Overview of Recent Cases Before the Court of Justice of the European Union (January–June 2024)

Introduction

In this case report, no less than seven cases are discussed. The first one is the only Grand Chamber judgment for this case report: Chief Appeals Officer. ¹ In that case, the Court ruled on the right to access social assistance for family members who derive a right of residence from an EU worker. The second case analysed is VA v Deutsche Rentenversicherung Bund, ² which dealt with the relationship between Article 21 TFEU and Regulation 987/2009 ³ in relation to the need to take into account ‘child-raising periods’ for the purpose of calculation of pension benefits. In short, the Court considered that ‘child-raising periods’ can be taken into account on the basis of Article 21 TFEU if there is a sufficient link, even though such matter is also governed by Regulation 987/2009.

The next two cases reported concerned third-country nationals in front of Dutch courts. First, in Raad van bestuur van de Sociale verzekeringsbank, ⁴ the Court was asked to interpret the EC-Algeria Association Agreement in relation to survivors’ pension being adjusted based on the fact that the recipient was resident in Algeria. Second, Staatssecretaris van Justitie en Veiligheid, ⁵ dealt with the right of residence of third-country national posted workers. Since the Vander Elst case, ⁶ it is clear that third-country national posted workers should not be required to apply for a work permit in the Member State where they are posted. But what about a residence permit? The Court answered in Staatssecretaris van Justitie en Veiligheid that it is at the discretion of the Member States to decide whether those posted workers need a residence permit.

The last three cases discussed are cases directly relating to the interpretation of Regulation 883/2004. ⁷ In the Sozialministeriumservice case, ⁸ the Court ruled that the Austrian care leave allowance at stake was a sickness benefit under Regulation 883/2004, and that making it dependent on the receipt of an Austrian care allowance was indirectly discriminatory. Familienkasse Sachsen ⁹ was a case about the interpretation of the procedure to be followed to determine the primary and secondary competent Member State in case of an overlap of family benefits. In the Hocinx case, ¹⁰ the Court came back to the issue of the exportation of family benefits from Luxembourg which was already the subject of a preliminary ruling in Caisse pour l'avenir des enfants. ¹¹ In Caisse pour l’avenir des enfants, the Court had ruled that the national law limiting the rights of non-residents to their biological children was indirectly discriminatory. In Hocinx, the same law came again under the scrutiny of the Court concerning the exclusion of non-resident children placed under the care of the worker by a judicial decision of another Member State. The Court, unsurprisingly, found the national law indirectly discriminatory again.

In addition to the cases reported below, there is also one case regarding the social security rights of EU officials: the Partena case. ¹² The question was whether a Member State could request an EU official who pursued an ancillary activity as a teacher in its territory to be subject to its social security system. The Court recalled that, pursuant to Article 14 of the Protocol No 7, the question of which social security scheme applies to EU officials is an exclusive competence of the EU and therefore falls outside the jurisdiction of the Member States. This matter is not governed by Regulation 883/2004, but instead by the Staff Regulations. The Court responded to the Belgian and Czech Governments that while extraneous remuneration of EU officials can be taxed by the competent Member State, this is not the same for social security obligations which are exclusively paid to the scheme of the EU institutions.

Right for family members to access social assistance: Case C-488/21 Chief Appeals Officer and Others ¹³

In Chief Appeals Officer and Others, the applicant was a Romanian national who was the mother of another Romanian national residing, working and then acquiring nationality in Ireland. Once she joined her daughter in Ireland, the mother asked for a disability allowance from the Irish authorities. The Irish authorities refused to award such benefits because if the mother was awarded such benefits, she would become an unreasonable burden on the social assistance of the State and would no longer have a right to reside in Ireland (paras. 23–25). In that context, the referring court asked whether EU law precludes, on one hand, the refusal to grant a social assistance benefit to a direct relative in the ascending line who, at the time the application for that benefit is made, is dependent on a worker who is a Union citizen, and on one hand, the withdrawal of her right of residence on the ground that the grant of the benefit would have the effect that the family member is no longer dependent on the worker.

First of all, the Court explained why this question has to be answered on the basis of Article 45 TFEU, and not on the basis of Directive 2004/38 as framed by the referring court. Indeed, since the daughter moved to Ireland and acquired Irish nationality, she could not rely on Directive 2004/38 based on Article 3(1). The Court then applied its reasoning from the Lounes case ¹⁴ where it had held that citizens who have exercised their free movement and then have acquired the nationality of the host Member State must be able to rely on Article 21 TFEU to be able to lead a normal family life in that Member State (para. 45). The Court considered that since Article 21 TFEU finds a specific expression with regard to the free movement of workers in Article 45 TFEU, the situation must be assessed under Article 45 TFEU (paras. 46–47) with the conditions for residence under Directive 2004/38 and the right to equal treatment on social advantages under Article 7(2) of Regulation 492/2011 being applied by analogy (paras.48–49, 53).

On the right of residence, direct relatives in the ascending line of a worker who is a Union citizen have a derived right of residence for more than three months where they are ‘dependent’ on that worker pursuant from Article 2(2)(d) and Article 7(1)(a) and (d) of Directive 2004/38 (para. 56). It was not clear in this case when the element of dependency should be assessed. Is it only when the person first joins the EU citizen (Reyes case) ¹⁵ or could it be checked later to see if the person retain the right of residence? Following the opinion of the AG, ¹⁶ the Court concluded that such dependency requirement can be verified until the relative can claim a right of permanent residence in the host Member State under Article 16 of Directive 2004/38 (para.60). The Court added that, in this case, it was not disputed that the mother was dependent on her daughter, both when she joined her and when she applied for the disability allowance, and she therefore had a derived right of residence (para. 62).

The Court then turned to the element of equal treatment. The daughter, an EU worker, enjoyed equal treatment with regard to social advantages pursuant to both Article 45(2) TFEU and its specific expression in Article 7(2) of Regulation 492/2011. The Court noted that a social advantage under Article 7(2) can also be considered as a social assistance benefit which falls under the scope of Regulation 883/2004 as a ‘special non-contributory benefit’ (para. 65). The Court then applied its reasoning from the Lebon case and found that a social assistance benefit granted to a family member of a migrant worker constitutes a ‘social advantage’ within the meaning of Article 7(2) since that family member is dependent on the worker. Hence, the dependent family member is an indirect beneficiary of the equal treatment granted to the EU worker (para. 66).

The Court came back to the issue of the impact on asking social assistance for the dependency element and concluded that the grant of a social assistance benefit cannot affect the element of dependency under Article 2(2)(d) of Directive 2004/38. To justify its interpretation the Court found that deciding otherwise would undermine the equal treatment accorded to the migrant worker and would contradict the objective of Regulation 492/2011, which is the integration of the migrant worker and its family member in the host society (paras. 69–70).

With this judgment, the Court extended its interpretation in Lounes to include workers under Article 45 TFEU. Furthermore, it reaffirmed its judgment in Lebon which was based on the predecessor of Regulation 492/2011. That being said, the novelty of the case is that Member States can verify the element of dependency for direct relatives in the ascending line until those relatives possess an autonomous right of residence. It should be noted that this interpretation from the Chief Appeals Officer case is subject to discussion in a pending case regarding the question on the place where that dependency element must be assessed. ¹⁷ It is then a saga that is to be continued.

The ‘sufficient link’ to take into account ‘child-raising periods’ completed in another Member State: Case C-283/21 Va v Deutsche Rentenversicherung Bund ¹⁸

The situation arising in this case was a classical cross-border situation: VA was a German national who had been living just across the German border, in the town of Vaals, in the Netherlands. Despite living in the Netherlands, VA attended school, trained professionally and only ever worked in Germany. Before raising her children at home, in the Netherlands, VA had neither been employed nor self-employed in Germany. After her ‘child-raising periods’, she pursued marginal occupations in Germany for which she was exempted from social security contributions. It was only in October 2012 that she started to work and pay social security contributions in Germany. When calculating her pension for total incapacity to work, the German authorities did not take into account her ‘child-raising periods’ completed in the Netherlands. The referring court asked whether those periods should be taken into account pursuant to Article 44(2) of the Implementing Regulation.

One of the conditions under Article 44(2) of the Implementing Regulation ¹⁹ is that the person is pursuing employed or self-employed activity at the date prior to taking the ‘child-raising periods’. Consequently, the Court found that this condition was not fulfilled in the case of VA (para. 36). Whereas the AG advised the Court to respect the choice made by the legislator in Article 44(2) and to apply those conditions, ²⁰ the Court held that Article 44(2) of Regulation 987/2009 is not the exclusive instrument that governs the regime of taking into account child-raising periods, referring to its previous ruling in CC v. Pensionsverischerungsanstalt ²¹ (paras. 44–45). In CC v. Pensionsverischerungsanstalt, the Court had ruled that, when a person does not fulfil one of the conditions of Article 44(2) but has still worked and paid contributions in the Member State responsible for the payment of the pension, Article 21 TFEU requires that Member State take into account ‘child-raising periods’ completed in another Member State (C-576/20, para. 65).

However, in the case of VA, she had not worked and paid contributions in the Member State responsible for the payment of the pension before the ‘child-raising periods’. The Court considered that it was not an obstacle for the application of Article 21 TFEU and the finding of a ‘sufficient link’. First, the Court found that a sufficient link can be established where a person has exclusively completed periods of insurance in the Member State responsible for the payment of pension, both before and after the completion of the child-raising periods in another Member State (para. 47). Second, in order to interpret what periods of insurance need to be taken into account, the Court referred to the definition in Article 1(t) of Regulation 883/2004 whereby periods of insurance not only cover periods of contribution, employment or self-employment, but also all periods treated as equivalent by the legislation of the competent Member State (para. 48). Since periods of vocational training as well as periods of marginal occupation were treated as periods of insurance under German law, the Court ruled that the (lack of) payment of contributions during those periods was irrelevant for establishing a sufficient link (paras. 49–51).

This case should be seen as a follow-up on previous case law of the Court on this matter. First, in Elsen, ²² Kauer, ²³ and Reichel-Albert, ²⁴ the Court ruled that free movement law required the legislation of a Member State to be applicable to ‘child-raising periods’ completed in another Member State if there was a sufficient link between those ‘child-raising periods’ and periods of occupation in the first Member State. Those judgments were rendered under Regulation 1408/71 and were only partially codified in Article 44(2) of the Implementing Regulation whereby the rationale of the Court's judgments was kept but the ‘sufficient link’ test was not included. As a result, the matter came before the Court again in CC v. Pensionsverischerungsanstalt, when the Court was asked about the relevance of its previous jurisprudence in Elsen, Kauer and Reichel-Albert in a situation where the new conditions of Article 44(2) of the Implementing Regulation could apply. Although the AG had already called the Court to respect the choice made by the legislator in CC v. Pensionsverischerungsanstalt, ²⁵ the Court ruled that Article 44(2) of Regulation 987/2009 is not the exclusive instrument that governs the regime of recognising child-raising periods (C-576/20, para. 55). In VA v Deutsche Rentenversicherung Bund, the Court confirmed its previous judgment in CC v. Pensionsverischerungsanstalt. In conclusion, the ‘sufficient link’ test under Article 21 TFEU continues to be relevant when the conditions of Article 44(2) of Regulation 987/2009 are not fulfilled. Beyond confirmation of previous case law, the novelty of this case is that periods of insurance for the establishment of the sufficient link under Article 21 TFEU mean what the competent State considers to be periods of insurance under its national law, regardless of whether the person has paid contributions or not.

Indexation of survivors’ pension upon export to Algeria on the basis of an Association Agreement: Case C-549/22 Raad van bestuur van de Sociale verzekeringsbank (Transfert de prestations de survie) ²⁶

The case concerned a widow of a worker of Algerian nationality, resident in Algeria in receipt of a survivors’ pension from the Netherlands on the basis of the past working activity of her husband (in the Netherlands). Initially, the survivors’ pension was granted in full. However, subsequently, the competent Dutch authority, the SVB, on the implementation of the so-called ‘country of residence principle’ decided to reduce the pension, initially by 40% and then by 60%. This was done on the basis of coefficients drawn by the Dutch legislature, which mandated that upon export, (survivors’) pensions and other social security benefits would be ‘adjusted’ (or ‘indexed’) to the cost of living in the country of residence of the entitled person (para. 17).

As a result, the applicant, X, decided to challenge this decision by the SVB on the basis of Article 68(4) of the EC-Algeria Association Agreement, which provides that ‘workers […] shall be able to transfer freely to Algeria, at the rates applied by virtue of the legislation of the debtor Member State […], any pensions or annuities in respect of old age, survivor status […].’ ²⁷

Initially, the Court examined whether the provision in question of the EC-Algeria Association Agreement had direct effect and as such could be relied upon by the applicant. It must be noted that the EC-Algeria Association Agreement, in Article 70(1), provides that a decision to implement Article 68 was to be subsequently adopted by the Association Council (consisting of representatives of the EU and Algeria) before the end of the first year following the entry of force of the Agreement. ²⁸ However, to date, such a decision has not been adopted by the Association Council, although the EU adopted its negotiating position in Council Decision 2010/699. ²⁹

Despite this, the Court concluded that Article 68(4) of the Association Agreement had direct effect. To this end, the Court used its well-established formula, ³⁰ namely, that a provision has direct effect as long as it ‘contains a clear and precise obligation which is not subject, in its implementation or effects, to the adoption of any subsequent measure’ (para. 30). Since the obligation to ‘freely transfer’ pensions was clear and precise enough and not dependent on the adoption of subsequent measures, the Court found that the provision had direct effect (para. 31). Article 70(1) of the Association Agreement aims to facilitate this right to ‘freely transfer’, but does not make this right conditional to the adoption of further measures (para. 33).

The Court also found that the applicant was within the personal scope of the EC-Algeria Association Agreement, despite it being applicable solely to ‘workers of Algerian nationality’ (para. 38). ³¹ According to the Court, restricting the application solely to workers themselves would deprive the provision of its useful effect, since, by definition, survivors’ pensions can only be claimed by the survivors of the worker and not the workers themselves (para. 38).

Having concluded that the provision had direct effect and that the applicant fell within the personal scope of the EC-Algeria Association Agreement and thus could rely upon its provisions, the Court proceeded to the heart of the dispute. The Court was tasked with determining whether the implementation of the ‘country of residence’ principle by the Netherlands, which led to a reduction in the level of the pension upon export to Algeria, was compatible with Article 68(4) of the Association Agreement. In interpreting the right to ‘freely transfer’, the Court noted that this right was subject to a qualification, namely, the ‘rates applied by virtue of the legislation of the debtor Member State or States’ (para. 46). Thus, the provision allowed for discretion and as such, the Netherlands was permitted to adjust the level of the pension exported outside the Netherlands on the basis of the ‘country of residence’ principle. The Advocate General also shared this view (para. 57 of the Opinion of Advocate General Collins). However, the room for discretion allowed by the Court was not unlimited, since the Netherlands was not allowed to render this ‘right to freely transfer’ meaningless, by depriving it of its useful effect (para. 48). The Court concluded that the Netherlands did not render the right to freely transfer meaningless, provided it was based on an objective factor, which was for the national court to verify (para. 49).

As such, the Court adopted a balanced approach between allowing discretion in the application of Article 68(4) of the Association Agreement (since the term ‘rates applicable’ allowed for such discretion), while ensuring that the provision retained its useful effect. At the same time, however, given that the original language of the proceedings of the case was Dutch, it cannot be overlooked that the Dutch linguistic version of Article 68(4) of the EC-Algeria Association Agreement uses a different word than ‘rates’, namely, ‘exchange rates’ (‘wisselskoers’ in Dutch). ³² This term provides for less discretion to the Member States since the adjustment can solely be on the basis of the applicable exchange rates and not a principle such as the ‘country of residence’ principle. However, since the Court did not interpret ‘rates’ as ‘exchange rates’- something that the English linguistic version certainly permits - the ‘country of residence’ principle was upheld.

Perhaps, the Court had the intention to clearly distinguish the Association Agreement from the scheme under Article 7 of Regulation 883/2004, ³³ which provides for export of social security benefits within the EU ³⁴ without ‘any reduction, amendment, suspension, withdrawal or confiscation’. ³⁵ The Advocate General also noted this in his Opinion that ‘the object and purpose of the Association Agreement are far more limited than those of Articles 45 to 48 TFEU’ (para. 60 of the Opinion of Advocate General Collins).

Moreover, both the Court (in para. 50) and the Advocate General (in para. 32 of his Opinion), agreed as to the non-applicability of Article 4(1) of Council Decision 2010/699, ³⁶ since it was not adopted by the Association Council. Reliance on Article 4(1) of Council Decision 2010/699 could lead to a wholly different outcome since it provided a scheme of export similar to the one applicable under Article 7 of Regulation 883/2004. However, not only was the Council Decision not relied upon at all, but it was also not used as ‘guidance on the interpretation of Article 68(4)’, as the Advocate General suggested (para. 32 of the Opinion of Advocate General Collins).

Third-country national posted workers: Case C-540/22 Staatssecretaris van Justitie en Veiligheid ³⁷

Since the Vander Elst case, ³⁸ third-country nationals lawfully and habitually employed in an EU Member State do not require work permits in the other EU Member State where they are posted. In Staatssecretaris van Justitie en Veiligheid (Détachement de travailleurs de pays tiers), the applicants were Ukrainian nationals who held residence permits for the purpose of employment in Slovakia before being posted to the Netherlands by a company established in Slovakia. According to Dutch law, third-country nationals posted in the Netherlands for more than 90 days in a 180-day period—a period corresponding to the right to freely circulate when one possesses a valid residence permit issued by a Member State under Article 21(1) of Convention Implementing the Schengen Agreement ³⁹ —need to apply for a fixed-term residence permit in the Netherlands. The IND, the competent institution for issuing residence permit in the Netherlands, awarded residence permits for a duration equivalent to the posted workers’ residence permits from Slovakia and limited to a maximum of two years. The problem was that the duration of the residence permits was shorter than the duration of the posting activities. The applicants appealed that decision, considering that the obligation to apply for residence permits as well as their duration and the accompanying administrative fees were unjustified restrictions to the free movement to provide services under Art. 56 TFEU.

The first question referred was essentially whether there is a need for third-country national posted workers to apply for a residence permit in the Member State where they are posted. The referring court asked whether there was a derived right of residence for third-country national posted workers under Article 56 TFEU. This concept of derived right of residence for third-country nationals is a well-known concept in EU citizenship law whereby a family member of an EU citizen derives a right of residence from that EU citizen. ⁴⁰ What triggered the referring court to ask that question was the reasoning of the Commission in Commission v Austria, ⁴¹ where the Commission had argued that service providers transfer a derived right of residence to their posted workers for the duration of the service (paras. 31–32). However, Commission v Austria was a case that dealt with an automatic refusal to issue an entry and residence permit in the event of the entry without a visa of a lawfully posted worker. In Commission v Austria, the Court found that such a refusal was a disproportionate restriction to Article 56 TFEU but did not engage into the discussion of posted workers benefiting from a right of residence under EU law. In Staatssecretaris van Justitie en Veiligheid, the Court found that the concept of derived right of residence under Article 21 TFEU could not be transposed to the context of provision of services under Article 56 TFEU. While the derived right of residence under Article 21 TFEU rests on the special relationship bond between the family member and the EU citizen protected under Article 7 of the Charter (right to private and family life), the Court concluded that such relationship and right were not found between an employer and its posted worker (para.54).

Since there is no derived right of residence based on Article 56 TFEU, the next question was whether a Member State can require a third-country national posted worker to obtain a residence permit in its territory. At the heart of this question was the doubt as to whether an obligation to obtain a residence permit was a restriction to Article 56 TFEU given the fact that there is already an obligation to declare the posting activities prior to posting in order to verify that the situation of the third-country national is lawful (Danieli & C. Officine Meccaniche and Others ⁴² ; Art. 9(1) of the Enforcement Posted Workers Directive). ⁴³ The Court ruled that such an additional requirement could indeed be considered as a restriction to Article 56 TFEU (paras.72–73), but such restriction was justified on two grounds. First, the Court agreed with the Dutch Government that such restriction was justified in order to respect the posted worker's right to legal certainty. That justification can be linked with the Court's previous case law, such as in Commission v Germany ⁴⁴ where the Court held that Member States might require documents proving that workers are posted lawfully including regarding their lawful residence, work authorisation and social security coverage. Second, the Court found that the restriction was justified by the need to check whether the posted worker does not constitute a threat to public policy. Obtaining a residence permit was an appropriate and necessary measure according to the Court, to the extent that refusal to grant residence for public policy reasons was only reserved to persons who represent a genuine and sufficiently serious threat to one of the fundamental interests of society (para. 96).

If EU law does not preclude a Member State where the worker is posted from imposing an obligation to obtain a residence permit, could that residence permit be limited to the duration of the work and residence permit from the Member State where the service provider is established? In other words, could the Netherlands limit the residence permit in the Netherlands to the duration of the Slovak residence permits? The Court held that it is at the discretion of the Member States to determine the period of validity of residence permit for posted third-country nationals since a service under Art. 56 TFEU must be of a temporary nature (para. 113). The Court found that the period of validity of a residence permit does not regulate the conditions for the right of the service providers and its potential restrictive effects are too uncertain and indirect for it to be capable of hindering the freedom to provide services (C-540/22, para. 116). However, the Court added that such a period of validity should not be manifestly too short to meet the needs of the majority of the service providers and the renewal of the permit should not be under excessive formal requirements (para. 116).

Finally, on the question of the fees to be paid when obtaining a residence permit, the Court ruled that charging fees for the processing of the residence application is allowed to the extent that those fees reflect the work and costs of the administration (paras. 119–121).

With its judgment in Staatssecretaris van Justitie en Veiligheid (Détachement de travailleurs de pays tiers), the Court has clarified the issue of whether Member States can require third-country national posted workers to obtain a residence permit. The judgment of the Court is not entirely surprising given the legal limbo third-country national posted workers find themselves in when it comes to their residence right. On one hand, those third-country nationals are covered by EU law when it comes to their provision of services in another Member State. On the other hand, there is no EU law covering their residence right. Recognition of the Slovak residence permits was not really an option in the case at hand given the current exceptions in EU law. Although the applicants had a single permit (combination of a work and residence permit) in Slovakia through the Single Permit Directive, that permit did not apply to third-country nationals who were posted for as long as they were posted (Art.3(2)(c) of Directive 2011/98) ⁴⁵ (paras. 87–88). It should be noted that this exception was kept in the recast Single Permit Directive adopted in April 2024 (Art. 3(2)(c) of Directive 2024/1233 ⁴⁶ ). Furthermore, Art. 1(2) of Regulation No 1030/2002 ⁴⁷ on a uniform format for residence permits states that the residence permits are valid only in respect of the territory of the Member State which issued them (paras. 87–88). In that context, the Court did not engage in filling the gaps by creatively interpreting Article 56 TFEU as the Commission would have wished. Instead, in the absence of EU law, the Court respected the discretion of the Member States. What is regrettable, though, is the absence of clarity on the duration of the period of validity of the residence permit. The Court ruled that such periods should not be manifestly too short to meet the needs of the majority of the service providers (emphasis added) (para. 116). But what is manifestly too short? How do you determine the needs of the majority of the service providers? On those questions, the Court can expect more preliminary ruling questions.

Classification of the Austrian care leave allowance: Case C-116/23 Sozialministeriumservice ⁴⁸

The applicant, an Italian national living and working in Austria, took care leave with the agreement of his employer, to care for his father in Italy. His father, resident in Italy, was ill and in need of around-the-clock care. However, when the applicant applied for the Austrian care leave allowance, this was rejected. According to the Austrian authorities, a care leave allowance to a caregiver such as the applicant in the proceedings, is linked to the payment of a care allowance under Austrian law to the person in need of care. Therefore, since the person in need of care (the father) was not a recipient of an Austrian care allowance, the caregiver (the applicant) was not entitled to the care leave allowance. According to the Austrian authorities, the fact that the father was in receipt of an Italian care allowance, equivalent to an Austrian one, was irrelevant, since the requirement under national law was that the person in need of care must be in receipt of an Austrian care allowance.

The first question was one of classification of the care leave allowance as a ‘sickness benefit’ within the meaning of Article 3(1)(a) of Regulation 883/2004. It must be noted that both the parties to the dispute accepted the classification as a sickness benefit, but the referring court had doubts. According to the referring court, since the benefit was granted in respect of absence of work, it could also be classified as an ‘unemployment benefit’ (para. 21).

In addition to being considered a ‘social security benefit’ (para. 33), ⁴⁹ two conditions must be fulfilled for a benefit to be considered as a sickness benefit and, more specifically, a long-term care benefit. While sickness benefits, in the strict sense, aim at the patient's recovery from illness, ⁵⁰ long-term care benefits cover the risk of reliance on care which may be of long(er) term. ⁵¹ Regardless, there is no difference in their treatment in Regulation 883/2004, with the same rules being applicable to them, since long-term care benefits are coordinated exactly like all other sickness benefits. Long-term care benefits have a purpose of (1) improving the state of health of a person reliant on care and (2) improving the quality of life of a person reliant on care. ⁵² With recourse to these two cumulative criteria, the Court had no trouble in classifying the benefits as long-term care benefits (para. 40). The fact that the allowance was awarded to the caregiver rather than the person in need of care did not alter this outcome. According to the Court, although the care leave allowance compensates the caregiver for the loss of earnings suffered during providing for care, it ultimately benefits the person in need of care, since it enables the caregiver to provide care to the person in need of it (para. 39).

The referring court also raised the question of whether the benefit should be deemed to be a sickness benefit in cash or in kind. ⁵³ According to the referring court, classification as a benefit in kind could prohibit its export outside Austria. ⁵⁴ The national court was justified in raising such a point, since benefits in kind could also take form of compensation in cash for medical costs, thus actually not always needing to be provided in kind. ⁵⁵ However, since the care leave allowance was in the form of fixed monetary sum provided to the caregiver and had a supplementary objective of facilitating access to care for the person in need of such care, the Court concluded that it was a cash benefit (paras. 41–43).

Subsequently, the Court turned its attention to the possible discriminatory nature of the Austrian legislation, according to which the grant of the care leave allowance to a caregiver was dependent upon the person in need of care being in receipt of an Austrian care allowance. The examination was conducted under the lens of Article 4 of Regulation 883/2004 ⁵⁶ and Article 7(2) of Regulation 492/2011, ⁵⁷ combined, since both ‘both give concrete expression to the principle of equal treatment in social security matters laid down in Article 45 TFEU’ (para. 54). The measure was judged as indirectly discriminatory since it was liable to affect nationals of other Member States more than Austrian nationals. For the former group, the persons in need of care (like a family member) were more likely to reside outside Austria, compared to the latter group in respect of which the persons in question were most likely to reside within Austria (paras. 57–58). As such, nationals of Member States other than Austria were not as likely to draw upon a care allowance from Austria.

Thenceforth, the Court examined the justification of maintaining the financial balance of the Austrian social security scheme, in terms of providing a care leave allowance only in sufficiently serious cases (para. 60). However, the Court pointed that such objective could also be achieved if in addition to accepting the Austrian care allowance of a specific gravity and above, the Austrian authorities also accepted equivalent care allowances from other Member States (in terms of fulfilling the qualifying criteria for the Austrian care leave allowance) (para. 63). However, this was not the case since equivalent care allowance benefits from other Member States were not accepted to establish entitlement to the Austrian care leave allowance. Thus, unless the legitimate aim was fulfilled in a proportionate manner, Article 4 of Regulation 883/2004, Article 7(2) of Regulation 492/2011 and Article 45 TFEU, precluded the conditions imposed by Austrian legislation regarding the awarding of the care leave allowance (para. 65).

Finally, the Court examined the practice of the Austrian authorities of refusing to take into account the application for the care leave allowance as a (simultaneous) application for a benefit of a similar nature, namely, the ‘family hospice leave’ to which the applicant could be alternatively entitled. According to the referring court, the applicant satisfied the conditions for this benefit, but the application for the care leave allowance was not reclassified by the competent Austrian authority as an application for the ‘family hospice leave’ benefit (paras. 25, 66). The referring court had doubts as to whether the refusal to reclassify the application was in conformity with the principle of effectiveness of EU law, prohibition of discrimination and the Charter of Fundamental Rights of the EU. ⁵⁸ According to the Court, Regulation 883/2004 only established a system of coordination of social security systems (para. 68). As such, the manner in which the right to such benefits is exercised, is a matter solely reserved for national law (para. 71). Moreover, also owing to the different objectives and conditions for grant of the two benefits, the Court found no breach of any instrument of EU law (para. 72).

Procedure for determining the competent Member State(s) for family benefits in case of change of circumstances of the applicant: Case C-36/23 Familienkasse Sachsen ⁵⁹

The applicant, a Polish national working in Germany was in receipt of German family allowances, while his wife was resident in Poland with their child. When applying for the benefits in 2016, the applicant declared that his wife was not in employment. In 2019, following information exchange between the Polish and the German authorities, the latter presumed that the applicant's wife was self-employed in Poland and as such, entitled to family benefits (in Poland). In fact, the Polish family benefits were granted irrespective of income, but the applicant's wife had made a declaration in Poland that she did not wish to receive such benefits, and therefore no Polish family benefits were paid to her. Following the communication of this information to Germany, the German competent authority decided to revoke the family allowances of the applicant with retroactive effect, up to the amount that would have been awarded by Poland.

According to the priority rules, in the event that family benefits are due in more than a single Member State, on the basis of an activity as an employed or self-employed person, the Member State of residence of the child is deemed as primarily competent. ⁶⁰ This Member State is obliged to award its family benefits in full. The other Member State is deemed as secondarily competent and obliged to award a ‘differential supplement’ equal to the difference between its benefits and the benefits provided by the primarily competent Member State. ⁶¹

As such, the German authorities took the position that they were not primarily competent to provide family benefits on the basis of the priority rules laid down in Article 68(1)(b)(i) of Regulation 883/2004. They considered they were only secondarily competent and as such obligated to pay a differential supplement equal to the difference between the level of the Polish and the German family benefits.

The main dispute under adjudication was which Member State was responsible to make the determination of primary and secondary competence to award family benefits, namely, Germany or Poland. It was doubted whether Germany was entitled to make a decision on the primary competent Member State itself, while requesting partial reimbursement of benefits (up to the level provided by Poland) from the applicant, although no family benefits were actually awarded in Poland (para. 37).

First, the Court recalled its case law in identifying situations of overlap of family benefits. According to its long-standing case law, ⁶² it is not sufficient that benefits are due theoretically in two Member States, but a person must ‘fulfil all the conditions, as to both form and substance, […] which may […] include the condition that a prior application must have been made’ (para. 43).

Thereafter, the Court pointed out the correct procedure to be followed in cases where an application for family benefits is directed to a Member State which is not primarily competent but secondarily competent. This Member State shall take a provisional decision that it is secondarily competent and forward the application to the primarily competent Member State, while awarding a differential supplement (if necessary) and informing the applicant, on the basis of the procedure in Article 68(3) of Regulation 883/2004 and Article 60(3) of Regulation 987/2009 (para. 45). Only in cases where the institution of other Member State does not take a position within two months does the provisional decision become final with regard to which Member State is primarily and secondarily competent. ⁶³ Subsequently, the primarily competent Member State is obliged to award its family benefits in full, ⁶⁴ while the secondarily competent Member State can request reimbursement of any excess amounts paid from the primarily competent Member State. ⁶⁵

However, in 2016, no such procedure was triggered since Germany, on the basis of the information available, took the position that it was competent and as such paid its benefits in full. The procedure under Article 68(3) of Regulation 883/2004 and Article 60(3) of Regulation 987/2009 became applicable only in 2019, when Germany, in the context of a subsequent verification/information exchange, presumed that the wife of the applicant was self-employed in Poland.

The Court ruled that it was for Poland to take a position as to whether it was primarily competent, since only Poland was in a position to verify whether the applicant's wife was self-employed within the meaning of national Polish law (para. 56). Germany, according to the Court, was not in a position to ascertain whether all conditions for self-employment are met (para. 57). In this instance, if all the substantive and formal conditions under Polish law were met, then Poland would be obliged to award its family benefits as the primarily competent Member State (para. 61).

As such, the Polish authorities would have to determine whether the applicant's wife was self-employed. If the question was to be answered in the positive, then Poland, on the basis of the priority rules, would be primarily competent to award family benefits, with Germany, as secondarily competent, being obliged to award solely a differential supplement.

The Court emphasised that Poland could not put forward purely formalistic reasons to elude (primary) competence to award family benefits (para. 61). Moreover, the reasons as to why the applicant's wife chose not to apply for family benefits in Poland were irrelevant and, as such, inconsequential for determining whether Poland was primarily competent (para. 61). If despite this, Poland refused to discharge its obligations as the primarily competent Member State, then Germany should award the benefits provided under its legislation and subsequently ask the Polish authorities for reimbursement of any amounts paid in excess (para. 62). As such, reimbursement should not have been requested from the applicant.

Germany was not entitled to unilaterally decide that it was no longer primarily competent but only secondarily competent, while transferring primary competence to Poland. Germany should have initiated the procedure envisaged in Article 68(3) of Regulation 883/2004 and Article 60(3) of Regulation 987/2009, requesting Poland to make the determination of competence (para. 63).

Due to the complexity of the coordination regulations, it has been widely recognised that the rights guaranteed by them shall be available not just in theory, but also in practice. ⁶⁶ As such, the present case is no exception to previous case law, ⁶⁷ which has emphasised and elaborated upon the significant administrative duties of the involved Member States’ administrations (para. 64). Through (sincere) cooperation, ⁶⁸ national institutions shall apply the rules of the coordination regulations in a manner that guarantees the rights of applicants and does not penalise or place them at a disadvantage, particularly when different views between Member States’ institutions exist. The procedure of Article 68(3) of Regulation 883/2004 and Article 60(3) of Regulation 987/2009 ensures that disagreements are settled directly between the involved Member States’ institutions, without involving the applicants, thus safeguarding their legal position and rights. As such, situations of reimbursements by the applicants owing to differential views between Member States’ institutions are prevented (para. 65). After all, ‘closer and more effective cooperation between social security institutions is a key factor in allowing the persons […] to access their rights as quickly as possible and under optimum conditions’. ⁶⁹

Equal treatment of frontier workers and the relationship between Regulation 492/2011 and Regulation 883/2004: Case C-27/23 Hocinx ⁷⁰

The Hocinx case can be seen as a follow-up to the previous case of Caisse pour l'avenir des enfants. ⁷¹ The latter case also concerned the compatibility with EU law of the differential conditions for entitlement to family allowance for workers resident within the territory of Luxemburg and workers not resident in Luxemburg, such as frontier workers.

In Hocinx, the applicant, a frontier worker, working in Luxemburg and resident in Belgium, claimed Luxemburg family allowances in respect of a child placed under his care with a court order from Belgium. While he was initially granted the family allowances in question, he was subsequently informed that he was no longer entitled to them and had to return the family allowances he received retroactively. The legislation of Luxemburg provided that workers not resident in Luxemburg were entitled to family allowances only in respect of ‘children born within marriage, children born outside marriage and adopted children of the person’ (para. 14). However, workers resident in Luxemburg were entitled to family allowances also in respect of children placed under their care with a court order (para. 15). The Court therefore inquired by a sole question as to whether such differential conditions for entitlement to family allowances were compatible with Article 45 TFEU, Article 7(2) of Regulation 492/2011, Article 67 of Regulation 883/2004 and Article 60 of Regulation 987/2009.

The Court replied in the negative, finding that the legislation of Luxemburg gave raise to indirect discrimination. Since non-resident workers, who were more likely nationals of other Member States, could not benefit from the same entitlement conditions as resident workers (who are more likely of Luxemburg nationality) for the grant of the family allowances, the Court found the legislation to be indirectly discriminatory (para. 35). As such, the Court found that Article 7(2) of Regulation 492/2011 and Article 45 TFEU precluded the different conditions for entitlement between resident and non-resident workers (para. 39). These two provisions prescribe for equal treatment in the granting of ‘social advantages’, a category to which these family allowances undeniably belonged (para. 27). ⁷² The Court did not examine any possible justifications to the indirect discrimination since it claimed that ‘the referring court has not […] set out any legitimate objective that might justify such indirect discrimination’ (para. 38).

On the question of whether the judgement placing the child under the care of the worker was rendered by a Belgian court had any implications, the Court of Justice found that it had to be treated as equivalent to one rendered by a court of Luxemburg (para. 37). Moreover, the Court did not consider in its judgment whether the child should be regarded as a family member of the worker, this not being the subject of the preliminary reference. ⁷³ However, the Advocate General found the issue relevant for the purpose of free movement and equal treatment rights of migrant workers, and concluded that the child was to be regarded as a family member (para. 48 of the Opinion of Advocate General Szpunar). He advocated for a reading that was broader than the term ‘family member’, found in Article 2(2) of Directive 2004/38, ⁷⁴ through the ‘prism’ of the Charter of Fundamental Rights of the EU (C-27/23, paras. 51–53). ⁷⁵ The reading of the Advocate General is broader than that in the Caisse pour l'avenir des enfants case, which confined the term ‘family member’ solely to the persons mentioned in Article 2(2) of Directive 2004/38. ⁷⁶

However, as mentioned above, the reference for preliminary ruling was not just under Regulation 492/2011 and Article 45 TFEU, but also Regulation 883/2004 (and Implementing Regulation 987/2009). Despite this, the operative part of the judgment only mentions Article 7(2) of Regulation 492/2011 and Article 45 TFEU. The manner in which Regulations 883/2004 and 987/2009 were sidestepped is perplexing. Two mentions to Regulation 883/2004 can be found in the judgment: (1) the Court states that the family allowances are ‘family benefits’ within the meaning of Article 3(1)(j) and (2) the Court also mentions the principle of equal treatment enshrined in Article 4 of Regulation 883/2004 (paras. 27 and 29, respectively). Thus, although the Court mentions Regulation 883/2004 twice in the body of the judgment, it is inscrutable why the operative part of the judgment omits any mention of it.

In sharp contrast, the Advocate General, concludes that Regulation 883/2004 applies beyond doubt, since the personal, material and territorial scopes of the Regulation are fulfilled (paras. 27–29 of the Opinion of Advocate General Szpunar). Moreover, also according to the Advocate General, the Caisse pour l'avenir des enfants case sets a clear precedent as to why both Regulation 883/2004 and Regulation 492/2011 apply to the case at hand (para. 27 of the Opinion of Advocate General Szpunar). Logically, the conclusions of the Advocate General are based not only on Regulation 492/2011 and Article 45 TFEU, but also Regulation 883/2004 and Implementing Regulation 987/2009 (para. 73 of the Opinion of Advocate General Szpunar).

In fact, the Court has applied the two Regulations in conjunction with each other repeatedly in the past. ⁷⁷ The Court provided a justification as to why Article 67 of Regulation 883/2004 and Article 60 of Regulation 987/2009 did not apply. According to the Court, ‘those provisions relate not to the situation of the worker himself or herself but to the situation of the members of the worker's family residing in another Member State’ (para. 25). The contradiction of this statement with previous case law is astonishing. The Court has repeatedly held that family benefits ‘cannot be regarded as payable to an individual in isolation from his or her family circumstances’ ⁷⁸ and that the entitlement to the family benefit arises not to a parent alone, but to the whole family. ⁷⁹ Therefore, the situation at hand concerned the worker as much as the child and, additionally, the personal scope of the Regulation includes not only workers, but all EU citizens and their family members (as the latter are defined in the national law of Luxemburg). ⁸⁰ As a result, the Court failed to utilise Article 67 of Regulation 883/2004, which would treat the worker and child ‘as if’ they were resident in Luxemburg, thus ensuring that they would be entitled to the family allowances in question.

As mentioned above, the Court refrained from applying Regulation 883/2004 in conjunction with Regulation 492/2011, sidestepping a long line of case law without any good reason or justification. It incorrectly stated that Article 67 of Regulation 883/2004 and Article 60 of Regulation 987/2009 did not apply and subsequently ignored the entirety of these two Regulations in the operative part of the judgment. However, since this is only a single case—and not one of the Grand Chamber—it would be precipitate, if not unwise, to read too much into the (non-) applicability of Regulation 883/2004 and its sidestepping in favour of Regulation 492/2011.