The advocate general of the European Court of Justice said the state could reject applications for German unemployment benefit Hartz IV from foreigners from other EU countries to prevent abuse of the system and “welfare tourism”.
The Luxembourg court will make its ruling over the next few months, but normally follows the advocate general’s advice.
The decision was made in a high-profile case of a 24-year-old Romanian woman and her son who have lived in Germany since 2010. The woman's local job centre in Leipzig refused to give her Hartz IV, prompting her to take legal action.
Her job centre in Leipzig argued the woman, who had no qualifications or training, was not attempting to find work, and therefore was not entitled to Hartz IV.
Advocate General Melchior Wathelet agreed and said that the state could exclude benefits from foreign job seekers who were not "integrating into the labour market".
He decided that under European law EU citizens who came to another country exclusively to claim benefits, could be denied those benefits.
The EU Commission, however, had argued for the Romanian woman, stating she should be entitled to Hartz IV benefits under EU law.
The case has attracted widespread attention in Germany amid a debate about benefits being paid to immigrants from countries in eastern Europe which have joined the EU in the past decade.