Judgment;Summary — ECLI:EU:C:2020:25
Date: 2020-01-22
Language of the case: German
Court formation: Tenth Chamber
Subject matter: Citizenship of the Union;Right of establishment;Principles, objectives and tasks of the Treaties;Freedom to provide services;Free movement of workers
Procedure: Reference for a preliminary ruling
Origin: Austria

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Translation C-32/19 — 1 
Case C-32/19 
Request for a preliminary ruling 
Date lodged: 
18 January 2019 
Referring court: 
Oberster Gerichtshof (Austria) 
Date of the decision to refer: 
19 December 2018 
Applicant and appellant on a point of law: 
AT 
Defendant and respondent in the appeal on a point of law: 
Pensionsversicherungsanstalt 
  
The Oberster Gerichtshof (Supreme Court, Austria), sitting as the court dealing 
with appeals on points of law (‘Revision’) in matters of employment and welfare 
law [...], in the welfare-law dispute between the applicant, AT [...], and the 
defendant, the Pensionsversicherungsanstalt (Pension Insurance Institution) [...], 
regarding the compensatory supplement (‘Ausgleichszulage’), in relation to the 
appeal on a point of law brought by the applicant against the judgment of 23 July 
2018 [...] of the Oberlandesgericht Graz (Higher Regional Court, Graz), sitting as 
the appellate court in labour and social security law cases, by which the judgment 
of the Landesgericht für Zivilrechtssachen Graz (Regional Court for Civil Matters, 
Graz), sitting as a court in labour and social security law cases, of 12 February 
2018 [...] was confirmed, has made the following 
O r d e r 
A. The following questions are referred to the Court of Justice of the European 
Union [Or. 2] for a preliminary ruling: 
EN 
REQUEST FOR A PRELIMINARY RULING OF 19. 12. 2018 — CASE C-32/19 
 
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1. Is Article 17(1)(a) of Directive 2004/38/EC of the European Parliament and 
of the Council of 29 April 2004 on the right of citizens of the Union and their 
family members to move and reside freely within the territory of the Member 
States, amending Regulation (EEC) No 1612/68 and repealing Directives 
64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 
90/364/EEC, 90/365/EEC and 93/96/EEC (Union Citizens Directive or Free 
Movement Directive) to be interpreted as meaning that workers who, at the time 
when they stop working, have reached the age laid down by the law of the State of 
employment for entitlement to an old age pension must have been working in the 
State of employment for at least the preceding 12 months and must have resided in 
the State of employment continuously for at least three years in order to acquire 
the right of permanent residence before completion of a five-year residence 
period? 
2. If Question 1 is answered in the negative: 
Do workers have the right of permanent residence pursuant to the first alternative 
in Article 17(1)(a) of the Union Citizens Directive if they take up employment in 
another Member State at a point in time at which it is foreseeable that they will be 
able to engage in their employment for only a relatively short period of time 
before they reach the statutory retirement age and, because of low income, will in 
any event be dependent on the host Member State’s social assistance after they 
stop working? 
B. The proceedings relating to the appeal on a point of law are stayed pending 
the preliminary ruling. [Or. 3] 
G r o u n d s: 
I. Facts and subject matter of the proceedings: 
The applicant, who was born on 28 January 1950, is a Romanian citizen. He 
reached the Austrian statutory retirement age of 65 on 28 January 2015. He 
receives an Austrian old-age pension of EUR 26.73 per month and a Romanian 
pension equivalent to approximately EUR 204 per month. He initially worked in 
Romania as a teacher in a primary school and then worked in a state-owned 
enterprise. He worked as a self-employed sculptor since 2010. Following the 
death of his wife (2012), he moved in with his daughter, who has lived in Austria 
since 2000. He has resided in Austria continuously since 21 August 2013. He 
worked in his son-in-law’s tobacconist for 12 hours per week from 1 October 
2013 until his retirement on 31 August 2015. His monthly salary, paid in cash, 
was approximately EUR 450. From 1 April 2016 until 1 February 2017, he 
worked in the tobacconist again, which had been taken over by his daughter in the 
meantime. According to his employment contract, his working hours were 20 
hours per week and his gross monthly salary was approximately EUR 800. 
However, the applicant worked less than the 20 hours per week agreed in the 
employment contract. His working hours were only slightly higher than what they 
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were during his previous period of employment, until August 2015. He was 
therefore registered for 20 hours per week only for the purpose of obtaining a 
registration certificate as an employee — which was issued by the Austrian 
authorities on 10 August 2016 — pursuant to Paragraph 51(1).1 of the Austrian 
Niederlassungs- und Aufenthaltsgesetz (Law on establishment and residence; ‘the 
NAG’). 
In dispute is the question whether the applicant is entitled to a right of permanent 
residence pursuant to Article 17(1)(a) of the Union Citizens Directive. It is not 
disputed, however, that [Or. 4], as an economically inactive Union citizen at least 
since the end of the second employment relationship, the applicant does not have 
sufficient resources within the meaning of Article 7(1)(a) and (b) of the Union 
Citizens Directive. It is also not disputed that the applicant had not yet resided in 
Austria continuously for five years as at the date relevant under Austrian law 
(Paragraph 223(1) of the Allgemeines Sozialversicherungsgesetz (General Law on 
social security, [ASVG]), 1 March 2017. 
II. Bases in EU law: 
The provisions of the Union Citizens Directive read, in extract, as follows: 
‘Article 16 
General rule for Union citizens and their family members 
1. Union citizens who have resided legally for a continuous period of five years 
in the host Member State shall have the right of permanent residence there. This 
right shall not be subject to the conditions provided for in Chapter III. (…) 
Article 17 
Exemptions for persons no longer working in the host Member State and their 
family members 
1. By way of derogation from Article 16, the right of permanent residence in 
the host Member State shall be enjoyed before completion of a continuous period 
of five years of residence by: 
(a) workers or self-employed persons who, at the time they stop working, have 
reached the age laid down by the law of that Member State for entitlement to 
an old age pension or workers who cease paid employment to take early 
retirement, provided that they have been working in that Member State 
[Or. 5] for at least the preceding twelve months and have resided there 
continuously for more than three years. 
If the law of the host Member State does not grant the right to an old age 
pension to certain categories of self-employed persons, the age condition 
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shall be deemed to have been met once the person concerned has reached the 
age of 60; 
(b) workers or self-employed persons who have resided continuously in the host 
Member State for more than two years and stop working there as a result of 
permanent incapacity to work. 
If such incapacity is the result of an accident at work or an occupational 
disease entitling the person concerned to a benefit payable in full or in part 
by an institution in the host Member State, no condition shall be imposed as 
to length of residence; 
(c) workers or self-employed persons who, after three years of continuous 
employment and residence in the host Member State, work in an employed 
or self-employed capacity in another Member State, while retaining their 
place of residence in the host Member State, to which they return, as a rule, 
each day or at least once a week. 
For the purposes of entitlement to the rights referred to in points (a) and (b), 
periods of employment spent in the Member State in which the person 
concerned was working shall be regarded as having been spent in the host 
Member State. (…) 
2. The conditions as to length of residence and employment laid down in point 
(a) of paragraph 1 and the condition as to length of residence laid down in point 
(b) [Or. 6] of paragraph 1 shall not apply if the worker’s or the self-employed 
person’s spouse or partner as referred to in point 2(b) of Article 2 is a national of 
the host Member State or has lost the nationality of that Member State by 
marriage to that worker or self-employed person.’ 
III. National law: 
Paragraph 53a (‘Permanent resident certificate of EEA nationals’) of the 
applicable version of the Niederlassungs- und Aufenthaltsgesetz (Law on 
establishment and residence; ‘the NAG’) reads, in extract: 
‘(1) EEA nationals who are entitled to the right of residence under EU law 
(Paragraphs 51 and 52) shall acquire the right of residence after residing legally 
for a continuous period of five years in federal territory, irrespective of whether 
the conditions laid down in Paragraphs 51 and 52 continue to be fulfilled. A 
document certifying their permanent residence shall be issued without delay upon 
application, after verification of the duration of residence. (…) 
(3) By way of derogation from subparagraph 1, EEA nationals shall, pursuant to 
Paragraph 51(1)(1), acquire the right of permanent residence before completion of 
the five-year period if 
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1. at the time when they stop working, they have reached the statutory 
retirement age or are workers who cease paid employment to take early 
retirement, provided that they have been working in federal territory for at least 
the preceding twelve months and have resided in federal territory continuously for 
more than three years; 
2. they have resided continuously in federal territory for more than two years 
and stopped working there as a result of permanent incapacity to work, whereby 
the conditions as to length of residence shall not apply if such incapacity is the 
result of an [Or. 7] accident at work or an occupational disease entitling the 
person concerned to a pension payable in full or in part by an Austrian pension 
insurance institution, or 
3. they were continuously employed and resident in federal territory for three 
years and then work in another Member State and retain their place of residence in 
federal territory, to which they return, as a rule, at least once a week; 
For the purposes of entitlement to the rights pursuant to points 1 and 2, periods of 
employment spent in another Member State of the European Union shall be 
regarded as periods of employment in federal territory. (…)’ 
Paragraph 292 of the applicable version of the General Law on social security 
(ASVG) reads: 
‘(1) If a pension plus any other net income accruing to a pensioner, together with 
amounts to be taken into account pursuant to Paragraph 294, fall short of the 
appropriate standard rate (Paragraph 293), the pensioner shall be entitled to a 
compensatory supplement to that pension in accordance with the provisions of this 
subsection, provided that he or she is legally and habitually resident in Austria.’ 
IV. Forms of order sought and arguments of the parties: 
On 14 February 2017, the applicant sought a compensatory supplement with effect 
from 1 March 2017. He invokes his right of permanent residence pursuant to 
Article 17(1)(a) of the Union Citizens Directive. 
The defendant Pensionsversicherungsanstalt, which contests the applicant’s legal 
residence in Austria, refused to grant the compensatory supplement. 
V. Proceedings to date: [Or. 8] 
The court of first instance (Regional Court for Civil Matters, Graz, sitting as a 
court in labour and social security law cases) dismissed the action for the grant of 
the compensatory supplement with effect from the relevant date (1 March 2017). 
According to the court, the conditions as to working for at least the preceding 
twelve months and as to residing in Austria continuously for three years also had 
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to apply in the case where the employee stopped working because he had reached 
the statutory retirement age. The applicant, it found, did not satisfy these 
conditions. 
The court of second instance (Higher Regional Court, Graz) dismissed the 
applicant’s appeal. It confirmed the interpretation of the court of first instance in 
relation to Article 17(1)(a) of the Union Citizens Directive. 
The applicant lodged an appeal on a point of law with the Oberster Gerichtshof 
(Supreme Court) [...] against that decision. He requests that he be granted a 
compensatory allowance at the statutory rate. 
In its response to the appeal on a point of law, the Pensionsversicherungsanstalt 
submits that the appeal on a point of law should be dismissed. 
VI. Grounds for the questions referred: 
The applicant’s right to have an Austrian compensatory allowance acknowledged 
depends on the legality of his residence in Austria. 
It is of decisive importance whether the temporal conditions in the last clause of 
Article 17(1)(a) of the Union Citizens Directive also apply to workers or self-
employed persons who, at the time when they stop working, have already reached 
the statutory retirement age of the host Member State. If this is the case, the 
applicant will not be entitled to a right of permanent residence pursuant to 
Article 17(1)(a) of the Union Citizens Directive. On 31 August 2015, when he 
gave up his employment in Austria for the first time, after reaching the statutory 
retirement age, he had indeed been employed for the preceding 12 months, but he 
had [Or. 9] not yet resided in Austria continuously for three years. When his 
second period of employment in Austria (from 1 April 2016 to 1 February 2017) 
came to an end, his residence in Austria did, admittedly, exceed three years, but 
his second employment relationship before he definitely stopped working lasted 
only 10 months. 
Pursuant to recital 19 of the Union Citizens Directive, rights of permanent 
residence should be maintained for Union citizens who are workers or self-
employed persons even before they have resided five years in the host Member 
State, as these constitute acquired rights, conferred by Regulation (EEC) 
No 1251/70 on the right of workers to remain in the territory of a Member State 
after having been employed in that State and Directive 75/34/EEC concerning the 
right of nationals of a Member State to remain in the territory of another Member 
State after having pursued therein an activity in a self-employed capacity. 
Pursuant to Article 2(1)(a) of Regulation (EEC) No 1251/70, a worker who, at the 
time of termination of his activity, had reached the age laid down by the law of a 
Member State for entitlement to an old-age pension and who had been employed 
in that State for at least the last twelve months and had resided there continuously 
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for more than three years had the right to remain permanently in the territory of a 
Member State. Article 2 of Directive 75/34/EEC governed these temporal 
conditions for self-employed workers. The Union Citizens Directive combines the 
rules for a right of permanent residence for workers and self-employed persons 
before completion of a period of five years of residence in Article 17. This could 
explain the wording in Article 17(1)(a). It is questionable whether a distinction is 
to be made between those who retire at the statutory retirement age and those who 
take early retirement. [Or. 10] 
Both groups of people are entitled to an old-age pension. 
The interpretation of Article 17(1)(a) of the Union Citizens Directive sought by 
the applicant ultimately contradicts the objectives in Article 17(1)(b) of the 
directive. Any worker or self-employed person who takes up employment in the 
host country shortly before reaching the statutory retirement age would have 
acquired a right of permanent residence after ceasing that activity after reaching 
the statutory retirement age, even if it is foreseeable that he will be dependent 
upon social assistance following retirement. This interpretation favours the taking 
up of short-term pseudo-employment in order to substantiate entitlement to social 
assistance — such as the Austrian compensatory supplement — after cessation of 
work. 
The referring court, however, takes the view that the wording of Article 17(1)(a) 
of the Union Citizens Directive is not clear enough for ‘acte clair’ to apply. 
VII. Stay of proceedings: 
[...] Oberster Gerichtshof, 
Vienna, 19 December 2018 
[...]