Summary
Parties
Grounds
Decision on costs
Operative part
Keywords
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1. Social security for migrant workers ° Community provisions ° Scope ratione materiae ° Benefits paid to elderly residents of an amount varying according to their resources ° Inclusion as an old-age benefit where the benefit is paid to a person who was subject as a worker to the legislation of the State granting the benefit under whose legislation that person already receives a pension
(EEC Treaty, Art. 51; Council Regulation No 1408/71, Art. 4)
2. Social security for migrant workers ° Old-age and death insurance ° Benefits ° Benefit securing for recipients supplementary resources of an amount equal to the difference between the minimum resources guaranteed by law and part of their resources of any kind ° Adjustment in the event of an increase in a foreign pension ° Recalculation
(Council Regulation No 1408/71, Arts 46 and 51)
Summary
1. As regards an employed person or assimilated worker who has completed periods of employment in a Member State, resides in that State and is entitled to a pension there, legislative provisions in that State giving all elderly residents a legally protected right to a minimum pension come within the field of social security covered by Article 51 of the Treaty, even where such legislation might fall outside this classification as regards other categories of recipients.
Benefits granted to elderly residents whose resources do not reach the minimum guaranteed by the law and which guarantee to their recipients supplementary resources of an amount equal to the difference between that minimum and part of the resources of any kind available to them must therefore be regarded as "old-age benefits" within the meaning of Regulation No 1408/71.
2. The provisions of Article 51(1) of Regulation 1408/71, according to which a recalculation of benefits in accordance with Article 46 of the regulation should not be carried out where the alteration which affects one of the benefits results from events unconnected with the worker' s personal circumstances and is the consequence of the evolution of the economic and social situation, cannot be applied to an old-age benefit which, whilst aiming to secure a minimum income for its recipients, is of a differential nature and whose amount varies, by its nature, in accordance with the evolution of the amount of the guaranteed minimum income, which is regularly re-assessed, and the resources of the person concerned.
The result of the application of that provision would be, on the one hand, that the increase of the resources of the person concerned resulting from the increase in a pension paid to him by virtue of rights acquired in another Member State would not be taken into account and that he would systematically receive an amount of resources exceeding the minimum income guaranteed by law and, on the other, that it would not merely put the migrant worker at an advantage but would alter the purpose of the benefit and disrupt the scheme of the national legislation.
Consequently, the provisions of Article 51(2) should be applied to the determination and adjustment of the amount of a benefit designed to secure a guaranteed minimum income paid to a worker who has been in employment in a Member State, resides in that State and receives a retirement pension from that State and a retirement pension from another Member State. As a result of the application of that provision, the benefit should be recalculated in the event of an alteration of the amount of the guaranteed income or of the recipient' s resources.
Parties
In Case C-65/92,
REFERENCE to the Court under Article 177 of the EEC Treaty by the Belgian Cour de Cassation (Third Chamber) for a preliminary ruling in the proceedings pending before that court between
Office National des Pensions (ONP)
and
Raffaele Levatino
on the interpretation of Articles 46 and 51 of Council Regulation (EEC) No 1408/71 of 14 March 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (as codified by Council Regulation (EEC) No 2001/83 of 2 June 1983, OJ 1983 L 230, p. 6),
THE COURT (Fifth Chamber),
composed of: G.C. Rodríguez Iglesias, President of the Chamber, R. Joliet, J.C. Moitinho de Almeida, F. Grévisse and D.A.O. Edward, Judges,
Advocate General: F.G. Jacobs,
Registrar: H.A. Ruehl, Principal Administrator,
after considering the written observations submitted on behalf of:
° the Office National des Pensions, by R. Masyn, General Administrator,
° Mr Levatino, by Jules Raskin, of the Liège Bar,
° the Commission of the European Communities, by Dimitrios Gouloussis, Legal Adviser, and Marie Wolfcarius, of its Legal Service, acting as Agents,
having regard to the Report for the Hearing,
after hearing oral argument from the Office National des Pensions, represented by J.P. Lheureux, Administration Secretary, Mr Levatino and the Commission of the European Communities, at the hearing on 17 December 1992,
after hearing the Opinion of the Advocate General at the sitting on 28 January 1993,
gives the following
Judgment
Grounds
1 By order of 10 February 1992, which was received at the Court on 4 March 1992, the Belgian Cour de Cassation (Court of Cassation) referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Articles 3, 46 and 51 of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, as codified by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6, hereinafter "the Regulation").
2 That question was raised in proceedings between the Office National des Pensions (hereinafter "the ONP"), the competent Belgian authority with regard to the payment of old-age benefits, and Mr Levatino, who has succeeded to the rights of his mother, Mrs Milazzo, in the main proceedings.
3 It appears from the case file that Mrs Milazzo, an Italian national, was resident in Belgium. She had been receiving an employed person' s retirement pension in Belgium since 1 October 1967 and a retirement pension in Italy since 1 November 1967.
4 In addition, since 1 January 1973 she had been receiving the guaranteed income for elderly persons provided for by the Belgian Law of 1 April 1969, as amended, (hereinafter "the guaranteed income").
5 The guaranteed income is a benefit guaranteeing its recipients supplementary resources equal to the difference between the minimum resources guaranteed by the Law and a proportion of the resources of any kind which they may have available to them.
6 It is granted to any person residing in Belgium over 65 years of age in the case of a man or over 60 years of age in the case of a woman whose resources fall below the minimum guaranteed by the Law.
7 Under the Belgian Law, in the version resulting from the Law of 8 August 1980, which was in force at the date when the decision which gave rise to the main proceedings was taken, the payment of that benefit to a foreign national was, however, conditional upon either the existence of a reciprocal agreement between the State of the foreign national and Belgium or his being in receipt of an employed person' s retirement pension granted in Belgium. The foreign national must also have resided in Belgium for at least five years preceding the date of first entitlement.
8 According to Article 10 of the Law:
"Retirement and survivors' pensions and all other advantages granted to the applicant or his spouse pursuant to a compulsory Belgian pension scheme introduced by or pursuant to a law ... or pursuant to a foreign compulsory pension scheme ... shall be deducted from the amount of the guaranteed income.
Furthermore, for the purposes of the application of this article, only the amount actually paid shall be taken into account ..."
9 Pursuant to those provisions, the Caisse de Pension de Retraite et de Survie, which the ONP succeeded in 1987, reduced the guaranteed income paid to Mrs Milazzo with effect from 1 April 1984 in order to take account of the last known amount of her foreign pension. That decision was notified to Mrs Milazzo on 6 March 1984.
10 Mrs Milazzo challenged that decision in the Tribunal du Travail (Employment Tribunal), Liège, on the ground that Article 51 of the Regulation precluded any recalculation of the guaranteed income in order to take account of the revalorization of her Italian pension, which was linked to the evolution of the cost of living.
11 By judgment of 16 September 1987, the Tribunal du Travail found in the plaintiff' s favour and ordered the ONP to pay Mr Levatino, her successor, the arrears of the guaranteed income due to Mrs Milazzo for the period 1 April 1984 to 26 August 1984, the date of Mrs Milazzo' s decease, "without effecting any deduction whatsoever on the ground that the original plaintiff had been in receipt of a foreign pension".
12 The ONP appealed to the Cour du Travail (Employment Court), Liège, against that judgment on the ground that Article 51 of the Regulation was not applicable to the recalculation of the guaranteed income, because it related only to benefits paid in accordance with Article 46 of the Regulation and the guaranteed income was not so paid.
13 By judgment of 3 February 1989, the Cour du Travail rejected that argument and confirmed that the ONP should be ordered to pay Mr Levatino the arrears of the guaranteed income due to Mrs Milazzo for the period 1 April 1984 to 26 August 1984 "without taking account of changes in the Italian pension resulting from inflation and consequently from the increase in the index".
14 The ONP appealed against that judgment to the Belgian Cour de Cassation. It argued essentially that Articles 46 and 51 of the Regulation were not applicable to the calculation of the guaranteed income and that their application might prove contrary to the principle of equal treatment enshrined in Article 3(1) of the Regulation.
15 Considering that the dispute raised questions relating to the interpretation of Community law, the Cour de Cassation stayed the proceedings and referred the following question to the Court for a preliminary ruling:
"Must Articles 46 and 51 of Regulation (EEC) No 1408/71 be interpreted as meaning that they apply where an old-age benefit paid under the legislation of one Member State overlaps with a benefit supplementing an employed person' s old-age benefit which guarantees an elderly person an income regardless of the length of the insurance periods and is paid under the legislation of another Member State, even if such application has the effect of conferring an advantage on a migrant worker in comparison with a non-migrant worker, although Article 3(1) of the said regulation provides that all nationals of Member States should be treated equally?"
16 Reference is made to the Report for the Hearing for a fuller account of the facts of the main proceedings, the applicable legislation, the course of the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.
17 In the question referred for a preliminary ruling, the national court asks whether Articles 46 and 51 of the Regulation are applicable to the determination and adjustment of the amount of a benefit such as the guaranteed income which is paid to a worker who has been employed in a Member State, resides in that State and receives a retirement pension from that State and a retirement pension from another Member State, even where the application of those provisions may confer an advantage on a migrant worker in comparison with a non-migrant worker.
18 The provisions of Article 46 of the Regulation relate to the calculation of old-age benefits and the provisions of Article 51 lay down the circumstances in which benefits "determined under the provisions of Article 46" must be increased or recalculated.
19 Article 51 itself is made up of two paragraphs. Article 51(1) provides that if the benefits of the States concerned are altered by a fixed percentage or amount to take account of an increase in the cost of living or changes in the level of wages or salaries or other reasons for adjustment, such percentage or amount must be applied directly to the amount of the benefits without the need for a recalculation in accordance with the provisions of Article 46. However, Article 51(2) provides that a recalculation is to be carried out in accordance with Article 46 if the method of determining or the rules for calculating the benefits should be altered.
20 In a reference for a preliminary ruling arising out of a dispute concerning precisely the application of the income guaranteed to elderly persons as provided for by the Belgium Law of 1 April 1969, the Court held in Case 1/72 Frilli v Belgian State [1972] ECR 457, paragraph 18, that as regards a wage-earner or assimilated worker who has completed periods of employment in a Member State, resides in that State and is entitled to a pension there, the legislative provisions giving all elderly residents a legally protected right to a minimum pension are provisions, which as regards these workers, come within the field of social security covered by Article 51 of the Treaty and within the regulations adopted in application of that article, even where such legislation might fall outside this classification as regards other categories of recipients.
21 A benefit such as the one at issue in the main proceedings must therefore be regarded as an "old-age benefit" within the meaning of the Regulation. In this case, the beneficiary' s rights must, according to Article 44 of the Regulation, be determined in accordance with the provisions of Chapter 3 of Title III of the Regulation, that is to say, in particular, in accordance with the provisions of Articles 46 and 51.
22 The ONP argues that the provisions of Article 46 are not applicable to a benefit such as the guaranteed income, which is a non-contributory benefit the amount of which depends only on the beneficiary' s resources.
23 The ONP' s argument cannot be accepted.
24 The provisions of the Regulation disclose an intention on the part of the Community legislator to include non-contributory old-age benefits, such as the guaranteed income, within the scope of Article 46.
25 First, Article 4(2) of the Regulation expressly provides that it is to apply to contributory and non-contributory schemes relating to old-age benefits.
26 Secondly, Article 46(2)(a) contains specific provisions for determining the so-called "theoretical" amount of non-contributory benefits.
27 Therefore, in the absence of any express provision to the contrary, Article 46 is applicable to the payment of social benefits such as the guaranteed income.
28 Since Article 51 of the Regulation relates, according to its very wording, to the adjustment of benefits determined "under the provisions of Article 46", its provisions are, in principle, also applicable to benefits such as the guaranteed income.
29 However, a benefit such as the guaranteed income has special characteristics. Consequently, it is necessary to determine whether, as a result of their content, the provisions of Article 51 are compatible with those characteristics and whether their application would not result in disruption of the national legislation which is referred to in the judgment in Frilli.
30 As the Court has consistently held (see Case C-227/89 Roenfeldt v Bundesversicherungsanstalt fuer Angestellte [1991] ECR I-323, paragraph 12) the sole purpose of the Regulation is to secure coordination as between national social security legislation, which leaves in being their differences, and it cannot have the effect of altering national legislation.
31 The Court held, inter alia, in Frilli (paragraphs 20 and 21) that, if the difficulties which might occur as a result of the application of the Community legislation to benefits such as the guaranteed income did not adversely affect the right and duty of courts and tribunals to ensure that migrant workers received protection wherever this proved to be possible, that protection could and should be ensured only in so far as it did not lead to disruption of the system set up by the national legislation in question.
32 Accordingly, it is necessary in the first place to consider whether the provisions of Article 51(1) of the Regulation may be applied where an old-age benefit such as the guaranteed income is at issue.
33 As the Court has consistently held (see in particular Case C-93/90 Cassamali v Office National des Pensions [1990] ECR I-1401, paragraphs 15 and 16), Article 51(1) must be interpreted as meaning that, in order to reduce the administrative burden which a fresh examination of the worker' s situation following every alteration of benefits would represent, it excludes a recalculation of benefits in accordance with Article 46 of the Regulation when the alteration which affects one of the benefits results from events unconnected with the worker' s personal circumstances and is the consequence of the general evolution of the economic and social situation. Only when the adjustment is due to an alteration of the method of determination or the rules for calculating a benefit by reason, inter alia, of a change in the worker' s personal circumstances is it necessary under Article 51(2) to carry out a recalculation of the old-age benefits.
34 The purpose of a benefit such as the income guaranteed to elderly persons is to offset the inadequacy of the resources of the person concerned so as to enable him to attain the minimum level of resources guaranteed by the Law, at least where he resides in the territory of the State providing the benefit. Entitlement to the benefit is not conditional on the length of insurance cover or, in the case of certain beneficiaries, on the duration of residence. Its amount, which is independent of the length of insurance cover or the duration of residence, is equal to the difference between the minimum income fixed by the national rules, on the one hand, and part of the beneficiary' s resources, including the national and foreign pensions which he receives, on the other. In view of its differential nature, the amount of this benefit varies, by its nature, in accordance with the evolution of the amount of the guaranteed income, which is regularly re-assessed, and the resources of the person concerned.
35 The result of the application of Article 51(1) would, according to the case-law of the Court, be that the increase in the resources of the person concerned as a result of the increase in his foreign pension would not be taken into account and that he would systematically receive an amount of resources which would exceed ° and, over time, significantly exceed ° the minimum income guaranteed by the Law.
36 The application of the provisions of Article 51(1) in this way would not only put migrant workers at an advantage, but would alter the purpose of the guaranteed income benefit and disrupt the scheme of the national legislation in question.
37 Indeed, inasmuch as it would preclude taking account of resources which should normally be deducted from the amount of minimum income guaranteed by the Law, the application of these provisions would adversely affect the supplementary nature of a benefit whose amount varies according to the resources of the person concerned and which is designed to offset the insufficiency of those resources.
38 In this regard, a benefit such as the guaranteed income differs from old-age pensions, since the nature and manner of determination of old-age pensions are ° unlike the guaranteed income benefit ° not affected by the provisions of Article 51(1), even if this may put the migrant worker at an advantage.
39 However, although it is true that the application of the provisions of Article 51(1) may, regard being had to their purpose, mean that a migrant worker is granted an amount of benefits greater than that to which the worker is entitled under Article 46 of the Regulation, nevertheless it cannot have the effect of jeopardizing the actual purpose of the benefit paid.
40 It follows from this that the provisions of Article 51(1) of the Regulation cannot be applied to benefits such as the guaranteed income, contrary to the contentions of Mr Levatino and the Commission.
41 It is therefore necessary to consider the question of the applicability of Article 51(2) to this type of benefit.
42 Taken as a whole, provisions such as those of Articles 8 and 10 of the Belgian Law of 1 April 1969 set out to ensure that all or part of the resources of the person concerned are taken into account for the purposes of calculating the benefit. They therefore constitute rules relating to the definition of the amount of the benefit and not, as Mr Levatino and the Commission argue, provisions designed to avoid the overlapping of the guaranteed income benefit with other benefits of the same nature.
43 Accordingly, any change in the beneficiary' s resources, whatever its origin, affects the beneficiary' s personal situation vis-à-vis the applicable legislation and alters the method for determining the benefit paid to him. This is true in particular where he receives an old-age pension paid by another Member State and it is increased in order to take account of, inter alia, the increase in the cost of living, as in the main proceedings, or is recalculated.
44 Article 51(2) provides that a recalculation of the benefit is to be carried out if the method of determining or the rules for calculating benefits are altered. Those provisions apply to the guaranteed income benefit, the calculation of which has to be altered where the amount of the guaranteed income itself or the resources of the recipient change. Therefore, it is pursuant to Article 51(2) that the amount of the guaranteed income benefit must be recalculated.
45 Accordingly, unlike Article 51(1), Article 51(2) does not allow the migrant worker to receive an amount of resources substantially in excess of the minimum guaranteed by the Law in the event that the old-age benefits paid to him by another Member State are increased. It is therefore not such as to disrupt the national legislation in question and may be applied to a benefit such as the guaranteed income.
46 It follows from the foregoing that a benefit such as the income guaranteed to elderly persons which is paid to a worker who has been in employment in a Member State, resides in that State and receives a retirement pension from that State must be calculated and adjusted in accordance with Article 46 and Article 51(2) of the Regulation.
47 Lastly, it appears from the case file of the national court and in particular from the arguments of the appellant in the main proceedings that the question whether the provisions of the Regulation must be applied even if their effect would be to put the migrant worker at an advantage compared with non-migrant workers, is concerned only with the provisions of Article 51(1) of the Regulation, which were such as to put Mrs Milazzo at an advantage and on which, moreover, her successor, Mr Levatino, relied in order to contest the ONP' s reduction of the amount of the guaranteed income benefit to which she was entitled.
48 Since Article 51(1) of the Regulation is not applicable to the adjustment of a benefit such as the guaranteed income, there is no need to respond to this point.
49 Suffice it to say, in any event, that the Court held in Case 22/77 Fonds National de Retraite des Ouvriers Mineurs v Mura [1977] 1699, paragraphs 9 and 10, on the one hand, that if the application of Community provisions causes migrant workers to obtain an advantage over non-migrant workers, this is not, for all that, discriminatory, since migrant workers are not in a situation comparable to that of workers who have never left their own country and, on the other hand, that any differences which may exist to the benefit of migrant workers do not result from the interpretation of Community law but rather from the lack of any common social security system or of any harmonization of the existing national schemes, which cannot be mitigated by the mere coordination at present practised.
50 It follows that Articles 46 and 51 of the Regulation are applicable even if their effect is to place migrant workers at an advantage over non-migrant workers.
51 Consequently, the reply to the national court' s question is that Articles 46 and 51(2) of the Regulation are applicable to the determination and adjustment of the amount of a benefit such the guaranteed income paid to a worker who has been in employment in a Member State, resides in that State and receives a retirement pension from that State and a retirement pension from another Member State. Article 51(1) is not, however, applicable to the adjustment of such a benefit.
Decision on costs
Costs
52 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.
Operative part
On those grounds,
THE COURT (Fifth Chamber),
in reply to the question referred to it by the Belgian Cour de Cassation, by judgment of 10 February 1992, hereby rules:
Articles 46 and 51(2) of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, as codified by Council Regulation (EEC) No 2001/83 of 2 June 1983, are applicable to the determination and adjustment of the amount of a benefit such as the guaranteed income paid to a worker who has been in employment in a Member State, resides in that State and receives a retirement pension from that State and a retirement pension from another Member State. Article 51(1) of that regulation is not, however, applicable to the adjustment of such a benefit.
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