61992C0065
OPINION OF ADVOCATE GENERAL
JACOBS
delivered on 28 January 1993 (
*1
)
My Lords,
1.
In this case the Cour de Cassation of Belgium has requested a preliminary ruling on the interpretation of Articles 3(1), 46 and 51 of Council 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 (in the consolidated version contained in Annex I to Council Regulation (EEC) No 2001/83 of 2 June 1983; OJ 1983 L 230, p. 6; hereafter ‘the regulation’).
2.
The respondent in the main proceedings, Mr Levatino, is the son of the late Mrs Caterina Milazzo. The facts of the case are not adequately set out by the referring court, but it appears that Mrs Milazzo, an Italian citizen resident in Belgium, was entitled to a Belgian retirement pension as an employed person from 1 October 1967 and an Italian retirement pension from 1 November 1967. In 1972 Mrs Milazzo applied to receive a guaranteed income benefit in accordance with the provisions of a Belgian statute, the Law of 1 April 1969. The purpose of that Law is to guarantee a minimum income to elderly persons who do not possess adequate resources. According to its provisions, the grant of the guaranteed income benefit is means-tested and does not depend on the completion of a particular period of insurance by the applicant. In particular, Article 4 provides that the guaranteed income benefit may only be granted after an enquiry into the resources of the applicant and that, subject to certain exceptions, any other income, irrespective of its nature and origin, of the applicant and his or her spouse is taken into account for this purpose. Article 10 states that the amount of the guaranteed income benefit is reduced by the amount of any retirement or survivor's pension or other financial benefit which the applicant or his or her spouse receives from a Belgian or foreign compulsory pension scheme.
3.
By a decision of 20 February 1975, the competent Belgian social security institution (Office National des Pensions pour Travailleurs Salariés, hereafter ‘ONPTS’) rejected Mrs Milazzo's application for a guaranteed income benefit on the ground that she was a national of a country with which Belgium had not concluded a reciprocal agreement as required by the Law of 1 April 1969. That decision was annulled by the Tribunal du Travail, Liège, in its judgment of 23 September 1975. The Tribunal du Travail based its judgment primarily on the decision of this Court in Case 1/72 Frilli v Belgium [1972] ECR 457. There the Court held, in connection with the same Law, that the guaranteed income benefit granted by legislation of general application of a Member State constitutes, as regards a migrant worker entitled to a pension in that Member State, an ‘old-age benefit’ within the meaning of Council Regulation No 3 of 3 December 1958, predecessor to Regulation No 1408/71, and that therefore the grant of such a benefit to a foreign worker cannot depend on the existence of a reciprocal agreement with the Member State of which the worker is a national.
4.
In compliance with the judgment of the Tribunal du Travail, ONPTS paid Mrs Milazzo a guaranteed income benefit with effect from 1 January 1973. In accordance with Article 10 of the Law of 1 April 1969 the amount of the guaranteed income benefit was calculated taking into consideration the amount of the retirement pensions to which Mrs Milazzo was entitled. The amount of her guaranteed income benefit was initially BFR 20679 per annum. It became BFR 34160 per annum on 1 July 1973 and increased thereafter according to the provisions of Belgian legislation as shown in the detailed calculations submitted by the National Pensions Office (successor to ONPTS, hereafter ‘ONP’) in response to a question put by the Court. These calculations also confirm that, as was stated by ONP in its written observations, and contrary to certain remarks made in the written observations of the Commission, Mrs Milazzo was indeed in receipt of a Belgian pension.
5.
Following an increase in Mrs Milazzo's Italian pension as a result of indexation, ONPTS decided to recalculate the amount of her guaranteed income benefit. By a decision notified to her on 6 March 1984, Mrs Milazzo was informed that with effect from April 1984 her guaranteed income benefit would be reduced by an amount of BFR 4818 per month; it may be noted that that substantial reduction was due to an abnormally large increase in her Italian pension, itself apparently due to the effect of the Italian indexation provisions. The decision of ONPTS to reduce Mrs Milazzo's guaranteed income benefit was annulled in proceedings before the Tribunal du Travail, Liège, initiated by Mrs Milazzo and continued by the respondent after her death. The judgment of the Tribunal du Travail was in substance upheld by the Cour du Travail, Liège, in its judgment of 3 February 1989. In that judgment, the Cour du Travail held that ONPTS should pay and index-link the guaranteed income benefit in accordance with Article 46 of the regulation without taking into account adjustments to the Italian pension arising from changes in the cost of living. On that basis, it ordered ONPTS to pay the respondent arrears of guaranteed income benefit between 1 April 1984 and 26 August 1984, the date of Mrs Milazzo's death. ONP challenged the decision of the Cour du Travail before the Cour de Cassation which has referred the following question to the Court of Justice:
‘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?’
6.
It should be noted that the version of the regulation applicable at the material time was that contained in Annex I of Council Regulation (EEC) No 2001/83 of 2 June 1983. Subsequent amendments made to the regulation and, in particular, the substantial amendments made by Council Regulation (EEC) No 1247/92 of 30 April 1992 (OJ 1992 L 136, p. 1) which came into force on 1 June 1992 and Council Regulation (EEC) No 1248/92 of 30 April 1992 (OJ 1992, L 136, p. 7) which also came into force on 1 June 1992 are not applicable in the present proceedings.
7.
Article 3(1) of the regulation provides as follows:
‘Subject to the special provisions of this Regulation, persons resident in the territory of one of the Member States to whom this Regulation applies shall be subject to the same obligations and enjoy the same benefits under the legislation of any Member State as the nationals of that State.’
8.
Articles 46 and 51 belong to Chapter 3 of Title III of the regulation which contains special provisions relating to ‘old-age and death (pensions)’ (Articles 44-51). Article 44 contains the general provisions for the award of benefits when an employed or self-employed person has been subject to the legislation of two or more Member States. Article 44(1) and (2) provide as follows:
‘1.
The rights to benefits of an employed or self-employed person who has been subject to the legislation of two or more Member States ... shall be determined in accordance with the provisions of this chapter.
2.
... when a claim for the award of a benefit is lodged, such award must be made having regard to all the legislations to which the employed or self-employed person has been subject. Exception shall be made to this rule if the person concerned expressly asks for postponement of the award of old-age benefits to which he would be entitled under the legislation of one or more Member States.’
Article 45(1) provides as follows:
‘The competent institution of a Member State whose legislation makes the acquisition, retention or recovery of the right to benefits conditional upon the completion of periods of insurance or residence shall take into account, to the extent necessary, periods of insurance or residence completed under the legislation of any Member State as if they were periods completed under the legislation which it administers.’
9.
Article 46 lays down rules for the calculation of benefits. Article 46(1) provides that, where a claimant fulfils the conditions laid down by national law of a Member State for entitlement to benefit without it being necessary to have recourse to the periods of insurance or residence completed by the claimant under the legislation of any other Member State, the competent institution of that Member State must calculate the amount of benefit under the provisions of its national law. It must also calculate the amount of benefit which would be obtained by applying the principles of aggregation and apportionment laid down in Article 46(2)(a) and (b). Of the two amounts so calculated, only the higher is to be taken into consideration.
10.
Article 46(2) and (3) provide as follows:
‘2.
Where an employed or self-employed person has been subject to the legislation of a Member State and where the conditions for entitlement to benefits are not satisfied unless account is taken of the provisions of Article 45 ..., the competent institution of that Member State shall apply the following rules:
(a)
the institution shall calculate the theoretical amount of benefit that the person concerned could claim if all the periods of insurance or residence completed under the legislation of the Member States to which the employed or self-employed person has been subject had been completed in the Member State in question and under the legislation administered by it on the date the benefit is awarded. If, under that legislation, the amount of the benefit does not depend on the length of the periods completed then that amount shall be taken as the theoretical amount referred to in this subparagraph;
(b)
the institution shall then establish the actual amount of the benefit on the basis of the theoretical amount referred to in the preceding paragraph, and in the ratio which the length of the periods of insurance or residence completed before the risk materializes under the legislation administered by that institution bears to the total length of the periods of insurance and residence completed under the legislations of all the Member States concerned before the risk materialized;
...
3.
The person concerned shall be entitled to the total sum of the benefits calculated in accordance with the provisions of paragraphs 1 and 2, within the limit of the highest theoretical amount of benefits calculated according to paragraph 2(a).
Where the amount referred to in the preceding subparagraph is exceeded, any institution applying paragraph 1 shall adjust its benefit by an amount corresponding to the proportion which the amount of the benefit concerned bears to the total of the benefits determined in accordance with the provisions of paragraph 1.’
11.
Finally, Article 51 provides as follows:
‘1.
If, by reason of an increase in the cost of living or changes in the level of wages or salaries or other reasons for adjustment, the benefits of the States concerned are altered by a fixed percentage or amount, such percentage or amount must be applied directly to the benefits determined under the provisions of Article 46, without the need for a recalculation in accordance with the provisions of that Article.
2.
On the other hand, if the method of determining or the rules for calculating benefits should be altered, a recalculation shall be carried out in accordance with the provisions of Article 46.’
12.
The question referred by the national court raises in substance two separate questions. First, it raises the question whether a benefit such as the guaranteed income benefit provided for by the Law of 1 April 1969 falls within the scope of Articles 46 and 51 of the regulation. Secondly, it raises the issue whether, in the event of the first question being answered in the affirmative, Article 51 requires that a guaranteed income benefit which is paid to a person who is also entided to a pension from another Member State must not be reduced on account of increases in that other pension due to indexation, even though that may lead to a more favourable treatment of a migrant worker vis-à-vis a non-migrant worker. I shall examine these two questions in turn.
13.
As far as the first question is concerned, ONP argues that in its decision in Frilli v Belgium the Court held that the guaranteed income benefit constitutes an old-age benefit only as regards the conditions for the granting of the guaranteed income benefit. According to ONP, the Court could not have envisaged that the provisions of Chapter 3 of Title III of the regulation apply in relation to the guaranteed income benefit. ONP claims that the method of calculation of the guaranteed income benefit as provided for by the Law of 1 April 1969 is incompatible with the system of aggregation and apportionment provided for in Chapter 3 of Title III of the regulation. In its view, the provisions of that Chapter lay down the rules for the determination of the right to an old-age pension when the amount of that pension depends on the length of the periods of insurance or residence completed by the claimant under the legislation of more than one Member State or when the claimant has been subject successively or alternately to the legislation of more than one Member State. By contrast, under the Law of 1 April 1969, the right to a guaranteed income benefit does not depend on the completion of a particular period of insurance or residence but solely on the financial resources of the applicant. ONP concludes that the guaranteed income benefit falls outside the scope of Article 46. Since Article 51(1) applies only to benefits determined under the provisions of Article 46, it follows, according to ONP, that it does not apply in relation to the guaranteed income benefit.
14.
In my view, these arguments are not persuasive. It must first be noted that according to Article 4(1) of the regulation, which specifies the branches of social security to which the regulation applies, old-age benefits fall within the ambit of its provisions (Article 4(1)(c)). Article 4(2) states that the regulation applies to all general and special social security schemes, whether contributory or noncontributory. By contrast, the regulation does not apply to social assistance (Article 4(4)). As stated, in its decision in Frilli v Belgium the Court held that the guaranteed income benefit, which is a noncontributory benefit of the mixed type (that is, one which presents features of both social security and social assistance), constitutes an old-age benefit within the meaning of Council Regulation No 3, which was superseded by Regulation No 1408/71. The Court stated in the first paragraph of the operative part of the judgment:
‘The “guaranteed income” granted by legislation of general application of a Member State giving old people who are resident in that State a right to a minimum pension must be considered, as regards employed ... workers within the meaning of Regulation No 3 who have a right to a pension in the same State, as an “old-age benefit” within the meaning of Article 2(1)(c) of the same regulation.’
It follows from that ruling that as regards a person in the position of Mrs Milazzo the guaranteed income benefit constitutes an old-age benefit for the purposes of the regulation. In principle, therefore, the provisions of the regulation apply to the guaranteed income benefit unless a particular provision or set of provisions makes it clear, expressly or by implication, that the guaranteed income benefit falls outside their scope.
15.
Chapter 3 of Title III of the regulation lays down provisions applicable to old-age and survivors' pensions. As the Commission points out, Article 44, which lays down the general rules for the award of benefits when an employed or self-employed person has been subject to the legislation of two or more Member States, does not provide that the provisions of that Chapter apply only to old-age benefits the amount of which is conditional on the completion of a specific period of insurance or residence by the claimant. On the contrary, the last sentence of Article 46(2)(a) expressly envisages the possibility of a benefit the amount of which does not depend on the length of the periods of insurance or residence completed being a benefit subject to the method of calculation provided for in Article 46. It follows, contrary to ONP's submissions, that a benefit such as the guaranteed income benefit falls within the scope of Chapter 3 of Title III of the regulation and, in particular, Article 46. In my view, the opposite solution would run counter not only to the letter but also to the objectives of Article 46. The case-law of the Court makes it clear that the purpose of the regulation is to promote as much as possible the free movement of workers (see e. g. Case C-227/89 Rönfeldt v Bundesversicherungsanstalt für Angestellte [1991] ECR I-323 at paragraph 24 of the judgment). If it were accepted that noncontributory benefits of the mixed type such as the guaranteed income benefit were beyond the scope of Article 46, the protection which Chapter 3 of Title III of the regulation is intended to grant to migrant workers would be substantially reduced. It would also be open to Member States to bypass the provisions of that Chapter by making use of noncontributory benefits.
16.
In my view, therefore, the guaranteed income benefit provided for by the Belgian Law of 1 April 1969 must be regarded as falling within the ambit of Article 46 of the regulation. Since Article 51 of the regulation applies to benefits determined under the provisions of Article 46, it follows that Article 51 also applies to the guaranteed income benefit.
17.
Before examining the second issue raised by the question referred by the national court, it is material to identify the effects of the applicability of Article 51 on the guaranteed income benefit. Article 51 as interpreted by the Court distinguishes between two types of cases (see, in particular, Case 7/81 Sinatra v FNROM [1982] ECR 137, Case 104/83 Cinciuolo v Union Nationale des Fédérations Mutualistes Neutres [1984] ECR 1285, Case C-85/89 Ravida v Office National des Pensions [1990] ECR I-1063, Case C-93/90 Cassamali v Office National des Pensions [1991] ECR I-1401): those cases in which the alteration in the benefits is due to the general evolution of the economic and social situation and unconnected with the personal circumstances of the beneficiary and those cases in which the alteration takes place either because of an alteration in the method of determining or the rules for calculating benefits. In the former case, Article 51(1) precludes a recalculation whereas in the latter case Article 51(2) requires a recalculation. It is clear, therefore, that Article 51(1) precludes ONP from recalculating Mrs Milazzo's guaranteed income benefit in order to take into account the increase in her Italian pension as a result of indexation.
18.
The second part of the question referred by the national court effectively asks whether the more favourable treatment of migrant workers vis-à-vis non-migrant workers such as results from the application of Article 51 in relation to the guaranteed income benefit is compatible with the principle of equal treatment provided for in Article 3(1) of the regulation, set out in paragraph 7 above.
19.
ONP argues that the payment of the guaranteed income benefit to migrant workers who are entitled to foreign pensions without taking into account increases in those pensions as a result of indexation would lead to discrimination contrary to Article 3(1) between workers only entitled to a Belgian pension and workers entitled to a pension from another Member State. This is because in the first case the indexation of the pension might lead to a reduction of the guaranteed income benefit whereas in the second case recalculation would be precluded by Article 51(1).
20.
ONP's argument cannot be accepted. By its terms, Article 3(1) of the regulation is expressed to be subject to the special provisions of the regulation. Those special provisions include Articles 46 and 51, which are plainly intended, as Article 44(1) makes clear, to apply only to persons who have been subject to the legislation of more than one Member State, and not to persons who have been subject to the legislation of only one Member State. Nor, I would add, does the interpretation of Article 51(1) which seems to me correct offend against any general principle prohibiting discrimination on grounds of nationality. It cannot be objected that that interpretation of Article 51(1) results in discrimination in that it puts the migrant worker in a more favourable position than the nationals of the host Member State, since discrimination can only arise where comparable situations are treated differently or where different situations are treated in the same way in the absence of objective justification for such treatment. Migrant and non-migrant workers, however, are not in comparable situations: see Case 22/77 FNROM v Mura [1977] ECR 1699, at paragraph 9 of the judgment. Article 3(1) of the regulation, and the prohibition of discrimination as a general principle of law, pl ainly cannot preclude a Member State from conferring the prescribed benefits on persons covered by the regulation on the ground that nationals of that Member State who are not within the scope of the regulation do not receive identical benefits. Consequently the argument based on alleged discrimination cannot affect the interpretation of Article 51.
Conclusion
21.
I am accordingly of the opinion that the question referred to the Court by the Cour de Cassation should be answered as follows:
Articles 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 must be interpreted as meaning that they apply to the award and to the recalculation of an old-age benefit paid under the legislation of a Member State which guarantees an elderly person an income regardless of the length of the insurance periods completed, such as the guaranteed income benefit provided for by the Belgian Law of 1 April 1969.
(
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)	Original language: English.