CYIL 2015

197

THE LIMITS OF SOǧCALLED BENEFIT TOURISM AND THE FREE MOVEMENT OF EU CITIZENS

noted that the aim of the measure was to avoid the overburdening of the national

budget by inactive EU citizens.

In March 2011 Mr Brey, together with his wife, moved to Austria.

In Germany

he was entitled to a disability pension in the amount of approx. 860,- € per month,

and a further state contribution of 225,- € per month. Upon arrival in Austria he

filed an application for the payment of a compensatory supplement under Austrian

law. This raised the question of whether Austria shall grant a social benefit to an

economically inactive EU citizen who had never contributed to the Austrian social

system and, most likely, would not contribute in the future. The compensatory

supplement under Austrian law would amount to approximately 330,- € per month.

With regard to thedecisions of the relevantAustrianauthorities, therewas amess.The

competent authority of social security administration (Pensionsversicherungsanstalt)

rejected the request of Mr. Brey and argued that, as the applicant did not have sufficient

funds in Austria, his stay was illegal. Referring to the rules of legal residence of

EU citizens which are contained in the Act on Establishment and Residence, the

social security institution rejected the claim for a compensatory supplement benefit

which is provided for in the Law on Social Security. Three weeks later, however,

the authority competent to decide questions of residence (Bezirkshauptmannschaft)

issued a certificate of registration for EU citizens confirming the legality of Mr. Brey’s

long-term residence in Austria, and, thus, it indirectly confirmed the entitlement

of the applicant to a compensatory supplement. In other words, the social security

authority decided on the legality of residence and the immigrant authority decided

on social benefits, with conflicting results.

The administrative courts which tried to reach a solution of this dilemma sided

with the applicant and noted that the decision of the competent immigration

authority on residence had not been challenged by the social security authority.

The appellate court in Graz added that it does not intend to examine whether the

confirmation of the legality of residence was in accordance with the law. On the basis

of an appeal filed by the social security authority the case came up before the Supreme

Court of Justice, which in turn submitted a question to the CJEU. Given that the

CJEU had already in 2004

ruled that the compensatory supplement under Austrian

law had to be regarded as a “special non-contributory benefit”, which falls under

Regulation 883/2004, this particular issue was no longer considered controversial.

ErläutRV 981 BlgNR 24. GP 160.

In the proceedings before the Austrian courts Mr. Brey said that he felt discriminated against in

Germany due to his Russian origin. See the judgment of the Supreme Court of Justice of 17 December

2013 (10 ObS 152/13w).

C-160/02 Skalka.

In the Skalka case the CJEU dealt with the application of Article 4, paragraph 2 of Regulation 1408/71.

This provision now corresponds to Article 70 of Regulation 883/2004. The CJEU was confronted

with the case of an Austrian pensioner who had permanently moved to the Spanish island of Tenerife