The United Kingdom and Germany plans to limit access for European Union citizens to social benefits
Article 45 TFEU establishes the free movement of workers as one of the fundamental freedoms of the single market. Likewise, Article 34(2) of the EU Charter of Fundamental Rights provides that “everyone residing and moving legally within the European Union is entitled to social security benefits and social advantages in accordance with Union law and national laws and practices”.
The Treaties confer on EU citizens directly effective rights which are enforceable in national courts and may only be restricted subject to the proportionality principle. Although EU migrants are not automatically entitled to claim benefits in the UK, they can have access to Income Support or Housing Benefits, or to social security benefits, including child benefit, invalidity benefit or contribution-based Jobseekers’ Allowance as UK’s nationals. The UK has been working with other EU member states to tighter the rules on access to benefits. However, the Commission is not willing to amend free movement rules for tighter restrictions on access to welfare benefits and other state-funded services for EU migrants and has made clear the EU-treaty-based right to free movement is not up for negotiation. According to the European Commission “the cases of abuse should be addressed on a case-by-case basis and within the existing legal framework.” But the existing EU legal framework does not provide for adequate safeguards to ensure free movement without overburdening member states’s public finances. In fact, despite what the Commission has been saying, the existing system is not working and needs to be reformed.
Under the Directive on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States all citizens from all EU member states as well as their family members from third countries have the right to move and right of residence for up to three months, without any conditions, to another member state. Then, after three months, the directive subject the right of residence to certain conditions. Article 7 of Directive 2004/38 provides that all EU citizens have the right to move and reside in another Member State as workers, self-employed or students or if they “have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State” as well as “comprehensive sickness insurance cover in the host Member State.”
Under Article 7(1)(b) of the Directive , economically non-active EU citizens have the right to reside in another Member providing that they have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State and also have comprehensive sickness insurance.
In the UK, access to the NHS cannot be seen as a comprehensive sickness insurance for EU migrants. The UK requires private health insurance. However, according to the Commission the UK has breached EU Law by not considering entitlement to treatment by the NHS as sufficient to allow EU citizens who live but have no job in the UK to stay in the country for more than three months. In fact, it has launched infringement procedures against the UK, requesting it to comply with EU rules by considering NHS cover as sufficient sickness insurance when assessing whether or not a non-active EU citizen is entitled to remain in the UK under the free movement rules. The UK is required to amend national rules and to bring UK law in line with EU law.
The European Commission has been arguing that “Member States can deny social assistance to non-active EU citizens who move to another Member State during the first three months of residence” and “during the first five years of residence, national authorities can check whether a citizen has become an unreasonable burden.” However, Member States are not always able to refuse residence and withhold the benefits as the Commission has been arguing. This particularly happens when the ECJ is required to interpret these measures. It is important to recall that the ECJ has been ruling on entitlement of benefits in the UK. Under the EU rules economically inactive persons are required to have sufficient resources, including sickness insurance, in order not to become an unreasonable burden on the host country’s social assistance system. The housing assessment officer of the London Borough of Harrow rejected an application for housing assistance on the grounds that under the Housing Act 1996 and the Allocation of Housing and Homelessness (Eligibility) Regulations 2006 the applicants were not entitled for housing assistance as they have no right of residence in the UK conferred by EU law. However, the ECJ ruled in the Case C 310/08, London Borough of Harrow v Nimco Hassan Ibrahim, Secretary of State for the Home Department, that a parent who is the primary carer of a child who is in education have a right of residence in the host Member State, in this case the UK, even if they cannot support themselves without social assistance. Consequently, the applicant who has never worked in the UK has been able to claim house as well as other benefits.
Under the EU Treaties social policy is a matter for member states’ governments but “The Union may take initiatives to ensure coordination of Member States’ social policies.” The EU Regulations do not provide for the harmonization of the national social security systems, but for their coordination. However, the so-called coordination of national systems, does not fully allow the Member States to retain their sovereignty with regard to social security. The rules for coordination of national social security systems fall within the framework of free movement of persons so that equality of treatment under the different national legislation for the persons concerned is guaranteed within the EU. In order to ensure that the application of the different member states legislations does not adversely affect the right to free movement, all member states authorities, including social security institutions and courts are obliged to comply with common rules and principles provide by the coordination provisions, as well as with the ECJ rulings. Hence, Member States are not free in deciding their social security systems, as they must take into consideration, the fundamental freedoms as well as general principles of Union law.
The EU rules on equal treatment and coordination of social security benefits can be exploited by non-active EU migrants who, under EU law, can access certain residence based healthcare and special non-contributory benefits, which overburden the UK social security system as the non-active EU citizens who move here do not contribute directly to it. Under the Regulation on the coordination of social security systems “persons to whom this Regulation applies shall enjoy the same benefits and be subject to the same obligations under the legislation of any Member State as the nationals thereof.” It does not apply to social assistance. This Regulation applies to all social security benefits, sickness benefits, maternity and equivalent paternity benefits, invalidity benefits, old-age benefits, survivors’ benefits, benefits in respect of accidents at work and occupational diseases, death grants, unemployment benefits, pre-retirement benefits, family benefits. Hence, all EU citizens, and their third country family member, who are working in the UK are entitled to social security benefits on the same terms as UK nationals. Under Regulation 883/2004 non-active persons are required to demonstrate, before they are entitled to claim equal treatment with UK nationals as regards social security benefits that, they have established their habitual place of residence in the host Member State.
It is well known that the ECJ has been playing a fundamental role in defining and extending the scope of social security coordination. The ECJ has been using the EU Regulations on the coordination of social security systems as instruments intended to ensure the right of EU citizens to move and reside freely within the EU, independently of the exercise of any economic activity. In fact, unsurprisingly, by broadly interpreting the principle of non-discrimination according to nationality, the ECJ has built its case law on equal treatment in favour of EU citizens.
The government believes the existing system is not working in the UK’s interest hence it is seeking to tackle pull factors that attract EU citizens to move into the UK by tightening and limiting access to UK’s social and housing benefits as well strengthening the habitual residence test. However, presently, there is not much that Government can do to limit access to benefits without breaching EU’s rules. In fact, every time the Government attempts to protect UK’s welfare and public health systems from abuse and huge burdens, by tightening rules on who can claim UK benefits, it faces a legal challenge from the European Commission. The Commission has been launching infringement procedures against the UK for breaching EU rules in this area.
UK’s Government measures
Stronger Habitual Residence Test
The Directive 2004/38/EC on the right of citizens of the Union and their families to move and reside freely within the territory of the Member States has been transposed into UK law by the Immigration (European Economic Area) Regulations 2006. Since 2006, to avoid welfare tourism, and protect the social system, the UK requires EU jobseekers to pass both the ‘right to reside’ and the ‘habitual residence’ tests in order to have access to certain benefits. The government amend legislation so that a person cannot be ‘habitually resident’ unless they have the ‘right to reside’ in the UK.
According to the European Commission social security benefits fell within the scope of Regulation (EC) No 1408/71 which requires equal treatment between UK’s nationals and persons from other EU countries and prohibits both direct and indirect discrimination. The Commission said, “As regards the hierarchy of norms (Regulation 1408/71 and Directive 2004/38), in view of its direct legal effect the Regulation takes precedence and Member States cannot use their national implementation of the Directive to impair Union rights which are directly applicable by virtue of the Regulation.” The European Commission has stressed “where citizens are entitled to social security/healthcare on the basis of residence under Regulation 1408/71, residence should be assessed within the meaning of this Regulation. Such rights cannot be restricted on the basis of the more restrictive residence conditions emanating from the Directive.”
The Commission referred the UK to the ECJ, in May 2013, over the right to reside test imposed on citizens from other Member States when claiming social security benefits. It is important to note that the European Commission’s legal action against the UK concerns ‘social security’ benefits under EU law, which includes Child Benefit, Child Tax Credit, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Income Support and State Pension Credit.
The European Commission recalled that under the EU Regulation on the coordination of social security systems, which concerns social security benefits and not social assistance benefits, “EU citizens have the same rights and obligations as nationals of the country where they are covered” and noted “The EU directive on the free movement of EU citizens (…) allows for restrictions of access to social assistance only, but it cannot restrict the access to social security benefits”. The Commission has stressed, “EU rules on coordination of social security do not allow for restrictions on social security benefits in the case of EU nationals that are workers, direct family members of workers or habitually resident in the Member State in question.” Hence, according to the Commission the UK shall solely apply to social security benefits the habitual residence test as it is provided in EU law.
Under the EU law “habitual residence test”, individuals are considered to habitually reside in a Member State if their habitual centre of interest is located there, taking into account factors such as family situation, duration and the continuity of presence, employment and housing situation and in which country the person pays tax. Furthermore, the European Commission pointed out, “The “right to reside” test is an additional condition for entitlement to the benefits in question which has been imposed unilaterally by the UK. UK nationals have a “right to reside” in the UK solely on the basis of their UK citizenship, whereas other EU nationals have to meet additional conditions in order to pass this “right to reside” test.” Consequently, according to the Commission, “the UK discriminates unfairly against nationals from other Member States”, breaching “EU rules on the coordination of social security systems which outlaw direct and indirect discrimination in the field of access to social security benefits.” If the ECJ finds that the UK has breached these rules and decides against it, the Government would have to followed its ruling and take measures to bring UK law in line with EU law. The UK is required to fully comply with the ECJ’s judgements. Under the terms of the European Community Act 1972 (ECA) the UK is required to comply with EU law, including the ECJ’s decisions, which are, under Section 3(1), binding precedents for all UK courts and tribunals.
It should be mentioned that the ECJ has the power to impose financial penalties on Member States, which fail to comply with a previous Court’s judgment. If Britain loses the case it will either have to change the law or face fines for non-compliance with EU rules.
According to the Government “If the European Commission’s view prevails, people with no right of residence and links to a country will be able to claim welfare benefits.” Economically inactive nationals, who presently are not entitled, would be able to claim benefits by just showing that they are factually habitually resident, becoming, in this way, a burden to the welfare system. In fact, if the ECJ decides against the UK, it would prove even more difficult for the Government to introduce measures intended to prevent abuse of the welfare system.
The Habitual Residence Test introduced in December 2013 entails a more in-depth and strict approach to establishing whether or not a person meets the existing criteria for habitual residence. EU migrants are now required to provide more evidence of their circumstances, before they are allowed to make a claim, such as what measures they have taken to establish themselves in the UK and that they are doing everything they can to find a job. The European Commission has already requested the Government to stop the application of the right to reside test. It is likely to find that the new requirements, imposed by the government, discriminate non-UK nationals coming from other EU Member States, which contravenes EU law.
EU citizens arriving in the UK have to wait a three month period before they can be considered as habitually resident for income-based Jobseeker’s Allowance purposes
The Jobseeker’s Allowance (Habitual Residence) Amendment Regulations 2013 (SI 2013/3196) came into force on 1 January 2014 and introduced a new requirement whereby people coming to the UK for the first time will have to wait a three month period before they can be considered as habitually resident for income-based Jobseeker’s Allowance purposes. Hence, for the purposes of claiming income-based Jobseeker’s Allowance, EU job seekers cannot be considered “habitually resident” unless they have been living in the Common Travel Area (the UK, Republic of Ireland. Channel Islands or the Isle of Man) for three months.
Under the Directive 2004/38/EC all EU citizens, including economically inactive people, are entitled to reside in another member state for an initial period of three months. The Directive 2004/38 does not provide for an immediate right to equal treatment for EU citizens who wish to enter the territory of another Member State for up to three months. Whereas the EU Workers and their family members have an right to access to the host Member State’s social security system under the same conditions as nationals. Under Article 24(2) of Directive 2004/38/EC Member States are not obliged to confer entitlement to social assistance during the first three months of residence. The Directive (Recital 21) has left to the host Member State to decide whether to grant social assistance during the first three months of residence, or for a longer period in the case of job-seekers.
Nonetheless, the UK’s measure might be considered contrary to EU law, as it might not comply with the ECJ’s ruling in Vatsouras whereby job seekers cannot be excluded from financial benefits which are intended to facilitate access to employment in the labour market. Initially the ECJ deemed that first-time jobseekers in a host Member State were not entitled to equal treatment with nationals as regards unemployment benefits. However, the Court held in the Collins and Vatsouras cases that jobseekers are entitled to equal treatment for the purpose of claiming a benefit of a financial nature aiming at facilitating access to the labour market. The Vatsouras case concerned the German basic benefit for jobseekers. The Court held that benefits that are intended to ensure that jobseekers are able of earning a living cannot constitute ‘social assistance’, irrespective of their formal status under national law, as they are likely to be aimed at facilitating access to employment. The ECJ has interpreted Article 45 TFEU so that a minimum subsistence allowance for jobseekers intended to facilitate access to employment in the labour market of a Member State cannot be regarded as “social assistance” within the meaning of Article 24(2) of Directive 2004/38.
The ECJ held that first-time jobseekers have a right to equal treatment with national jobseekers as regards benefits intended to facilitate access to employment, if there is a genuine link to the employment market of the host member state. According to the Court the existence of such a link can be established if the jobseeker has, genuinely sought work in the host Member State for a reasonable period.
The measures requiring first time jobseekers to live in the UK for three months in order to be able claim Child Benefit and Child Tax Credit might also face legal challenges.
Under the Housing Benefit (Habitual Residence) Amendment Regulations 2014 from 1 April 2014 first time EU jobseekers are unable to claim Housing Benefit. The DWP pointed out “This reform only removes EEA jobseekers’ access to HB and does not affect their EU treaty rights to reside in the UK whilst they search for work.” Yet, it might be argued that exclusion of EU jobseekers from access to Housing Benefit breaches the EU anti-discriminations rules namely articles 18 and 45 of the TFEU. Housing benefit might be considered a benefit of a financial nature which is intended to facilitate access to employment in the labour market, in accordance with the ECJ’s rulings. The Commission may also considered that this measure is inconsistent with the principle of proportionality.
Cuts on access to benefits for non-UK nationals after 6 months
The Directive 2004/38 provides that all EU citizens have the right to move and reside in another Member State as workers, self-employed or students or if they “have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State” as well as “comprehensive sickness insurance cover in the host Member State.” The EU law does not impose further conditions for EU citizens who are workers or self-employed, as well as their family members, to be entitled to social assistance benefits in the UK. On the other hand non active citizens from other member states who live in the UK supposedly are not eligible for these benefits as under EU law they are required to have sufficient resources.
EU citizens are able to keep their residence right as long as they do not become an unreasonable burden on the social assistance system of the host Member State. Member states are required to take into account he circumstances in each individual case and are not allowed to provide for a fixed amount to be deemed as ‘sufficient resources’.
Jobseekers who have never worked in the host Member State and who have entered it in order to seek employment (first-time jobseekers) have no worker status to retain. Under Article 7(1) first-time jobseekers need to be self-sufficient and have comprehensive sickness insurance in order to be entitled to reside in that Member State. Nevertheless, Article 14(4)(b) of the Directive provides that “an expulsion measure may in no case be adopted against Union citizens or their family members if … the Union citizens entered the territory of the host Member State in order to seek employment. In this case, the Union citizens and their family members may not be expelled for as long as the Union citizens can provide evidence that they are continuing to seek employment and that they have a genuine chance of being engaged.” This has been interpreted as providing jobseekers a right to reside in the host Member State without the need to prove self-sufficiency.
The Directive differentiates jobseekers who used to be employed in the host Member State before involuntary losing their employment who, under certain conditions, are able to keep their status as a worker or self-employed and ‘first-time jobseekers’ who move to the host Member State to seek employment there and therefore have no worker status. Under Article 7(3) of Directive 2004/38, EU citizens are able to keep their status of worker or self-employed if “he/she is temporarily unable to work as the result of an illness or accident”, “he/she is in duly recorded involuntary unemployment after having been employed for more than one year and has registered as a job-seeker with the relevant employment office;” and if ”he/she is in duly recorded involuntary unemployment after completing a fixed-term employment contract of less than a year or after having become involuntarily unemployed during the first twelve months and has registered as a job-seeker with the relevant employment office” but “in this case, the status of worker shall be retained for no less than six months;” Consequently, the self-sufficiency and sickness insurance requirements do not apply in these cases.
The Immigration (European Economic Area) (Amendment) (No. 2) Regulations 2013 (SI 2013/3032), introduced the requirement that EU jobseekers only have the right to reside in the UK if they provide evidence from the outset that they are seeking work and have a genuine chance of being engaged. Under Article 7 of the Directive, EU nationals who had a right to reside as a worker may retained this status in the event that they are involuntarily unemployed. Under the new Regulations EU nationals, who were formerly in work but were made redundant, will be able to retain their “worker” status, but they must provide, from the outset, evidence that they are “seeking employment and have a genuine chance of being engaged”. Hence, EU nationals with a right to reside as “jobseekers” or a “retained workers” will lose their status after six months unless they can provide evidence that they are “seeking employment” and have a “genuine chance of being engaged”. Moreover, an EU national that had worked for less than 12 months before becoming involuntarily unemployed, is only able to keep his “worker” status for up to six months. In this case, the person in question might be able to continue to his/her right to reside in the UK on another basis. Moreover, EU jobseekers are unable to claim JSA, Child Benefit and Child Tax Credit after six months if they cannot demonstrate a genuine prospect of finding work.
As above-mentioned, according to the European Commission social security benefits, including Child Benefit, Child Tax Credit, income-based Jobseeker’s Allowance fell within the scope of Regulation (EC) No 1408/71 which requires equal treatment between UK’s nationals and persons from other EU countries and prohibits both direct and indirect discrimination.
The ECJ in the Antonissen confirmed that jobseekers have a right of residence during the periods (and deemed six months as a reasonable period) they are seeking work and while they have a genuine chance of finding employment. Thus, having a right of residence they also have a right to equal treatment, including access to social benefits for more than six months. But, the Court has not limited jobseekers’ right of residence to six months, as a jobseeker who is able to provide evidence of a genuine chance of finding a job cannot be required to leave the host Member State. The ECJ takes the view that jobseekers have a residence right as long as they can prove that they are seeking employment, even if it is more than six months. Moreover, they do not need to be self-sufficient in order to be entitled to reside in the host Member State.
Moreover, the ECJ has introduced the requirement to consider links to the labour market in order to decide for how long an EU national is able to keep his status as a worker after he has lost his job. Hence, as stronger the link with the labour market as stronger the claim to continue the worker status, and, consequently greater the entitlement to all social benefits.
The right of residence is also subject to the condition that the EU citizen does not become an unreasonable burden on the social assistance system of the host member state. The Department for work and Pensions and the UK courts have been arguing that the fact that an EU citizen claims social benefits is proof of lack of self-sufficiency as they have no other right to reside and become a ‘burden on the social assistance system’.
In September 2013, the ECJ in Peter Brey confirmed that one of the objectives of the Directive, is to ensure that EU citizens do not become an unreasonable burden on the social assistance system of the host member state. Moreover, the Court took the view that social assistance in terms of Directive 2004/38 covers: “all assistance […] that can be claimed by a person who does not have resources sufficient to meet his own basic needs and the needs of his family and who, by reason of that fact, may become a burden on the public finances of the host Member State during his period of residence which could have consequences for the overall level of assistance which may be granted by that State.” Although the Court accepted that if an economically inactive EU citizen claimed a benefit in the host Member State, this could mean that the person in question is not self-sufficient and that this claim could become a burden on the Member State’s social assistance system it stressed that the personal situation of the person concerned need to be examined. The Court ruled that “EU law – in particular, as it results from Article 7(1)(b), Article 8(4) and Article 24(1) and (2) of 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 … – must be interpreted as precluding national legislation, … , which, even as regards the period following the first three months of residence, automatically – whatever the circumstances – bars the grant of a benefit, … , to a national of another Member State who is not economically active, on the grounds that, despite having been issued with a certificate of residence, he does not meet the necessary requirements for obtaining the legal right to reside on the territory of the first Member State for a period of longer than three months, since obtaining that right of residence is conditional upon that national having sufficient resources not to apply for the benefit.”
The fact that a an economically inactive migrant receives social assistance can be an indication that she/he does not have sufficient resources to avoid becoming an unreasonable burden on the social assistance system of the host Member State but it is not sufficient as such conclusion cannot be arrived at automatically. The Court ruled that national competent authorities must carry out “an overall assessment of the specific burden which granting that benefit would place on the social assistance system as a whole by reference to the personal circumstances characterising the individual situation of the person concerned before making a decision to refuse benefit”.
The UK’s domestic law on the right to reside and welfare benefits will need to be revisited in the light of this ruling. As a result of this ruling, some economically inactive EU migrants who have been refused benefit based on a failure to satisfy the right to reside condition, may be entitled to benefits after national courts carry out an overall assessment of the specific burden that granting benefit to the claimant would place on the UK’s social assistance system, by reference to the personal circumstances of the claimant, concluding that the circumstances of the particular case would not pose an unreasonable burden on the UK social assistance system.
The ECJ in Brey held that the test is whether the granting of a social security benefit creates a burden on the Member State’s social assistance system as a whole that justifies extinguishing the residence right nonetheless the national authorities must undertake a personal assessment of the EU citizen’s situation. This ruling entails further administrative burden on national authorities. It is also anther example of the EU social system being shaped by the ECJ.
The Government is planning to reduce from six to three months the time citizens from other member states, without a job, and without prospects of getting one, can claim job seekers’ allowance, child tax credit and child benefit. However, according to The Daily Telegraph an European Commission said “As and when these proposals are finalised properly, we will scrutinise them carefully to see if they are fully compliant with EU law.”
It is important to recall that in the Antonissen case, the CJEU held that jobseekers have a right to reside in the host Member State for as long as they have a genuine chance of finding a job there, which can go beyond six months from entry into the host Member State, if they can prove that they are still seeking a job and have a genuine chance of finding one. The ECJ has deemed a period of six months as reasonable to allow the jobseeker to find a job.
It is extremely difficult to national authorities to refuse residence and withhold benefits, even when an EU citizen has become an “unreasonable burden”.
It is important to recall that the CJEU has been playing a fundamental role in defining and extending the scope of free movement as well as of social security coordination and entitlement to member states’ benefits. According to an Advocate General’s opinion concerning social security benefits the “EU law does not preclude nationals of other Member States being refused, on the basis of a general criterion, entitlement to a ‘special non-contributory cash benefit’ (such as the German basic provision benefits for jobseekers who are in need of assistance), provided that the criterion adopted (for example, the reason for the applicant’s entering the territory of the Member State) is capable of demonstrating the absence of a genuine link with the host Member State and is thereby intended to prevent an unreasonable burden falling on the national social assistance system.” However, the CJEU is very likely to reverse the Advocate General’s Opinion. According to the European Commission there cannot be a blanket ban excluding citizens from other EU member states from receiving social benefits as each case must be dealt individually on the basis of the person’s circumstances.
The Government introduced, from 1 March 2014, a new minimum earnings threshold in order to determine whether an EEA national is in “genuine and effective work” and consequently has a right to reside in the UK as a “worker” or “self-employed person.” Those EU nationals that earn less than £150 a week “will be assessed against a broader range of criteria to decide whether they should still be considered as a worker, or self-employed.”
It is important to recall that under EU law, any EU national who has a worker status is entitled to social security benefits as an UK national. But the Government wants to ensure that solely those who are genuinely working a minimum earnings threshold are entitled to benefits. However, the minimum earnings threshold is likely to be challenged by the European Commission ass it might deemed the UK is interpreting the concept of a ‘worker’ by reference to the level of earnings. This breaches EU law, as it is forbidden to define the EU concept of work by reference to national laws. The Commission is likely to argue that the Government has introduced a restrictive approach to the EU concept of a worker. In fact, according to The Financial Times a commission spokesman said “The Court of Justice’s case law makes clear that part-time workers, trainees and au pairs can be classified as ‘workers’, provided their activity has an economic value and is genuine and effective. This case law makes clear that a definition of a worker according to the amount he or she earns is not compatible with EU law.”
In order to ensure the equal application of the provisions on freedom of movement within the EU, the Court rejected national definitions of ‘worker’ which refer to minimum wages or minimum working hours. Likewise part-time workers or workers who are not able to support themselves exclusively from their salaries and consequently rely on the national social security system to supplement their low incomes are not prevented from being workers. The ECJ has held that it is only required that the work is genuine and effective. Any effective and genuine employment activity has been deemed by the ECJ as sufficient for someone to be considered a worker, as it has only excluded people who take on small scale activities that it can be regarded as purely marginal and ancillary. Hence, the concept of a ‘worker’ cannot be defined by national law as it is an “autonomous EU concept”.
Measures imposing a 12 month re-entry ban for EU nationals that have been removed for not working or being self-sufficient as well as to deport and ban from re-entry for 12 months any EU national “sleeping rough or begging” ‘unless they can prove they have a proper reason to be here, such as a job’ are also likely to face legal challenges. It seems that the government is relying on a lack of self-sufficiency to deport homeless EU nationals but this may only be allow in some cases, and it must entail a burden on the social assistance system in order to permit member states to extinguish the right of residence of EU citizens. Deportation must comply with the principle of proportionality.
Within the first three months EU citizens will lose the right to reside in the host member state if they ‘become an unreasonable burden on its social assistance system. Then, EU citizens retain the right of residence in the host member state if they are workers or self-employed person or if they have sufficient resources ‘not to become a burden on the social assistance system’. Moreover, EU citizens cannot be expelled if they have worked for more than one year and registered as a job-seeker and have worked for less than one year and registered as a job-seeker, for at least a six-month period, as well as if they can prove that they are seeking employment and have a genuine chance of finding a job. It is important to recall that EU citizens or their family members that become ‘permanent residents’ after living five years in the host Member State cannot be expelled on the grounds of unemployment. The residence right might be lost if these conditions cannot be met yet under the EU rules there is no such thing as automatic expulsion, as each case must be individually considered. It is important to note that Recital 16 provides “As long as the beneficiaries of the right of residence do not become an unreasonable burden on the social assistance system of the host Member State they should not be expelled.” Hence, an expulsion measure cannot be applied as an automatic consequence of resort to the social assistance system.
Directive 2004/38 provides that an expulsion measure should not be adopted against workers, self-employed persons or jobseekers, save on grounds of public policy or public security or public health. Moreover, under Article 15(3) of the citizens’ Directive ‘The host Member State may not impose a ban on entry in the context of an expulsion decision’ that was taken on the basis of ‘grounds other than public policy, public security or public health”. Hence if a EU citizen is expelled on the grounds of lack of self-sufficiency, the host Member State cannot impose a re-entry ban, as the person in question may return there at any time.
There is the possibility, depending on the gravity of the offence, for the host member state to prohibit re-entry into its territory for a certain period of time, if the person in question represents a genuine, continuous and sufficiently serious threat to public order. Under Article 35 of Directive 2004/38, “Member States may adopt the necessary measures to refuse, terminate or withdraw any right conferred by this Directive in the case of abuse of rights or fraud, such as marriages of convenience.” However, it is extremely difficult to establish that the person in question behaviour is intended to abuse the advantages provided by free movement rules could be qualified as a serious threat to public order, and then that a re-entry ban is a proportional measure.
It is important to recall that the UK and other member states pointed out in a letter to the European Commission “The way the provisions are construed, (…), means that they may not be subject to a ban on re-entry. In fact, those who have actually been expelled because of fraud or document forgery cannot be stopped from re-entering the country virtually the next day”. Hence, the existing system does not work. The ECJ has also ruled that Member States must indicated on case-by-case basis the exact reasons for imposing restrictions on the right of entry and the right of residence of EU citizens. Member States are required, before taking an expulsion decision, to assess several factors such as “the period for which the individual concerned has been resident, his or her age, degree of integration and family situation in the host Member State and links with the country of origin.”
Article 67 of Regulation 883/2004 provides “A person shall be entitled to family benefits in accordance with the legislation of the competent Member State, including for his family members residing in another Member State, as if they were residing in the former Member State.” Consequently, an EU national covered by the UK social security system can claim Child Benefit and Child Tax Credit for their dependent children even if they are not resident in the UK. The UK’s domestic legislation only allows in very limited circumstances payments of Child Benefit and Child Tax Credit for families abroad. It is well known that in case of conflict between national and EU legislation, the latest prevail. The EU Regulation 883/2004 provision overrides therefore the domestic legislation.
The Government wants to prevent Child Benefit and Child Tax Credit being paid to children not resident in the UK. However, any amendment to this regulation intended to remove the right of EU nationals to claim child benefit at the UK rate in respect of children not resident in this country requires a proposal by the European Commission and then would be subject to the ordinary legislative procedure.
German Government measures
Under the draft bill, EU nationals looking for work in Germany will have six months to find a job. EU nationals that have no means of supporting themselves and are unable to prove they have a reasonable prospect of securing work can stay in Germany for six months then they would have to leave the country. According to Germany this is in line with the EU rules on freedom of movement, as it does not apply to EU nationals that have a ‘reasonable’ chance of finding work, to those with sufficient financial means, and to those working just a few hours per week. It particularly notes that the ECJ considers the six months period to be appropriate.
Under the draft bill, EU citizens that lie or use fraudulent means to claim social benefits in Germany will be expel and temporarily prohibited from re-entering Germany. Germany wants to ban any EU citizens found guilty of “abusing or defrauding” the German welfare system from re-entering the country for up to five years. By limiting re-entry bans to the most severe cases of fraud, Germany is hoping that the measure complies with EU law.
Whereas Germany has proposed to apply a re-entry ban to more serious cases such as fraud the UK is considering a general re-entry ban. Germany has proposed to impose an entry ban only on persons who have committed fraud, which might fall within the scope of Article 35 of the Directive, the ‘abuse of rights’ clause whereby “Member States may adopt the necessary measures to refuse, terminate or withdraw any right conferred by this Directive in the case of abuse of rights or fraud, such as marriages of convenience.” Yet, an expulsion cannot be automatic. David Cameron’s proposal would apply an entry ban for 12 months to anyone who is expelled for not working, unless they are able to prove that they have a good reason to return. This proposal is likely to breach EU law as the directive forbids an entry ban to those who are not working and who create an unreasonable burden for the social assistance system.
The German draft bill also would require EU nationals claiming child benefit in two countries to provide a tax registration number and document the existence of the child in order to prevent fraudulent claims. German position is therefore different from the UK.
The European Commission has welcomed the German proposals nonetheless it will “carefully assess the draft legal measures … to ensure their strict compliance with EU law”. It will particularly “… look very closely at this re-entry ban to verify its compliance with the Freedom of Movement Directive of 2004.”
According to the Daily Telegraph a Brussels source said, “The German proposals are well researched and fact based whereas the British go with Iain Duncan Smith’s gut feelings or Cameron’s fears about out Ukipping Ukip,”. Moreover, such source said that “Germany has also been clear it will act within the law, the UK doesn’t give a monkeys and runs into trouble.”
The British Government’s efforts to limit the impact of the EU’s rules through domestic legislation are likely to be challenged by the European Commission and struck down by the European Court of Justice.
David Cameron wants to restrict access to benefits for EU migrants as well as to introduce mechanisms aimed at preventing “vast migrations” from EU new members states. As David Cameron pointed out “The Council underlined the need to address concerns about immigration arising from misuse of, or fraudulent claims on, the right of freedom of movement.” Yet, while the original draft of the strategic agenda stressed the negative impact that fraudulent claims have on Member States’ welfare systems and this “must be tackled at all levels”, the final document stressed that the main priority is to protect “the Union’s four fundamental freedoms, the right of all EU citizens to move freely and reside and work in other member states, including from possible misuse or fraudulent claims;”
The UK must have the exclusive right to decide eligibility and structures for welfare benefits. Social security benefits should be dealt at national level and not at EU level.The Member States’ social security schemes are coordinated by EU primary EU law (Article 48 TFEU) and secondary legal acts, set out in Regulation (EC) No 883/2004 and the Implementing Regulation (EC) No 987/2009. It is important to note that any amendment to primary law such as Article 45 TFEU and Article 48 TFEU whereby the European Parliament and the Council are allowed to adopt measures in the field of social security as to provide freedom of movement for workers, or any other amendments to the text of the EU treaties on freedom of movement will require the agreement of all EU Member States. Although all member states agreed that abuse of free movement of persons has to be combated not all member states are willing to reopen issues on social law and amend the Treaties. Moreover, they would never agreed to amend the treaties in a way that would give back to the UK control over this area of law.
It is important to recall that the unaccountable and unelected European Commission, which has no democratic mandate but it has almost the exclusive right of initiative over all EU legislation. The Commission is also in charge of putting forward proposals to amend or repeal existing legislation. But the Commission has no appetite to revise EU’s free movement rules. Moreover, the Commission defines in its proposals the common interest or the interest of the Union, it does not take into account member states’s individual interests. The text ultimately adopted by the EU legislative bodies takes into account the EU interests as a whole. Hence, even if the European Commission puts forward a proposal amending Regulation (EC) No 883/2004 and the Implementing Regulation (EC) No 987/2009 intended to strengthen the habitual residence test or an amendment to Directive 2004/38 there is no guarantee such proposals would address the UK’s concerns. Moreover, any proposal to amend these regulations and directive will be subject to the Ordinary legislative procedure and QMV. Furthermore, the ordinary legislative procedure enables the European Parliament to override a decision taken by the Council.The European Parliament will consider any proposal intended to limit access to social benefits as a restriction to freedom of movement. The MEPs won’t agree to restrict free movement and limit access to benefits. Hence, the UK would not be able to get the European Commission, the other Member States, and the European Parliament to agree to a satisfactory change to the EU secondary law, which would enable the UK’s to protect its social security system from abuse. In the meantime, the EU’s free movement laws will continue to be abused by some migrants who travel to the UK to claim benefits becoming, in this way, a burden to the welfare system.
In order to the UK to regain control over immigration and social policies and to be able to introduce the above-mentioned measures, the Westminster Parliament must be able to override all EU legislation, which is deemed not to be in Britain’s national interest. Hence, the only possible solution for the UK is to amend the ECA 1972 so that it can disapply EU law where it is in the national interest to do so. The ECJ’s powers and the impact of its rulings in the UK must be properly addressed, including Sections 2(4) and 3 UK of the ECA 1972 whereby UK courts are required to override any national legislation, which is deemed to be incompatible with EU law.
Without a fundamental renegotiation of the Treaties, there is nothing the Government can do about to reverse the present situation unless it amends the ECA 1972 so that EU law can be disapplied.