Accordingly, that concept 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. It follows that a compensatory supplement intended to augment a retirement pension may be regarded as coming under the ‘social assistance system’ of the Member State concerned. That benefit, which is intended to ensure a minimum means of subsistence for its recipient where his pension is insufficient, is funded in full by the public authorities, without any contribution being made by insured persons.

That concept must be defined, not by reference to formal criteria, but by reference to the objective pursued by Article 7(1)(b) of Directive 2004/38, which is to allow the host Member State to impose legitimate restrictions in connection with the grant of social security 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 system’ as used in Article 7(1)(b) of Directive 2004/38 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States cannot be confined to those social assistance benefits which, pursuant to Article 3(5)(a) of Regulation No 883/2004 on the coordination of social security systems, do not fall within the scope of that regulation.

EU law — in particular, as it results from Article 7(1)(b), Article 8(4) and Article 24(1) and (2) of Directive 2004/38 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States — must be interpreted as precluding national legislation which, even as regards the period following the first three months of residence, automatically — whatever the circumstances — bars the grant of a benefit, such as the compensatory supplement intended to augment a retirement pension, to a national of another Member State who is not economically active, on the grounds that, despite having been issued with a registration certificate, 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 obtaining that right of residence is conditional upon that national having sufficient resources not to apply for the benefit.

It is true that the fact that a national of another Member State who is not economically active may be eligible 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 that 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.

By making the right of residence for a period of longer than three months conditional upon the person concerned not becoming an ‘unreasonable’ burden on the social assistance ‘system’ of the host Member State, Article 7(1)(b) of Directive 2004/38 means that the competent national authorities have the power to assess, taking into account a range of factors in the light of the principle of proportionality, whether the grant of a social security benefit could place a burden on that Member State’s social assistance system as a whole.

The automatic barring by the host Member State of nationals of other Member States who are not economically active from receiving a particular social security benefit, even for the period following the first three months of residence referred to in Article 24(2) of Directive 2004/38, does not enable the competent authorities of the host Member State to carry out — in accordance with the requirements under, inter alia, Articles 7(1)(b) and 8(4) of that directive and the principle of proportionality — an overall assessment of that burden. In particular, it is important that the competent authorities are able to take into account, inter alia, the following: the amount and the regularity of the income received by the person in question; the fact that those factors have led those authorities to issue him with a registration certificate; and the period during which the benefit applied for is likely to be granted to him. In addition, in order to ascertain the extent of the burden which that grant would place on the national social assistance system, it may be relevant to determine the proportion of the beneficiaries of that benefit who are Union citizens in receipt of a retirement pension in another Member State.

(see paras 63, 64, 72, 77, 78, 80, operative part)