In July 2024, the European Commission decided to refer Germany to the Court of Justice of the European Union for failing to uphold the rights of mobile workers from other EU Member States as regards the amount of family benefits granted to them. This failure to uphold the rights of mobile workers constitutes discrimination and breaches EU law on social security coordination (Regulation (EC) No 883/2004) and on the free movement of workers (Regulation (EU) No 492/2011 and Article 45 of the Treaty on the Functioning of the European Union).
Bavaria introduced in 2018 a new scheme of family allowances for residents of Bavaria with young children (up to 3 years old). Under this scheme, EU nationals whose children reside in a Member State where the cost of living is lower than in Bavaria receive only a reduced amount of the benefit.
The Commission finds that this scheme is not compatible with EU law as it discriminates against EU mobile workers. One of the fundamental principles of the EU is that people are treated equally without any distinction based on nationality. Following this basic principle, EU mobile workers who contribute in the same way to the social security system and pay the same taxes as local workers are entitled to the same social security benefits. Therefore, EU mobile workers, whose children reside permanently in another Member State, should receive the same amount of family benefits as other workers in Bavaria.
The Commission sent a letter of formal notice to Germany in November 2021. In June 2022, the Court of Justice of the European Union ruled in case C-328/20 that the Austrian child benefit scheme, which was very similar to the one in Bavaria, was not in line with EU law. This ruling confirmed the Commission’s position. The Commission followed up with a reasoned opinion to Germany in January 2023. Since Germany’s reply did not sufficiently address the Commission’s concerns, the Commission has now decided to refer the case to the Court of Justice of the European Union.
Background
Article 45 of the Treaty on the Functioning of the European Union (TFEU) prohibits discrimination of EU citizens on the basis of their nationality in another EU Member State when it comes to access to employment and conditions of work.
This Treaty provision is further detailed in Regulation (EU) No 492/2011 on the freedom of movement for workers. Article 7(2) specifies that EU mobile workers should enjoy the same social and tax advantages as national workers. This includes family benefits.
Finally, according to Regulation (EC) No 883/2004 on the coordination of social security systems, EU mobile workers should be treated equally to nationals in the Member State where they work. They are entitled to the same amount of family benefits, including for their dependent children who reside permanently in another Member State.
More information here.
