Social benefits for eu citizens: when germans burden foreign countries

How will the ECJ rule on Hartz IV for Romanians and Bulgarians? A ruling on a pensioner living in Austria provides clues.

Always good for a snappy remark: session room of the ECJ. Picture: dpa

For weeks, Germany has been discussing poverty immigration from Romania and Bulgaria. The CSU wants to restrict social benefits for EU citizens and thus reduce the incentives to come to Germany. In doing so, the CSU does not take EU law into consideration. The discussion at the legal level tends to go in the other direction. There, already existing German benefit exclusions for EU citizens are controversial.

Currently, the German Social Security Code II explicitly excludes job-seeking EU citizens from receiving Hartz IV benefits. However, at the end of November, the Social Court of North Rhine-Westphalia declared this exclusion clause to be contrary to EU law. However, the ruling is not yet legally binding. In another case, the Federal Social Court asked the European Court of Justice (ECJ) for clarification in mid-December. But how will it decide?

A ruling by the ECJ from September 2013 (Ref.: C-140/12), which is hardly known in Germany, provides some clues. The case does not concern the threatened overburdening of the German social system by EU foreigners, but conversely the threatened overburdening of the Austrian social system by Germans who immigrated to the Alpine Republic.

Specifically, the case concerned the German pensioner Peter B., who moved to Austria with his wife in 2011. B. receives a small pension for reduced earning capacity from Germany. In Austria, he also applied for the local equalization supplement, which is used to top up insufficient pensions to the subsistence level. However, the Austrian authorities denied B. the equalization supplement. He had no permanent right of residence in Austria at all because he did not have sufficient means to finance his livelihood himself. The authorities referred to a corresponding clause in the Austrian Settlement and Residence Act.

Concept of "social assistance" interpreted broadly

The ECJ objected to the Austrian clause. Instead, the courts there would have to examine whether the granting of the benefit in the specific case placed an "unreasonable" burden on the social system. The NRW State Social Court referred to this ruling: Hartz IV should not be excluded automatically and without exception for EU citizens seeking work.

In fact, the ECJ ruling provides several important pointers for the German debate. Thus, the ECJ does not measure the case against the "EU Regulation on the Coordination of Social Security Systems," which generally requires strict equal treatment of EU citizens with regard to social benefits. Rather, the standard is the EU Citizenship Directive, which expressly provides that EU citizens may be denied "social assistance" in certain constellations.

The term "social assistance" is also interpreted broadly. The Austrian equalization supplement for pensioners is therefore also classified as "social assistance." This suggests that the ECJ will also consider German Hartz IV benefits to be "social assistance" within the meaning of EU law.

On the other hand, the ECJ also emphasizes a duty of "financial solidarity" on the part of the host states, especially if the EU citizen’s indigence is "only of a temporary nature". An "automatic exclusion of economically inactive nationals of other Member States" from social assistance was therefore inadmissible. The conclusion of the Essen Regional Social Court that the German exclusion clause would also have to be inadmissible because of its automatism is therefore quite understandable.

It is possible that the ECJ is even more citizen-friendly in the case of Hartz IV, because "job-seeking" EU citizens still want to be economically active and therefore, according to EU logic, need stronger protection in the host state than pensioners.