Family allowance -Interoperability between EU legal instruments

In Caisse pour l’avenir des enfants v FV, GW (C-802/18), in the context of a claim for family allowances, the ECJ was called upon to clarify whether an amendment of the Luxembourg Social Security Code, is compatible with EU law.

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In Caisse pour l’avenir des enfants v FV, GW (C-802/18), in the context of a claim for family allowances, the ECJ was called upon to clarify whether an amendment of the Luxembourg Social Security Code, is compatible with EU law.

The case in the main proceedings

Since 1 August 2016, pursuant to Art 270 of the Social Security Code, only children born within marriage, children born outside marriage and adopted children of an insured person, are regarded as family members and give rise to entitlement to family allowances.

As a consequence of that amendment, a frontier worker living in France, ceased to receive family allowances, on behalf of his spouse’ child from a previous relationship. The child lives exclusively in the couple’s joint household, and sole parental authority of the child is exercised by the mother (i.e. the frontier worker’s spouse).

Questions referred to the ECJ for preliminary ruling

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

  • must family allowances awarded pursuant to Articles 269 and 270 Social Security Code, be treated as a social advantage, in the sense of Art 45 TFEU and Art 7(2) Regulation 492/2011?
  • If the response to the first question is in positive, whether Member States retain the autonomy to define members of the family who are entitled to family benefits, pursuant to Art 1(i) Regulation 883/2004, or are however bound by the definition laid down in Art 2(2) Directive 2004/38 ?
  • provided that the definition of family member laid down in Art 270 Social Security Code, is in breach of Directive 2004/38, can the exclusion of the child of a spouse be considered indirect discrimination that is supported by an objective justification, notably the personal right of the child, and the fact that Luxembourg exports almost 48% of its family benefits ?

The ECJ ruling

As regards the first question, the ECJ underlines that pursuant to Art 45(2) TFEU and Art 7(2) Regulation 492/2011, freedom of movement of workers implies equality of treatment. It follows that, social advantages (“any advantage whether or not linked to a contract of employment……generally granted to national workers primarily because of their objective status as workers or by virtue of the mere fact of their residence in the national territory”) must be extended to frontier workers.

In the same context, the ECJ observes that as the case at issue, the frontier workers’ right to family allowances, is linked to the exercise of a salaried activity in Luxembourg, and to the submission to the latter legislation.

Having regard to the above considerations, family allowances must be treated as a social advantage, in the sense of Article 45 TFEU and Article 7(2) Regulation 492/2011.

As regards the second and the third question, the ECJ observes that the referring court essentially asks whether Art 1(i) Regulation 883/2004 ,read in conjunction Art 7(2) Regulation 492/2011 and Art 2(2) Directive 2004/38, must be interpreted as precluding Art 270 Social Security Code, from providing for an indirect discrimination against frontier workers.

Children residing in Luxembourg are eligible for family allowance merely by virtue of residence, while for certain children, part of frontier workers’ household and on their charge, the latter are not eligible for such allowance.

The ECJ analyses first the legal grounds:

  • a family allowance as the case at issue, represents a social security benefit, notably a family benefit, in the sense of Art 3.1(j) Regulation 883/2004, and a frontier worker fails under the scope of Art 2.1 the said regulation. It follows that Regulation 883/2004 is applicable to the case at issue
  • Regulation 883/2004 and Art 7(2) Regulation 492/2011 can be applied in conjunction, and consequently, the questions referred must be addressed on grounds of both regulations

As regards Regulation 492/2011:

  • it was established that a family allowance as the case at issue, represents a social advantage in the sense of Art 7(2) of the said regulation
  • pursuant to settled ECJ case law, family members of frontier workers are indirect beneficiaries of the equality of treatment provided for by Art 7(2) Regulation 492/2011
  • in the meaning of the said article, children of the spouse or registered partner of a frontier worker, may benefit indirectly from social advantages, if they are on the latter charge
  • the Court has already held that the concept of family member of a frontier worker, in the meaning of Art 7(2) Regulation 492/2011 (i.e. family member that could be indirectly eligible for equality of treatment), is equivalent to the same concept in the sense of Art 2(2) Directive 2004/38

It follows that pursuant to Art 7(2) Regulation 492/2011, read in conjunction with Art 2(2) Directive 2004/38, the case at issue represents an indirect discrimination.

An indirect discrimination must be justified by a legitimate objective and must not go beyond what is necessary to attain that objective.

Or, as the case at issue:

  • the national legislation does not confer any personal right to children of non-resident workers, and consequently such an objective cannot justify indirect discrimination
  • as regards the unreasonable burden for the Luxembourg family benefits system, provided that such an objective could be considered as legitimate, the indirect discrimination is neither appropriate, nor necessary to attain that objective

To that extent, the Court emphasises that by disregarding the relevance of a common household and/or mainly dependence, in the context of frontier worker’ right to family allowance, the Social Security Code represents per se grounds for a wide interpretation as regards beneficiaries of such allowances.

As regards Regulation 883/2004

  • pursuant to Art 67 Regulation 883/2004, “A person shall be entitled to family benefits in accordance with the legislation of the competent Member State, including for his/her family members residing in another Member State, as if they were residing in the former Member State
  • pursuant to Art 1 (i) Regulation 883/2004, interpreted by settled ECJ case law, Member States retain the competence to define members of the family who are entitled to family benefits
  • however, Member States must exercise such competence in compliance with EU law, in particular with the provisions related to freedom of movement of workers
  • the Court has held that Article 7(2) Regulation 492/2011, “is the particular expression, in the specific area of the grant of social advantages, of the principle of equal treatment enshrined in Article 45(2) TFEU, and must be accorded the same interpretation as that provision” (Depesme e.a., C‑401/15 à C‑403/15, EU:C:2016:955, paragraph 35)
  • or, having regard to the present ruling partial conclusion, Article 7(2) Regulation 492/2011, precludes national legislations from providing for the exclusion of the child of a spouse, from the definition of family members for which a frontier worker is eligible to receive family allowance

Having regard to the above considerations, the ECJ concludes that Art 1(i) Regulation 883/2004 ,read in conjunction with Art 7(2) Regulation 492/2011 and Art 2(2) Directive 2004/38, must be interpreted as precluding national legislations from providing for an indirect discrimination against frontier workers, such as the case at issue.

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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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