ECJ Ruling on Hartz IV payments for EU foreigners

On 6 October 2020, the Grand Chamber of the ECJ ruled that a national rule which automatically excludes unemployed EU foreigners from social security benefits in all circumstances is contrary to EU law.

A Polish citizen had brought the action. He had worked in Germany for two years and then became unemployed. He then received unemployment benefits and social security benefits for his children for almost a year, but was not granted any further benefits beyond that period. The responsible authority rejected the application for a further authorisation on the grounds that it was unfounded: There was no employee status and the stay was only for the purpose of looking for work in Germany.

In its ruling, the ECJ derived an independent right of residence for the plaintiff on the basis of the children's school attendance. Although the children's right of residence and their access to schooling was originally based on the father's employee status, the children's right of residence is becoming an independent right and exists beyond the loss of his employee status. The basis for this is the right to the "same social advantages" under the regulation on freedom of movement for workers and the right to equal treatment under the regulation on coordination of social security schemes. The situation is different for persons seeking work in another Member State and whose right of residence derives exclusively from it. The host Member State may continue to withhold social assistance benefits from those persons.

The present judgment confirms the ECJ's jurisprudence on the right of EU citizens to equal social advantages and clarifies that the children's school attendance constitutes a sufficient link with the host Member State and derives an independent right of residence from this.

For Germany, the judgement means that § 7 (1) sentence 2 no. 2 letter c) SGB II must be amended. Discussions on amendments to the law on the general freedom of movement for Union citizens are also currently under way as a result of infringement proceedings against Germany.