Discriminating against families: Italian family benefits before the ECJ

 

 

Virginia Passalacqua, post-doctoral researcher in EU law, Utrecht University

 

In Italy, if you are a multimillionaire and you just had a baby, the State gives you 960 euros. However, if you are, say, the non-EU domestic employee of such a millionaire and you also just had a baby, the State gives you zero.

How is this possible? Thanks to Italian legislation that for 20 years has discriminated systematically against foreign families. No wonder, these families are also poorer compared to Italian ones: 25% of them were in absolute poverty in 2020, against 6% of Italian ones.

In July 2020, the issue of discriminatory criteria for access to family benefits arrived before the ECJ, thanks to a reference by the Italian Constitutional Court (ICC), currently pending (O.D. and others, C-350/20).

This is the fourth time that the ECJ is asked to assess Italian discriminatory criteria to access family benefits (after Martinez Silva, VR, and WS). But this time, the ECJ is called to interpret a new legal parameter: Art. 34.2 of the Charter of Fundamental Rights of the EU (the Charter). Can this be a game-changer?

The relevance of Art. 34.2 of the Charter has been questioned by commentators: admittedly, secondary norms are sufficient to declare the Italian law incompatible with EU law. Yet, it is argued that the ECJ should not miss this opportunity to clarify that migrants’ equal access to benefits is a fundamental right in the EU, providing guidance both to the Italian top Court and to the lawmaker.

 

The dispute before the ICC and the preliminary question

 

The facts of the case are rather simple. O.D. and seven other TCNs applied for family benefits, either assegno di maternità or bonus bebè, alias maternity and childbirth allowance.

The maternity allowance exists since 2001 and is granted to low-income women that do not receive a job-related maternity allowance. Instead, the childbirth allowance was introduced in 2014 to support families with a newborn. This was originally granted only to low-income families, but a 2019 amendment made all families eligible; still, the amount of the allowance varies according to their income (from 960 to 1920 euros p/y).

The Italian National Institute for Social Security (INPS) refused to grant O.D. and others the maternity and childbirth allowances because only Italian nationals, EU citizens, and TCN long-term residents are eligible under Italian law. Instead, the applicants are single permit holders: legally residing TCN workers whose status is regulated by the Single Permit Directive 2011/98/EU.

O.D and others challenged such refusal on the grounds that it entailed discrimination and was contrary to EU law. Indeed, Art. 12 of the Single Permit Directive imposes to Member States to grant single-permit holders equal treatment with nationals in several areas, including “branches of social security, as defined in Regulation (EC) No 883/2004”. They argued that the two allowances must be considered as social security and that they are equally entitled to them.

The applicants, supported by ASGI - a pro-migrant association, won all the proceedings against INPS before first and second-instance courts, until they reached the Italian Supreme Court. This decided to refer their cases to the ICC for a constitutionality assessment, which, in turn, decided to make a preliminary reference to the ECJ, under the consideration that this is an area “marked by the growing influence of EU law”.

The preliminary reference asks whether the childbirth and maternity allowances can be considered as branches of social security under Regulation 883/2004 so that they would fall in the scope of application of Art.12 Directive 2011/98 and Art. 34.2 of the Charter, which grants equal treatment to any legally resident person in matters of social security and social advantage.

I will tackle these issues in order.

 

Are the maternity and childbirth allowances to be considered as social security under Regulation 883/2004?

 

Arguably, EU law and case law leave little space for interpretation on this question. The ECJ has consistently held that to understand whether a benefit falls within the scope of Regulation 883/2004 we need to look at its “constituent elements”, i.e. “its purpose and the conditions for its grant, and not on whether it is classified as a social security benefit by national legislation” (UB C-447/18, at 22).

First, the benefit’s purpose must be related to one of the risks listed in Art. 3 of Regulation 883/2004, among which appear “maternity and equivalent paternity benefits” and “family benefits”, defined as “all benefits in kind or in cash intended to meet family expenses” (Art. 1).

Second, the benefit must be granted automatically on the basis of objective criteria, without any individual or discretionary evaluation of personal needs (Martinez Silva, at 22).

Both maternity and childbirth allowances are granted on the basis of objective criteria (i.e. income and the birth of a new child) and give economic support to families. They perfectly match the ECJ definition of social security, and this is why all first and second-instance Italian courts upheld the applicants’ view and granted them equal access to the allowances as required by Art. 12 of the Single Permit Directive.

INPS and the Italian government, however, advanced an exception in respect to the childbirth allowance. They argued that its goal is to incentivizing birthrate, rather than meeting family expenses; this would be confirmed by the fact that (from 2019) the childbirth allowance is a universal benefit, granted to all families and not only to low-income ones.

But this point too had already been addressed by the ECJ, in the case law on free movement of workers. In Reina, the Court assessed whether a German measure (“childbirth loan”) could be legitimately reserved to German nationals on the grounds that it was aimed “to make up the relative deficit in births among the German population in relation to the foreign population”.

Unsurprisingly, this chauvinistic argument did not convince the ECJ. The Court stated that the sole fact that a social measure pursues a demographic aim is not enough to exclude it from the scope of application of EU law and that social security and advantages must be granted equally to EU migrants (Reina at par 15; Commission v. Greece, C-185/96, at 34). Ironically enough, in the case of Reina the discriminated family was of Italian nationality.

 

Art. 34.2 of the Charter: a hollow hope or an added value?

 

As mentioned, the Italian Constitutional Court’s decision to invoke Art. 34.2 of the Charter was met with skepticism by commentators, who deemed it superfluous and of questionable relevance (Giubboni, 2021). This is because, as previously shown, secondary law is sufficient to declare unlawful the exclusion of single permit holders from the beneficiaries of the two allowances. So, does the Charter lack any added value?

Upon a closer look, the answer is no. Art. 34.2 of the Charter states:

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.

This provision does present at least three important advantages. First, it refers to both social security and social advantages, while Art. 12 of the Single Permit Directive refers only to social security. Second, it grants equal treatment to all migrants residing legally, without making distinctions based on status. Third, it confers to the migrants’ right to equality a fundamental status in the EU.

The concreteness of the first two advantages is tempered by their limited scope of application (the Charter applies to Member States only when they implement EU law) and by their being subject to limitations under EU and national law. Instead, the third advantage, abstract as it is, is more significant.

In a context where even the European Social Charter grants migrants only limited access to social benefits (see Art. 19), the broad scope of Art. 34.2 sounds revolutionary. This confirms that, despite the (often valid) criticisms against the restrictive EU migration policy, fighting discrimination against migrants is a hallmark of the EU.

Indeed, the ECJ has fought discrimination against (EU and TCN) migrants for decades, pioneering the idea that equality is a necessary precondition for inclusion and integration (Kamberaj, at 90).

The case of O.D. and Others offers the ECJ the opportunity to clarify the fundamental nature of the principle of equal access to benefits for TCN migrants, which so far has been relegated to an ‘ordinary legislative function’ (Muir, 2020, at 121). This would pursue not only a rhetorical function, but it would provide guidance amidst a very confusing “polycentric” adjudication practice (Kilpatrick, 2014).

Especially in Italy, national courts have suffered from a lack of uniform interpretation when adjudicating migrants’ equal treatment (also because of the ‘dual preliminarity’ controversy, Lazzerini 2020). And the ICC denounced this situation in its reference: “The sheer number of pending disputes is testament to the serious uncertainty concerning the meaning to be ascribed to EU law.”

Moreover, Italian norms in many parts contain discriminatory provisions against migrants, and a current proposal to reform family benefits features again discriminatory selection criteria, despite a pending Commission infringement on the matter.

The ECJ evaded its obligation to interpret Art. 34.2 once (in the case of UB, C-447/18). This time, it should state clearly that migrants’ equal access to benefits is a fundamental principle of the Union, sending a powerful message to the Italian Constitutional Court and the Italian lawmaker.

 

Conclusion

 

The preliminary reference in the case of O.D. and Others speaks of an alarming phenomenon. In Italy, TCN families in need have been denied equal access to social benefits for decades, and the childbirth allowance reached a low point in this respect: it is universally granted to all but to TCN migrants.

Against this background, the preliminary reference in the case of O.D. and Others offers an important opportunity. The ECJ has a long tradition of fighting discrimination and constitutionalizing equality. In the case of O.D. and Others, its ruling can acquire erga omnes effect thanks to the follow-up ICC judgment.

The EU Court should not miss this opportunity for stating out and loud that equality is a fundamental principle of the EU also when it comes to TCN migrants, which cannot be disposed of by the erratic will of the government of the day.

 

Barnard & Peers: chapter 26

JHA4: chapter I:6

Photo Credit: Guiseppe Milo, via Wikimedia Commons

Don’t think of the children! CJEU approves automatic exclusions from family benefits in Case C-308/14 Commission v UK

Charlotte O'Brien, Senior Lecturer, York Law School 

The Court of Justice’s retreat from the zone of Member States’ welfare systems hastens. Having once suggested that citizenship is ‘destined to be our fundamental status’, and provides the basis for a ‘degree of financial solidarity’, the Court had established that EU nationals falling into temporary difficulties would be entitled to some amount of support from a host state, depending on how ‘deserving’ the claim seemed to be.

But the Court has shifted away from notions of citizenship, so there may never be such a thing as a reasonable burden. Having established that EU migrants claiming social benefits can in principle be subject to a right to reside test not applied to own nationals in Brey, the Court found in Dano that a case-by-case assessment where someone was deemed to have moved for the ‘sole’ purpose of claiming benefits was not necessary. This was expanded in Alimanovic and Garcia Nieto to suggest that jobseekers were not entitled to a case-by-case assessment either.  In Commission v UK we see the CJEU’s desires to accommodate the UK’s discriminatory tendencies rather usurp the applicable legal framework.

The key tensions at the heart of the case – the discriminatory effects of the right to reside test, and its application to family benefits – are glossed over in a brief judgment. The Brey and Dano principles are imported into Regulation 883/2004 (which concerns the coordination of social security in cross-border cases) and applied to family benefits, while the burden of proof is reversed so that a discriminating Member State is presumed to be acting lawfully if they brandish the ‘public finances’ trump card.  

The decision finds that the UK is entitled to apply the ‘right to reside’ test to claimants for Child Benefit and Child Tax Credit; UK nationals automatically fulfil the test, while EU national claimants must show that they fulfil the conditions of Article 7 of Directive 2004/38 (which sets out the main rules on EU citizens moving to another Member State). In short, they must be workers, or have retained worker status, or be the family members of EU national workers. This analysis addresses four issues that stand out in the judgment: (i) the extension of the ‘right to reside’ principle, in paragraph 44 of Brey, to override Article 4 in regulation 883/2004, and the implications for other benefits; (ii) the issue of direct versus indirect discrimination and the reversal of the burden of proof on the issue of justification; (iii) the failure to differentiate between different ‘types’ of economic inactivity, jettisoning proportionality, extinguishing EU citizenship, and ignoring the rights of the children; and (iv) the finding that the UK does not ‘systematically’ check EU nationals’ right to reside.    

(i) Distilling a fundamental principle from para 44 of Brey

 

Article 4 of Regulation 883/2004 states:

“Unless otherwise provided for by this Regulation, 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.”

In Brey, the Court sidestepped this equal treatment requirement, by finding that the benefit at issue was social assistance. This was material to the lawfulness of the right to reside test – the questions were inextricably interlinked, and the nature of the benefit ‘must be examined in the context’ of the right to reside question. The right to reside test was a lawful means to avoid undue burdens on the ‘social assistance system’.

The classification of the benefit was important in Brey. But in Commission v UK classification is treated as irrelevant – and one sentence in Brey (there is ‘nothing to prevent, in principle, the granting of social benefits to Union citizens who are not economically active being made conditional upon those citizens meeting the necessary requirements for obtaining a legal right of residence in the host Member State’) is made to do a lot of legwork – finding that all benefits can be subject to a discriminatory right to reside test. Article 4 Regulation 883/2004 does not get a look in other than to state that it has not been infringed.   

 

The Court found that the Regulation deals with competence, not eligibility for benefits. But this is too simplistic. The Regulation does govern aspects of eligibility – stating that place of residence cannot be a deciding factor in many cases; stating that conditions as to insurance must be capable of being discharged by insurance in other Member States, and so on; and it provides in Article 4 a principle of equal treatment for persons subject to the Regulation. 

Family benefits are ‘pure’ social security. There is no basis for finding that they fall within the ‘social assistance’ exclusions of Directive 2004/38, or for finding that the primary law requirement of equal treatment in Article 18 TFEU should not apply. There is no specific provision in the Treaty or secondary law excluding Union citizens from equal treatment with regard to family benefits. They are squarely in the material scope of Regulation 883/2004, and so subject to the equal treatment provision therein. In this way the Regulation offers some protection to the children in migrating families, since they are typically subjects rather than agents of migration, and it has usually been accepted that they should not be penalised for changes in their parents’ work status.

Several provisions might therefore plausibly prevent the application of a right to reside test to Union citizens claiming a family benefit. But the Court’s reasoning is short and simple – it quotes the Brey statement. One sentence in a judgment that dealt with a different category of benefits, where the material part of that decision is not being followed, is arguably of insufficient legal weight to displace a presumption of equal treatment, in the absence of a Treaty provision or express secondary law provision to do the displacing.

The end, contradictory, result, is that the limitations of Directive 2004/38 are independent of the provisions of Regulation 883/2004, so the Directive can adopt a wider definition of social assistance, but the equal treatment provision in Regulation 883/2004 is bound by limitations written into Directive 2004/38 – limitations intended for different benefits. This judgment imports the personal scope of Directive 2004/38 into Regulation 883/2004. But that Regulation has a deliberately wider personal scope. The ECJ made clear that the Regulation’s predecessor, Regulation 1408/71, was not confined to people in employment in Dodl and Oberhollenzer. Regulation 883/2004, far from narrowing the scope of Regulation 1408/71, was enacted to “replace and extend” that instrument. Recital 42 refers explicitly to ‘the new category of non-active persons, to whom this Regulation has been extended’. Here, the Court’s finding that such persons will not be left without a competent state, just without benefit eligibility, is a little simplistic. Extrapolating that logic, domestic rules may well exclude such people (falling into Article 11 (3)(e)) from the whole material scope of the Regulation – in which case, for what is that State competent, and why have a category 11(3)(e) at all, other than to point to whose rules of exclusion apply?  

The implications of the judgment could have ramifications throughout the EU, for States that have not yet adopted such tests, and for States that have so far limited them to benefits with an element of social assistance, who might conceivably roll them out further. It could steepen the welfare cliff edge for those who have been working but who fall out of work (or have been a family member of a worker and cease to be so). It could result in excluding a number of workers who cannot adduce sufficient evidence that their activities meet nationally-imposed definitions of work – e.g. meeting hours or earnings thresholds continually over a prolonged period of time. And it could result in deepening child poverty for vulnerable children, whose welfare might otherwise have received some protection from the coordination scheme. It endorses ‘hand-to-mouth’ citizenship.

(ii) Direct versus indirect discrimination and reversing the burden of proof

The Commission claimed that the rule created direct discrimination but the Court did not engage with that claim. It simply reiterated the Brey point, that there is nothing to prevent right to reside tests, then added that where such tests are adopted a Member State ‘commits indirect discrimination’.

But the condition is directly discriminatory. Only EU nationals must provide evidence of a right to reside. Only EU nationals can be excluded from entitlement due to economic inactivity. The application of an extra condition to non-nationals was recognised as being directly discriminatory in Grzelczyk.

The Court slightly confuses things by pointing out that a ‘residence condition’ is indirectly discriminatory. But the right to reside test is not a residence condition. It is a requirement to be economically active and is only applied to EU nationals.

On finding instead that indirect discrimination was at issue, the Court turned to the question of justification.

Typically, where a potential infringement has been made out, it is up to the infringer to demonstrate that their actions are justified (see O’Flynn and Groener). The Member State must show that they are pursuing a legitimate aim, that the means are proportionate and appropriate, and do not go beyond what is necessary.   

The justification requirement was rather swiftly dealt with, as the Court shied away from the judicial kryptonite that is the mention of public finances. In spite of mounting evidence that fears of benefit tourism are misplaced, no evidence of a threat to public finances was required for this aim to be accepted as legitimate. The Court did not ask whether the test itself was proportionate or appropriate. Instead it asked whether the checks conducted as part of the test were proportionate and appropriate.

And here it shifts the burden of proof to the Commission. The Court summarised the information provided by the UK noting that claimants must provide a ‘set of data’, and further checks are carried out ‘only in specific cases’ and ‘only in the event of doubt’.

But the judgment does not tell us how much data is required of claimants, how many ‘specific’ cases lead to further checks, or how many cases involve ‘doubt’; the repeated use of the word ‘only’ without these statistics tells us nothing about scale or proportionality. 

Instead it is up to the Commission to show that  ‘such checking does not satisfy the conditions of proportionality, that it is not appropriate for securing the attainment of the objective of protecting public finances or that it goes beyond what is necessary to attain that objective.’

(iv) Dismissing the rest of Brey: jettisoning proportionality, extinguishing EU citizenship, and ignoring the children

Given the reliance placed upon para 44 in Brey, para 45 is conspicuous by its absence; it added ‘However, it is important that the requirements for obtaining that right of residence… are themselves consistent with EU law’.

And in Brey the Court found that EU law precluded the automatic barring of economically inactive persons from entitlement to benefits without assessment of their individual circumstances. Relevant circumstances included the duration of residence, amount of income, amount and duration of benefit claimed, etc.

This is the proportionality route to entitlement – where Union citizenship in theory offers a safety net for those who fall between the categories in Directive 2004/38. It allows for some differentiation based on circumstances, recognising that the label of ‘economic inactivity’ can mask a wide range of residence, economic and integration histories, and benefit claims may represent a wide range of claims of varying degrees of reasonableness.

In recent cases we have seen the Court retreat from this approach, finding that a case-by-case assessment was not necessary where the claimant at issue might be a benefit tourist, or where she was a jobseeker. Here, this aspect of Brey goes unmentioned, other than when summarising the Commission’s argument that the test is ‘an automatic mechanism that systematically and ineluctably bars claimants’ from benefits.

The Court did not engage with this argument. It appeared to consider automatic exclusion inherently lawful: ‘As the United Kingdom submitted at the hearing, legality of the claimant’s residence in its territory is a substantive condition which economically inactive persons must meet in order to be eligible for the social benefits at issue’.

The absence of an alternative ground for eligibility for those deemed economically inactive is striking in EU law terms, (even if it is rather old news in the UK), since it marks a departure from the ‘real link’ case law, whereby nearly-blanket rules had to have some proportionality-based exceptions. And it sends any Union citizenship-based right to equal treatment (Article 18 TFEU) up in smoke. It permits treating all ‘economically inactive’ migrants as equally worthless, regardless of their degree of integration into society, regardless of their, or their family’s employment history, and regardless of the circumstances that have led to a loss of worker status. And it permits the total erasure of children’s rights from the factors to be considered, even though it is their rights and their welfare being contested – Child Benefit and Child Tax Credit are specifically designed to address costs of protecting child welfare. In a report analysing recent welfare changes, the UN Committee on the Rights of the Child has already expressed ‘serious concerns’ about the UK’s imposition of cuts to tax credits ‘regardless of the needs of the households’ concerned. The right to reside test goes further, being not merely a cut but a disentitlement for affected children, even if they were born in the UK and have no significant links with their State of nationality.   

The Brey formulation treated as so pivotal, permitting right to reside tests, had itself rested on a series of EU citizenship cases, which established and developed the ‘real link’ concept. Para 44 cited Martinez Sala, Grzelczyk, Trojani, Bidar and Förster, all of which precluded the use of blanket rules, and all of which required some assessment of circumstances of the case.

So the reliance upon the Brey formulation becomes even less persuasive, in light of the departure from all of the authorities upon which that formulation rests. Cases establishing the rights attendant upon EU citizenship cannot credibly be used to make those rights and that status disappear.   

(v) The systematic verification obfuscation

Article 14(2) of Directive 2004/38 allows Member States to verify whether the residence conditions set out in that directive are met ‘in specific cases where there is a reasonable doubt’, adding that such verification ‘shall not be carried out systematically’.

As noted above, the Court found that the checking done by the UK did not amount to systematic verification. But this finding would have been helped by some analysis of Article 14(2) and the distinction between permitted checks and prohibited verification.

The government’s own announcements suggest there is something systematic going on. The government announced in 2014 that restrictions to benefits for EU nationals would be ‘augmented by additional HMRC compliance checks to improve detection of when EEA migrants cease to be entitled to these benefits. The checks will apply to all EEA migrant claims’. The Budget made clear that these checks would be applied to ‘new and existing awards’. In responding to a Freedom of Information request, the government confirmed that it had been carrying out ‘increased compliance checks’, issuing letters ‘targeted at EU/EEA Nationals’ requesting further information and/or evidence to check that claimants met entitlement conditions for Child benefit and Child Tax Credit.

Moreover, claimants face routine requirements for ‘documentary evidence’ of entitlement, and a ‘wide range of checks and an annual review’ in all cases of cross-border claims. It is difficult to know what would infringe Article 14(2).

To summarise, this judgment seems driven by the teleology noted in the Advocate General’s Opinion – to avoid offending the UK government at all costs. The difficulty is that the legal framework does not very easily bend to the desired outcome. The Court has seized upon one sentence in a previous judgment, and clung to it as providing all the necessary authority to override any conflicting legal principle. The Court avoids dwelling too much on the relative weight of legal principles, by simply skipping the analysis. Article 4 of Regulation 883/2004; Article 18 TFEU; the prohibition of direct, as opposed to indirect discrimination; the appropriateness of the right to reside test; the effects of Brey with regard to proportionality; EU citizenship; Article 14(2) of Directive 2004/38… they get little, if any, attention. Primary law and secondary law are presumptively displaced in the face of a fragment of a judgment that the Court is choosing not to follow – a fragment taken out of context, and pitted against the authorities upon which it is based.

The Court has missed an opportunity to engage in a principled and honest review of the directly discriminatory nature of tests that impose conditions of economic activity on EU nationals but not on own nationals. That in itself is not surprising, since the legal fiction that such tests are indirectly discriminatory seems to be the pragmatic acceptance of a politically necessity. But in allowing such tests to seep beyond protection of the ‘social assistance system’ and to govern eligibility for all benefits related to ‘public finances’, in dismissing the equal treatment provisions in primary and secondary law, in importing conditions to curb the personal scope of Regulation 883/2004, in reversing the burden of proof for justification, and deferring to the public finances trump card, the Court has divined from recent case law a higher, fundamental principle of exclusion, and a default of discrimination. The children of economically inactive EU nationals are now, in EU terms, officially irrelevant, since right to reside tests that exclude them wholesale from entitlement get the green light, with no requirements for citizenship, real links or proportionality to play a part. This may seem an inevitable result of the prevailing political wind, but a little more discipline would have been welcome, to address the legal bases that were engaged, and to keep the judgment more carefully confined. Instead what we have is light on authority, but sweeping in its potential reach and detrimental effects upon Union citizenship and on EU national children.     

Barnard & Peers: chapter 13

Photo credit: www.telegraph.com

The final UK renegotiation deal: immigration issues

Steve Peers*

So David Cameron has achieved his deal on the renegotiation of the UK’s EU membership (full text of that deal here). This is the first of a series of posts on the final deal – starting with the issue of ‘EU immigration’ (or, from the EU law point of view, the free movement of EU citizens). This builds on (and partly recycles) my earlier post on the EU immigration issues in the draft deal.

I will write later about the other substantive issues (competitiveness, Eurozone relations, sovereignty) and on the legal form of the deal (although see already my post on the legal form of the draft deal; my comments there won’t change much when I update them in light of the final deal). And see also Katarzyna Granat's analysis of the 'red card' for national parliaments – again, the final text of the deal doesn’t differ from the draft here).

The deal takes the form of seven legal texts: a Decision of the EU Member States’ Heads of State and Government (the ‘Decision’); a Statement of the Heads of State and Government (which consists of an agreed Council Decision); a Declaration by the European Council (which consists of the EU Member States’ Heads of State and Government, although when acting collectively they are legally distinct from the European Council): and four declarations by the Commission. Of these, Section D of the draft Decision and three of the Commission declarations relate to immigration issues. One of these Commission declarations (relating to child benefit exports) was added during the negotiation, while the text of Section D and another declaration (on the ‘emergency brake’ in in-work benefits) was amended. The other declaration (on so-called ‘abuse’ of free movement) was not changed.

While Section D contains some important attempts to clarify EU free movement law, the key feature of the deal on immigration is the intention to propose amendments to the three main current EU laws. These three laws are: (a) the EU citizens’ Directive, which sets out the main rules on most EU citizens moving to other Member States: (b) the EU Regulation on free movement of workers, which contains some specific rules on workers who move; and (c) the Regulation on social security, which sets out rules on coordination and equal treatment in social security for those who move between Member States. 

All three sets of amendments are to be proposed by the Commission as soon as the main Decision enters into effect. That will happen (see Section E of the Decision) as soon as the UK announces that it will remain a member of the EU – if, of course, the UK public vote to remain in the upcoming referendum. The deal includes a commitment from the Commission to make these proposals, and from the other Member States to support their adoption in the EU Council (oddly, the latter commitment does not apply to the planned amendment to the citizens’ Directive, since that proposal is not referred to in the main Decision).

However, all three proposals will be subject to the ‘ordinary legislative procedure’, meaning that they have to be agreed with the European Parliament. It is also possible that their legality would be challenged before the EU Court of Justice. I can’t appraise the political likelihood of the European Parliament approving the proposals, although the largest party (the European People’s Party, made up essentially of centre-right parties like Angela Merkel’s Christian Democrats) has announced that it supports the renegotiation deal in principle, subject to examination of the details. However, I offer some thoughts below about possible challenges to the legality of these laws if they are adopted.

Unlike some other parts of the deal (on the position of non-Eurozone states, and the exemption of the UK from ‘ever closer union’), there is no mention of future Treaty amendments to give effect to any part of the text dealing with free movement (immigration) issues. So the main impact of the deal in this area will come from the three legislative proposals, once adopted. Since those proposals will not be tabled or agreed until after the UK ‘Remain’ vote (if there is one), this means that the analysis of the details is necessarily somewhat speculative. There are some important points of detail that will only be clear once the legislation is proposed and approved. I flag up some of those finer points below.

Although the press discussion has focussed on the ‘emergency brake’ in in-work benefits, there are three categories of issues: benefits (including a couple of points besides that emergency brake); the family members of non-EU citizens; and EU citizens who commit criminal offences. I refer back to Cameron’s November 2014 speech on EU immigration issues (which I analysed here) where relevant.

It should be noted that there is no text in the deal on two of the issues which Cameron had raised: removal of job-seekers if they do not find a job within six months, and a requirement to have a job offer before entry. Both these changes would have required a Treaty amendment, in light of the Antonissen judgment of the CJEU.

Benefits

There are three benefits issues in the draft deal: (a) the ‘emergency brake’ for in-work benefits; (b) the export of child benefit; and (c) benefits for those out of work.

‘Emergency brake’ on in-work benefits

Cameron had called for no access to tax credits, housing benefits and social housing for four years for EU citizens, but later signalled his willingness to compromise on this point. The position of non-workers and job-seekers is discussed below; but the position of workers is legally and politically difficult, since the Treaty guarantees them non-discrimination.

In the end, the deal provides not for permanent discrimination on this issue, but temporary discrimination on the basis of an ‘emergency brake’. The Commission will propose legislation on this issue, which will provide that the UK (or other Member States) can apply a four-year ban on in-work benefits, subject to substantive and procedural criteria. Procedurally, the rules will say that a Member State will apply to the Council to authorise the ban. The Council will presumably act by the default voting rule in the Treaties: a qualified majority on a proposal from the Commission. That means no single Member State can veto the request to pull the brake. The final deal leaves vague the exact authorisation process which will apply in the Council, to avoid annoying the European Parliament (EP); but that detail will have to be addressed sooner or later. Certainly the EP will have to approve the legislation which sets up that process in the first place; the question is whether it would have a role deciding if the brake should be pulled.

A Commission declaration states the UK qualifies to pull this ban immediately, in particular because it did not apply transitional controls to workers from new Member States in 2004. However, there is nothing in the deal to suggest that Member States – who would have the final word – also agree. The restrictions would only to those who were ‘newly arriving for a period of seven years’, and would have to be phased out during that time. Again, the seven years matches the transitional period which the UK could have applied to control the numbers of workers from new Member States, back in 2004.

Several points of detail arise. First of all, after the seven years have expired, it’s not clear how much time would then have to pass before the brake could be applied again. Secondly, it will be important to clarify the meaning of those who are ‘newly arriving’. What about those who lived in the UK before, and are now returning here? How much time would they have had to spend in Poland (say) before they are considered ‘newly arriving’ again? Presumably the brake would not apply to those who are already here when the brake is pulled, but are not working at that time (due to youth, unemployment, childcare or illness) but who get work afterward.  

Thirdly, it will be necessary to define how to calculate the four year period. It’s easy enough to apply it to those who begin work as soon as they (newly) arrive in the country, and who work for the full four years afterward. But what about those (a non-working spouse, or a teenager, for instance) who start work some time after they enter the country? What about those who start work, stop for whatever reason and then restart? What about those who start work during the brake period, then spend a year or so in Poland, then come back? And how can we be sure when exactly someone entered the country in the first place?

The final crucial point of detail is, obviously, the grounds on which the brake can be applied. According to the Decision, it would apply where:

‘an exceptional situation exists on a scale that affects essential aspects of [a Member State’s] social security system, including the primary purpose of its in-work benefits system, or which leads to difficulties which are serious and liable to persist in its employment market or are putting an excessive pressure on the proper functioning of its public services’.

There’s certainly a widespread perception that one of more of these problems exist in the UK and are caused by the large increase in the number of workers from other Member States in recent years. However, there are two serious problems with the proposed mechanism. Firstly, as Jonathan Portes has argued, objective evidence for this view is lacking. Secondly, while the CJEU has been willing to accept certain limits to free movement rights on the grounds of protecting health systems (see my prior blog post for details), this would have a much more far-reaching impact on non-discrimination for workers. It’s certainly conceivable that by analogy from the Court’s obvious willingness to keep EU monetary union afloat, along with its endorsement of restrictions for non-workers in recent years (see below), it might accept that these plans do not violate the Treaties. But as EU law currently stands, that is probably a long shot.

Export of child benefit

Cameron sought to end payment of child benefit to children living in other Member States. This payment is provided for in the EU social security coordination Regulation, which would have to be amended to change those rules. There was a strong argument that the plan would have breached the Treaties, since in the case of Pinna the CJEU struck down EU legislation that allowed Member States not to export such benefits at all as a breach of the rules on free movement of workers.

The deal does not go as far as Cameron wanted: instead child benefit can be limited by indexing it to the ‘conditions’ in the receiving State. This will only apply to ‘new claims made by EU workers in the host Member State’; but after 1 January 2020, this ‘may’ be extended to ‘existing claims already exported by EU workers’. This is clarified by the Commission declaration, which states that the ‘conditions’ refers to the ‘standard of living and level of child benefits’ in the child’s State of residence. The transitional rule, and the Commission declaration, were added during negotiations. It’s an open question whether this new law would breach the Treaties, since there is no case law on the point.

Several points of detail arise here. It’s explicit that the new rules will be optional, so Member States can still be more generous if they want to. There’s nothing to limit their application to the UK (although I will refer to the UK and Poland here, purely for the sake of readability). It’s not clear whether the rules will also apply to British citizens who have children in other Member States; arguably the principle of non-discrimination will require that they do. It’s also not clear what happens to ‘mixed’ families of (say) British and Polish parents (or indeed step-parents). Will it depend on which parent is the worker? What if both are workers? What if that changes over time?

The transitional clause also raises issues. The Decision distinguishes between ‘new claims’ and ‘existing claims already exported by EU workers’. Presumably the new law will state a precise date at which claims can be regarded as ‘existing’ (say 1 January 2017). These must be existing exported claims, so if a child moves to Poland after 1 January 2017, or is born after that date and resides in Poland, then child benefits could be reduced, even if the worker is already in the UK. So if my estimated date is correct, anyone who is thinking about having a child, and who wants to avoid the application of these rules, had better get a move on. Perhaps this Easter will be the season of fertility even more than usual.

Finally, it should be noted that a challenge by the Commission to other aspects of UK payment of child benefit to EU citizens is still pending. The non-binding opinion of an Advocate-General argues in favour of the UK in this case (for a critical view, see Charlotte O’Brien’s analysis here). It wouldn’t surprise me if the Commission quietly withdrew this legal challenge. You read that here first.

Benefits for those out of work

Cameron sought to end social assistance for job-seekers. The EU legislation already rules out social assistance for job-seekers, so this reflects the status quo. Although the CJEU has said that job-seekers have a right to access benefits linked to labour market participation, if they have a link already with the labour market in question, it took a narrow view of this rule in the judgment in Alimanovic. Pure benefit tourists (who have never had work in the host State) are not entitled to benefits, according to the judgment in Dano. So the Decision simply reiterates this case law, which has already satisfied Cameron’s main objectives in this field. It should be noted that another judgment by the Court of Justice on EU benefits issues is due next week.

EU citizens’ family members

Under the EU citizens’ Directive, currently EU citizens can bring with them to another Member State their spouse or partner, the children of both (or either) who are under 21 or dependent, and the dependent parents of either. This applies regardless of whether the family members are EU citizens or not. No further conditions are possible, besides the prospect of a refusal of entry (or subsequent expulsion) on grounds of public policy, public security or public health (on which, see below).

In principle EU law does not apply to UK citizens who wish to bring non-EU family members to the UK, so the UK is free to put in place restrictive rules in those cases (which it has done, as regards income requirements and language rules). However, the CJEU has ruled that UK citizens can move to another Member State (the ‘host Member State’) and be joined by non-EU family members there, under the more generous rules in the EU legislation. Then they can move back to the UK (the ‘home Member State’) with their family members, now invoking the free movement rights in the Treaties. This is known in practice (in the UK) as the ‘Surinder Singh route’, because of the name of the case which first established this principle. In 2014, the CJEU clarified two points about this scenario (as discussed by Chiara Berneri here): (a) it was necessary to spend at least three months in the host Member State exercising EU law rights and residing with the family member, before coming back; and (b) the EU citizens’ Directive applied by analogy to govern the situation of UK citizens who return with their family members.

In his 2014 speech, David Cameron announced his desire to end all distinction between EU citizens and UK citizens as regards admission of non-EU family members, by allowing the UK to impose upon the EU citizens the same strict conditions that apply to UK citizens. Since this would have deterred the free movement of those EU citizens who have non-EU family members, there is a good chance that it would have required not just a legislative amendment but a Treaty change.  (Note that according to the CJEU, EU free movement law does not just require the abolition of discrimination between UK and other EU citizens, but also the abolition of non-discriminatory ‘obstacles’ to free movement).

However, the deal does not go this far. The main Decision states that:

‘In accordance with Union law, Member States are able to take action to prevent abuse of rights or fraud, such as the presentation of forged documents, and address cases of contracting or maintaining of marriages of convenience with third country nationals for the purpose of making use of free movement as a route for regularising unlawful stay in a Member State or for bypassing national immigration rules applying to third country nationals.’

The Commission Declaration then states that it will make a proposal to amend the citizens’ Directive:

‘to exclude, from the scope of free movement rights, third country nationals who had no prior lawful residence in a Member State before marrying a Union citizen or who marry a Union citizen only after the Union citizen has established residence in the host Member State. Accordingly, in such cases, the host Member State's immigration law will apply to the third country national.’

That Declaration also states that the Commission will clarify that:

‘Member States can address specific cases of abuse of free movement rights by Union citizens returning to their Member State of nationality with a non-EU family member where residence in the host Member State has not been sufficiently genuine to create or strengthen family life and had the purpose of evading the application of national immigration rules’; and

‘The concept of marriage of convenience - which is not protected under Union law – also covers a marriage which is maintained for the purpose of enjoying a right of residence by a family member who is not a national of a Member State.’

It seems clear that these ‘clarifications’ will not be included in the legislative proposal, since the declaration later concludes (emphasis added):

‘These clarifications will be developed in a Communication providing guidelines on the application of Union law on the free movement of Union citizens.’

Let’s examine the planned legislative amendments, then the guidelines which will provide ‘clarifications’. The amendments will exclude two separate categories of non-EU citizens from the scope of the citizens’ Directive: those who did not have prior lawful residence in a Member State before marrying an EU citizen who has moved to another Member State; and those who marry such an EU citizen after he or she has moved to a Member State. For these people, national immigration law will apply.

The background to this proposal is CJEU case law. In 2003, in the judgment in Akrich, the CJEU ruled that Member States could insist that non-EU family members had previously been lawfully resident in the Member State concerned (previously no such rule appeared to exist). But in 2008, in Metock, the CJEU overturned this ruling and said that a prior legal residence requirement was not allowed.

Several points arise. First, the basic definition: what is lawful residence exactly? Presumably it means more than lawful presence, ie a stay of three months on the basis of a valid visa or visa waiver. But what about ambiguous cases, such as a pending asylum application or appeal? EU legislation says that asylum-seekers can usually stay until the application fails (if it fails), and then during the appeal (subject to some big exceptions). According to the CJEU, the EU’s main rules on irregular migrants therefore don’t apply to asylum-seekers whose application is pending.

Secondly, it’s odd to refer to national law alone, since sometimes EU law governs the admission of non-EU nationals. Even the UK (along with Ireland) is bound by the first-phase EU asylum law, and by the EU/Turkey association agreement. Denmark is bound by the latter treaty. And all other Member States are bound by the second-phase asylum law, along with EU legislation on admission of students and researchers and some categories of labour migrants (the highly-skilled, seasonal workers and intra-corporate transferees).

Thirdly, it’s arguable that the EU principle of non-discrimination applies. That would mean, for instance, that if a German woman already in the UK married her American husband, the UK would have to treat her the same as a British woman in the same situation – but no worse. This would in fact be relevant to every Member State – there’s nothing in this part of the deal that limits its application to the UK. (One important point of detail is whether all Member States would be obliged to apply the new rules on ‘prior lawful residence’ and ‘marriage after entry of the EU citizen’, or whether they could choose to waive one or both of those rules. The EU citizens’ Directive already states that Member States can apply more liberal standards if they wish to).

Finally, the consequences of the rule will need to be clearer in the future legislative amendments. Does the exclusion from the scope of the Directive mean that the family member is excluded forever from the scope of the citizens’ Directive – even if the person concerned is admitted pursuant to national immigration law? That would mean that national immigration law (or EU immigration legislation, in some cases) would continue to govern issues such as the family member’s access to employment or benefits, or subsequent permanent residence. It’s also not clear what happen to children such as the step-child of the EU citizen, or a child that was born to the EU and non-EU citizen couple while living in a third country.

Could this legislative amendment violate the EU Treaties? In its judgment in Metock, the Court referred almost entirely to the wording of the citizens’ Directive. It mainly referred to the Treaties when concluding that the EU had the competence to regulate the status of EU citizens’ third-country national family members. But it also referred to the Treaty objective of creating an ‘internal market’, as well as the ‘serious obstruct[ion]’ to the exercise of freedoms guaranteed by the Treaty, if EU citizens could not lead a ‘normal family life’. It must therefore be concluded that there is some possibility that the revised rules would be invalid for breach of EU free movement law.

Would the amendment violate the EU Charter right to family life? That’s unlikely. While the right to family life is often invoked to prevent expulsions of family members, the case law of the European Court of Human Rights gives great leeway to Member States to refuse admission of family members, on the grounds that the family could always live ‘elsewhere’ – as the CJEU has itself acknowledged (EP v Council). There is some possibility, though, that the CJEU would be reluctant to follow that case law (EP v Council concerns families entirely consisting of non-EU nationals) in the context of free movement: the idea that you could go away and enjoy your family life somewhere else is antithetical to the logic of free movement.

As for the ‘clarifications’ in future guidelines, they will of course not be binding. They first of all refer to cases where an EU citizen has moved to another Member State and come back to the home State. The definition of what constitutes a ‘sufficiently genuine’ move to another country is set out in the case law (three months’ stay with a family member) and mere guidelines cannot overturn this.

It should be noted that the Surinder Singh case law is in any event derived from the Treaty. This line of case law does not accept that such movement between Member States is an ‘evasion’ of national law – as long as free movement rights are genuinely exercised with a family member for a minimum time. The CJEU also usually assumes (see Metock, for instance) that a ‘marriage of convenience’ cannot apply to cases where there is a genuine relationship, even if an immigration advantage is gained. (The Commission has released guidelines already on the ‘marriage of convenience’ concept: see analysis by Alina Tryfonidou here).

Having said that, the planned legislative changes will complicate the plans of people who wish to move to another Member State with their non-EU family and then move back, since national immigration law will apply to their move to the host Member State. It will be important to see how the legislative amendments address the transitional issues of people who have already moved to a host Member State before the new rules apply. Can the home Member State say, possibly based on the Commission’s ‘guidance’ (which might be issued before the new legislation is adopted) that those families must now obtain lawful residence in the host State for the non-EU family member, before the non-EU family member can come to the home State?

Criminality and free movement law

The Treaties allow for the refusal or entry or expulsion of EU citizens on ‘grounds of public policy, public security or public health’. The citizens’ Directive sets out detailed substantive and procedural rules on this issue, which has been the subject of considerable CJEU case law.

What does the renegotiation deal do? First of all, the Decision states that:

‘Member States may also take the necessary restrictive measures to protect themselves against individuals whose personal conduct is likely to represent a genuine and serious threat to public policy or security. In determining whether the conduct of an individual poses a present threat to public policy or security, Member States may take into account past conduct of the individual concerned and the threat may not always need to be imminent. Even in the absence of a previous criminal conviction, Member States may act on preventative grounds, so long as they are specific to the individual concerned.’

To this end, the Commission declaration states that it will:

‘also clarify that Member States may take into account past conduct of an individual in the determination of whether a Union citizen's conduct poses a "present" threat to public policy or security. They may act on grounds of public policy or public security even in the absence of a previous criminal conviction on preventative grounds but specific to the individual concerned. The Commission will also clarify the notions of "serious grounds of public policy or public security" and "imperative grounds of public security" [grounds for expelling people who have resided for longer periods in a host Member State].  Moreover, on the occasion of a future revision of [the citizens’ Directive], the Commission will examine the thresholds to which these notions are connected.’

It’s not clear whether the revision of the Directive referred to at the end here is as imminent as the proposal to amend the rules to create a ‘prior lawful residence’ rule for non-EU family members. Otherwise the plan to issue guidelines is clearly not binding. The language in these guidelines partly reflects the existing law, but some features are new: the greater emphasis on past conduct, the lesser need to show that a threat is imminent and the possibility of expelling someone as a ‘preventative’ measure.

These changes fall within the scope of Cameron’s desire to have ‘stronger measures to deport EU criminals’. However, it should be noted that there is no specific reference to his plans for ‘tougher and longer re-entry bans for foreign rough sleepers, beggars and fraudsters’. While a conviction and re-entry ban for fraud might be covered by the guidelines referred to above, there’s no mention of clarifying entry bans as regards those guidelines, or changing the legislation on this issue. Also, as I noted in my comments on Cameron’s plans at the time, EU legislation does not allow for re-entry bans for rough sleepers and beggars, since the EU citizens’ Directive states unambiguously that a ban on entry cannot be imposed where a person was expelled for grounds other than public policy, public security and public health. Put simply, a Member State can impose an entry ban where an EU citizen has been expelled due to criminality – but not where he or she has been expelled due to poverty.

Longer waiting periods for free movement of persons from new Member States

Finally, it should be noted that the Decision briefly refers to Cameron’s plan to have longer waiting periods for free movement of persons in future accession treaties. It does not incorporate his suggestion, but merely notes it. However, since the details of each new Member State’s adaptation to EU law are set out in each accession treaty, which has to be approved by each Member State, the UK can simply veto any future accession treaties unless longer waiting periods for free movement are indeed included. The next accession to the EU is at least four years away, probably more. So nothing really turns on the absence of agreement with the UK’s position for now.

Conclusion

The key point to remember about the renegotiation deal, particularly as regards EU immigration, is that it consists of different parts. The main deal takes the form of a Decision, which essentially clarifies EU law without amending it. According to CJEU case law (Rottmann), the Court is willing to take Decisions like these into account when interpreting EU law.

However, in the area of EU immigration, the other parts of the deal are more relevant: the intention to pass three new EU secondary laws. Those new laws will be a fully-fledged amendment to existing EU rules, not simply a clarification of it. While some points of detail remain to be worked out, it is clear from the deal that the Commission will make proposals in these areas, and all Member States (ie the Council) will support them. It remains to be seen whether the European Parliament will approve them, and whether the CJEU would accept challenges to their legality. My assessment of the Court’s likely response, as detailed above, is that the amendments on family members will probably be acceptable; the child benefit reforms are an open question; and the changes on in-work benefits are highly vulnerable. Of course, there’s no prior case law on these specific issues, and so we can’t be certain of the Court’s approach in advance.

Overall, as I concluded in the earlier post on the draft agreement, these changes, if they are all implemented as planned, will fall short of a fundamental change in the UK’s relationship with the EU. But equally it is clearly wrong to say that they mean nothing – if in fact they are implemented. The changes would be modest but significant: amendments to three key pieces of EU legislation that would for the first time roll back EU free movement law, not extend it. Leaving aside the calls for non-binding guidelines, there would be cutbacks in in-work benefits (albeit for a limited period), significantly more control on the admission of non-EU family members of EU citizens, and more limited export of child benefit.

Barnard & Peers: chapter 13

Photo credit: www.telegraph.co.uk

*Disclosure: I will be consulting for the European Parliament on the free movement aspects of the renegotiation. However, my advice will be fully independent; I don't represent or advocate for the European Parliament (or anyone else) on these (or any other) issues.