Opinion of the Advocate-General
1 In this case, the Tarkastuslautakunta (Social Security Review Tribunal, Finland) asks questions about the interpretation of, in particular, Articles 4(1)(h) and 73 of Regulation No 1408/71. (1)
2 The essential issue is whether a home child-care allowance (lasten kotihoidon tuki) which parents may, under provisions of national law, claim where they choose not to take up a guaranteed place in a public day-care institution is to be regarded as a family benefit within the meaning of the Regulation.
The relevant legislative provisions
Community provisions
3 The material scope of Regulation No 1408/71 is defined in Article 4. According to Article 4(1)(h), the Regulation applies to `all legislation concerning ... family benefits'. Article 4(4) provides that the Regulation does not apply to `social and medical assistance'.
4 According to the definition in Article 1(u)(i):
`the term family benefits means all benefits in kind or in cash intended to meet family expenses under the legislation provided for in Article 4(1)(h), excluding the special childbirth or adoption allowances referred to in Annex II'.
5 Article 14(1)(a) provides:
`A person employed in the territory of a Member State by an undertaking to which he is normally attached who is posted by that undertaking to the territory of another Member State to perform work there for that undertaking shall continue to be subject to the legislation of the first Member State, provided that the anticipated duration of that work does not exceed 12 months and that he is not sent to replace another person who has completed his term of posting.'
6 Article 73 provides:
`An employed or self-employed person subject to the legislation of a Member State shall be entitled, in respect of the members of his family who are residing in another Member State, to the family benefits provided for by the legislation of the former State, as if they were residing in that State, subject to the provisions of Annex VI.'
7 According to Article 75(1), family benefits are to be provided, in the cases referred to in Article 73, by the competent institution of the State to the legislation of which the employed or self-employed person is subject in accordance with the provisions administered by that institution, whether or not the natural or legal person to whom such benefits are payable is residing or staying in the territory of the competent State or in that of another Member State.
8 According to Article 4(2a), the Regulation applies `to special non-contributory benefits which are provided under legislation or schemes other than those referred to in paragraph 1 or excluded by virtue of paragraph 4, where such benefits are intended ... to provide supplementary, substitute or ancillary cover against the risks covered by the branches of social security referred to in paragraph 1(a) to (h)'.
9 Article 10a(1) provides, however, so far as is relevant for the present case that `persons to whom this Regulation applies shall be granted the special non-contributory cash benefits referred to in Article 4(2a) exclusively in the territory of the Member State in which they reside, in accordance with the legislation of that State, provided that such benefits are listed in Annex IIa'.
National provisions
10 Under the Laki lasten päivähoidosta (Law No 36/1973 on day care of children), all parents and other persons having custody have a right, for each of their children, to a place in a day-care institution from the time the entitlement to parental benefit (maternity and/or paternity benefit) expires until the child attains the age of compulsory schooling. It is incumbent upon the local authorities to arrange for sufficient day-care places to cover the needs of each municipality. (2) Under Article 11a(2) of the Law as amended, parents who choose not to claim a day-care place under Article 11a(1) as amended are entitled to an allowance under the provisions of the Laki lasten kotihoidon ja yksityisen hoidon tuesta (Law No 1128/1996 on home child-care allowance and private child-care allowance, hereinafter `the Law on home child-care allowance' or `the Law'). (3)
11 According to Article 1, the Law on home child-care allowance regulates the award of financial support aimed at enabling parents, as an alternative to day-care places arranged by the local authorities, to organise day-care for their children. The Law provides for payment of two types of allowance: home child-care allowance (lasten kotihoidon tuki) and private child-care allowance (lasten yksityisen hoidon tuki). The present case is concerned with a claim for home child-care allowance.
12 Article 2 of the Law defines home child-care allowance as an allowance, granted to parents or other persons having custody, for the purpose of arranging for day-care, which comprises care money (hoitoraha) and income-dependent care supplement (hoitolisä). Care money is paid for each child and graded according to the child's age. Care supplement is paid for one child of the family only. Full supplement is paid where the family income - adjusted by reference to the total number of children in the family - falls below a threshold laid down in Article 5 of the Law on home child-care allowance. Where the family income exceeds that threshold, the amount of care supplement is reduced accordingly.
13 Under Article 20 of the Law, the local authorities may, moreover, grant a supplementary amount (kunnallinen lisä) in addition to care money and care supplement.
14 Under Article 3(1) of the Law, applicable to home child-care allowance and private child-care allowance: `It is a condition of receiving the allowance referred to in this law that the child's parents or other persons having custody do not choose a day-care place in accordance with Article 11a(1) of the Laki lasten päivähoidosta [Law on day care of children] and that the child actually lives in Finland.'
15 Entitlement to the allowance is however not conditional upon the child being cared for by the parents or care taking place in the child's home. The allowance may thus be payable where, for example, the child is placed in private day-care or where it is cared for in the home by a person other than the parents. The allowance is generally paid to the parent, or other person having custody, caring for the child.
16 Home child-care allowance is, in accordance with Article 8 of the Law, paid out by the Kansaneläkelaitos (Social Insurance Institution). The cost incurred by the Social Insurance Institution is reimbursed, under Article 9, by the local authorities.
The facts and the questions referred
17 The facts, as set out in the order for reference, may be summarised as follows.
18 Ms Päivikki Maaheimo, the applicant in the main proceedings, is a Finnish national. She is married to a Finnish national. Having obtained parental leave, Ms Maaheimo cared for her child at home. She received, with effect from 8 January 1998, home child-care allowance pursuant to the Law on home child-care allowance. Her husband, Hannu Maaheimo, worked in Germany as a posted employee from 1 May 1998 to 30 April 1999. From 10 July 1998 to 31 March 1999 Päivikki Maaheimo stayed with her child and husband in Germany. During that period, the whole family remained subject to Finnish social security legislation.
19 By decision of 27 August 1998, the Social Insurance Institution terminated the home child-care allowance with effect from 10 August 1998 on the ground that the applicant's child was no longer living in Finland as required by Article 3(1) of the Law on home child-care allowance.
20 The applicant appealed against that decision to the Etelä-Suomen Sosiaalivakuutuslautakunta (Social Insurance Tribunal), which dismissed her appeal by decision of 1 March 1999. On 31 March 1999 the applicant appealed against that decision to the Tarkastuslautakunta, asking for the decision of the Social Insurance Tribunal to be set aside and for the Social Insurance Institution to be ordered to continue to pay the allowance.
21 Before the Tarkastuslautakunta she argued that the decision to terminate the allowance was contrary to Regulation No 1408/71. She contended, essentially, that termination of home child-care allowance on the basis of temporary residence in Germany of a person insured in Finland is a significant economic hindrance to freedom of movement and stay in the area of the European Community and as such contrary to the spirit of Regulation No 1408/71, and that home child-care allowance must be regarded as a family benefit within the meaning of Article 4 of the Regulation.
22 The Social Insurance Institution maintained, in reply to those arguments, that home child-care allowance (and private child-care allowance) must be regarded as social assistance which falls outside the scope of Regulation No 1408/71, and that the allowance may therefore be paid under the Law on home child-care allowance only for a child actually living in Finland.
23 Considering that the case before it raised issues of Community law, the Tarkastuslautakunta stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:
`(1) Is the home child-care allowance, provided for by the Laki lasten kotihoidon ja yksityisen hoidon tuesta (Law on home child-care allowance and private child-care allowance) to be regarded as a family benefit within the meaning of Article 4(1)(h) 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 amended and updated by Council Regulation (EEC) No 2001/83 of 2 June 1983 and amended by Council Regulation (EEC) No 3427/89 of 30 October 1989?
(2) If so, does Article 73 in conjunction with Article 75 of Regulation No 1408/71, having regard also to Article 10a and to the fact that the Laki lasten kotihoidon ja yksityisen hoidon tuesta (Law on home child-care allowance and private child-care allowance) is not mentioned in Annex IIa of the Regulation, impose an obligation to pay home child-care allowance in respect of the child of a worker posted temporarily to another Member State, where the residence requirement which applies under the national legislation is not satisfied and the choice - also referred to in the national legislation - between a day-care place organised by the local authorities and home child-care allowance cannot therefore be made or has not in fact been made?
(3) If not, do other provisions of Community law impose an obligation to pay home child-care allowance in the situation described in question 2?'
24 The Finnish Government and the Commission have submitted written and oral observations.
The first question
25 By its first question, concerning the material scope of Regulation No 1408/71, the national court essentially seeks to ascertain whether a home child-care allowance such as that provided for by the Law on home child-care allowance is to be regarded as a family benefit within the meaning of Article 4(1)(h) of the Regulation.
26 The Court has repeatedly held that the distinction between benefits falling within the scope of Regulation No 1408/71 and those falling outside its scope is based essentially on the constituent elements of each particular benefit, in particular its purposes and the conditions on which it is granted, and not on whether a benefit is classified as a social security benefit by national legislation. (4) In that regard, it is settled case-law that a benefit can be regarded as a social security benefit only if, first, it is granted, without any individual and discretionary assessment of personal needs, to recipients on the basis of a legally defined position and, second, it relates to one of the risks expressly listed in Article 4(1) of Regulation No 1408/71. (5)
27 More specifically, the Court held in Hoever and Zachow (6) that the child-raising allowance (Erziehungsgeld) provided for by the German Bundeserziehungsgeldgesetz (Federal Law on the grant of child-raising allowance and child-raising leave) must be regarded as a family benefit within the meaning of Regulation No 1408/71. The Court emphasised that the German allowance, which is automatically granted to persons fulfilling certain objective criteria without any individual and discretionary assessment of personal needs, is paid only where the family of the person concerned comprises one or more children; that its amount varies partly according to the age and number of the children, and also according to the parents' income; and that it is aimed at remunerating the service of bringing up a child, meeting other costs of caring for and bringing up a child and, as the case may be, mitigating the financial disadvantages entailed in giving up income from full-time employment. (7)
28 In the present case, it not disputed that the provisions relating to the grant of home child-care allowance confer a legally defined right, and that the allowance is granted automatically to persons who fulfil certain objective criteria, without any individual and discretionary assessment of personal needs. That applies, in particular, to care money (hoitoraha) and care supplement (hoitolisä) awarded pursuant to Article 2 of the Law on home child-care allowance. In that context it may be noted that while care supplement is income dependent, it is awarded to all parents who apply for it and who fulfil the objective criteria as to family income laid down in the Law.
29 There is, however, disagreement as to whether the allowance at issue relates to one of the risks listed in Article 4(1) of Regulation No 1408/71. According to the Commission, the allowance is essentially similar to the allowance at issue in Hoever and Zachow and must be regarded as a benefit intended to meet family expenses within the meaning of Article 1(u)(i). The Finnish Government resists that conclusion. It contends that the allowance at issue must be regarded as social assistance within the meaning of Article 4(4) of Regulation No 1408/71.
30 In that regard it stresses, first, that the allowance is part of a general system laid down by Finnish law which offers parents a choice between a place in a public day-care institution - which is a social service - and the payment of home child-care allowance. That system is aimed at organising the day care of children in Finland and offering parents a real choice as to how they wish to care for their children. The system is not, like the German allowance at issue in Hoever and Zachow, intended to meet family expenses by remunerating parents for caring for their children or by compensating them for lost income. Thus, award of the allowance is not conditional upon parents caring for the children themselves, ceasing to work or otherwise forgoing income.
31 The Finnish Government also points out that it is the local authority in whose area the family is resident which must provide public day-care places and which carries the cost of home child-care allowance paid to parents. Given the close connection between the provision of public day care and the award of home child-care allowance within the Finnish legislation, the two must be considered as a whole for the purposes of categorisation under Regulation No 1408/71, and the conditions on which the two are granted must be identical. Thus, since the right to a place in a public day-care institution is subject to a residence requirement, the award of the allowance must also be subject to that condition.
32 I am not convinced by those arguments.
33 It may be recalled that in Offermans (8) the Court held that `the expression "to meet family expenses" in Article 1(u)(i) of Regulation No 1408/71 is to be interpreted as referring, in particular, to a public contribution to a family's budget to alleviate the financial burdens involved in the maintenance (Unterhalt) of children'. (9) Meeting such family expenses is, as the Court stressed, `compatible with the aims mentioned in the first recital in the preamble to Regulation No 1408/71, namely improving the standard of living and conditions of employment of persons who have exercised their right to freedom of movement'. (10)
34 Article 1 of the Law on home child-care allowance states that the Law regulates the award of financial support aimed at enabling parents to organise day-care for their children. It appears from that formulation that the Law is intended to meet - and it certainly has the effect of meeting - the cost of third-party child-care (in a private crèche or by a child-minder) and, as the case may be, to mitigate the financial disadvantages suffered by a parent who gives up income from full-time employment to care for a child with a view to giving the parents economic freedom to choose the type of day care which they consider most appropriate for their children.
35 The existence of a nexus between family expenses and the allowance at issue is confirmed by the provisions of the Law on home child-care allowance governing the conditions on which it is granted. Thus, the allowance is paid only where the family of the person concerned comprises one or more children, and its amount varies according to the age and number of the children and the parents' income.
36 Moreover, family benefits within the meaning of Article 4(1)(h) of the Regulation may have more than one purpose. To fall within Article 4(1)(h) it is sufficient that one of the purposes of a benefit provided for by national law is to meet family expenses. Thus in Hughes (11) the Court found that family credit in Northern Ireland performed a dual function:
`first, ... it encourages workers who are poorly paid to continue working; and secondly, it is intended to meet family expenses, as is clear in particular from the fact that it is paid only where the claimant's family includes one or more children and from the fact that the amount of the benefit varies according to the age of the children. It is by virtue of that second function that a benefit such as family credit falls within the category of family benefits ...'. (12)
37 The fact that the allowance at issue in the present case is, as the Finnish Government stresses, contributing to the organisation of day care in Finland is therefore not sufficient to take it outside the material scope of the Regulation.
38 As to the second argument put forward by the Finnish Government, it may be acknowledged that there is a connection between the provision of public day care, which - as appears to be common ground - is a social service, and the conditions on which home child-care allowance is awarded under Finnish law. It is however clear from that legislation that parents can choose freely between a place in a public day care institution and the allowance at issue. Indeed, it appears from the explanations given at the hearing that parents are free to alternate between public day-care and home child-care allowance during the period of entitlement. Entitlement to home child-care allowance is thus - as the Commission points out - not in any way subsidiary to, or dependent upon prior application for, a place in public day-care. It is a right which exists under Finnish law, for all parents, independently of the right to a place in public day-care. In those circumstances, I cannot accept the Finnish Government's contention that the allowance at issue is an integral and entirely inseparable part of a system of social assistance. In my view, the allowance must be analysed as a separate benefit and thus, in accordance with its purpose and effect, be considered to be a benefit intended to meet family expenses within the meaning of Article 1(u)(i) of Regulation No 1408/71.
39 I conclude, for those reasons, that the Finnish home child-care allowance constitutes a family benefit within the meaning of Article 4(1)(h) of Regulation No 1408/71.
The second question
40 By its second question, the national court essentially seeks to ascertain whether the provisions of Regulation No 1408/71 preclude the application of a residence requirement as a condition for payment of home child-care allowance in respect of the children of workers posted temporarily to another Member State.
41 The answer to that question follows from Article 73 of the Regulation as interpreted in the Court's case-law.
42 Article 73 creates, as the Court has repeatedly held, (13) in favour of a worker who is subject to the legislation of a Member State other than the State in whose territory the members of his family reside, a real entitlement to the family benefits provided for by the applicable legislation. That entitlement cannot be defeated by the application of a provision of that legislation by virtue of which persons not residing in the territory of the Member State in question are not to receive family benefits. (14) It is moreover settled case-law that Article 73 is applicable to a worker who lives with his family in a Member State other than the one whose legislation is applicable to him. (15)
43 To my mind there is no doubt that that case-law should be applied to the situation of a posted worker who lives with his family for a limited period of time in a Member State other than the one in which he and his family normally reside and who - in accordance with Article 14(1)(a) of the Regulation - remains subject to the social security legislation of the latter State.
44 That interpretation is, as the Commission points out, consistent with the wording of Article 73 and with its purpose, which is, as the Court has stated, `to prevent Member States from making entitlement to, and the amount of, family benefits dependent on residence of the members of the worker's family in the Member State providing the benefits, so that Community workers are not deterred from exercising their right to freedom of movement'. (16)
45 It is moreover consistent with Article 75(1) which envisages that family benefits are to be provided, in the cases referred to in Article 73, by the competent institution of the State to the legislation of which the employed or self-employed person is subject in accordance with the provisions administered by that institution, whether or not the natural or legal person to whom such benefits are payable is residing or staying in the territory of the competent State or in that of another Member State.
46 It may be added that the Law on home child-care allowance is not mentioned in Annex IIa of the Regulation. The rules laid down in Articles 4(2a) and 10a(1) (17) of the Regulation are therefore in any event irrelevant for the present case.
The third question
47 In the light of the answer to the first question, it is not necessary for the Court to answer the third question.
Conclusion
48 I am accordingly of the opinion that the questions referred by the Tarkastuslautakunta should be answered as follows:
(1) An allowance, such as the home child-care allowance provided for by the Finnish Laki lasten kotihoidon ja yksityisen hoidon tuesta (Law on home child-care allowance and private child-care allowance), which is automatically granted to persons fulfilling certain objective criteria, without any individual and discretionary assessment of personal needs, and which is intended to meet the costs of child care, must be treated as a family benefit within the meaning of Article 4(1)(h) 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.
(2) Where an employed person is subject to the legislation of a Member State on the basis of Article 14(1)(a) of Regulation No 1408/71 as a posted worker and lives with his family in another Member State by reason of his posting, his spouse is entitled in accordance with Article 73 of the Regulation to receive family benefit such as the home child-care allowance provided for by the legislation of the first Member State.
(1) - Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, OJ English Special Edition 1971 (II), p. 416, subsequently amended on numerous occasions. The most recent codified version of that Regulation is to be found in Council Regulation (EC) No 118/97 of 2 December 1996 amending and updating Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community and Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71, OJ 1997 L 28, p. 1.
(2) - Article 11(1) and Article 11a(1).
(3) - That law replaced, with effect from August 1997, the Laki lasten kotihoidon tuesta (Law on home child-care allowance) of 1993.
(4) - See Case C-85/99 Offermans [2001] ECR I-2261, paragraph 27 of the judgment and the case-law cited there.
(5) - Ibid., paragraph 28 of the judgment.
(6) - Joined Cases C-245/94 and C-312/94 [1996] ECR I-4895.
(7) - See also Case C-85/96 Martínez Sala [1998] ECR I-2691, paragraphs 22 to 24 of the judgment, and Case C-275/96 Kuusijärvi [1998] ECR I-3419, paragraph 60.
(8) - Cited in note 5.
(9) - Paragraph 41 of the judgment. See also Case C-255/99 Humer, judgment of 5 February 2002, paragraph 31.
(10) - Paragraph 40 of the judgment.
(11) - See Case C-78/91 Hughes [1992] ECR I-4839.
(12) - Paragraphs 19 and 20 of the judgment. See also the Opinion of Advocate General Van Gerven at paragraph 6.
(13) - See Case 101/83 Brusse [1984] ECR 2223, paragraph 30 of the judgment; Kuusijärvi, cited in note 8, paragraph 68.
(14) - Ibid. See also Case 321/93 Imbernon-Martinez [1995] ECR I-2821, paragraph 22 of the judgment.
(15) - See Kuusijärvi, cited in note 8, paragraph 69 of the judgment, and the case-law cited there.
(16) - Case C-266/95 Merino García [1997] ECR I-3279, paragraph 28 of the judgment.
(17) - See above, paragraph 9.
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