Social security-Cross-border workers- family allowances

Luxembourg welcomes around 177000 cross-border workers. The family benefits system exports almost 48% of its family benefits. Notwithstanding such facts, in EU v Caisse pour l'avenir des enfants (C-801/18), the ECJ decided to rule by reasoned order.

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Sep 21, 2019
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Luxembourg welcomes around 177000 cross-border workers. The family benefits system exports almost 48% of its family benefits.

Notwithstanding such facts, in EU v Caisse pour l'avenir des enfants (C-801/18), the ECJ decided to rule by reasoned order.

Case in the main proceedings

EU, a Portuguese national residing in France and working in Luxembourg, applied to the Caisse nationale des prestations familiales for family allowances for his child, who lives with her mother in Brazil.

The Caisse pour l’avenir des enfants rejected that application on the ground that EU did not have Brazilian or Luxembourg nationality, the Social Security Convention of 1965 did not apply to him.

The Social Security Arbitration Board Luxembourg, dismissed the appeal brought by EU, taking the view that that EU’s child was not entitled to family allowances:

  • on her own account, since she did not actually live in Luxembourg on a continuous basis
  • through her mother, since the latter was not subject to Luxembourg law
  • through her father, since he did not come within the scope of the Social Security Convention concluded between Luxembourg and Brazil, as he was neither a Luxembourg national nor a Brazilian national

EU argued that, not receiving family allowances, would result in a disadvantage liable to discourage him from working in Luxembourg, and which would amount to an infringement of the principle of freedom of movement for workers within the European Union (Article 45TFEU).

Questions referred for a preliminary ruling

The questions referred by the Social Security Arbitration Board to the ECJ, can be summarised as follows:

  • whether as the case at issue, Article 45 TFEU, read in conjunction with Article 4  Regulation 883/2004, must be interpreted as precluding the competent authorities of one Member State, from refusing to pay to a national of a second Member State, family benefits for his child living in a non-member country, when, under identical conditions ,the first Member State nationals and residents, are entitled  to such benefits, pursuant to a bilateral international convention concluded between the first Member State and that non-member country
  • whether considerations relating to heavy financial and administrative burdens faced by the authority concerned, may be relied on to provide objective justification for unequal treatment

ECJ’s reasoned order

The ECJ observes first that the situation fails under the scope of Article 45TFEU.

Article 45TFEU requires “abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment”.

The Court recalls settled case law relating to the application of the principle of equal treatment in the context of the relationship between EU law and bilateral conventions concluded between two Member States or between one Member State and a non-member country (Matteucci, 235/87, EU:C:1988:460, Saint-Gobain ZN, C‑307/97, EU:C:1999:438 and Gottardo, C‑55/00, EU:C:2002:16).

The ECJ reiterates its position: subject to the provisions of Article 351TFEU, commitments concluded under international agreements, do not preclude Member States from complying with obligations arise from EU law.  

Regarding the second question:

  • Pursuant to settled case law, financial and administrative burdens cannot, in any event, be relied to justify unequal treatment in the sense of Article 45 TFEU (Gottardo, C‑55/00, EU:C:2002:16, paragraph 38, Merida, C‑400/02, EU:C:2004:537, paragraph 30, Erny, C‑172/11, EU:C:2012:399, paragraph 48).
  • Disturbing the balance and reciprocity of a bilateral international convention concluded between a Member State and a non-member country, may constitute an objective justification, however, such argument cannot be invoked as the case at issue.

The ECJ concludes that, “Article 45TFEU read in conjunction with Article 4 Regulation 883/2004, must be interpreted as precluding the refusal by the competent authorities of one Member State to pay to a national of a second Member State, who works in the first Member State without living there, family allowances for his child living in a non-member country with her mother when, under identical conditions for the grant of those benefits, those competent authorities recognise the entitlement of their own nationals and residents to family benefits pursuant to a bilateral international convention concluded between the first Member State and that non-member country, unless those authorities can put forward an objective justification for refusing to do so”.

Go to the profile of Tanel Feldman

Tanel Feldman

Senior Partner , Immigration Law Associates

Immigration Law Associates provides services in the following areas of law: A- INTRA-EU MOBILITY -European Union Services: A1 Freedom to provide services : Social security and labour law -intra-EU mobility of employed and self-employed workers A2 Freedom of movement of persons : a) Citizenship of the Union and Member State nationality b) Entry and residence rights from the Citizens’ Rights Directive-c) Freedom of movement of workers B LEGAL MIGRATION- Belgium and Luxembourg : corporate and private immigration

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