61979C0807
OPINION OF MR ADVOCATE GENERAL
WARNER
DELIVERED ON 10 JUNE 1980
My Lords,
This case comes before the Court by way of a reference for a preliminary ruling by the Sozialgericht of Augsburg. The plaintiffs in the proceedings before that Court are the five children of Mr Francesco Gravina, an Italian worker who died in the Federal Republic of Germany on 6 July 1973. The defendant is the Landesversicherungsanstalt Schwaben (which I shall call the “LVA Schwaben”). The plaintiffs claim in those proceedings payment to them of orphans' pensions with effect from the end of June 1974.
The case raises questions as to the interpretation and as to the scope of Article 78 of Council Regulation (EEC) No 1408/71.
Paragraph 1 of that Article defines the benefits to which it applies. They include orphans' pensions of the kind here in question. Paragraph 2, as amended by Council Regulation (EEC) No 2864/72, provides:
“Orphans' benefits shall be granted in accordance with the following rules, irrespective of the Member State in whose territory the orphan or the natural or legal person actually maintaining him is resident or situated;
(a)
for the orphan of a deceased worker who was subject to the legislation of one Member State only in accordance with the legislation of that State;
(b)
for the orphan of a deceased worker who was subject to the legislation of several Member States:
(i)
in accordance with the legislation of the Member State in whose territory the orphan resides provided that, taking into account where appropriate Article 79 (1) (a), a right to one of the benefits referred to in paragraph 1 is acquired under the legislation of that State, or
(ii)
in other cases in accordance with the legislation of the Member State to which the deceased worker had been subject for the longest period of time, provided that, taking into account where appropriate Article 79 (1) (a), the right to one of the benefits referred to in paragraph 1 is acquired under the legislation of that State; if no right is acquired under that legislation, the conditions for the acquisition of such right under the legislations of the other Member States shall be examined in decreasing order of the length of insurance periods or periods of residence completed under the legislation of those Member States.”
Paragraph 2 ends with a sentence that applies where the deceased worker was at the date of his death himself a pensioner. That sentence is not in point on the facts of the present case but an argument was founded upon it on behalf of the plaintiffs.
Article 79 (1), so far as here relevant, provides, putting it shortly, that benefits within Article 78 are to be provided, in accordance with the legislation determined by applying the provisions of that article, by the institution responsible for administering that legislation and at its expense; and that if that legislation makes the acquisition of a right to benefit dependent on the length of insurance periods, or the amount of the benefit dependent on the length of such periods, periods completed by the worker concerned in all Member States are to be aggregated.
Article 79 (3) is not directly in point but its content is relevant to some of the arguments that were put forward before us. It provides that the right to benefits under Article 78 shall be suspended “if the children become entitled to family benefits or family allowances under the legislation of a Member State by virtue of the pursuit of a professional or trade activity”.
Article 92 of Council Regulation (EEC) No 574/72, which lays down the procedure for implementing Regulation No 1408/71, provides so far as relevant:
“Any person to whom benefits are paid under... Article 78 of the Regulation... shall inform the institution responsible for the payment of such benefits:
—
of any change in the situation of the... orphans which might alter entitlement to benefits;
—
of any modification in the number of... orphans in respect of whom benefits are due;
—
of any transfer of residence of the... orphans;
—
of the pursuit of any professional or trade activity giving entitlement to family benefits or family allowances for such... orphans.”
The facts of the present case are these.
The late Mr Gravina worked in Italy between October 1951 and January 1961. In so doing he completed 180 weeks of contributions to the Italian pensions insurance scheme, equivalent to 42 months.
He worked in the Federal Republic of Germany from October 1961 until the date of his death, 6 July 1973, thereby completing 141 months of contributions to the German pensions insurance scheme. On 22 March 1974 the Landesversicherungsanstalt Baden (the “LVA Baden”) granted survivors' pensions to his widow and to the plaintiffs. Although this is not mentioned in the order for reference, it is common ground between the parties that those pensions were computed on the basis of the periods of insurance completed by Mr Gravina in Germany only, because the LVA Baden had not been told of his periods of insurance in Italy. It is conceded by the LVA Schwaben that (by virtue of Article 79 (1) of Regulation No 1408/71) the Italian periods should have been taken into account and that, if they had been, the pensions would have been greater.
In May 1974 the widow returned, with the plaintiffs, to live in Italy. The LVA Baden thereupon ceased payment of the pensions, as from the end of June 1974, and sent the papers to the LVA Schwaben as the appropriate liaison body. The LVA Schwaben continued payment of the widow's pension, but refused to pay orphans' pensions for the plaintiffs on the ground that, since Mr Gravina had completed insurance periods both in Italy and in Germany, and the plaintiffs now resided in Italy, they were, by virtue of Article 78 (2) (b) (i) of Regulation No 1408/71, entitled to orphans' benefits from the competent Italian institution and not from any German institution.
It appears that there has been for some years a difference of opinion between the German authorities and the Italian authorities as to the correct interpretation of Article 78 in circumstances such as those of this case. The German authorities hold that, where an orphan's country of residence changes, his rights have to be determined afresh and that there may follow a change in the institution liable for payment of benefits to him. The Italian authorities hold on the contrary that, once the institution responsible for the payment of benefits to an orphan has been determined after his parent's death in accordance with the rules laid down in Article 78, that institution remains so responsible notwithstanding any subsequent change in the orphan's residence. It seems, from what we were told on behalf of the plaintiffs, that that disagreement resulted in their receiving no benefit at all for over four years. In November 1978 the competent Italian institution, the INPS, relented and awarded them pensions with effect from August 1973 (the month following their father's death) provisionally, i.e. pending the final determination of the question which was the institution responsible for the payment of benefits to them.
Mr Gravina had not been insured in Italy for long enough for his children to become entitled to orphans' pensions there by virtue of the relevant Italian legislation alone. They were awarded their (provisional) pensions by the INPS on the basis of Article 79 (1) of Regulation No 1408/71.
Their situation is different in Germany. There Mr Gravina worked for the requisite qualifying period of 60 months. Moreover, so the Sozialgericht states in the order for reference, citing paragraph 1315 (2) of the Reichsversicherungsordnung, German law does not in the circumstances withdraw the plaintiff's rights to their German pensions by reason of their move to Italy. That was confirmed to us by Counsel for the LVA Schwaben at the hearing. I understand it to be because the move to Italy was their mother's choice, not their own. Counsel for the LVA Schwaben also told us that, under German law, each of the plaintiffs would cease to be entitled to his pension as and when he came of age, and that some of them had already done so. I see no reason to doubt that that is correct.
In the upshot it seems that, so long at all events as the plaintiffs remained resident in Germany, the pension to which each of them was entitled while a minor fell into two parts, a part to which he was entitled by virtue of German law alone, and to which under German law alone he remained entitled despite the move to Italy, and an additional part to which he was entitled by virtue of Community law, as a result of the aggregation of the periods for which his father was insured in Italy.
The pensions to which the plaintiffs were entitled in Germany were greater than those awarded to them (provisionally) by the INPS. We were told that that was because the Italian pensions were computed by reference to the remuneration earned by Mr Gravina when he last worked in Italy and that in other circumstances an Italian pension might be more advantageous. Some of Your Lordships put questions to Counsel at the hearing designed to elucidate what were the relative amounts of the German and the Italian pensions to which the plaintiffs might be entitled. The answers seemed to me inconclusive. They appeared to reveal only how much had been paid by the LVA Baden (i.e. how much the plaintiffs were entitled to under German law alone) and how much in total had been paid to the widow by the INPS on her own behalf and in respect of her children. I do not think, however, that any question that Your Lordships have to decide in this case turns on the figures.
The questions referred to the Court by the Sozialgericht of Augsburg are, in slightly abbreviated form, these:
(1)
In the event of the residence of orphans being transferred to another Member State, does Article 78 (2) of Regulation No 1408/71 enable the competent institution of the Member State to withdraw benefits that have already been duly awarded in that Member State where, if the benefits were to be awarded for the first time pursuant to Article 78 (2) of the regulation, the institution of that other Member State would be the competent institution?
(2)
If such is the case, is withdrawal justified even where entitlement to benefits within Article 78 (1) of Regulation No 1408/71 is conferred by national law alone?
I propose to deal first with the second of those questions.
It is of course well established by decisions of this Court that Article 51 of the Treaty does not empower the Council to legislate in such a way as to deprive a person of rights that he has under the law of a Member State independently of Community law. I will refer to that principle as “the Petroni principle” after the name of the leading case in the line of authorities establishing it, Case 24/75 Petroni v ONPTS [1975] 2 ECR 1149. The order for reference makes it clear that it is first and foremost because of the existence of that principle that the Sozialgericht asks its second question.
In Case 733/79 the Laterza case, in which I delivered my opinion to the First Chamber on 27 March 1980 and in which judgment is awaited, I expressed the view that, if Mr Laterza derived a right to Belgian family allowances from Belgian law alone, Article 77 (2) (b) (i) of Regulation No 1408/71 could not take that right away from him. If that is correct, and I still think it is, the same must be true here, mutatis mutandis, of Article 78 (2) (b) (i), since the two provisions are parallel, the one applying to family benefits and the other to orphans' benefits.
On behalf of the LVA Schwaben and of the Commission we were referred to Case 19/76 the Triches case [1976] 2 ECR 1243. The decision in that case turned however on an express finding that Mr Triches was not entitled to Belgian family allowances by virtue of Belgian law alone (see paragraph 15 of the judgment). Indeed the Court went out of its way in that case to reassert that “the measures taken by the Council pursuant to Article 51 must not have the effect of depriving a migrant worker of a right acquired by virtue only of the legislation of the Member State in which he has worked” (see paragraph 18 of the judgment).
Taking as I do that view on the second question, I need not, I think, deal with the other reason given by the Sozialgericht for asking it, viz. that the contrary view might give rise to doubt as to whether Article 78 was compatible with the German Constitution (the “Grundgesetz”) and in particular as to whether it infringed a right of property secured by Article 14 of that Constitution. In any case I would not have wished, on that point, to do more than express my agreement with what was said by Mr Advocate General Reischl in the opinion that he delivered on 27 March 1980 in Cases 41, 121 and 796/79, the Testa, Maggio and Vitale cases, in which also judgment is awaited.
Lest however it should be thought that I differ from what Mr Advocate General Reischl there said about the application of the Petroni principle, I must make it clear that I do not. Mr Advocate General Reischl was there considering the application of that principle in relation to Article 69 of Regulation No 1408/71, which is about the retention of the right to unemployment benefit by a person going to seek work in a Member State other than the one where he is entitled to such benefit. As Mr Advocate General Reischl pointed out, Article 69 recognizes and makes an exception to the generally accepted rule that a right to unemployment benefit is conditional on the person concerned being available for employment where the benefit is claimed. Moreover, as he also pointed out, the combined effect of Article 69 and of the German legislation that was in question in those cases was to confer on the person concerned an option. He could, in Germany, either claim the rights to which he was entitled under Article 69 or claim the rights to which he was entitled under German law alone. What he could not do was to claim both. There is some analogy there to the cases about anti-duplication provisions contained in national legislation (for instance Case 98/77 the Schaap case [1978] ECR 707 and Case 105/77 the Boerboom-Kersjes case, ibid. p. 717) where the Court has held that a person is entitled in a Member State to whichever is the greater of the benefit to which he is entitled under the legislation of that State, including any relevant anti-duplication provision, and the benefit to which he is entitled under Regulation No 1408/71.
In the present case there is no relevant option or alternative. In the Testa, Maggio and Vitale cases the option exists only in Germany. In the Schaap and Boerboom-Kersjes type of case the alternative exists only in the Member State whose legislation contains the anti-duplication provision. To say here that the plaintiffs had the choice of claiming benefits under German law alone or of claiming them under Article 78 would be to fly in the face of the authorities in this Court, of which Petroni v ONPTS is itself an example, where it has been held that a person may, whilst asserting his rights in one Member State under the law of that State alone, assert in another Member State his rights under Community law.
I should, I think, in that connexion, refer briefly to the opinion of Mr Advocate General Capotorti and to the judgment of the Second Chamber in Case 143/79 Walsh v Insurance Officer (22 May 1980, not yet reported). That case was, Your Lordships remember, about maternity benefits and in particular about the interpretation of Article 8 of Regulation No 574/72 and the validity of that article in the light of its proper interpretation. Article 8 applies where a woman “is entitled to claim maternity benefits under the legislations of two or more Member States”. Mr Advocate General Capotorti seems to have held that Article 8 was capable of reducing the rights to which a woman was entitled under the law of a Member State alone, but was none the less compatible with Article 51 of the Treaty. A cursory reading of the judgment of the Second Chamber might lead to the conclusion that it had adopted the same view. In truth however, as I understand it, the judgment proceeded on the basis that, on the proper interpretation of Article 8, the reference there to “the legislation of two or more Member States” was a reference to the combined effect of the legislation of each of those States and the relevant Community Regulations, and on the footing that in fact Mrs Walsh was entitled to maternity benefits in neither of the Member States there concerned (Ireland and the United Kingdom) by virtue of national law alone. On that footing there is of course no inconsistency between the judgment and the authorities in this Court (such as the Petroni case, Case 50/75 the Massonet case [1975] 2 ECR 1473, Case 62/76 the Strehl case [1977] 1 ECR 211 and Case 112/76 the Manzoni case [1977] 2 ECR 1647) according to which Article 51 of the Treaty does not permit the Council to legislate for the prevention of duplication of benefits by means of a reduction in the amount of a benefit to which a person is entitled by virtue of the national legislation of a Member State alone.
I would therefore, in the present case, answer the Sozialgericht's second question in the negative.
I turn to its first question, which, if I am right that the Petroni principle applies to that part of the plaintiffs' German pensions to which they are entitled under German law alone, can be relevant only to that part of them to which, at all events so long as they were resident in Germany, the plaintiffs were entitled by virtue of Community law owing to their father's periods of insurance in Italy. Your Lordships' answer to that question should put an end to the disagreement between the German and Italian authorities as to the interpretation of Article 78.
I have come to the conclusion that, on that question, the German authorities, with which the Commission agrees, are right. In the first place it seems. to me improbable that the Council should have considered a change of residence irrelevant in any circumstances, since the level of social security benefits in each Member State is to some extent adapted to conditions in that State, in particular to the cost of living and the availability of other social services there. Secondly, and much more importantly, I am impressed by the fact that, of the items of information that have to be communicated to the responsible institution by virtue of Article 92 of Regulation No 574/72, every one other than “any transfer of residence of the orphans” is clearly of a kind such as to affect their entitlement to benefits. I think it improbable that the Council inserted “any transfer of residence of the orphans” between “any modification in the number of orphans in respect of whom benefits are due” and “the pursuit of any professional or trade activity, etc.” (which would be relevant under Article 79 (3)) simply because, as was suggested on behalf of the plaintiffs, the responsible institution must know the address to which it is to send payments.
Nor do the other arguments put forward on behalf of the plaintiffs and of the Italian Government in support of the contrary view seem to me convincing.
The plaintiffs and the Italian Government both relied on a statement recorded in the minutes of the Council concerning Article 78 (2) (b) (ii) of Regulation No 1408/71. That statement, which is published in the Commission's “Practical Handbook of Social Security for Employed Persons and their Families moving within the Community” at p. 195, is in these terms:
“It is understood that the legislation under which the orphan receives benefits is determined once and for all and that after exhausting the entitlement provided by that legislation there can be no recourse to another legislation which might enable benefit to be continued.”
Such a statement has of course no legal force but, as I said in my opinion in the Laterza case, I do not think that we are required to ignore it entirely.
The plaintiffs and the Italian Government submit that, according to that statement, once the legislation under which an orphan receives benefit under Article 78 (2) (b) (ii) has been determined, no subsequent change in his residence can render a different legislation applicable. The same rule, they submit, should be applied, by analogy, to a case within Article 78 (2) (b) (i).
I do not think that that is right. Article 78 (2) (b) (ii), Your Lordships remember, applies where the deceased worker was subject to the legislation of more than one Member State and where the orphan resides in a Member State whose legislation does not (even if aggregation is applied) confer any benefit on him. In such a case Article 78 (2) (b) (ii), to put it shortly, selects as the legislation under which the orphan is to benefit that to which the deceased worker was subject for the longest period of time and under which (applying aggregation where appropriate) a benefit is conferred on the orphan. What the statement in the Council's minutes is concerned to make clear, it seems to me, is that, in such a case, once the orphan's entitlement to benefit under that legislation has been exhausted, he cannot have recourse to another Member State's legislation to which his parent was subject for a shorter period in order to continue to receive benefits, for instance where the latter legislation provides for benefits to be paid to orphans until a later age than the former. I do not read the statement as having anything to do with a change in the orphan's residence. So I do not think that it prevents a change in his residence from resulting in a change in the legislation under which he is to benefit.
As I mentioned earlier the plaintiffs also based an argument on the last sentence of Article 78. That sentence is in these terms :
“However, the legislation of the Member State applicable in respect of provision of the benefits referred to in Article 77 for a pensioner's children shall remain applicable after the death of the said pensioner in respect of the provision of the benefits to his orphans.”
That sentence appears to me to be designed to secure continuity in the payment of benefits for a worker's children where before his death he was a pensioner in receipt of family benefits in respect of them. It does not say, and cannot in my opinion be interpreted as meaning, that the legislation to which it refers is to remain applicable notwithstanding any subsequent change in their residence.
The Italian Government relied on Article 10 of Regulation No 1408/71. But that opens with the words “Save as otherwise provided in this Regulation...”. Since Article 78 provides its own code as to the pertinence of the recipient's residence in the case of orphans' benefits, the application of Article 10 is, in my opinion, excluded.
Lastly the Italian Government cited two decisions of this Court on the interpretation of Article 79 (3) of Regulation No 1408/71, namely those in Case 115/77 the Laumann case [1978] ECR 805 and in Case 100/78 the Rossi case [1979] ECR 831 (the latter of which I analysed, for what that is worth, in my opinion in the Laterza case). Article 79 (3) is not of course in point here nor, in my opinion, can one derive from those decisions any general principle relevant to the solution of the present question.
I am thus of the opinion that the Sozialgericht's first question should be answered in the affirmative, with the qualification that that answer applies only to so much (if any) of the benefits as the orphans are not entitled to by virtue of national law alone.