OPINION OF ADVOCATE GENERAL

TRSTENJAK

delivered on 18 April 2012 ( 1 )

Case C-562/10

European Commission

v

Federal Republic of Germany

‛Failure of a Member State to fulfil obligations — Article 56 TFEU — Freedom to provide services — Independent social security system to cover against the risk of reliance on care — Benefits in kind for persons reliant on care — Person reliant on care temporarily staying in another Member State — National care insurance scheme which does not provide for the reimbursement of care-related benefits in kind supplied in the Member State of stay at the same rate as for care-related benefits in kind granted in the Member State in which the person concerned is insured’

I – Introduction

1. Following the Court’s decisions in Molenaar ( 2 ) and Chamier-Glisczinski, ( 3 ) the Federal Republic of Germany’s social care insurance scheme is being examined once again for compatibility with European Union law. Introduced as compulsory insurance on 1 January 1995 by Book XI of the Social Security Code (Sozialgesetzbuch, ‘SGB XI’), ( 4 ) it covers against the risk of reliance on care. For European Union law purposes, a social care insurance scheme which grants persons insured under it cash benefits and benefits in kind is classified as a sickness benefit ( 5 ) in the case-law of the Court.

2. Once again, the subject-matter of the dispute is Paragraph 34(1)(1) of the SGB XI, pursuant to which, apart from in certain restricted exceptional cases, the entitlement to receive care-related benefits in kind under the care insurance scheme is in principle suspended for the period that the insured person is abroad.

3. The practical relevance of this restriction is considerable, since it is not unusual for German insured persons to stay abroad, with the possible consequence of being deprived of certain benefits of the German care insurance scheme whilst there.

4. First, this is significant in relation to the recently observed tendency for precisely those persons who are mostly heavily reliant on care, having regard to possibly better or more cost-effective care options, to stay permanently outside Federal territory. ( 6 )

5. Second, the question arises as to the ‘exportability’ ( 7 ) abroad of benefits under the social care insurance scheme even if German persons reliant on care only stay abroad temporarily for a holiday or for professional reasons.

6. The Court has already had several opportunities to review the rules of the social care insurance scheme from a European Union law perspective.

7. In Molenaar, ( 8 ) against the background of free movement of workers and Regulation No 1408/71, the Court decided that the German care allowance constitutes a cash benefit which the insured person must be able to avail himself of for an unlimited period even outside Germany in another Member State. ( 9 ) In the meantime, the German legislature has taken this judgment into account and consequently recognised the exportability of the care allowance to another Member State.

8. From a European Union law perspective, the position appears different in relation to care-related benefits in kind. This topic was the subject-matter of Chamier-Glisczinski, ( 10 ) which concerned the case of full in-patient care in a care home in Austria. The question whether in the light of Article 18 EC (now Article 21 TFEU) care-related benefits in kind may be claimed by German insured persons in another Member State in the same way as in Germany was answered in the negative by the Court, which cited in its reasons that the receipt of benefits in kind is determined by the law of the Member State of stay ( 11 ) and possibly less favourable treatment of the insured person in comparison to the legal position in the Member State in which the person concerned is insured had to be accepted since social insurance law is not harmonised across the European Union. ( 12 )

9. In contrast to the Chamier-Glisczinski case, the present proceedings for failure to fulfil obligations do not concern full in-patient care in a care home, but recourse to care services and care equipment for care at home for an insured person staying temporarily, for instance due to a holiday, in another Member State.

10. Since Paragraph 34(1)(1) of the SGB XI precludes recourse to the social care insurance scheme, the Commission alleges failure to fulfil obligations under Article 56 TFEU.

II – Legal context

A – European Union law

1. Regulation (EEC) No 1408/71

11. Article 22(1) 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, ( 13 ) provides that in the event of a stay outside the competent State: ‘An employed or self-employed person who satisfies the conditions of the legislation of the competent State for entitlement to benefits ..., and: (a) whose condition requires benefits in kind which become necessary on medical grounds during a stay in the territory of another Member State, taking into account the nature of the benefits and the expected length of the stay; … ... shall be entitled: (i) to benefits in kind provided on behalf of the competent institution by the institution of the place of stay or residence in accordance with the provisions of the legislation which it administers, as though he were insured with it; … (ii) to cash benefits provided by the competent institution in accordance with the provisions of the legislation which it administers. However, by agreement between the competent institution and the institution of the place of stay or residence, such benefits may be provided by the latter institution on behalf of the former, in accordance with the provisions of the legislation of the competent State. …’

12. Article 31 of Regulation No 1408/71 includes a comparable provision for a ‘Stay of a pensioner and/or members of his family in a Member State other than the State in which they reside’.

13. Article 36(1) of Regulation No 1408/71 provides: ‘Benefits in kind provided in accordance with the provisions of this chapter by the institution of one Member State on behalf of the institution of another Member State shall be fully refunded.’

2. Regulation (EC) No 883/2004

14. According its Article 90, Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems ( 14 ) replaces Regulation No 1408/71 with effect from 1 May 2010. ( 15 )

15. Article 19(1) of Regulation No 883/2004 provides that in the event of a stay outside the competent Member State: ‘Unless otherwise provided for by paragraph 2, an insured person and the members of his family staying in a Member State other than the competent Member State shall be entitled to the benefits in kind which become necessary on medical grounds during their stay, taking into account the nature of the benefits and the expected length of the stay. These benefits shall be provided on behalf of the competent institution by the institution of the place of stay, in accordance with the provisions of the legislation it applies, as though the persons concerned were insured under the said legislation.’

16. Article 27 and 35 of Regulation No 883/2004 correspond, in essence, to Article 31 and 36 of Regulation No 1408/71.

B – National law

17. The version of Paragraph 34 of the SGB XI expanded by subparagraph 1a, ( 16 ) which is applicable now, states: ‘(1) The entitlement to benefits shall be suspended: 1. for the period that the insured person is abroad. In respect of temporary stays abroad of up to six weeks in the calendar year the care allowance under Paragraph 37 or the benefits pro rata under Paragraph 38 must continue to be provided. This only applies to care-related benefits in kind if the care assistant who normally supplies the care-related benefits in kind accompanies the person reliant on care during the stay abroad, ... (1a) The entitlement to a care allowance under Paragraph 37 or a proportionate care allowance under Paragraph 38 is not suspended for insured persons reliant on care staying in a Member State of the European Union, a Contracting State to the Agreement on the European Economic Area or Switzerland. ...’

18. In relation to ‘care-related benefits in kind’, Paragraph 36(1) of the SGB XI provides: ‘For care at home, persons reliant on care are entitled to general care and domestic help as benefits in kind (care at home). ... Care at home shall be provided by appropriate care assistants who are employees either of the Pflegekasse (‘care fund’) or of out-patient care institutions which are parties to service agreements with the care fund. Care at home may also be provided as a benefit in kind by individuals who are parties to an agreement ... with the care fund. ...’

19. Paragraph 37 of the SGB XI regulates the ‘care allowance for care services arranged by the patient personally’ and provides: ‘(1) Instead of care at home, persons reliant on care may apply for a care allowance. The entitlement requires the person reliant on care to secure for himself the necessary general care and domestic help in an appropriate way using the full amount of the care allowance. …’

20. According to Paragraph 38 of the SGB XI, it is possible to choose a combination of cash benefits and benefits in kind (combined benefits). The person reliant on care is essentially bound by the decision as to what proportion of cash benefits and benefits in kind he wants to avail himself of for a period of six months. However, where there is a substantial change in circumstances it is possible to adapt the decision to the new changed care situation under Paragraph 48(1) of the SGB X, ( 17 ) for instance if the actual need or the availability of the carers change.

21. Paragraph 40 of the SGB XI governs the provision of care equipment and provides: ‘(1) Persons reliant on care shall be entitled to the provision of care equipment which contributes to making the care easier or alleviating the difficulties faced by the person reliant on care or which facilitates a more independent lifestyle for him, provided that the equipment should not be provided by health insurance or other competent authorities as a result of illness or disability. The care fund shall review the necessity for the provision of the care equipment applied for with the participation of a trained care worker or of the medical service. ... (2) … (3) The care funds shall primarily provide technical care equipment on loan in all appropriate cases. They may make their consent to this dependent upon the persons reliant on care adapting to the care equipment or having training in its use either personally or for the carer. ...’

III – Pre-litigation procedure

22. The reason for the proceedings for failure to fulfil obligations was the case of a German man who stayed with his wife, who is reliant on care, in another Member State in a spa hotel for a period of two months a year in each case. In caring for his wife abroad, he was supported by a foreign out-patient care-service and a care bed also had to be hired there. However, the social care insurance scheme only granted a care allowance in the amount of a sum which was significantly less than the value of the care-related benefits in kind which could have been claimed for a stay in Germany. The costs for the hire of the care bed were not reimbursed.

23. After the Commission became aware of this, it requested, by letter of 19 September 2007, supplementary information on the applicable statutory rules from the Federal Republic of Germany, which was provided by letter of 7 January 2008. By a further letter of 17 October 2008, the Commission then referred, inter alia, to a possible incompatibility of the rules under the social care insurance scheme, with regard to the reimbursement of costs incurred in another Member State for out-patient care, with the freedom to provide services and set a two-month time-limit for comments to be submitted. Those comments were submitted on 17 December 2008, and in those comments the Federal Republic of Germany opposed the legal opinion of the Commission. It also made further comments in further letters dated 16 July 2009 and 18 September 2009. By letter of 23 November 2009, the Commission sent the Federal Republic of Germany a reasoned opinion.

24. In answer to this opinion, the Federal Republic of Germany announced an amendment to the law in relation to continued payment of the care allowance for a stay in another Member State and maintained its interpretation of the law in other respects.

IV – Procedure before the Court and forms of order sought by the parties

25. By its application of 29 November 2010, lodged at the Court on 30 November 2010, first of all the Commission claims that the Court should: — declare that the Federal Republic of Germany has failed to fulfil its obligations under Article 56 TFEU by (1) limiting entitlement to care allowance, pursuant to Paragraph 34(1)(1) of SGB XI (Social Security Code), to a maximum of six weeks where a person reliant on care temporarily stays in another Member State; (2) not providing for, or by excluding through Paragraph 34(1)(1) SGB XI, reimbursement of care-related benefits in kind at the same rate as granted in Germany in respect of care services used by a person reliant on care staying temporarily in another Member State and supplied by a service provider established in another Member State; (3) not reimbursing costs relating to the hire of care equipment where a person reliant on care stays temporarily in another Member State, or by excluding reimbursement through Paragraph 34(1)(1) SGB XI, even where those costs would be reimbursed in Germany or the care equipment would be provided and the reimbursement would not lead to a twofold increase or other increase in the costs of the services granted in Germany; — and order the Federal Republic of Germany to pay the costs of the proceedings.

26. The Federal Republic of Germany contends that the Court should dismiss the application and order the Commission to pay the costs.

27. After the Federal Republic of Germany amended Paragraph 34 of the SGB XI in order to make it possible to receive a care allowance in another Member State for an unlimited period in future, by its pleading of 2 December 2011, the Commission withdrew its action with regard to the first claim, but maintained the remaining parts of the action.

28. The Federal Republic of Germany welcomes the withdrawal of the action, but with regard to the claims which are maintained by the Commission, persists with its application to dismiss the claims and order the applicant to pay the costs.

V – Main arguments of the parties

29. It is the Commission’s view that the rules applicable to care-related benefits in kind within the meaning of Paragraph 36 of the SGB XI and care equipment within the meaning of Paragraph 40 of the SGB XI in the event of a temporary stay in another Member State, which provide for significantly lower benefits than in the case of care received in Germany are not compatible with the freedom to provide services guaranteed by Article 56 TFEU. It submits that according to the case-law of the Court, Member States are obliged to have regard to European Union law in the course of the exercise of their powers to organise their social security systems. Article 56 TFEU requires the removal of all restrictions on the freedom to provide services even if they apply without distinction to domestic service providers and to those from other Member States, if they are liable to impede the activities of similar service providers abroad. The German rule makes it harder for individuals to avail themselves of foreign care service providers as compared to comparable German service providers. With regard to the provision of care equipment, a restriction also exists in so far as the costs of hire of such care equipment abroad are not reimbursed even if they would qualify for reimbursement in Germany.

30. It submits that there are no apparent grounds of justification for the above restrictions either. The restrictive rules go beyond what is necessary to protect the quality of the services in question or public health because they exclude reimbursement of costs incurred in another Member State independently of any quality assessment. It is also not apparent to the Commission that the above-mentioned rules are necessary in order to protect the financial balance of the care insurance scheme because in Germany higher sums would be reimbursed readily and there is also no apparent reason why persons reliant on care, who for instance only received a care allowance in Germany, should change to more cost-intensive care-related benefits in kind abroad.

31. The Commission states that the principles of the Chamier-Glisczinski judgment are not transferable to the present proceedings because on the one hand that judgment was not concerned with Article 56 TFEU and on the other hand it relates to the case of a permanent transfer of residence.

32. The Federal Republic of Germany submits with regard to reimbursement for out-patient care services under Paragraph 36 of the SGB XI that no restriction exists for the simple reason that there is no entitlement to reimbursement in Germany where persons are used who are not party to a contract with the care fund. It argues that whilst complying with secondary law requirements does not absolve a Member State from guaranteeing the freedom to provide services, nevertheless the entitlement of the socially insured person arising from secondary legislation should not be wholly disregarded when considering all the circumstances. Consequently, the division of competence between the Member States justifies not providing certain benefits abroad even if the level of benefits in the State of stay is possibly lower than that in the Member State in which the person concerned is insured.

33. However, it argues that a restriction on the freedom to provide services, if there be any, is justified. The protection of public health alone requires rules such as those at issue here because it is the aim of those rules to ensure care services at a high level. Quality assurance requires a strict assessment of the care institutions and agreements are only concluded with those persons or institutions through whom this is guaranteed. Service agreements with foreign care providers are therefore not envisaged under the law as it stands because in addition to the medical-care services, a significant criterion is also personal attention and for these purposes the language and the cultural background of the person to be cared for plays a significant role. Quality assurance measures could not be guaranteed abroad.

34. In addition, it argues that it is impossible to maintain an adequate efficient care system and to structure that system organisationally if during certain travel periods large numbers of patients have themselves cared for abroad and at the same time domestic care assistants are not fully employed. This particular aspect is also taken into account by Article 22 of Regulation No 1408/71.

35. Finally, it argues that the financial balance of the care insurance scheme is also put at risk in the event of it being possible to export care-related benefits in kind.

36. It argues that the case-law of the Court in Kohll ( 18 ) in relation to treatment costs incurred in another Member State may not be applied to the social care insurance scheme for the simple reason that there is not the risk of a gap in care; in this respect the care insurance scheme constitutes a special case as compared to health insurance. This is confirmed by the Court’s statements in theChamier-Glisczinsiki judgment, in which the area of competence which is reserved to the Member States for health services is emphasised once more. Accordingly, there is no obligation on the Member State in which the person concerned is insured to provide benefits which do not even exist in the insured person’s State of residence. By giving up the place of residence or deciding to change the place where they are staying for a longer period, a person reliant on care decides to subject himself to the rules of the State of stay.

37. Finally, it submits that a restriction on the freedom to provide services does not exist in the rule on the provision of care equipment but, on the contrary, the rule in Article 19(1) of Regulation No 883/2004 applies here in relation to the provision of benefits abroad.

VI – Legal assessment

38. Following an introductory consideration of the social care insurance scheme, I will set out first of all the subject-matter of the proceedings for failure to fulfil obligations and then the criterion to be applied. Subsequently, I will examine whether in this case a failure to fulfil obligations under Article 56 TFEU must be found to exist. Finally, I will consider the Commission’s claim for costs.

A – Main features of the social care insurance scheme

39. In so far as the main features of the social care insurance scheme in relation to out-patient care are relevant to the present proceedings and concern a temporary stay abroad, they may be summarised as follows.

40. The social care insurance scheme of the Federal Republic of Germany provides for various benefits for the benefit of persons reliant on care. In its list of benefits in the area of out-patient care, it includes options of a flat-rate ‘care allowance,’ ( 19 ) the amount of which depends on the degree of reliance on care, or specific care-related benefits in kind such as ‘care at home’. ( 20 ) In addition, care equipment may also be provided subject to certain conditions. ( 21 )

1. Care-related benefits in kind

41. Pursuant to Paragraph 36 of the SGB XI, for the purposes of care at home, persons reliant on care are entitled to general care and domestic help as a benefit in kind; the care at home must be provided by appropriate care assistants from the care fund or certain care services which are parties to agreements with the care fund. Depending on the category of reliance on care of the person reliant on care, currently monthly amounts paid by the fund are from EUR 450 to EUR 1 550. In January 2010, the relevant time of the deadline set in the reasoned opinion, the amounts paid were between EUR 440 and EUR 1 510. In the relationship between the care fund and the person reliant on care benefits in kind are provided for these purposes, for which the care fund pays the care providers direct.

42. If a person reliant on care is staying abroad, entitlements under Paragraph 36 of the SGB XI to the receipt of benefits in kind are in principle suspended for the duration of that stay under Paragraph 34(1)(1) of the SGB XI: it is possible to continue receiving care-related benefits in kind abroad merely for a period of six weeks in the calendar year if a carer who supplies the care-related benefits in kind accompanies the person reliant on care during the stay abroad. For these purposes, the carer who accompanies the person reliant on care abroad must be a care assistant who is authorised to provide care services within the meaning of Paragraph 36 of the SGB XI.

2. Care allowance

43. Alternatively, there is the possibility under Paragraph 37 of the SGB XI to apply for a care allowance instead of care-related benefits in kind in order for the person reliant on care to use that allowance to secure for himself, in an appropriate way, the general care and domestic help. This flat-rate care allowance, which is again dependent on the category of reliance on care in which the person reliant on care is placed, is currently between EUR 235 and EUR 700 and is consequently significantly below the amounts paid for care-related benefits in kind. At the relevant time of the reasoned opinion, the amounts paid were between EUR 225 and EUR 685. Under Paragraph 38 of the SGB XI, benefits in kind and care allowances may also be combined by claiming both only in part, though the person concerned is in principle bound by this decision in each case for a period of six months.

44. Even if a person reliant on care stays in a Member State of the European Union, a Contracting State to the Agreement on the European Economic Area or Switzerland, the care allowance under Paragraph 37 of the SGB XI and the proportionate care allowance under Paragraph 38 of the SGB XI continue to be paid as a flat-rate reimbursement in order to give effect to the Molenaar judgment and Paragraph 34(1a) of the SGB XI now makes this expressly clear.

3. Care equipment

45. Finally, under Paragraph 40 of the SGB XI, the person reliant on care is also entitled to the provision of care equipment which contributes to making the care easier or alleviating the difficulties faced by the person reliant on care, unless this equipment has been provided by other competent authorities.

46. This entitlement is also suspended if a person reliant on care stays abroad.

B – Subject matter of the proceedings for failure to fulfil obligations

47. Following the partial withdrawal of the action by the Commission, its complaints are directed (i) against the German rules on reimbursement in relation to care services which are ’supplied by a service provider established in another Member State’ where a person reliant on care stays temporarily in another Member State, and (ii) against the corresponding provisions on reimbursement for the hire of care equipment.

48. The action therefore merely relates to the use of benefits in kind where the insured person temporarily stays in another Member State. The fact that, in principle, foreign service providers are excluded from the benefit in kind system of the social care insurance scheme simply because they have not concluded service agreements with the care fund is not the subject of complaint. Consequently, even in German territory they could not market their services via the care fund but only offer their services directly to the persons reliant on care themselves, who would then have to cover the costs by recourse to their own financial means and, where appropriate, the care allowance.

49. The Commission also only questions the German legislation from the point of view of the freedom to provide services, without considering other aspects, such as for example Union citizenship and free movement of persons, which are possibly affected. Therefore these other aspects must not be considered further, since pursuant to Article 38(1) of the Rules of Procedure of the Court the subject-matter of the dispute is stated by the application initiating the proceedings and the Court must not rule ultra petita. ( 22 )

50. Taking these requirements as a starting point, it is necessary to consider whether and to what degree the freedom to provide services may be relevant in relation to Member States’ social security system rules.

C – Criterion to be applied in relation to freedom to provide services

51. According to the settled case-law of the Court, ( 23 ) the right to receive health care benefits in another Member State does not only come within the scope of Regulation No 1408/71 (or Regulation No 883/2004 now), ( 24 ) but it is also necessary to comply with the fundamental freedoms and in particular the freedom to provide services.

52. Accordingly, it is conceivable that as a result of the fundamental freedoms, Union citizens must be granted benefits in the area of health care which go beyond the scope of what is provided for by secondary law in the area of social security, specifically by Regulation No 1408/71 and its successor regulation. ( 25 )

53. Certain commentators have criticised this stance. In essence, it is argued that direct recourse to the fundamental freedoms is barred by the secondary legislation, which must take precedence as the criterion for the entitlement of the insured person because otherwise the balanced system of coordination of the social security systems could become imbalanced and a conflict with the legislative competence of the Member States could arise. They say it is only possible to have recourse to primary law if a rule of secondary law is invalid. ( 26 )

54. Nevertheless, this criticism from commentators has not led to a paradigm shift by the Court. However, the Court is well aware of the fragmented competences in the area of health services – and of the resulting conflict between Member States’ sovereign powers in respect of organising health services on the one hand ( 27 ) and the fundamental freedoms on the other hand – and in its settled case-law it emphasises that European Union law does not detract from the power of the Member States to organise their social security systems. In the absence of harmonisation at European Union level, it is thus for the legislation of each Member State to continue to determine the conditions for granting social security benefits. When exercising that power and generally for the purposes of organising health services, Member States must comply with European Union law, in particular the provisions on the freedom to provide services, ( 28 ) the free movement of goods, ( 29 ) and freedom of establishment. ( 30 )

55. In more specific terms, that means that in the area of health services it is necessary to comply with the fundamental freedoms, but they leave it wholly to the competence of the Member State to assess for itself the level of protection which it wishes to afford to public health and the way in which that level is to be achieved. ( 31 ) Therefore the freedom to provide services does not bring about any entitlement in principle ( 32 ) to a certain organisation of the national health care system or to the provision of a certain list of benefits.

56. Having determined the specific criterion of freedom to provide services in relation to benefits in the area of healthcare, it is necessary to examine whether the German rules, pursuant to which the export of a benefit in kind is only possible in a restricted way for insurance benefits under the care insurance scheme, infringe Article 56 TFEU.

D – Infringement of Article 56 TFEU by the restricted export of a benefit in kind under the social care insurance scheme?

1. Cross-border situations where there is a restricted export of a benefit in kind under the social care insurance scheme

57. The protective scope of the freedom to provide services is available in the present case. The present case may be distinguished in this respect from the judgment in Chamier-Glisczinski, ( 33 ) as that case involved an internal Austrian situation with regard to the benefits at issue because the person concerned had established a permanent stay in Austria and had availed herself of benefits there.

58. However, the present case concerns a recipient of services temporarily staying in another Member State and therefore a scenario in which the person providing the service and the recipient are established in different Member States. The freedom to provide services does not only encompass the case of cross-border services which the person providing the service carries out without moving from the Member State in which he is established, but also protects the recipient who as in the present case travels to another Member State in order to have a certain service provided to him there and therefore also in particular the freedom of an insured person established in a Member State to travel – as a tourist for example – to another Member State and to receive healthcare services there from a service provider established in the latter Member State, where the need for such care arises because of his state of health. ( 34 )

59. Furthermore, healthcare services do not escape the protective scope of Article 56 TFEU simply because after paying the foreign person providing the service for the services received the recipient of services subsequently seeks reimbursement of the related costs through a national social security system. ( 35 )

2. Restriction on the freedom to provide services by the restricted export of a benefit in kind under the social care insurance scheme?

60. It is settled case-law that Article 56 TFEU precludes the application of any national rules which have the effect of making the provision of services between Member States more difficult than the provision of services purely within a Member State. ( 36 )

a) Care services in the event of care at home in the light of Article 56 TFEU

61. First of all, it is necessary to examine whether it must be considered as such an added difficulty that the Federal Republic of Germany does not provide for, or excludes through Paragraph 34(1)(1) SGB XI, reimbursement of care-related benefits in kind at the same rate as granted in Germany in respect of care services used by a person reliant on care staying temporarily in another Member State and supplied by a service provider established in another Member State. If this is the case, the second question arises as to whether there is a possible justification for such a restriction.

i) Existence of a restriction?

62. From the point of view of a German insured person covered by care insurance as a customer of care services, their legal position under the SGB XI in relation to benefits provided in another Member State is as follows.

63. For a six-week period, he may firstly, in accordance with Paragraph 34(1)(1) of the SGB XI, continue to use the care services of an appropriate care assistant who accompanies him. For these purposes, it must be a person who has the qualifications provided for under Paragraph 36 of the SGB XI and therefore usually a trained care worker from a German care service. ( 37 ) Recourse to a foreign supplier for such purposes is ruled out.

64. However, he cannot obtain any ‘reimbursement of care-related benefits in kind at the same rate as granted in Germany’ under the SGB XI for care services which the insured person uses in another Member State supplied by service providers there. Whilst he is still free to use foreign services, the amounts paid for German benefits in kind are not allowed, because the foreign service provider has not integrated itself into the German care insurance scheme by means of a service agreement. However, in order to cover the costs, the insured person covered by care insurance may have recourse to the care allowance (which is lower in comparison to the amounts paid for benefits in kind), provided that he has opted to receive that allowance.

65. At first sight, these circumstances point towards a finding that there is a restriction on the freedom to provide services with regard to care services in another Member State. If one solely considers the provisions of the SGB XI, everything initially points toward the German person reliant on care in another Member State seeing himself less well provided for financially in relation to the need for care services than is the case in Germany, where he can have recourse to the benefit in kind system under the care insurance scheme with the higher amounts paid for that in comparison to the care allowance. Consequently, it appears to be made more difficult to receive services in another Member State and the threshold of a restriction on services is achieved.

66. However, the factual and legal situation is more complicated than it appears when considering the rules of the SGB XI in isolation. Namely, as the Federal Government points out on several occasions, it must be taken into account that in another Member State the person reliant on care possibly also has benefits in kind available to him from the social security system of the Member State of stay. There was or is an entitlement to this under Article 22 of Regulation No 1408/71 or Article 19(1) of Regulation No 883/2004 respectively, namely ‘on behalf of the competent institution’ of the Member State in which the person reliant on care is insured. In so far as the law of the State of stay permits this, within the scope permitted by that law, the person reliant on care may therefore also have recourse to the service providers there.

67. In the light of the above, assumption of the costs of care services, for instance help at home from a care assistant at the same rates as would be the case in Germany under the amounts paid for care-related benefits in kind in the SGB XI, is not guaranteed for a German person reliant on care in another Member State but it is not excluded either. Three scenarios are conceivable, depending on the organisation of the list of benefits under the foreign social security system. Firstly, in the event of a need for care services abroad, the person reliant on care might be in a worse position financially there than in Germany if in another Member State he is solely reliant on the care allowance and the foreign social security system does not grant him any benefits for care at home. However, on the other hand it is also conceivable that in the event of using care services abroad the person reliant on care could find himself in a better position financially there than in Germany, particularly having regard to the possibly more generous organisation of social security benefits abroad. The third scenario is that the interplay of the entitlements to benefits which exist leads to the person reliant on care finding himself in exactly the same financial position abroad as in Germany.

68. Whether a German person reliant on care in another Member State is confronted with added difficulty in using services there, which makes such services less attractive to him ( 38 ) than those offered on the German market for care services, therefore ultimately depends on the interplay between the German and the foreign social security legislation. Therefore the question of the existence of a restriction may not be answered in absolute terms. It depends on the circumstances of the individual case.

69. Accordingly, it must first of all be noted that the Commission’s submissions on this point were unsubstantiated and in particular did not deal cogently and in detail with the interplay of the varying social security legislation of the Member States with regard to the rules under the SGB XI.

70. However, it is settled case-law that it falls to the Commission to actually prove the allegation that the obligation has not been fulfilled. It is the Commission’s responsibility to place before the Court the information needed to enable the Court to establish that this obligation has not been fulfilled and in so doing the Commission may not rely on presumptions. ( 39 ) Against this background, it is incumbent on the Commission to put forward sufficient facts on the basis of which a failure to fulfil obligations can be identified. Once this has been done, it is incumbent on the Member State to contest substantively and in detail the information produced and the consequences thereof. ( 40 )

71. The Commission has not fulfilled this obligation to set out all the facts necessary to establish its case here; its second claim cannot be successful simply for this reason alone.

ii) In the alternative: possible grounds of justification

72. If, notwithstanding my analysis above, the Court finds that there is a restriction, as a second step the question then arises as to a justification for that restriction; this is considered below as a precaution, with the brevity required.

73. A restriction on the freedom to provide services with regard to care-related benefits in kind, which can only be obtained in another Member State under the SGB XI by means of the provision of the care allowance, may possibly be justified on the basis of the protection of public health ( 41 ) or the protection of the health of the population which, subject to compliance with the principle of proportionality, is one of the overriding reasons in the general interest which can justify restrictions on the fundamental freedoms. ( 42 )

74. Having already referred to the discretion of the respective Member State to organise its system of healthcare provision, it is necessary to examine how the German care insurance scheme appears with regard to protection of the health of the persons insured under it. Then it is necessary to examine whether the decision of the legislature to apply different criteria to care services depending on whether they are provided by parties to contracts with the care fund or by independent suppliers is proportionate.

– Territorial concept to ensure the high quality standards of the care fund

75. According to the submissions of the Federal Republic of Germany, ( 43 ) care services which have concluded a service agreement to provide care at home with the care fund and which could provide care-related benefits in kind are not currently available to the insured person abroad, with the effect that whilst abroad he is deprived of care-related benefits in kind from the care fund. ( 44 )

76. This organisation of the German system must be accepted, especially since under Article 168(7) TFEU each Member State is free to take responsibility for the organisation of its health service. Whether, where and to what extent it grants entitlements is in principle its own decision. There is no European Union law obligation upon a Member State to make available an autonomous benefit-in-kind system in every other Member State for insured persons covered by its care insurance: the fact that the social security systems are not harmonised across the European Union, but are merely coordinated, and that in particular moving to another Member State does not have to be ‘neutral’ with regard to the benefits under social security legislation but may be ‘more or less advantageous or disadvantageous’ for the insured person, was expressly underlined by the Court in Chamier-Glisczinski. ( 45 )

– Proportionality of this concept against the background of the alternatives of a care allowance and receipt of benefits in kind

77. The territoriality principle for benefits in kind under the care insurance scheme, which is taken as a basis by the German legislature, may be explained, inter alia, by the fact that the high quality standards of its care service, which require constant supervision, are not achievable across the European Union with justifiable expense owing to the complexity of the supervision procedures and having regard to the fact that the care services profession is not harmonised across Europe. ( 46 )

78. However, since in its list of benefits the social care insurance scheme provides for (i) care-related benefits in kind which are in principle not exportable abroad and (ii) for a care allowance which the insured person can in principle avail himself of in Germany and, abroad, the rules of the social care insurance scheme are, on the one hand, appropriate and necessary in order to maintain the high quality standard which is aspired to in Germany and on the other hand, do not lead to any disproportionate disadvantage to insured persons, who for whatever reasons, organise their care for themselves outside the system of the social care insurance scheme with the assistance of the care allowance.

79. Withholding receipt of benefits in kind in another Member State is inherent in the system and does not lead to any inappropriate disadvantage in relation to stays abroad in another Member State.

80. An insured person engaging a care service selected by him personally which is not in a contractual relationship with the care fund cannot in fact claim ‘reimbursement of care-related benefits in kind at the same rate as granted in Germany’ in Germany either. If he operates outside the limits of the benefit in kind system which the care insurance scheme currently only provides for him in Germany, then in Germany, in the same way as abroad, this happens at his own risk and solely the care allowance remains for him to cover his care requirements. Therefore it is ultimately a matter for the individual decision of the person reliant on care whether he places his care at home in the hands of the system of the care insurance scheme, which is strictly organised and subject to strict quality and supervision standards, ( 47 ) or largely ( 48 ) takes his own responsibility for organising his care outside that system using the care allowance granted to him. If he decides for the latter, he must content himself with the (lower) care allowance, both in Germany and abroad.

81. The dualist approach of the benefits system under the social care insurance scheme, which in that system inherently only makes available benefits in kind in Germany and grants a flat-rate care allowance, may not be criticised either in the light of the case-law of the Court.

82. Against this background, no European Union law requirement may be inferred from the Vanbraekel judgment that in the event of temporary stays abroad foreign service providers must be remunerated according to the amounts paid for benefits in kind under the social care insurance scheme. Whilst that judgment holds that the ‘fact that a person has a lower level of cover when he receives hospital treatment in another Member State than when he undergoes the same treatment in the Member State in which he is insured’ ( 49 ) is a barrier to freedom to provide services, it is sufficient to point out that the Vanbraekel judgment was premised on the ‘same treatment’, that is an identical benefit in both States. The latter cannot be readily assumed in relation to the benefit in kind system under the social care insurance scheme in comparison with benefits provided by non-affiliated independent suppliers, because independent service providers are not subject to the stringent quality and supervision standards which distinguish the social care insurance scheme which the Federal Government has described, without any objection, as being ‘an unparalleled system within Europe’. ( 50 )

83. In the light of point 2 of the operative part of the Chamier-Glisczinski judgment, there is no problem under European Union law if German law does not provide for the export of benefits in kind in this respect. It would also be hard to comprehend if a person resident in another Member State who is most heavily reliant on care would be refused such an export of benefits in kind, but it would have to be granted indirectly via the freedom to provide services in the event of temporary stays. Therefore if a Union citizen decides to temporarily or permanently transfer his place of stay to another Member State, then, just as he must accept the advantages associated with this, he must also accept the corresponding disadvantages in relation to the benefits provided as they arise from the interplay of the coordinated, though not harmonised, social security systems.

84. In the light of the above, the German rule, which is aimed at a high-quality standard of care services subject to constant supervision and the deployment of particularly well-qualified trained care workers, is justified on the grounds of protection of health. It is appropriate to achieve the objective of high-quality care of persons reliant on care, by reserving the higher amounts paid for benefits to those service providers who wholly subject themselves to the care fund’s quality assurance programme. Neither can the rule be criticised with regard to the necessity for it: especially in the area of the protection of public health, the national legislature must be granted a wide discretion with regard to the level of quality to be strived for. In connection with this, reference must be made mutatis mutandis to the Apothekerkammer judgment mentioned above in footnotes 30 and 31. Finally, the rule also appears appropriate, because as compared to a mandatory benefit in kind system provided by the care fund, for instance, it facilitates greater flexibility for persons reliant on care, who remain at liberty to independently seek services outside the benefit in kind system and to have recourse to the care allowance in respect of such services.

85. Accordingly, there is no unlawful restriction and therefore no infringement of Article 56 TFEU and the Commission’s second claim has consequently been unsuccessful.

86. The third claim must still be considered.

b) Hire of care equipment in the event of temporary stays abroad in the light of Article 56 TFEU

87. First of all, it is necessary to examine whether it should be considered to be a restriction on the freedom to provide services that the Federal Republic of Germany does not reimburse costs relating to the hire of care equipment where a person reliant on care stays temporarily in another Member State, or excludes reimbursement through Paragraph 34(1)(1) SGB XI, even where those costs would be reimbursed in Germany or the care equipment would be provided and the reimbursement would not lead to a twofold increase or other increase in the costs of the services granted in Germany. Secondly, the question arises as to a possible justification.

i) Existence of a restriction

88. The provision of care equipment must also be classified as a benefit in kind and therefore must also be assessed according to the same criteria which were considered above in relation to care services.

89. The basic decision of the German legislature in relation to the social care insurance scheme is plain and clear: in another Member State it is to operate via the care allowance; in Germany, a choice is to be available between a care allowance and benefits in kind, the latter also in relation to care equipment subject to strict quality control, ( 51 ) which confers a specific character on the provision of benefits in kind in Germany. In relation to care equipment, this also applies to German and foreign suppliers without distinction. In addition, as explained above, pursuant to Regulation No 1408/71 or where appropriate Regulation No 883/2004, it is open to the insured person to avail himself of benefits in kind in another Member State provided that the law of the State of stay provides for it, subject to the law of that State and for the account of the competent institution.

90. Consequently, subject to the same criteria as in relation to the use of care services, the question arises as to whether, in respect of the hire of care equipment in another Member State, a restriction on the freedom to provide services exists at all: the question whether a person reliant on care in another Member State who is provided with the German care allowance is in a better or a worse position in relation to the hire of care equipment when compared with the position in Germany cannot be answered sweepingly here either, but depends upon the circumstances of the individual case. The same applies to the question of the existence of a restriction and here the Commission must also be reproached for the fact that its submissions leave something to be desired in terms of precision because it does not subject all of the conceivable scenarios to a precise evaluation.

91. A restriction would have to be assumed if Paragraph 40 of the SGB XI completely excluded foreign suppliers of care equipment and for instance only products provided by German suppliers were allowed to be used. However, this has neither been submitted by the Commission, nor is it the subject of the present action and there are no grounds for this apparent from Paragraph 40 of the SGB XI.

92. Since the Commission has therefore not met its obligation to set out all the facts necessary to establish its case, the third claim must be dismissed simply for this reason alone.

ii) In the alternative: possible grounds of justification

93. If, notwithstanding my analysis above, the Court finds that there is a restriction, as a second step the question then arises as to a justification for that restriction, which is to be considered below as a precaution with the brevity required.

94. In relation to the care equipment, reference must also be made to the Chamier-Glisczinski judgment, which denied an entitlement to the export of benefits in kind under the social care insurance scheme, ultimately referring to a lack of harmonisation of social insurance law; it must be pointed out that the German rule on care equipment, should it be evaluated as a restriction on the freedom to provide services at all, would be justified on the basis of the considerations outlined above.

95. Accordingly, the Commission’s third claim is also unsuccessful, as it has been established that there is no infringement of Article 56 TFEU.

E – Summary and order as to costs

96. In conclusion, since none of the claims advanced by the Commission must be upheld, the action must be dismissed.

97. However, it does not seem appropriate to order the Commission to pay all of the costs in accordance with the application: if the Commission had maintained its first claim, it would have been upheld, since at the relevant time of the reasoned opinion, Paragraph 34 of the SGB XI was not yet consistent with the Molenaar judgment with regard to the care allowance and in this respect an infringement of Article 56 TFEU for withholding the care allowance in another Member State would have been found to exist.

98. Accordingly, pursuant to Article 69(5) of the Rules of Procedure, it appears appropriate to order the Commission to pay two thirds of the costs and the Federal Republic of Germany to pay one third of the costs.

VII – Conclusion

99. In the light of all the foregoing considerations, I propose that the Court should rule as follows: (1) The action is dismissed. (2) The Commission shall bear two thirds of the costs of the Federal Republic of Germany and two thirds of its own costs. The Federal Republic of Germany shall bear one third of the costs of the Commission and one third of its own costs.

( 1 ) Original language: German; Language of the proceedings: German.

( 2 ) Case C-160/96 Molenaar [1998] ECR I-843.

( 3 ) Case C-208/07 Chamier-Glisczinski [2009] ECR I-6095.

( 4 ) Book XI of the Social Security Code – social care insurance scheme – (Article 1 of the Law of 26 May 1994, BGBl. I p. 1014), which was most recently amended by Article 4 of the Law of 22 December 2011 (BGBl. I p. 2983).

( 5 ) See, for instance, Case C-388/09 da Silva Martins [2011] ECR I-5737, paragraphs 38 and 42. For the sake of completeness, it should be noted that a social care insurance scheme does not, in principle, come within the scope of Directive 2011/24/EU of the European Parliament and of the Council of 9 March 2011 on the application of patients’ rights in cross-border healthcare, which has to be implemented by 25 October 2013 (OJ 2011 L 88, p. 45). According to recital 14 and Article 1(3)(a) of that directive, it does not apply to ‘services in the field of long-term care the purpose of which is to support people in need of assistance in carrying out routine, everyday tasks’. In addition, the latter directive is not applicable ratione temporis to the present proceedings either. As a result of the two-month time-limit set in the reasoned opinion received by the defendant on 23 November 2009, the legal position as at 23 January 2010 should be taken as being authoritative and consequently the directive which only came into force in 2011 must be disregarded here.

( 6 ) Recently, SPIEGEL online reported on so-called dementia-centres in Thailand at http://www.spiegel.de/wirtschaft/soziales/0,1518,773044-3,00.html.

( 7 ) In relation to the malleable concept of the export of benefits, see the ‘Gemeinsame Rundschreiben der Spitzenverbände der Pflegekassen zu Leistungen der Pflegeversicherung bei Auslandsaufenthalt’13. September 2006, No. 1.2, available online at http://www.sindbad-mds.de/infomed/sindbad.nsf/002568A2003D5BAE/B6FAF6382466683E00256C72005C0D2C?OpenDocument, and Bassen, A., ‘Export von Sachleistungen der Pflegeversicherung nach der Entscheidung des EuGH in der Rechtssache von Chamier-Glisczinski’, NZS 2010, p. 479 et seq.

( 8 ) Molenaar, paragraphs 36 to 39.

( 9 ) See also more extensively on the issue of payment of the old age insurance contributions of a third person to whom a person reliant on care resorts for assistance at home, Joined cases C-502/01 and C-31/02 Gaumain-Cerri and Barth [2004] ECR I-6483, paragraph 36.

( 10 ) Chamier-Glisczinski, paragraphs 24 to 28, 63 to 65, 83 to 88 and point 2 of the operative part of the judgment.

( 11 ) Chamier-Glisczinski, paragraph 65.

( 12 ) Chamier-Glisczinski judgment, paragraphs 84 und 85.

( 13 ) OJ, English Special Edition, Series I, Chapter 1971(II) p. 416, last amended by Regulation (EC) No 592/2008 of the European Parliament and of the Council of 17 June 2008 (OJ L 177, p. 1).

( 14 ) OJ 2004 L 166, p. 1, as most recently amended by Commission Regulation (EU) No 1244/2010 of 9 December 2010 (OJ 2010 L 338, p. 35).

( 15 ) See Article 91 of Regulation No 883/2004.

( 16 ) Introduced by Article 7 of the Law of 22 June 2011 coordinating the social security system in Europe and amending other statutes (BGBl. I p. 1202). In giving reasons for the amendment to the statute, the German Bundestag (the lower house of the Federal Parliament) expressly referred in paper number 17/4978 to the Molenaar judgment and to the fact that now the ‘wording of Paragraph 34 of the SGB XI is consistent with the requirements of EC law.’

( 17 ) This provision governs the setting aside of an administrative act with permanent effect where the circumstances have changed.

( 18 ) Case C-158/96 Kohll [1998] ECR I-1931.

( 19 ) Paragraph 37 of the SGB XI.

( 20 ) Paragraph 36 of the SGB XI.

( 21 ) Paragraph 40 of the SGB XI.

( 22 ) Case C-211/08 Commission v Spain [2010] ECR I-5267, paragraph 32 and the case-law cited there.

( 23 ) See, for instance, Joined Cases 286/82 and 26/83 Luisi and Carbone [1984] ECR 377, paragraph 16; Case C-120/95 Decker [1998] ECR I-1831, paragraph 27; Kohll, paragraph 20; and Commission v Spain, paragraph 45 and the case-law cited there.

( 24 ) In relation to the possibility of granting more extensive social protection by the Member States, see Chamier-Glisczinski, paragraph 56.

( 25 ) See, for instance, Case C-368/98 Vanbraekel and Others [2001] ECR I-5363, paragraphs 42, 45, 51 to 53. In that case, in relation to the question of the extent to which the insured person had to be reimbursed in respect of hospital treatment in another Member State, the Court held that ‘the fact that a person has a lower level of cover when he receives hospital treatment in another Member State than when he undergoes the same treatment in the Member State in which he is insured’ was a barrier to freedom to provide services.

( 26 ) A brief overview of the state of the discussion amongst commentators may be found in Bassen, p. 480, in particular footnotes 12 and 13.

( 27 ) See Article 168(7) TFEU.

( 28 ) See, for instance, Case C-372/04 Watts [2006] ECR I-4325, paragraph 92 and the case-law cited there and Commission v Spain, paragraph 53.

( 29 ) In relation to this, see in connection with the supply of medicinal products, Case C-141/07 Commission v Germany [2008] ECR I-6935, paragraphs 22 to 26 and the case-law cited there.

( 30 ) See in relation to this Joined Cases C-171/07 and C-172/07 Apothekerkammer des Saarlandes and Others [2009] ECR I-4171, paragraph 18 and the case-law cited there.

( 31 ) Apothekerkammer des Saarlandes, paragraph 19 and the case-law cited there.

( 32 ) However, the freedom to provide services can require in an individual case that the costs of a treatment abroad must also be reimbursed if the social security system of the State of origin expressly denies reimbursement for the costs of certain treatments abroad. See in relation to this Case C-444/05 Stamatelaki [2007] ECR I-3185.

( 33 ) See also paragraphs 75 to 77 of that judgment.

( 34 ) See, in that regard, Commission v Spain, paragraph 47 to 52 and the case-law cited there.

( 35 ) See, in that regard, Commission v Spain, paragraph 47 and the case-law cited there.

( 36 ) Kohll, paragraph 33; Case C-157/99 Smits and Peerbooms [2001] ECR I-5473, paragraph 61 and Stamatelaki, paragraph 25 and the case-law cited there.

( 37 ) In practice, this situation might well only arise rarely, having regard to the high costs resulting from such an accompanying care worker which may not be borne in full but only within the limits of the relevant amounts paid by the care fund.

( 38 ) See: Case C-55/94 Gebhard [1995] ECR I-4165, paragraph 37.

( 39 ) Case C-246/08 Commission v Finland [2009] ECR I-10605, paragraph 52; Case C-438/07 Commission v Sweden [2009] ECR I-9517, paragraph 49; and Case C-401/06 Commission v Germany [2007] ECR I-10609, paragraph 27.

( 40 ) See e.g.: Case 272/86 Commission v Greece [1988] ECR 4875, paragraph 21.

( 41 ) See, in relation to this: Article 62 TFEU in conjunction with Article 52 TFEU and Kohll, paragraph 51 and the case-law cited there.

( 42 ) See, in relation to this: Apothekerkammer des Saarlandes, paragraphs 25 to 28 and the case-law cited there.

( 43 ) Paragraph 45 of the defence.

( 44 ) Apart from the scenario of being accompanied by his carer, which must be practically inconsequential: see Paragraph 34(1)(1) of the SGB XI.

( 45 ) See: paragraph 84 and 85 there.

( 46 ) See, in relation to this: pages 15 to 17 of the defence of the Federal Republic of Germany.

( 47 ) See, for instance in relation to the details, the communication from the Federal government dated 17 December 2008, p. 3 to 7, which is enclosed as appendix 4 to the action. The quality standards for the care institutions, which are relevant for the purposes of concluding a service agreement, may be understood from Paragraph 71 and 72 of the SGB XI.

( 48 ) However, pursuant to Paragraph 37(3) of the SGB XI, recipients of care allowances are also subject to regular advice and quality control by an authorised care institution.

( 49 ) Vanbraekel, paragraph 45; Emphasis added here alone.

( 50 ) See the communication of the Federal Government dated 17 December 2008, p. 3 (previously mentioned in footnote 47).

( 51 ) A formal procedure, subject to the intervention of the care fund, is provided for in Paragraph 40(1) of the SGB XI.