to be up in umbrage about EU interference to placate EuroSceptics, instead of, more usefully, making the most of what EU law allows.

Open borders are open for workers to move so that there is more competition in the labour market. This has reduced the cost of labour for industry, probably including adding to the fall in real earnings since the recession, but this makes the UK more competitive which is one reason why we are now growing at 2-3% while the average rate in the EU is lower (or nil).

While migration for higher benefits available in the UK should be stopped, those who want EU workers from working in the UK had better be prepared to do the migrants work at the rates they are being paid, or do without their starbucks coffee, high street shopping and much of our service industry (and some manufacturing)