Opinion of Mr Advocate General Alber delivered on 12 February 1998. - Office National des pensions (ONP) v Francesco Conti. - Reference for a preliminary ruling: Cour du travail de Liège - Belgium. - Social security - Articles 12(2), 46(3) and 46b of Regulation (EEC) No 1408/71 - Old age and death (insurance) - National rules against overlapping. - Case C-143/97.



European Court reports 1998 Page I-06365



Opinion of the Advocate-General

A - Introduction

1 This reference for a preliminary ruling from the Cour du Travail (Higher Labour Court), Liège, concerns the interpretation of Articles 12(2), 46 and 46b of Regulation (EEC) No 1408/71 (1) in relation to the calculation of a miner's retirement pension increased by a supplement under Belgian law and to the possible reduction of the supplement to take account of retirement benefits acquired in other Member States.

2 The facts of the main proceedings are as follows: the plaintiff and respondent (`the plaintiff') was born in Italy, where he was first employed. He was then employed in the Federal Republic of Germany and finally worked as an underground mineworker for 26 years in Belgium.

3 Miners' retirement pensions are calculated on the basis of a presumed working life of 30 years pursuant to Article 3(2) of the Law of 20 July 1990 introducing a flexible retirement age for employed persons and adjusting the pensions of employed persons to advances in the general standard of living. (2)

Article 3(6), first subparagraph, of the Law provides that `the amount of the retirement pension of an employed worker who has not completed a total of 30 calendar years of normal and principal occupation as an underground mineworker or a quarry worker employed underground, but has completed at least 25 years, shall be increased by a supplement'.

Article 3(6), second subparagraph, provides that `that supplement shall be equal to the difference between the amount of the retirement pension he would have obtained had he actually been in normal and principal occupation underground in the said undertakings for 30 calendar years and the total amount of the retirement pensions or benefits in lieu thereof which he can claim under one or more of the schemes referred to in paragraph 1, first subparagraph, point (a)'.

Article 3(1), first subparagraph, point (a), refers in particular to `a retirement pension or survivor's pension or benefit(s) in lieu thereof, granted ... under a scheme of a foreign country'.

4 By administrative decision, the Office National des Pensions, defendant and appellant in the main proceedings (`the ONP'), granted the plaintiff a mineworker's retirement pension of BFR 449 417 annually with effect from 1 January 1991. The decision also showed that he was entitled to an annual supplement of BFR 40 591, adding `this supplement will be reduced by the amount of other retirement pensions or benefits in lieu thereof which may be claimed by you under a Belgian or foreign scheme'.

5 The supplement was reduced to zero by reason of employed person's retirement pensions received by the plaintiff from other sources, one of LIT 101 619 per month paid by Italy since 1 November 1989, and the other of DM 3 208.80 per year paid by Germany since 1 January 1991. The plaintiff brought an action before the courts to contest the reduction in the supplement.

6 Before the Belgian courts the plaintiff contended that Article 3(6), second subparagraph, contains a reduction provision which, under Articles 12(2) and 46(3) of Regulation No 1408/71, and also Article 46b of the Regulation, which came into force on 1 June 1992, should not be applied in calculating the pension to which he is entitled under Belgian law.

Before it was amended, Article 12(2) of the Regulation read as follows:

`The provisions of the legislation of a Member State for reduction ... of benefit in cases of overlapping with other social security benefits or other income may be invoked even though the right to such benefits was acquired under the legislation of another Member State or such income arises in the territory of another Member State. However, this provision shall not apply when the person concerned receives benefits of the same kind in respect of invalidity, old age, death (pensions) or occupational disease which are awarded by the institutions of two or more Member States in accordance with Articles 46, 50, 51 or Article 60 (1) (b).'

7 At first instance the plaintiff's action was successful and the ONP lodged an appeal on the ground that the Belgian provision in question was purely a rule for calculating the benefit payable and that it was applied before the benefit could be `reduced, suspended or withdrawn'.

8 The national court has referred the following question to the Court of Justice for a preliminary ruling:

`Is the concept of a provision for reduction of benefit in Articles 12(2), 46(3) and 46b of Regulation (EEC) No 1408/71 to be interpreted as covering a legislative provision of a Member State which, in providing that the amount of the retirement pension of an employed person who has not completed a total of 30 years of employment but has completed at least 25 years is to be increased by a supplement, states that that supplement is to be equal to the difference between the amount of the retirement pension which the worker would have received if he had in fact been employed for 30 years and the total amount of the retirement pensions which he can claim under a national scheme or a scheme of another Member State?'

9 The ONP and the Commission took part in the written procedure. The Swedish Government also appeared at the hearing. Reference to the detailed submissions of the parties will be made below.

B - Discussion

10 First of all, it must be observed that the relevant provisions of Regulation No 1408/71 were amended with effect on 1 June 1992. It is clear from the order for reference that this was mentioned by the plaintiff in the proceedings before the national courts. The Commission also rightly took this circumstance into account in its arguments.

11 Consequently, the Community provisions for the period from 1 June 1991, the date when the pension was first granted, to 31 May 1992 differ from the amended provisions which took effect on 1 June 1992. Nevertheless, it is clear that the concept of `provision for reduction of benefit' within the meaning of this legislation has not undergone any change in substance.

12 In the written procedure, as in the main proceedings, the ONP contended that the Belgian provision in question was a rule for the calculation of benefit. It adds that the amount of the benefit is necessarily calculated before a rule of reduction, if any, is applied. Furthermore, the provision could not be regarded as an obstacle to freedom of movement because other Belgian retirement benefits are taken into account in calculating the supplement.

Finally, at the hearing the ONP representative stated that the supplement constituted the difference in amount necessary to reach the minimum benefit laid down by Belgian law, for the calculation of which, under Article 50 of Regulation No 1408/71, retirement benefits payable from other sources are included in the total of the benefits payable under the chapter of the Regulation concerning pensions. (3)

13 At the hearing, the Swedish Government took the view in essence that the Belgian provision in question should not be classified as a provision for the reduction of benefit within the meaning of Regulation No 1408/71, but purely as a rule of calculation. However, even if the Court were to regard the rules for determining the amount of the benefit as a provision for reduction, Articles 12(2), 46(3) and 46b of the Regulation should not be applied because this would have negative repercussions.

14 The Commission, on the other hand, finds that the Belgian provision in question should be regarded as a provision for the reduction of benefit within the meaning of the Regulation. Whether the version of the Regulation in force before or after 1 June 1992 is applied, this view leads to the result that pension benefits payable under the schemes of other Member States would have to be disregarded when calculating the supplement.

The Commission finds support for its view in the Court's case-law (4) and explains the difference between external and internal rules against concurrent benefits. It states that the rule in question in the present case is an external rule against concurrent benefits and it must be disregarded in the calculation of a benefit payable under the legislation of a Member State.

The legal position under Regulation No 1408/71 until 31 May 1992

15 The relevant provisions of Regulation No 1408/71 in the version in force until 31 May 1992 are in Article 12(2), the wording of which is given above, and in Article 46(3), which provides as follows:

`The person concerned shall be entitled to the total sum of the benefits calculated in accordance with the provisions of paragraphs 1 and 2, within the limit of the highest theoretical amount of benefits calculated according to paragraph 2 (a).

Where the amount referred to in the preceding subparagraph is exceeded, any institution applying paragraph 1 shall adjust its benefit by an amount corresponding to the proportion which the amount of the benefit concerned bears to the total of the benefits determined in accordance with paragraph 1.'

16 The Court delivered the Romano judgment (5) while these provisions were in force. The question referred for a preliminary ruling in that case was whether the Belgian provisions then in force for taking account of or leaving out of account notional years of employment for calculating a retirement pension for miners should be regarded as a provision for the reduction of benefit within the meaning of Article 12(2). Under certain circumstances, (6) workers in the mining industry were credited with a notional period of employment until a full working life was reached, calculated on the basis of 30 years' employment. For calculating the pensions of migrant workers, these notional years were normally reduced by the number of years of actual employment in another Member State.

17 The national court before which the case was brought requested the Court of Justice for a preliminary ruling on the question whether the relevant Belgian provisions were rules against overlapping benefits within the meaning of Regulation No 1408/71, with the consequences which that entailed for calculating the pension.

18 In the judgment of 4 June 1985, the Court replied as follows:

`A national provision which reduces the additional years of notional employment from which a worker may benefit by the number of years in respect of which he may claim a pension in another Member State constitutes a provision for reduction of benefit within the meaning of Article 12(2) of Regulation No 1408/71 which, by virtue of the last sentence of Article 12(2), is not to be applied when the amount of the pension is calculated under Article 46(1) of that regulation'. (7)

19 The question arising in this context in the present case is whether this assessment applies similarly to the amended Belgian provisions covering the period from 1 January 1991 to 31 May 1992.

20 The ONP takes the view that the method of calculation introduced by the Law of 20 July 1990 differs in principle from that to which the Romano case relates, so that the reply given by the Court in that case is not a precedent for assessing the new legal position.

21 The Commission, on the other hand, considers that the position under national law in the Romano case is substantially the same as that in the main proceedings in the present case.

22 It is clear that the Belgian provisions on miners' pensions, both in the version applying in the Romano case and in the version now in force, lay down a special advantage for workers in the mining industry. This consists, firstly, in the fact that a full working life of 30 years is presumed, that is to say, a much shorter period than is generally the case. Secondly, under the rules for persons in that category, after actual employment of at least 25 years, the pension benefit payable is increased to a full benefit by law. This applies to both of the legal situations in question, but the technique of applying the increase differs. Whereas under the former Law the periods to be taken into account were completed by reckoning notional periods, the present position is that a supplement is granted and the reference pension is based on 30 years' employment.

23 The pension benefits which can be claimed from other sources are deducted from the difference between the pension earned from actual periods of employment and the full benefit. This also applies under both systems, i.e. in accordance with the technique of increasing the pension to a full pension, by reducing the notional periods which are initially taken into account or by reducing the calculated amount of the supplement. In so far as a particular category of workers (for whatever reason) is granted an improved position by comparison with the general rule, because the pension benefit they have earned by contributions is increased to a full pension, the earlier and the later situations in law are comparable. The benefits from other sources which must be taken into account for this purpose are also comparable. Under both systems benefits granted under specified national schemes and those under schemes of foreign countries must be included. (8)

24 The Court has found that the `external' rule against concurrent benefits which was contained in the former (national) rule against such benefits was a `provision for reduction of benefit' within the meaning of Article 12(2) of Regulation No 1408/71. Because of its similar structure and purpose the new provision should be regarded in the same way.

25 The fact that the periods to be taken into account for calculating the pension are in principle the subject of other provisions (9) shows that this is the correct approach. However, if the taking account or reduction of notional periods must be deemed a reduction provision within the meaning of the legislation, this must apply even more to the grant or reduction of additional payments. Consequently, the provisions in question relate to `overlapping benefits' (10) and `award of benefits'. (11)

26 If, therefore, reducing the supplement by an amount equal to the benefits payable under foreign schemes is regarded as a reduction provision within the meaning of Regulation No 1408/71, it must not be applied when the pension is calculated in accordance with Article 46 of the Regulation, as the second sentence of Article 12(2) expressly says. In any case, this is the approach which should be taken on the basis of the version of Regulation No 1408/71 in force up to the end of May 1992.

The legal position under Regulation No 1408/71 as from 1 July 1992

27 The relevant provisions of the Regulation were amended in order to consolidate it and take account of and systematise the Court's case-law up to that date. (12) Since 1 July 1992 these provisions have been worded as follows:

Article 12(2): `Save as otherwise provided in this Regulation, the provisions of the legislation of a Member State governing the reduction ... of benefits in cases of overlapping with other social security benefits or any other form of income may be invoked even where such benefits were acquired under the legislation of another Member State or where such income was acquired in the territory of another Member State'. (13)

28 It will be noted immediately that the second sentence of Article 12(2) has been deleted: this qualified the general principle set out in the first sentence and excluded reduction where the person concerned received benefits of the same kind in respect of invalidity, old age, death (pensions) or occupational disease which were awarded by the institutions of two or more Member States. The new version begins with the words `save as otherwise provided in this Regulation'. In these other provisions, e.g. Articles 46a to 46c, the general sense of the passage deleted from Article 12 is repeated and given effect. Therefore the special provisions concerning overlapping benefits in Chapter 3 of the Regulation are applicable.

29 Article 46 was completely recast. The Community-law rule against overlapping benefits in the former version of Article 46(3) was deleted and Article 46(3) now reads as follows:

`The person concerned shall be entitled to the highest amount calculated in accordance with paragraphs 1 and 2 from the competent institution of each Member State without prejudice to any application of the provisions concerning reduction, suspension or withdrawal provided for by the legislation under which this benefit is due.

Where that is the case, the comparison to be carried out shall relate to the amounts determined after the application of the said provisions.'

30 A new Article 46b on `Special provisions applicable in the case of overlapping of benefits of the same kind under the legislation of two or more Member States' was added. This reads as follows:

`1. The provisions on reduction, suspension or withdrawal laid down by the legislation of a Member State shall not be applicable to a benefit calculated in accordance with Article 46(2).

2. The provisions on reduction, suspension or withdrawal laid down by the legislation of a Member State shall apply to a benefit calculated in accordance with Article 46(1)(a)(i) only if the benefit concerned is:

(a) either a benefit, which is referred to in Annex IV, part D, the amount of which does not depend on the length of the periods of insurance or of residence completed, or

(b) a benefit the amount of which is determined on the basis of a credited period ...'.

31 The question now arises whether the change in the legal situation requires a different Community-law assessment of the national reduction provision.

32 In so far as pension benefits under foreign schemes must be deducted when calculating the pension under national law, this is an external rule against concurrent benefits. In any case, the amendment of Regulation No 1408/71 has not caused the national provision to lose its character as a provision for the reduction of benefit. Its nature as an external rule against concurrent benefits is likewise not altered by the fact that it forms part of an internal rule against such benefits which, under Article 46(3), may be applied when calculating an independent benefit for the purpose of Article 46(1)(a)(i) of Regulation No 1408/71 and a pro rata pension, based on Community law, for the purpose of Article 46(2).

33 It follows that the national provision in question is a provision for the reduction of benefit within the meaning of Regulation No 1408/71 and therefore it is applicable in accordance with the rules laid down in the Regulation.

34 Article 12(2) lays down the principle that national, including external, rules against overlapping benefits are applicable `save as otherwise provided in this Regulation'. However, such other provisions arise from the special rules in Chapter 3 of the Regulation concerning pensions. The general rules applying in that context `relating to reduction, suspension or withdrawal applicable to benefits in respect of invalidity, old age or survivors under the legislations of the Member States' appear in Article 46a of the Regulation.

35 Article 46a(3)(a) reads as follows:

`Account shall be taken of the benefits acquired under the legislation of another Member State or of other income acquired in another Member State only where the legislation of the first Member State provides for the taking into account of benefits or income acquired abroad.'

36 The provisions applicable in the case of concurrent benefits of the same kind under the legislation of two or more Member States take priority to the abovementioned provision and appear in Article 46b. In the present case, the pension benefits received from Belgium, Italy and Germany are unquestionably `benefits of the same kind', which are defined by Article 46a(1) as `benefits in respect of invalidity, old age or survivors calculated or provided on the basis of periods of insurance and/or residence completed by one and the same person'. Article 46b(1) completely excludes the application of Member States' provisions on the reduction of benefits in the case of the pro rata pension calculated in accordance with Article 46(2).

37 The Commission considers that this provision, which is the basis for its opinion that the Member States' provisions on the reduction of benefits are not applicable, applies to the present case.

38 In the present context, however, we would be in the situation of calculating an independent benefit under Article 46(1)(a)(i) as the 26 years' employment taken into account by the Member State's institution were completed under the Belgian legislation alone. Therefore, Article 46b(2), which provides that provisions on reduction, suspension or withdrawal of benefits are to apply only subject to very precise conditions, would apply. Those conditions are that the amount of the benefit does not depend on the length of the period of insurance or residence and that the benefit is referred to in Annex IV, part D, of the Regulation. Neither condition is fulfilled in the present case, so that the reduction provision in question cannot be applied.

39 The result would be the same as the conclusion reached by the Commission, so that in the final analysis it is not necessary in this case to determine whether the main proceedings involve Article 46b(1) or (2).

40 The result also seems fair. Theoretically, it is possible that a migrant worker whose pension benefit is calculated in accordance with Belgian law would be in a slightly more favourable situation than a worker who has spent his entire working life in the Belgian scheme. However, this could not be regarded as preferential treatment because a Belgian migrant worker would also, by virtue of the Community rules, avoid the reduction provisions laid down by the legislation of Member States. Furthermore, the calculation of benefit in accordance with Belgian law is one step in the calculation by reference to the Community rules of the benefit to which a migrant worker is entitled. The present proceedings are not concerned with the final result after carrying out all the calculation steps in the complicated system laid down in Chapter 3 of the Regulation.

41 There is no doubt that, in revising Regulation No 1408/71 by means of, in particular, Regulation (EEC) No 1248/92, (14) the purpose of the Community legislature was to create a clearly established framework for the application of national anti-overlapping rules in the calculation of pensions under the Community rules and, with that end in view, Article 46b, which is relevant to the present case, was added to the Regulation. In this way the consistency of the Court's case-law has been expressly maintained.

42 The considerations underlying the amending Regulation are set out in the preamble, the 15th recital of which reads as follows:

`Whereas, in accordance with the consistent case law of the Court of Justice, the Council is not deemed competent to enact rules imposing a restriction on the overlapping of two or more pensions acquired in different Member States by a reduction of the amount of a pension acquired solely under the national legislation; whereas, according to the Court of Justice, it is for the national legislator to enact such rules, bearing in mind that it is for the Community legislator to fix the limits within which the national provisions concerning reduction, suspension or withdrawal are to be applied. ...' (15)

The 16th and 17th recitals then state:

`Whereas, to protect migrant workers and their survivors against an excessively stringent application of the national provisions concerning reduction, suspension or withdrawal, it is necessary to include a provision in Regulation (EEC) No 1408/71 laying down strict rules for the application of these provisions.

Whereas, for the same reasons it is necessary to insert a provision ... stipulating that, in the case of overlapping of benefits of the same kind, these provisions shall be applicable only in the case of certain types of benefits and in certain specific cases.' (16)

Finally, the 18th recital states that `it is necessary to list in Annex IV, D, the types of benefits to which the aforesaid provisions can be applied in the case of overlapping of benefits of the same kind'.

43 Rules adopted in this way by the Community legislature are binding.

44 Finally it is necessary to examine the argument which the ONP put forward at the hearing, to the effect that Article 50 of the Regulation is applicable.

45 Article 50 regulates the `award of a supplement where the total of benefits payable under the legislations of the various Member States does not amount to the minimum laid down by the legislation of the State in whose territory the recipient resides'. The article reads as follows:

`A recipient of benefits to whom this Chapter applies may not, in the State in whose territory he resides and under whose legislation a benefit is payable to him, be awarded a benefit which is less than the minimum benefit fixed by that legislation for a period of insurance or residence equal to all the periods of insurance taken into account for the payment in accordance with the preceding articles. The competent institution of that State shall, if necessary, pay him throughout the period of his residence in its territory a supplement equal to the difference between the total of the benefits payable under this Chapter and the amount of the minimum benefit.'

46 The ONP seeks support in the judgment given in Case 22/81 (17) in contending that the supplement for miners under Belgian law is a supplement within the meaning of Article 50, so that the benefits payable under the legislation of other Member States must necessarily be included in calculating the supplement.

47 The ONP's reasoning cannot be accepted for several reasons. Firstly, there is no `minimum benefit' within the meaning of Article 50, which is defined by the Court in the Browning judgment as `a specific guarantee the object of which is to ensure for recipients of social security benefits a minimum income which is in excess of the amount of benefit which they may claim solely on the basis of their periods of insurance and their contributions'. The Belgian supplement in question has the opposite effect of improving, under strict conditions, the situation of a particular category of persons by increasing the pension earned to a full benefit. This benefit is precisely not related to the actual period of insurance.

48 I am not persuaded to change my mind by the reference by the ONP's representative to the Opinion of Advocate General Sir Gordon Slynn who, it is true, stated that `the minimum benefit may not necessarily be expressed in the legislation as a specific sum of money. It may be a sum which is capable of calculation by reference to a formula'. However, if this is placed in its context, we find that the Advocate General continues: `it must, however, not be conditional, other than in the way which I have indicated', which is a reference to `the completion of the period of insurance'. (18)

49 Consequently the Belgian legislation concerning miners' pensions cannot be regarded as granting a `minimum benefit'.

50 There is a further reason why Article 50 of Regulation No 1408/71 does not apply. It necessarily presupposes that benefits are calculated in accordance with the Community rules for the purpose of Article 46(2) of the Regulation. (19) However, as I have already said with regard to Article 46b, the calculation in the present case does not relate to an independent benefit solely on the basis of periods of employment completed under the Belgian system.

C - Conclusion

51 It follows that the reply to the question referred to the Court must be in the affirmative and I propose that it be given in the following terms:

The concept of a provision for reduction of benefit in Articles 12(2), 46(3) and 46b of Council Regulation (EEC) No 1408/71 must be interpreted as covering a legislative provision of a Member State which, in providing that the amount of the retirement pension of an employed person who has not completed a total of 30 years of employment but has completed at least 25 years is to be increased by a supplement, states that that supplement is to be equal to the difference between the amount of the retirement pension which the worker would have received if he had in fact been employed for 30 years and the total amount of the retirement pensions which he can claim under a national scheme or a scheme of another Member State.

(1) - Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, in the consolidated version in OJ 1992 C 325, p. 1; see also Regulation (EEC) No 1408/71 as amended by Council Regulation (EEC) No 2001/83 of 2 June 1983, OJ 1983 L 230, p. 6.

(2) - Moniteur Belge, 15 August 1990.

(3) - See Chapter 3 `Old age and death (pensions)'.

(4) - See the judgments in Case 58/84 Francesco Romano [1985] ECR 1679, Case C-90/91 Di Crescenzo [1992] ECR I-3851, and Case 24/75 Petroni [1975] ECR 1149.

(5) - Case 58/84, cited in footnote 4.

(6) - For details, see the judgment in Case 58/84, cited in footnote 4.

(7) - See Case 58/84, cited in footnote 4.

(8) - See Article 3(1)(a) of the Law of 20 July 1990 and Article 10(2)(1) of Royal Decree No 50 of 24 October 1967, in the version in force since 1 January 1981.

(9) - See Article 45 of Regulation No 1408/71.

(10) - Article 12(2) of Regulation No 1408/71.

(11) - Title of Article 46 of Regulation No 1408/71.

(12) - See the judgment in Case 24/75 Petroni [1975] ECR II49.

(13) - Emphasis added.

(14) - Council Regulation (EEC) No 1248/92 of 30 April 1992 amending 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 and Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71 (OJ 1992 L 136, p. 7).

(15) - Emphasis added.

(16) - Emphasis added.

(17) - Browning [1981] ECR 3357.

(18) - See the Opinion in Case 22/81, p. 3377 ff., cited in footnote 17.

(19) - See the text of Article 50: `period of insurance or residence equal to all the periods of insurance ...' (emphasis added). See also Articles 45 and 46(2).