Essay: Case Dano

Case Dano concerns a legal dispute between Elisabeta and Florin Dano and Jobcenter Leipzig. The Romanian Ms Dano entered Germany with her son, asked for social benefits, but does not look for a job while the assistance is only meant for jobseekers. Ms Dano was granted a residence permit from the German authorities and is living with her sister, who takes care of them. The case is held at the Sozialgericht Leipzig. This court asked several prejudicial questions to the Court of Justice.
Relevant legal questions
The legal questions asked by the Sozialgericht Leipzig are the following :
1) Is the ratione personae of article 4 of Regulation No 883/2004 also applicable on special non-contributory benefits that fall under articles 3(3) and 70 of the Regulation?
2) If yes, are the member states allowed to exclude other Union citizens than their own from the right to get non-contributory social security benefits, when these benefits are provided to their own nationals in the same situation despite the ratione personae of article 4 of the Regulation in order to prevent an unreasonable recourse?
3) If no, is it prohibited for the member states to exclude other Union citizens than their own from social security benefits under article 70 of the regulation, when these benefits are provided to their own nationals in the same situation, based on the articles 18 TFEU, 20(2) TFEU and 24(2) of Directive 2004/38/EC?
4) If this exclusion is allowed: may the provision of benefits be limited to the necessary funds for return to the home state or do articles 1, 20 and 51 of the Charter require more extensive payments which enable permanent residence?
Answers of the Court of Justice
Question 1:
Special non-contributory cash benefits as referred to in Articles 3(3) and 70 of the Regulation fall within the scope of Article 4 of the Regulation.
Question 2 + 3:
Article 24(1) of Directive 2004/38, read in conjunction with article 7(1)(b) and article 4 of Regulation 883/2004, does not preclude legislation of a member state in which the citizens of other member states are excluded from certain ‘special non-contributory cash benefits’, although these benefits are granted to nationals of the host member state that are in the same situation. This is only allowed when citizens of other member states do not have a right of residence as meant in Directive 2004/38.
Question 4:
The court has no jurisdiction to answer this question, because it concerns an area (of special non-contributory cash benefits) on which the Member States have competence to lay down the conditions.
Analysis
The case is about the politically sensitive issue of ‘welfare tourism’.
In Grzelczyk the Court ruled that the status of citizen of the Union is destined to be the fundamental status of nationals of Member States. In the cases D’Hoop and N. the Court added to this that every Union citizen may therefore rely on the prohibition of discrimination on the grounds of nationality laid down in Article 18 TFEU. The Dano judgement refers explicitly to these statements and the non-discrimination principle.
The strong emphasis on the lawfulness of the residence in this judgment is noteworthy. A Union citizen can only claim equal treatment to social benefits if his residence in the host Member State complies with the conditions of Directive 2004/38. This is not in line with previous case law, for example the Martinez Sala case, in which the Court considered that lawful residence according to national law was enough to invoke Article 18 TFEU.
The decision is also a deviation from the Brey case. In Brey, the Court decided that relying on social assistance does not automatically mean that a person does not have sufficient resources to prevent him from being an unreasonable burden on the social assistance system of that State. In order to determine whether that is the case, the State has to take the personal circumstances of the individual into account and apply the principle of proportionality. However, in Dano, the Court does not even mention the personal situation of Elizabeth Dano or the principle of proportionality. The facts that Dano was granted a residence permit of unlimited duration by the German authorities and that she lived with her sister, who supported her self-sufficiency by giving her shelter and food, are not even taken into consideration. Apparently, the Court does not look at the actual situation (does she have a residence permit?), like it did in the Trojani case, but to the theoretical situation: does she fulfill the requirements for a right of residence under the Directive 2004/38?
For certain Member States, the outcome of this case will be a big relief. The fear for benefit tourism has been a major issue on the Governments’ political agenda for some Member States. But this judgment is not only a reminder of the restrictions of a Union citizen’s right to equal treatment; it also gives responsibility to the national authorities by answering the fourth question. The Court confirmed that special non-contributory benefits are a national competence, which means that Member States are free to determine the material conditions and the extent of their social assistance system. This can be useful for national governments to defend their limitations on EU migrants’ access to social welfare benefits. The future fate of the Dano’s has been handed over to the German authorities.
The decision of the Court will probably raise legal issues in the future. According to Article 14(3) of the Directive 2004/38 expulsion measures shall not be the automatic consequence of a citizen’s recourse to the social assistance system of the host Member State. But apparently it is possible to starve them out by denying them social assistance. Thus a person in Dano’s situation might have the right to stay in a host Member State, but does not fulfill the conditions for social assistance. This could cause poverty in the host State and those ‘legal limbo’s’ might soon become a reality.