Opinion of Mr Advocate General Jacobs delivered on 20 March 1997. - Office national des pensions (ONP) v Maria Cirotti. - Reference for a preliminary ruling: Cour du travail de Bruxelles - Belgium. - Social security - Articles 46 and 51 of Regulation (EEC) No 1408/71. - Case C-144/96.



European Court reports 1997 Page I-05349



Opinion of the Advocate-General

1 In the present case the Cour du Travail (Higher Labour Court), Brussels, has referred to the Court a question concerning the interpretation of Articles 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 (hereinafter `the Regulation'). (1) The national court is essentially asking whether it is consistent with those provisions for a separated spouse's share of her husband's old-age pension to be recalculated on the ground that an index-linked invalidity benefit to which she is entitled under the legislation of another Member State has been increased.

2 That issue arises because Mrs Cirotti, who is Italian, was in receipt of both half her husband's Belgian old-age pension and an Italian invalidity benefit. When the Belgian pensions office first assessed Mrs Cirotti's entitlement to the Belgian pension, they reduced the amount to which she was prima facie entitled by the amount of the Italian benefit. Since then, the amount of the Italian benefit, which is index-linked, has increased. The Belgian pensions office is seeking further to reduce the amount of the Belgian pension received by Mrs Cirotti by the amount of that increase.

3 Article 46 lays down rules on the award of old-age and death (pensions) benefits for workers who have been subject to the legislation of two or more Member States. In brief, the rules confer on a worker who has completed insurance periods in more than one Member State the right to old-age benefits determined in accordance with a calculation which I have explained in some detail in my Opinion in Cabras (2) if the benefits so calculated are higher than those which the worker would otherwise receive from the Member States concerned.

4 The right thus conferred on the migrant worker to benefit from the most favourable system implies in principle that, whenever there is an alteration in the benefits granted under that system, a fresh calculation is to be carried out in accordance with Article 46 in order to determine which system is the most advantageous following the alteration. (3) The circumstances in which a fresh comparison is required are laid down by Article 51.

5 Article 51 provides:

`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'.

6 Thus in order to reduce the administrative burden which a fresh examination of the worker's situation following every alteration of benefits would represent, Article 51(1) excludes a recalculation of benefits in accordance with Article 46 and, hence, a fresh comparison between the national system and the Community system when the alteration which affected one of the benefits resulted from events unconnected with the worker's personal circumstances and was the consequence of the general evolution of the economic and social situation. Only when the adjustment is due to an alteration of the method of determination or the rules for calculating a benefit by reason, inter alia, of a change in the worker's personal circumstances is it necessary under Article 51(2) of the Regulation to carry out a recalculation of the old-age benefits. (4)

7 As I explained in my Opinion in Cassamali: (5)

`The scheme of Article 51 of Regulation No 1408/71 is to distinguish between two situations: (i) index-linked adjustments and (ii) adjustments due to a change in the method of calculation. In the latter situation a complete recalculation takes place. In the former situation a fixed percentage or amount is added to the benefits hitherto payable and, apart from that adjustment, no recalculation takes place. Article 51 does not envisage a third possibility whereby an index-linked increase in one Member State may be taken into account in another Member State for the purposes of a national rule against the overlapping of benefits. Article 51(1) lays down the principle of the autonomous development of social security benefits. Once benefits have been calculated in accordance with Article 46, they develop autonomously in each of the Member States concerned; an adjustment in one Member State does not affect the benefit paid in the other. Article 51(2) lays down an exception to the principle where there are changes in the method of calculating benefit. That exception is necessary because the effect of such changes might be to put the person concerned in a position where a different formula would be more favourable to him. In this regard, it must be remembered that Article 46 has consistently been interpreted by the Court as entitling the individual to the application of either the whole of national legislation or the whole of Community legislation, including their respective rules against overlapping, whichever is more favourable (see, for example, Case 22/77 FNROM v Mura [1977] ECR 1699). It is unlikely that the circumstances referred to in Article 51(1), i.e. an adjustment of benefits due to an increase in the cost of living or in the level of wages or salaries, would affect the outcome of the comparison between the two alternatives'.

8 Although Article 51(1) is not couched in terms of an express prohibition (`without the need for a recalculation ...'), the Court has interpreted it as a prohibition. (6)

9 I now turn to the present case, of which the order for reference contains an all too succinct summary. On the basis of the national case-file and the written observations of the parties it is however possible to reconstruct the salient facts.

10 Mrs Maria Cirotti is an Italian national living in Chieti, Italy. As from 1973 she was entitled to an Italian invalidity pension. Mrs Cirotti's husband, Mr Raffaele Mennitti, from whom she lived apart, received from 1 April 1981 until his death in 1991 a full miners' retirement pension in Belgium. Article 74 of the Belgian Royal Decree of 21 December 1967 laying down general rules for the retirement and survivors' pensions of employed persons essentially provided, at the material time, that a woman living separated from her husband could, under certain conditions, receive payment of part of the retirement pension paid to her husband. From July 1981 Mrs Cirotti was entitled, on the basis of that Decree, to a share of the employed person's retirement pension payable to her husband.

11 When Mrs Cirotti claimed part of that pension paragraphs (2)(d) and (3)(B) of Article 74 of the Royal Decree were applied by the Office national des pensions (National Pensions Office, hereinafter `ONP'). The effect of those provisions was to grant Mrs Cirotti payment of half of her husband's pension (at the rate for married men; amounting to BF 11 243 per month), less the amount she herself received by way of invalidity pension in Italy (amounting to the equivalent of BF 7 368), resulting in net monthly benefits of BF 3 875. She also received a heating allowance of BF 586. Mrs Cirotti accepted that calculation.

12 However, by a decision of 21 December 1988 the ONP reduced the amount of Mrs Cirotti's benefits, taking into account the increases since 1981 in her Italian invalidity pension. Those increases are apparently index-linked. Mrs Cirotti brought an action against that decision before the Tribunal du Travail (Labour Court), Brussels. In a judgment of 7 June 1993 the Tribunal du Travail ruled in favour of Mrs Cirotti, on the grounds that Article 51(1) of the Regulation did not permit a recalculation of benefits.

13 The ONP appealed against that decision to the Cour du Travail, which referred to the Court the following question:

`Must Articles 46 and 51 of Regulation (EEC) No 1408/71 be interpreted as applying in the event of an invalidity benefit, calculated under the legislation of one Member State, overlapping with an old-age benefit, calculated under the legislation of another Member State, which grants a separated spouse a share of the employed person's old-age benefit payable to the other spouse, even if that would give migrant workers an advantage over non-migrant workers, when Article 3(1) of the regulation provides for equal treatment of all nationals of the Member States?'

14 Although that question refers generally to Articles 46 and 51 of the Regulation, it is apparent from the facts of the case and the arguments of the parties that the referring court seeks a reply to the question whether Article 51(1) precludes or Article 51(2) requires recalculation of the benefits to which Mrs Cirotti is entitled.

15 It is clear in my view that Article 51(1) precludes recalculation in this case.

16 First, the benefits in question, namely Mrs Cirotti's share of her husband's pension and her own invalidity benefit, clearly fall within the scope of that provision. It is clear from the case-law of the Court that it is not an objection to the application of Article 51(1) in this case that the two benefits to which Mrs Cirotti was entitled may not have been of the same kind, whether because one is an old-age benefit and the other an invalidity benefit (7) or because one benefit is paid by reason of her husband's periods of insurance and the other (presumably) by reason of her own. (8)

17 It is also clear from the case-law of the Court that it is irrelevant whether the benefit which is sought to be reduced by reason of index-linked increases in another benefit was itself calculated under the national rules alone or under Article 46. Either way, the former benefit must not be affected by those increases. (9)

18 Since, therefore, for the reasons given above the benefits in question clearly fall within Article 51, since the increase in the Italian benefit is index-linked and since Article 51(1) prohibits recalculation in such circumstances, the ONP may not recalculate Mrs Cirotti's share of her husband's pension.

19 I am not persuaded by the ONP's argument that the Court's judgment in Levatino should be applied by analogy. (10) In that case the Court ruled that Article 51(1) of the Regulation was not applicable to the adjustment of a benefit such as the Belgian guaranteed income for elderly persons. That ruling, however, was clearly based on the specific features of the guaranteed income; in my view, those features are not shared by the separated spouse's share of a pension at issue in this case and the judgment is accordingly distinguishable.

20 Levatino concerned the rights of Mr Levatino's mother, Mrs Milazzo, who had been resident in Belgium and who had received Italian and Belgian retirement pensions. In addition she had received a benefit under the guaranteed income scheme equal to the difference between the minimum resources guaranteed by Belgian law and her retirement pensions. Following an increase in Mrs Milazzo's Italian pension as a result of indexation, the ONP decided to recalculate the amount of her guaranteed income benefit. Mrs Milazzo contested that decision on the basis of Article 51(1) of the Regulation.

21 In its judgment the Court, having explained the normal operation of Article 51(1), analysed the purpose of the guaranteed income, namely to offset the inadequacy of the resources of the person concerned so as to enable him to attain the minimum level of resources guaranteed by the law. The Court found that, in view of its differential nature, the amount of the benefit varied in accordance with the evolution of the amount of the guaranteed income (which was regularly reassessed) and the resources of the person concerned. If Article 51(1) were applied, therefore, the increase in the resources of the person concerned as a result of the increase in his foreign pension would not be taken into account and his resources would systematically exceed the minimum guaranteed income. The Court concluded that the application of Article 51(1) `would not only put migrant workers at an advantage but would alter the purpose of the guaranteed income benefit and disrupt the scheme of the national legislation in question'. (11)

22 The Court stressed again the variable nature of the guaranteed income benefit (12) and added: (13)

`In this regard, a benefit such as the guaranteed income differs from old-age pensions, since the nature and manner of determination of old-age pensions are - unlike the guaranteed income benefit - not affected by the provisions of Article 51(1), even if this may put the migrant worker at an advantage.'

23 The Court concluded that the application of Article 51(1) could not have the effect of jeopardizing the actual purpose of the benefit paid. (14)

24 In my view the Court's decision in Levatino was wholly exceptional. The above paragraphs explicitly distinguish between the guaranteed income benefit and old-age pensions. Mrs Cirotti receives an old-age pension. It is true that it is a share of the pension awarded to her husband. I fail to see however in what way that circumstance could alter the character of that benefit as an old-age pension, rather than a guaranteed income benefit. From the information available to the Court it appears that Mrs Cirotti was entitled to a share of her husband's retirement pension under much the same conditions as those governing a personal retirement pension: it was a fixed share of her husband's pension (therefore depending on his working career), and it was subject to rules on the overlapping of benefits which appear to be similar to those applying in the case of a personal retirement pension. (15) In those circumstances there is no reason not to apply Article 51(1) to index-linked adjustments to a benefit awarded under the legislation of another Member State.

25 In that connection the ONP points out that under the Belgian rules the ONP must, when awarding such a share, take into account other types of income received by the person in question. Thus, in the present case the invalidity pension awarded to Mrs Cirotti in Italy must be taken into account, and its amount must be deducted from her share of her husband's retirement pension. The ONP therefore characterizes those rules as rules on the award of benefits, which do not come within the scope of Article 51.

26 The fallacy in that argument is obvious. Article 51 can be applied only where a migrant worker receives more than one benefit from more than one Member State. It serves no purpose whatsoever in the absence of rules (in the Regulation, or under national law) on the overlapping of benefits. It is only where there is such overlapping that Article 51 will apply. According to the judgment in Levatino the criterion for Article 51(1) not to be applied is that its application would alter the purpose and disrupt the scheme of the national legislation in question. I do not see how it could be suggested that in the present case there is any such risk. The fact that index-linked adjustments to Mrs Cirotti's invalidity pension cannot lead to a recalculation of her share of her husband's pension does not in any way alter the purpose of the Belgian scheme entitling a spouse living separated from her husband to part of his pension, nor does it disrupt that scheme.

27 The ONP also argues that the application of Article 51(1) in cases such as the present violates Article 3(1) of the Regulation, on equality of treatment. Article 3(1) provides:

`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'.

The ONP takes the view that the application of Article 51(1) systematically benefits the spouse living separated to the disadvantage of the spouse from whose pension benefits a share is awarded. It contends that that amounts to discrimination prohibited by Article 3(1).

28 The ONP puts the argument very succinctly, and I fail to see (a) how the application of Article 51(1) could lead to any systematic discrimination between spouses, and (b) in what way such discrimination is contrary to Article 3(1) of the Regulation, since the latter refers only to discrimination on the basis of nationality.

29 The national court asks in addition whether Article 3(1) of the Regulation would be infringed if the result of applying Article 51(1) to a case such as Mrs Cirotti's would be to give migrant workers an advantage over non-migrant workers. That question in my view clearly calls for a negative reply. It is clear from FNROM v Mura (16) that the application of the Community rules on the coordination of social security may entail certain advantages for migrant workers. Article 3(1) itself provides that the application of the principle of equal treatment is subject to the special provisions of the Regulation. (17)

30 There is one final point which I should mention for the sake of completeness. Mrs Cirotti referred to the judgment in Schmidt v Rijksdienst voor Pensioenen. (18) That case concerned Mrs Schmidt's entitlement to a personal old-age pension in Germany and her entitlement, after her divorce from her husband, to a Belgian pension as a divorcee. The specific issue was whether the personal old-age pension and the divorcee pension were benefits of the same kind, in which case Mrs Schmidt would be entitled to the amount calculated in accordance with Article 46 of the Regulation. The Court ruled that the two pensions were not benefits of the same kind; Article 46 was accordingly inapplicable and the Rijksdienst was entitled to apply national anti-overlap rules to reduce the amount of the Belgian divorcee's pension.

31 Mrs Cirotti seeks to distinguish Schmidt on the basis that a divorcee's pension is different from her entitlement, as a spouse living separated, to a share of her husband's pension. That point does not however fall to be decided. As pointed out above, (19) it is clear from Ravida (20) that Article 51 - which was not in issue in Schmidt - applies even in cases involving benefits which are not of the same kind. The judgment in Schmidt is therefore irrelevant for determining whether Article 51(1) should be applied or not.

Conclusion

32 I am therefore of the opinion that the question referred by the Cour du Travail should be answered as follows:

Article 51 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 precludes a recalculation of benefits in the event of alterations, made on account of the general evolution of the economic and social situation, to an invalidity benefit calculated under the legislation of one Member State, overlapping with an old-age benefit, calculated under the legislation of another Member State, which grants a separated spouse a share of the employed person's old-age benefit payable to the other spouse.

(1) - See for the consolidated version applicable at the material time Annex I of Council Regulation (EEC) No 2001/83, OJ 1983 L 230, p. 6. The Regulation, and in particular Article 46, was amended by inter alia Council Regulation (EEC) No 1248/92 of 30 April 1992, OJ 1992 L 136, p. 7. The latest consolidated version is published as Part I of Annex A to Council Regulation (EEC) No 118/97 of 2 December 1996, OJ 1997 L 28, p. 1.

(2) - Case C-199/88 [1990] ECR I-1023, paragraphs 10 to 15 of the Opinion. See also the Opinion of Advocate General Darmon in Case C-5/91 Di Prinzio [1992] ECR I-897, paragraphs 16 to 21, and, for a worked example, the Opinion of Advocate General Da Cruz Vilaça in Case 323/86 Collini v ONPTS [1987] ECR 5489, paragraphs 20 to 31.

(3) - Case 7/81 Sinatra v FNROM [1982] ECR 137, paragraph 8 of the judgment.

(4) - Case C-93/90 Cassamali [1991] ECR I-1401, paragraphs 15 to 16 of the judgment. See also Sinatra, cited in note 3, Case 104/83 Cinciuolo v Union Nationale des Fédérations Mutualistes Neutres [1984] ECR 1285, Case 141/88 Caisse Nationale d'Assurance Vieillesse des Travailleurs Salariés v Jordan [1989] ECR 2387, Case C-85/89 Ravida [1990] ECR I-1063 and Case C-193/92 Bogana v Union Nationale des Mutualités Socialistes [1993] ECR I-755.

(5) - Cited in note 4, paragraph 12.

(6) - See for example Cassamali, cited in note 4, paragraph 17 of the judgment, and my comments in my Opinion in that case, paragraphs 9 and 10.

(7) - See, for example, Cinciuolo, cited in note 4.

(8) - Ravida, cited in note 4, paragraphs 15 to 17 of the judgment, and my Opinion in that case, paragraphs 11 to 17.

(9) - Cassamali, cited in note 4, paragraph 20 of the judgment.

(10) - Case C-65/92 ONP v Levatino [1993] ECR I-2005.

(11) - Paragraphs 33 to 36 of the judgment.

(12) - Paragraph 37.

(13) - Paragraph 38.

(14) - Paragraph 39.

(15) - See, for example, the rules in issue in Di Prinzio, cited in note 2.

(16) - Case 22/77, cited in paragraph 7 above, paragraphs 8 to 10 of the judgment.

(17) - See further my Opinion in Levatino, cited in note 10, paragraphs 19 and 20.

(18) - Case C-98/94 [1995] ECR I-2559.

(19) - At paragraph 16.

(20) - Cited in note 4, see paragraph 23 of the judgment.