The European Court of Justice has declared a German regulation restricting child benefit payments for newcomers from other EU countries to be inadmissible. The judges of the highest European court ruled on Monday that claims in the first three months of residence may not be made dependent on income from gainful employment.

The child benefit in question does not represent a social assistance benefit in the sense of possible exception provisions, since it does not serve to ensure subsistence, but to balance family expenses, the Court explained.

Since EU law does not provide for an exception to the principle of equal treatment of nationals and nationals of another Member State with regard to such family benefits, Union law opposes the unequal treatment introduced by the German legislature.

The German regulation aims to avoid an influx of nationals from other member states, which could lead to an inappropriate recourse to the German social security system, the ECJ noted. However, that requirement does not apply to German nationals returning from a stay in another Member State.

As a restriction, the judges only emphasized that the newcomers can only invoke equal treatment if they have actually established their “habitual residence” in Germany during the first three months in question. A temporary stay is therefore not sufficient.

The background to the ECJ decision is the case of a Bulgarian woman whose application for child benefit for her three children in Germany was rejected by the Lower Saxony-Bremen Family Benefits Office of the Federal Employment Agency.