61986CC0313_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
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My Lords,
Mr Olivier Lenoir, a French national, is retired and entitled to a French State old-age pension . He has apparently not worked in any Member State other than France . In June 1983 he moved with his wife and two children from his home in France to Eastbourne in England .
He continues to receive his French pension, which is paid by the Caisse d' allocations familiales des Alpes Maritimes ( the "CAF "). However, by decision of 10 November 1984, the CAF stopped payments until then made under two heads, a single wage allowance (" allocation de salaire unique ") and schooling expenses allowance (" allocation de rentrée scolaire "), and demanded repayment of the amounts disbursed under those heads since the family moved to England . An appeal against that decision was rejected by the commission des recours gracieux ( Appeal Committee ) of the CAF . Mr Lenoir has further appealed to the commission de première instance de sécurité sociale des Alpes Maritimes ( Social Security First Instance Appeals Board : the "national court ").
The CAF justifies its position by reference to Article 77 of Regulation 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" ( the "Regulation "). A consolidated version of that regulation is set out in Annex I to Council Regulation No 2001/83 ( Official Journal 1983, L 230, p . 6 ).
Article 4 ( 1 ) provides that the Regulation shall apply to all legislation concerning specified branches of social security which include "( c ) old age benefits" and "( h ) family benefits ". Title III has special provisions relating to the various categories of benefits, e.g . those relating to pensions for employed persons who have been subject to the legislation of two or more Member States ( Chapter 3 ) and to family allowances and family benefits for those who are employed or unemployed . Article 77 falls in Chapter 8 "Benefits for dependent children of pensioners and for orphans ". It provides as follows :
"1 . The term 'benefits', for the purposes of this article, shall mean family allowances for persons receiving pensions for old age ... and increases or supplements to such pensions in respect of the children of such pensioners ...
2 . Benefits shall be granted in accordance with the following rules, irrespective of the Member State in whose territory the pensioner or the children are residing :
( a ) to a pensioner who draws a pension under the legislation of one Member State only, in accordance with the legislation of the Member State responsible for the pension ..."
This is reinforced by Article 79 ( 1 ) which provides that "benefits, within the meaning of Articles 77 and 78, shall be provided in accordance with the legislation determined by applying the provisions of those articles by the institution responsible for administering such legislation and at its expense as if the pensioner ... had been subject only to the legislation of the competent State ".
Article 1 contains definitions of terms used in the Regulation . Paragraph ( u ) reads :
"( u ) ( i ) '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 ) ...
( ii ) 'Family allowances' means periodical cash benefits granted exclusively by reference to the number and, where appropriate, the age of members of the family ".
Although "benefits" for the purposes of Article 77 is given a special meaning and is not the same as "family benefits" defined in Article 1 ( u ) ( i ), there is nothing in my view to suggest that "family allowances" in Article 77 should be given a meaning other than that set out in Article 1 ( u ) ( ii ).
The national court asks :
"Must Article 77 of Community Regulation No 1048/71 (( sic )) of 14 June 1971 be interpreted as entitling a person in receipt of family benefits who is a national of a Member State of the Community and resides in the territory of another Member State to payment by the social security institution of his country of origin solely of 'family allowances' and not other family benefits, in particular the allowance in respect of schooling expenses (' allocation de rentrée scolaire' ) and the supplementary family allowance (' allocation de complément familiale' )?"
Although the national court' s question refers to the supplementary family allowance, the national proceedings in fact concern the single wage allowance which was, in 1978, incorporated with other benefits into the supplementary family allowance, but which continues to be paid to those who were entitled to receive it in 1977 but do not qualify for the supplementary family allowance . That is Mr Lenoir' s position . I therefore deal only with the single wage allowance and with schooling expenses .
It seems that the disputed payments were in fact made to Mr Lenoir' s wife but by reference to their joint resources . In a letter of 4 December 1984 to the CAF which is before the Court, Mr Lenoir states that he is challenging the refusal to continue those payments and the demand for recovery on his wife' s behalf by virtue of a notarial power of attorney . No question of Mr Lenoir' s competence to bring the national proceedings seems to have arisen .
The national court takes the view that although the payments in issue would have been payable to Mr Lenoir had he resided in France, a proper interpretation of Article 77 and one in conformity with internal non-binding guidelines applied by the CAF results in his not being entitled to these payments because he now lives in another Member State . Mr Lenoir says that this interpretation is wrong; France, Italy and the Commission contend that it is a correct interpretation but Italy adds that if so then Article 77 is pro tanto invalid .
The French Government argues that the disputed payments are not "family allowances" under French or Community law . In French law, there is no special provision for dependent children of pensioners . Family benefits are payable to all social security recipients provided the appropriate conditions are met . Book V of the Social Security Code lists family benefits which include family allowances, what is now the supplementary family allowance and the schooling expenses allowance ( Article L 511-1 of the Code ). The single wage allowance is payable under Article L 522-1 to a household or person whose resources do not exceed a specified ceiling and who are responsible for children, all of whom are above the age range specified for another allowance payable in respect of young children . The schooling expenses allowance, a lump sum paid at the beginning of the school year, is payable under Article L 543-1 to families in receipt of family benefit for each child of compulsory school age; Article L 543-2 provides for financial ceilings, varying according to the number of children, above which the allowance will not be paid . France argues that these allowances do not fall within Article 1 ( u ) ( ii ) of Regulation No 1408/71 because they are not "granted exclusively by reference to the number and ... age" of the children : they are also means-tested and subject to other conditions such as enrolment at school . Although they are undoubtedly "family benefits" within the meaning of Article 1 ( u ) ( ii ), that is irrelevant to Article 77 under which the only benefits payable are family allowances properly so called .
The Commission considers that the specific payments in question were not intended to be "exported ". It refers to Article 10 ( 1 ) of the Regulation which recognizes that some payments may be withheld if the person otherwise entitled to them resides in a Member State other than the one making the payments . Thus, "save as otherwise provided in this Regulation, invalidity, old-age or survivors' cash benefits, pensions for accidents at work or occupational diseases and death grants acquired under the legislation of one or more Member States shall not be subject to any reduction, modification, suspension, withdrawal or confiscation by reason of the fact that the recipient resides in the territory of a Member State other than that in which the institution responsible for payment is situated ".
The single wage allowance, even if it would otherwise fall within the definition, it is said, is excluded because in the preparatory work for the Regulation it was proposed to exclude it as being a special family benefit, the purpose of which was to pay a spouse who stayed at home in order to look after children . It was, moreover, a payment of a kind which it was not intended to make "exportable" because of the difficulties encountered in assessing factual and financial situations in another Member State . The schooling allowance is to be put in the same category by analogy .
On the other hand, the Commission contends, the "supplementary family allowance" ( to which Mr Lenoir would not be entitled under French law because he did not have three or more children ) satisfies the definition of "family allowances" ( if it is a relevant issue ) despite the fact that it is subject to the amount of family resources since in other Member States such allowances are made subject to criteria other than the number and age of the members of the family .
I am not satisfied that the travaux préparatoires are helpful or necessary for the interpretation of Article 1 ( u ) ( ii ), not least since in some areas substantial changes were made by the Council to the Commission' s proposal . The short issue is whether in the context of the Regulation as it stands "exclusively" is given its ordinary meaning or whether some other qualifications are to be implied or may be introduced before a payment can be a "family allowance ". It is clear that in Article 1 ( u ) ( ii ) "members of the family" has to be read in the light of the definition in Article 1 ( f ) (" any person defined or recognized as a member of the family or designated as a member of the household by the legislation under which benefits are provided ...") so that to that extent a qualification is introduced . There is no other express qualification .
Does Article 77 ( 2 ) ( a ) or ( b ) in respect of the cases which they cover allow further qualifications to be introduced by national legislation so long as the starting point is the number and age of the members of the family? For example, some national legislation may introduce a means test or define the kind of schools for which a schooling allowance is applicable, once the allowance is linked to the number and age of the members of the family . If the word "exclusively" were not found in 1 ( u ) ( ii ) there would be a strong argument that it could . "Exclusively" is, however, there and it must be assumed that it was put in deliberately . The only real meaning which can be given to it is that contended for by the French Government; it follows in my opinion that if an allowance is subject to other factors it is not, under the Regulation, a family allowance payable to a pensioner living with his family in a Member State other than that from which the payment is made .
It is this somewhat remarkable result that leads the Italian Government to contend that the provision is invalid, on the basis that it is incompatible with Article 51 of the Treaty pursuant to which, inter alia, the Regulation was made .
The Commission' s reply is that this issue is not raised in the Reference and is not before the Court . Even if the Court were to consider the Regulation pro tanto invalid it cannot so declare .
It is clear that if a question of validity alone is referred to the Court, the Court can rule on the interpretation; can it do the contrary?
In Case 16/65 Schwarze v Einfuhr - und Vorratsstelle fuer Getreide und Futtermittel (( 1965 )) ECR 877, at p . 886, the Court said : "If it appears that the real purpose of the questions submitted by a national court is concerned rather with the validity of Community measures than with their interpretation, it is appropriate for the Court to inform the national court at once of its view without compelling the national court to comply with purely formal requirements which would uselessly prolong the procedure under Article 177 and would be contrary to its very nature ... This type of strict adherence to formal requirements ... would be inappropriate to the special field of judicial cooperation under Article 177 ...". I would apply, or if necessary extend, that approach in this case; it cannot be right in my view for the Court, if wholly satisfied by a party submitting observations ( and after the Community institutions have had the chance to argue to the contrary ) that the provision to be interpreted is invalid, to be confined to interpreting that invalid provision which the national court must then apply ( since it cannot itself declare it invalid as the Court' s judgment of 22 October 1987 in Case 314/85 Foto Frost v HZA Luebeck-Ost ECR 4199 establishes ). It may be that in cases of doubt, or where the Court thinks it needs further argument, it could indicate the possibility of invalidity without ruling on it . In a clear case it has in my view jurisdiction under Article 177 to rule on validity where superficially the question goes to interpretation, if the validity question is fundamental to the issue in the national proceedings . To put the national court inevitably in the position of having to make a second reference seems to me an unnecessary duplication .
Article 51 of the Treaty provides, so far as is relevant to the Italian Government' s argument :
"The Council shall, acting unanimously on a proposal from the Commission, adopt such measures in the field of social security as are necessary to provide freedom of movement for workers; to this end, it shall make arrangements to secure for migrant workers and their dependants : ...
( b ) payment of benefits to persons resident in the territories of Member States ."
The Italian Government relies on the Court' s judgment in Case 41/84 Pinna v Caisse d' allocations familiales de la Savoie (( 1986 )) ECR 1, where the Court held invalid Article 73 ( 2 ) of the Regulation on two grounds .
The first was that Article 73 created a distinction between employed persons subject to the legislation of a Member State other than France ( who were entitled under Article 73 ( 1 ) to benefits provided by the law of the host State to members of their families resident in another Member State ) and persons subject to French legislation ( who were entitled under Article 73 ( 2 ) to the family allowances provided for by the law of the State of residence of the family members ). By drawing this distinction Article 73 frustrated the aim of Article 51 of the Treaty which was to coordinate ( but not harmonize ) social security legislation .
If it were shown here that Article 77 affected only French nationals, a similar result would follow . This has not been so shown . Indeed means-tested grants are available in other Member States and it seems to follow that they are not family allowances for the purposes of the Regulation . The present article does not heighten or create disparities which exist between the Member States and it is accepted that existing disparities may have to be tolerated between the various systems of the Member States .
The second ground relied on by the Court in Pinna was that Article 73 ( 2 ) constituted covert discrimination "since the problem of members of the family residing outside France arises essentially for migrant workers ." That achieved the same result as overt discrimination based on nationality, contrary to the principle of equal treatment required by the Treaty .
Mr Lenoir was not at the material time a worker, nor as far as can be seen was he a migrant worker, nor is he being discriminated against overtly on the basis of his nationality . The provisions of Article 77, if interpreted as I think they should be interpreted, do, however, mean that if he moves to another Member State on or after retirement in France he loses certain family benefits which he would have received had he remained in France . The same result would seem to follow for a Frenchman who had been a migrant worker in another Member State and who wished to return on retirement to France . He would not be able to take with him family benefits dependent on factors other than the number and age of members of his family which, had he stayed in the Member State to the legislation of which he was subject, he would have been paid . This ultimately may be a deterrent to the migrant worker to move back or even in the first place to move away from his country of origin for the purpose of his work . It is unacceptable, says the Italian Government, if under Article 73 an employed person can have the family benefits provided for by the legislation of the Member State to whose legislation he is subject, even if the members of his family do not live with him, but if a pensioner ( living with his family ) loses family benefits under the legislation of the Member State to which he was subject, if he himself moves back to his native land .
Moreover, the exclusion from Article 77, for a pensioner, of those family benefits which are not strictly family allowances is capable, as the Italian Government contends, of breaking down social security rights which, even if expressed separately, are really part of a parcel of such rights .
So far as Article 77 limits such benefits, in respect of children of retired migrant workers wishing to return home, to family allowances, which is, I think, the correct interpretation, it impedes rather than aids the freedom of movement of workers and equal treatment and may not validly be adopted pursuant to Article 51 of the Treaty . Article 77 in my view should therefore be declared pro tanto void . It is in my opinion immaterial that Mr Lenoir was not a migrant worker and that he is the less common case of a national adversely affected by the legislation of his own Member State to which he was subject but in which State he no longer resides . The Regulation applied both to him as an employed person subject to the legislation of one Member State and to the members of his family ( Article 2 of the Regulation ).
Accordingly in my view he is entitled to rely on the invalidity of the Regulation .
It would in my opinion be right, as in Pinna, to limit the effects of such a decision, if given by the Court, to those pensioners who brought proceedings or made a claim prior to the date of the Court' s judgment in respect of claims for benefits relating to periods prior to that date and to benefits due subsequent to the date of judgment .
I would accordingly answer the question referred on the lines that Article 77 of Council Regulation No 1408/71 of 14 June 1971, as now contained in Regulation No 2001/83 of 2 June 1983, is invalid in so far as it limits entitlement to benefits in particular in respect of school expense allowances and single wage allowances to periodical cash allowances granted exclusively by reference to the number, and where appropriate, the age of members of the family of a pensioner to whom the Regulation applies .
Mr Lenoir' s costs fall to be dealt with by the national court as a step in the national proceedings . The costs of France, Italy and the Commission are not recoverable .