Mr Brey and his wife, who are both of German nationality, left Germany and moved to Austria. In Germany, Mr Brey receives an invalidity pension of EUR 862.74 per month before tax, and a care allowance of EUR 225 per month. The couple has no other income or assets. The Pensionsversicherungsanstalt refused Mr Brey’s application for a compensatory supplement on the ground that, owing to his low retirement pension, Mr Brey does not have sufficient resources to establish his lawful residence in Austria. The Bezirkshauptmannschaft Deutschlandberg (first‑level Deutschlandberg administrative authority) (Austria) issued Mr Brey and his wife with an EEA citizen registration certificate.
When this case reached the Austrian Supreme Court, it decided to stay proceedings and ask the ECJ to ascertain whether EU law – in particular, Directive 2004/38 – should be interpreted as precluding national legislation, which does not allow the grant of a benefit, such as the compensatory supplement, to a national of another Member State who is not economically active, on the grounds that, despite having been issued with a certificate of residence, he does not meet the necessary requirements for obtaining the legal right to reside on the territory of the first Member State for a period of longer than three months, since such a right of residence is conditional upon that national having sufficient resources not to apply for the benefit.
As a preliminary point, it should be borne in mind that, in Skalka, the Court ruled that the compensatory supplement falls within the scope of Regulation 1408/71 and therefore constitutes a ‘special non-contributory benefit’.
It cannot be inferred from Article 70(4) of Regulation 883/2004, read in conjunction with Article 1(j) thereof, that EU law precludes national legislation, under which the right to a special non‑contributory cash benefit is conditional upon meeting the necessary requirements for obtaining a legal right of residence in the Member State concerned. Regulation 883/2004 does not set up a common scheme of social security, but allows different national social security schemes to exist and its sole objective is to ensure the coordination of those schemes.
Moreover, the Court has consistently held that there is nothing to prevent, in principle, the granting of social security benefits to Union citizens who are not economically active being made conditional upon those citizens meeting the necessary requirements for obtaining a legal right of residence in the host Member State.
A benefit such as the compensatory supplement does indeed fall within the scope of Regulation 883/2004. However, that fact cannot, in and of itself, be decisive for the purposes of interpreting Directive 2004/38. The objectives pursued by Regulation 883/2004 are different to the objectives pursued by that directive. In that regard, it should be borne in mind that Regulation 883/2004 seeks to achieve the objective set out in Article 48 TFEU by preventing the possible negative effects that the exercise of the freedom of movement for workers could have on the enjoyment, by workers and their families, of social security benefits. By contrast, although the aim of Directive 2004/38 is to facilitate and strengthen the exercise of the primary and individual right to move and reside freely within the territory of the Member States, it is also intended to set out the conditions governing the exercise of that right, which include, where residence is desired for a period of longer than three months, the condition laid down in Article 7(1)(b) of the directive that Union citizens who do not or no longer have worker status must have sufficient resources.
While Regulation 883/2004 is intended to ensure that Union citizens who have made use of the right to freedom of movement for workers retain the right to certain social security benefits granted by their Member State of origin, Directive 2004/38 allows the host Member State to impose legitimate restrictions in connection with the grant of such benefits to Union citizens who do not or no longer have worker status, so that those citizens do not become an unreasonable burden on the social assistance system of that Member State.
The concept of social assistance must be interpreted as covering all assistance introduced by the public authorities, whether at national, regional or local level, that can be claimed by an individual who does not have resources sufficient to meet his own basic needs and the needs of his family and who, by reason of that fact, may become a burden on the public finances of the host Member State during his period of residence which could have consequences for the overall level of assistance which may be granted by that State.
As regards the compensatory supplement, it is clear that that benefit may be regarded as coming under the ‘social assistance system’ of the Member State concerned. Consequently, the fact that a national of another Member State who is not economically active may be eligible, in light of his low pension, to receive that benefit could be an indication that that national does not have sufficient resources to avoid becoming an unreasonable burden on the social assistance system of the host Member State for the purposes of Article 7(1)(b) of Directive 2004/38.
However, the competent national authorities cannot draw such conclusions without first carrying out an overall assessment of the specific burden which granting that benefit would place on the national social assistance system as a whole, by reference to the personal circumstances characterising the individual situation of the person concerned. The mere fact that a national of a Member State receives social assistance is not sufficient to show that he constitutes an unreasonable burden on the social assistance system of the host Member State.
In particular, in a case such as that before the referring court, it is important that the competent authorities of the host Member State are able, when examining the application of a Union citizen who is not economically active and is in Mr Brey’s position, to take into account, inter alia, the following: the amount and the regularity of the income which he receives; the fact that those factors have led those authorities to issue him with a certificate of residence; and the period during which the benefit applied for is likely to be granted to him. In addition, in order to ascertain more precisely the extent of the burden which that grant would place on the national social assistance system, it may be relevant, as the Commission argued at the hearing, to determine the proportion of the beneficiaries of that benefit who are Union citizens in receipt of a retirement pension in another Member State.