Una McMenamin v Adjudication Officer.
Date: 1992-12-09
14 However, it should be noted that, as follows from the judgments in Case 227/81 Aubin v UNEDIC and ASSEDIC ([1982] ECR 1991, paragraph 11) and Case 150/82 Coppola v Insurance Officer ([1983] ECR 43, paragraph 11), the rule that a person is subject only to the legislation of the Member State of employment laid down by Article 13 of Regulation No 1408/71 does not preclude certain benefits being governed by the more specific rules of that regulation.
17 Under Article 10(1)(a) of Regulation No 574/72, allowances payable by the State of employment take priority over allowances payable by the State of residence, which are consequently suspended.
18 However where a professional or trade activity is exercised or pursued in the State of residence, Article 10(1)(b)(i) lays down the converse rule that the right to allowances payable by the State of residence prevails over the right to benefits payable by the State of employment, which are then suspended.
20 That phrase was inserted by Council Regulation No 1660/85 which entered into force on 20 June 1985. The former wording provided for the suspension of allowances due in pursuance of Article 73 of Regulation No 1408/71 from the State of employment only if the spouse exercised a professional or trade activity in the State of residence of the children.
21 In its judgment in Case 149/82 Robards v Insurance Officer ([1983] ECR 171) the Court held that the suspension provided for in the former version of that provision should also apply where the divorced spouse exercised a professional or trade activity in the State of residence. The Court stated:
"... the interpretation of the provision in question should be confined to the case which is before the national court, namely that of a divorced spouse who has not remarried and is carrying on a professional or trade activity. It would be for the Commission and the Council to take the necessary measures in order to amend the provision in question if it appeared that such an amendment were necessary in order to enable other cases to be satisfactorily resolved" (paragraph 19, in fine).
22 The Council then replaced the words "the spouse" by "the person entitled to the family benefits or family allowances, or the person to whom they are paid".
23 The intention of the Council, as is apparent from the thirteenth and fourteenth recitals in the preamble to Regulation No 1660/85 and in the light of paragraph 17 of the Robards judgment, was to extend, not to limit, the cases in which benefits due in pursuance of Article 73 of Regulation No 1408/71 were to be suspended. Those recitals state:
"the rule in Article 10 of Regulation (EEC) No 574/72, which provides that the right to family benefits arises under the legislation of the Member State in the territory of which the children reside, takes effect solely where the person who exercises the professional or trade activity in the Member State of residence activating the transfer of priority is the spouse of the employed or formerly employed person, whether that spouse is himself or herself entitled to the benefits or not;
... those provisions have been seen to operate unfairly in circumstances in which the person entitled to the benefit and exercising the professional or trade activity was not or was no longer the spouse of the employed or formerly employed person; ... these provisions should therefore be amended so as to correct this anomaly".
24 The periphrasis "the person entitled to the family benefits or family allowances, or the person to whom they are paid" must therefore be understood as encompassing in particular, apart from the spouse, a person who is not or is no longer married to the person entitled to benefits in pursuance of Article 73 of Regulation No 1408/71 or that person himself if the overlapping entitlement to family allowances arises because that person is also working in the State of residence. The legislature chose to define that group of persons by their common characteristic, namely their status as persons entitled to family allowances in the State of residence, rather than by giving an exhaustive list. Moreover in the judgment in Case 168/88 Dammer v Securex ([1989] ECR 4553, paragraph 16), the Court held that:
"... under the Community rules prohibited overlapping is considered to occur when two parents work in two different Member States and are each entitled, in their State of employment, to family benefits for the same member of the family, and that problem is resolved by a rule determining priority, as between the two sets of national legislation concerned, in the event that that member of the family resides in one of the two States of employment".
25 The principle that may be deduced therefrom is as follows: where a person having the care of children exercises a professional or trade activity in the territory of the State of residence of those children, the allowances payable by the State of employment in pursuance of Article 73 are suspended.
26 Under the consistent case-law of the Court, and as now embodied in Article 2(1) of Council Regulation (EEC) No 1249/92 of 30 April 1992 amending Regulation No 1408/71 and Regulation No 574/72 (OJ 1992 L 136, p. 28), the suspension of rights acquired in pursuance of Article 73 is only partial if the benefits paid by the State of employment are higher than those paid by the State of residence. In such a case the worker is entitled to a supplementary allowance equal to the difference between the two amounts, the cost of which is to be borne by the competent institution of the State of employment (judgment in Case 24/88 Georges v ONAFTS [1989] ECR 1905). Moreover, rights due in pursuance of Article 73 are to be suspended only if allowances are actually paid in the State of residence (judgment in Case C-117/89 Kracht v Bundesanstalt fuer Arbeit [1990] ECR I-2781).
27 The reply to be given to the national court should therefore be that the exercise by a person having the care of children, and, in particular, by the spouse of the person entitled in pursuance of Article 73 of Regulation No 1408/71, of a professional or trade activity in the Member State of residence of the children suspends, under Article 10 of Regulation No 574/72, the right to allowances in pursuance of Article 73 of Regulation No 1408/71 up to the amount of the allowances of the same kind actually paid by the State of residence, irrespective of who is designated as directly entitled to the family allowances by the legislation of the State of residence.