CYIL 2015

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HARALD CHRISTIAN SCHEU

CYIL 6 ȍ2015Ȏ

concern social entitlements of inactive EU citizens. The concurrence of two sets of

rules in Regulation 883/2004 and Directive 2004/38 is, indeed, characterized by

a wide variety of vague terms and an unsolved relationship. No wonder that the

national courts turn in such a situation to the CJEU with hope and sometimes with

legitimate scepticism.

3. The social rights of economically inactive Union citizens

in the light of the Brey case

In the Brey case,

the CJEU had to deal with the clarification of the relationship

between Regulation 883/2004 and Directive 2004/38 and had the chance to, at

least partially, remedy the unclear legislation. The main subject of our analysis is the

interpretation of the term ‘social assistance’ in relation to potential claims of economically

inactive EU citizens.The Brey case concerned the payment of a compensatory supplement

intended to augment a retirement pension (Ausgleichszulage) under Austrian law. In

general, this social benefit is meant to serve the purpose of a minimum pension, which

as such is not regulated in Austria. In the case that the total income of a person who

is ordinarily resident in Austria and receives a pension there remains below a certain

reference amount (Richtsatz), the difference is offset by compensatory supplements.

In principle, such supplements may be seen as a social benefit for inactive citizens,

i.e. both Austrian nationals and migrating Union citizens.

3.1 A prelude to the case

After economically inactive EU citizens had started, in larger numbers, to claim

the compensatory supplement in Austria, the Austrian parliament, in December

2010, adopted legal provisions

which aim to restrict access of EU citizens to the

Austrian social assistance system. First, § 51 Section 1 of the Act on Establishment

and Residence was amended. In its original version the provision had provided

that EU citizens (resp. the citizens of the European Economic Area) have a right of

residence for more than three months, if they have sufficient resources in order to

ensure that during their stay they would not need social assistance. The amended

version reads as follows: “that during their stay they will not need social assistance or

compensatory supplement”. Secondly, § 292 Section 1 of the Law on Social Insurance

was amended,

so that the condition for granting the compensatory supplement

was no longer just a “habitual residence” but “lawful and habitual residence”. The

legality of residence was conditioned by the fact that the EU citizen would not need a

compensatory supplement to his pension. The explanatory report to both provisions

C-140/12.

Budgetbegleitgesetz 2011 (BGBl. I Nr. 111/2010).

Allgemeines Sozialversicherungsgesetz (BGBl. Nr. 189/1955/ BGBl. I Nr. 194/1999).