Opinion of the Advocate-General
1. This reference for a preliminary ruling from the Tribunal du travail (Labour Court) de Mons (Belgium) is concerned with the interpretation of Regulation (EEC) No 1408/71, and more specifically Articles 46a and 46b thereof, relating to provisions on reduction and rules against overlapping, applicable to old-age and survivors' benefits.
2. This issue was raised in proceedings between Ms Insalaca and the Office national des pensions, with regard to calculation of the ceiling in respect of overlapping amounts of, firstly, Belgian old-age and survivor's pensions and, secondly, an Italian survivor's pension, which the claimant can claim as a surviving spouse.
I - Facts and main proceedings
3. On 28 October 1997, Ms Insalaca made an application to the ONP for survivor's and retirement pensions chargeable to the social security scheme for employed workers in Belgium. She was widowed in 1981, and since that date she has also received a survivor's pension payable by Italy.
4. By decision of 17 March 1998, the defendant granted the claimant a retirement pension in the amount of BEF 248 751 per annum as from 1 December 1998.
5. On 2 July 1998, the ONP recognised Ms Insalaca's right to receive a survivor's pension, in an amount which proved to be lower than that expected by the claimant. She disagreed with the calculation and appealed against this administrative decision before the Tribunal du travail de Mons.
6. In calculating the ceiling in respect of the amount of the old-age pension and the survivor's pension, the ONP took into account the rules against overlapping described in Article 52(1) of the Arrêté Royal (Royal Decree) of 21 December 1967, and Article 46c of the Regulation. This method of calculation gives rise to a reduction in Ms Insalaca's survivor's pension.
7. The claimant takes the view that Article 52(1) of the Royal Decree, as it has been applied, infringes Articles 46a and 46b of the Regulation.
II - Legal background
A - The Community legislation
8. Article 12(2) of the Regulation sets out the principle, according to which:
Save as otherwise provided in this Regulation, the provisions of the legislations of a Member State governing the reduction, suspension or withdrawal of benefits in cases of overlapping with other social security benefits or any other form of income may be invoked even where such benefits were acquired under the legislation of another Member State or where such income was acquired in the territory of another Member State.
9. Article 46 of the Regulation describes the rules applicable for the award of benefits.
10. Article 46(1) of the Regulation provides:
Where the conditions required by the legislation of a Member State for entitlement to benefits have been satisfied ..., the following rules shall apply:
(a) the competent institution shall calculate the amount of the benefit that would be due:
(i) on the one hand, only under the provisions of the legislation which it administers;
(ii) on the other hand, pursuant to paragraph 2;
...
11. Article 46(2) of the Regulation provides:
Where the conditions required by the legislation of a Member State for entitlement to benefits are satisfied only after application of Article 45 and/or Article 40(3), the following rules shall apply:
(a) the competent institution shall calculate the theoretical amount of the benefit to which the persons concerned could lay claim provided all periods of insurance and/or of residence, which have been completed under the legislation of the Member States to which the employed person or self-employed person was subject, have been completed in the State in question under the legislation which it administers on the date of the award of the benefit. If, under this legislation, the amount of the benefit is independent of the duration of the periods completed, the amount shall be regarded as being the theoretical amount referred to in this paragraph;
(b) the competent institution shall subsequently determine the actual amount of the benefit on the basis of the theoretical amount referred to in the preceding paragraph in accordance with the ratio of the duration of the periods of insurance or of residence completed before the materialisation of the risk under the legislation which it administers to the total duration of the periods of insurance and of residence completed before the materialisation of the risk under the legislations of all the Member States concerned.
12. Article 46(3) of the Regulation provides:
The person concerned shall be entitled to the highest amount calculated in accordance with paragraphs 1 and 2 from the competent institution of each Member State without prejudice to any application of the provisions concerning reduction, suspension or withdrawal provided for by the legislation under which this benefit is due.
Where that is the case, the comparison to be carried out shall relate to the amounts determined after the application of the said provisions.
13. Article 46a of the Regulation lays down general provisions relating to reduction, suspension or withdrawal applicable to benefits in respect of invalidity, old age or survivors under the legislations of the Member States.
14. Article 46a(1) of the Regulation defines overlapping of benefits of the same kind:
... overlapping of benefits of the same kind shall have the following meaning: all overlapping of benefits in respect of invalidity, old age and survivors calculated or provided on the basis of periods of insurance and/or residence completed by one and the same person.
15. Article 46a(2) of the Regulation defines overlapping of benefits of different kinds:
... overlapping of benefits of different kinds means all overlapping of benefits that cannot be regarded as being of the same kind within the meaning of paragraph 1.
16. Article 46a(3) of the Regulation specifies the rules applicable for the application of provisions on reduction, suspension or withdrawal laid down by the legislation of a Member State in the case of overlapping of a benefit in respect of invalidity, old age or survivors with a benefit of the same kind or a benefit of a different kind:
The following rules shall be applicable for the application of provisions on reduction, suspension or withdrawal laid down by the legislation of a Member State in the case of overlapping of a benefit in respect of invalidity, old age or survivors with a benefit of the same kind or a benefit of a different kind or with other income:
(a) account shall be taken of the benefits acquired under the legislation of another Member State or of other income acquired in another Member State only where the legislation of the first Member State provides for the taking into account of benefits or income acquired abroad;
(b) account shall be taken of the amount of benefits to be granted by another Member State before deduction of taxes, social security contributions and other individual levies or deductions;
(c) no account shall be taken of the amount of benefits acquired under the legislation of another Member State which are awarded on the basis of voluntary insurance or continued optional insurance;
(d) where provisions on reduction, suspension or withdrawal are applicable under the legislation of only one Member State on account of the fact that the person concerned receives benefits of a similar or different kind payable under the legislation of other Member States or other income acquired within the territory of other Member States, the benefit payable under the legislation of the first Member State may be reduced only within the limit of the amount of the benefits payable under the legislation or the income acquired within the territory of other Member States.
17. Article 46b of the Regulation contains special provisions applicable in the case of overlapping of benefits of the same kind under the legislation of two or more Member States:
1. The provisions on reduction, suspension or withdrawal laid down by the legislation of a Member State shall not be applicable to a benefit calculated in accordance with Article 46(2).
...
B - The Belgian legislation
18. Article 52(1) of the Royal Decree authorises, up to a certain ceiling in respect of the amount, overlapping of old-age and survivors' pensions.
Survivors' pensions granted under the legislation of another Member State are to be taken into account in calculating the ceiling in respect of the amount of old-age and survivors' pensions.
19. Article 52(1) of the Royal Decree describes a mechanism to limit overlapping.
20. The first subparagraph of this article deals with the situation where the surviving spouse can claim both a survivor's pension under the pension scheme for employed workers and one or more retirement pensions ... [T]he survivor's pension may be aggregated with the said retirement pensions only up to a sum equal to 110% of the amount of the survivor's pension which would have been awarded to the surviving spouse for a complete contributions record.
21. The second subparagraph of the same article governs the situation where the surviving spouse mentioned in the first subparagraph can also claim one or more survivor's pensions. It lays down a complex rule according to which the survivor's pension may not be greater than the difference between, first, 110% of the amount of the survivor's pension for a complete contributions record, and, secondly, the total of the amounts of the retirement pensions ... and an amount equal to the survivor's pension of an employed worker for a complete contributions record, multiplied by the fraction or the sum of the fractions which express the amount of the survivors' pensions in the other pension schemes excluding the scheme for self-employed workers.
III - The questions
22. Since the Tribunal du travail de Mons found that the main proceedings require an interpretation of Community law, it decided to stay proceedings and refer the following questions to the Court for a preliminary ruling:
(1) Does the national rule governing the calculation of a survivor's pension and establishing a restriction of the ceiling in respect of overlapping of old-age and survivors' pensions where the surviving spouse can claim a survivor's pension payable by another Member State constitute a provision on reduction within the meaning of Articles 46a and 46b of Regulation No 1408/71 of 14 June 1971?
(2) If so, must Articles 46a and 46b be interpreted as authorising the national institution which applies the provision against overlapping to take account of the survivor's pension granted under the scheme of another Member State in order to reduce the ceiling in respect of overlapping of old-age and survivors' pensions provided for by national legislation?
23. In this reference for a preliminary ruling, the question which arises is whether a national rule against overlapping, intended to reduce the ceiling in respect of overlapping of old-age and survivors' pensions, on the ground of the existence of a survivor's pension granted to the surviving spouse under the scheme of another Member State, is a provision on reduction within the meaning of Articles 46a and 46b of the Regulation and whether, if so, those articles allow the taking into account a benefit from another Member State to have the effect of reducing the ceiling in respect of the amount of benefits which the person concerned is entitled to claim in the Member State where he was employed.
IV - Legal analysis
A - Classification as a provision on reduction of benefit (first question submitted for a preliminary ruling)
24. In its first question, the referring court is essentially asking whether a national rule limiting the ceiling in respect of overlapping of the old-age pension and the survivor's pension, on the ground that the surviving spouse receives a survivor's pension payable by another Member State, constitutes a provision on reduction of benefit within the meaning of the Regulation.
25. The concept of provision on reduction of benefit has been defined by case-law of the Court.
26. In its judgment in Conti the Court held that [a] national rule must be regarded as a provision for reduction of benefit if the calculation which it requires has the effect of reducing the amount of the pension which the person concerned may claim because he receives a benefit from another Member State.
27. Under the terms of this definition, the concept of provision on reduction of benefit contains, for our purposes, two main conditions.
28. The first condition concerns the requirement of an extraneous element. The benefits to which the person concerned is entitled must be covered by the legal systems of two or more Member States.
29. The second condition relates to the intention of the national rule on calculation. Its chief consequence must be a reduction in the amount of the pension granted to the recipient.
30. In respect of the first condition, my observation is that Article 52(1) of the Royal Decree raises some difficulties of interpretation.
31. This provision contains two subparagraphs. The first subparagraph applies when the recipient is entitled to a survivor's pension and to more than one retirement pension. The second subparagraph covers the situation where the person concerned can claim more than one survivor's pension.
32. From the documents available in this case, I note that the defendant is applying the second subparagraph of the provision to Ms Insalaca, to the detriment of the first subparagraph. The defendant justifies this choice on the basis of the existence of two survivor's pensions, which call for the application of the second subparagraph of Article 52(1) of the Royal Decree. However, this provision does not explicitly state that it is intended to apply to benefits of an external nature, that is, benefits paid on the basis of the legal systems of other Member States. This lack of clarity in the terms used may have led to divergences of interpretation by the parties to the proceedings.
33. The Commission initially objected to the interpretation put forward by the claimant. It took the view that the second subparagraph of Article 52(1) of the Royal Decree did not apply to benefits of an external nature.
34. The claimant submitted that this provision applied equally to external and domestic benefits.
35. On the day of the hearing, the Commission altered its position and eventually adopted a broad interpretation of Article 52(1) of the Royal Decree.
36. The referring court does not seem to harbour any doubts as to the interpretation to be given to Article 52(1) of the Royal Decree. At no time does the court challenge the fact that the defendant has taken into account a pension of an external nature, namely the Italian survivor's pension, in calculating the ceiling in respect of the authorised amount. It takes the view that the defendant acted correctly in applying the second subparagraph, and not the first subparagraph, of the article.
37. It should be borne in mind that the Court has no jurisdiction to interpret national law and that it is for the national court alone to determine the precise scope of national laws, regulations or administrative provisions.
38. If, as the national court considers, the defendant was entitled to take the Italian survivor's benefit into account in calculating the ceiling in respect of the amount granted to the claimant and has, therefore, correctly interpreted the second subparagraph of Article 52(1) of the Royal Decree, then the condition of extraneity should be viewed as completely satisfied.
39. In respect of the second condition, it should be borne in mind that the Court's definition in case-law of the concept of provision on reduction of benefit is unequivocal: a national rule against overlapping is a provision on reduction if it has the effect of reducing the amount of benefits to which the claimant is entitled.
40. It is also very clearly apparent from the order for reference that the national court recognises that the application of the calculation rule which forms part of the second subparagraph of Article 52(1) of the Royal Decree is unfavourable to the claimant. At the end of its analysis of the national provision, the court concludes that mathematically, the ceiling under the second subparagraph will be lower than that under the first subparagraph. In other words, it seems that, notwithstanding its question, the national court has no doubts about classifying the national rule against overlapping as a provision on reduction within the meaning of the case-law of the Court.
41. To the same effect, I note that none of the parties to the proceedings is challenging the consequences of the second subparagraph of Article 52(1) of the Royal Decree. All the parties agree in recognising that the application of this provision leads to a reduction in the amount of benefits granted to the recipient.
42. Therefore, the response to the question raised by the referring court should be that a national rule governing the calculation of a survivor's pension and providing for a restriction of the ceiling of the old-age pension and the survivor's pension, where the surviving spouse can claim a survivor's pension payable by another Member State, constitutes a provision on reduction of benefit within the meaning of the Regulation.
B - Reduction of the ceiling in respect of overlapping of old-age and survivors' pensions because of the existence of a survivor's pension granted under a scheme of another Member State (the second question)
43. Since the national rule is a provision on reduction of benefit within the meaning of the Regulation, the referring court is essentially asking, in the second question, whether the competent authority of the Member State of residence can take into account a survivor's pension granted on the basis of the legislation of another Member State in order to reduce the ceiling in respect of the amount of the old-age pension and the survivor's pension which the claimant may claim.
44. It should be borne in mind that the Regulation is intended to guarantee the protection of the social rights of workers who exercise their freedom of movement in the territory of Member States.
45. Article 12(2) of the Regulation lays down the principle by which provisions on reduction may be invoked even where the benefits concerned were acquired under the legislation of another Member State. However, Article 12(2) of the Regulation provides for the possibility of exceptions.
46. Article 46b(1) of the Regulation is an exception to the principle laid down by Article 12(2) of the Regulation. It provides that provisions on reduction of benefit are not to be applicable to a benefit calculated in accordance with Article 46(2) of the Regulation.
47. It should be borne in mind that Article 46b of the Regulation applies to benefits of the same kind. The Court has consistently held that social security benefits must be regarded as being of the same kind if their subject-matter and purpose, together with their method of calculation and the conditions for granting them, are identical. Article 46(2) of the Regulation relates to the award of pro rata benefits.
48. In this case, the Belgian and Italian survivor's benefits are benefits of the same kind and are subject to a calculation on the basis of Article 46(2) of the Regulation. Consequently, they fall within the context of the exception provided for by Article 46b(1) of the Regulation. The national provision on reduction provided for in the second subparagraph of Article 52(1) of the Royal Decree cannot be applied to them.
49. It should be noted that it has also been established in the case-law of the Court that, if the application of the national legislation alone proves less favourable to the recipient than application of the arrangement under Article 46 of the Regulation, the provisions of that article must be applied.
50. Calculation of the amount of benefits is carried out in three stages. First, the competent institution calculates the independent benefit in accordance with the first subparagraph of Article 46(1) of the Regulation. Second, pursuant to the second subparagraph of Article 46(1), it calculates the amount of the pro rata benefit in accordance with Article 46(2). Third, pursuant to Article 46(3) of the Regulation, the competent institution compares the independent benefit and the pro rata benefit and takes into consideration the higher of those two amounts.
51. As a consequence, it is for the competent institution to establish a comparison between the benefits which would be due under national law alone, including its rules against overlapping, and the benefits which would be due under Article 46 of the Regulation, and to ensure that the migrant worker receives the benefit which represents the higher of those two amounts.
52. It is clear from the above that Articles 46a and 46b of the Regulation preclude national legislation such as that at issue in the main proceedings, according to which the amount of a survivor's pension must be reduced because of the existence of another survivor's pension paid by another Member State, if the application of the legislation is less favourable than the application of Articles 46a and 46b of the Regulation would be.
Conclusion
53. Having regard to those considerations, I propose that the Court give the following answers to the questions referred for a preliminary ruling by the Tribunal du travail de Mons:
(1) A national rule governing the calculation of a survivor's pension and establishing a restriction of the ceiling in respect of the amount of the survivor's pension and the old-age pension, where the surviving spouse can claim a survivor's pension payable by another Member State, constitutes a provision on reduction of benefit within the meaning of Articles 46a and 46b of Regulation (EEC) No 1408/71 of the Council 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 amended and updated by Council Regulation (EEC) No 2001/83 of 2 June 1983, as amended by Council Regulation (EEC) No 1248/92 of 30 April 1992.
(2) Articles 46a and 46b of Regulation No 1408/71, as amended and updated by Regulation No 2001/83, as amended by Regulation No 1248/92, preclude the application of a national rule against overlapping, according to which the amount of a survivor's pension must be reduced because of the existence of another survivor's pension acquired under the legislation of another Member State, if the application of the rule is less favourable than the application of Articles 46a and 46b of the Regulation would be.
Full & Egal Universal Law Academy