1 By judgment of 11 April 1991, which was received at the Court on 25 April 1991, the Court of Appeal in Northern Ireland referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Articles 13 and 73 of 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, as amended and updated by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6), and Article 10 of Council Regulation (EEC) No 574/72 of 21 March 1972 laying down the procedure for implementing Regulation (EEC) No 1408/71, as amended and updated by Regulation No 2001/83 and by Council Regulation (EEC) No 1660/85 of 13 June 1985 (OJ 1985 L 160, p. 1).
2 Those questions were raised in a dispute between Mrs McMenamin and the Adjudication Officer concerning the extent of Mrs McMenamin' s right to family benefits in Northern Ireland.
3 Mrs McMenamin is a frontier worker who works in the United Kingdom as a teacher in Northern Ireland but lives in Ireland with her husband and their four children. Her husband is employed by the Revenue Commissioners in Ireland.
4 The Irish legislation, the Social Welfare (Consolidation) Act 1981, confers entitlement to child allowance on the person with whom the child normally lives. If the child lives with its father and its mother, as in this instance, the Social Welfare (Children' s Allowances) (Normal Residence) Rules 1974 provide that it is the child' s mother who is entitled to the allowance.
5 On 1 December 1986 Mrs McMenamin applied for child benefit in Northern Ireland under the Child Benefit (Northern Ireland) Order 1975, as amended. The Adjudication Officer decided that Mrs McNenamin was entitled only to a supplement from 2 December 1985, namely the amount necessary to bring the child benefits payable to her under the corresponding Irish legislation up to the level of child benefits payable under the 1975 Order. Mrs McMenamin appealed to the Social Security Appeal Tribunal which upheld the Adjudication Officer' s decision. Mrs McMenamin then appealed to the Social Security Commissioner.
6 The Adjudication Officer accepted that a claim for child benefit made by Mrs McMenamin in Ireland on 16 July 1979 under the corresponding Irish legislation should be treated as a valid claim in Northern Ireland. Consequently, by an interim decision dated 26 April 1989, the Social Security Commissioner awarded a child benefit supplement to Mrs McMenamin from 17 July 1978 (that is, one year before the date of the claim) until 19 June 1985 (the day before the entry into force of Article 10 of Regulation No 574/72 as amended by Article 2 of Regulation No 1660/85).
7 In his final decision given on 2 November 1989 the Social Security Commissioner decided that as from 20 June 1985 Mrs McMenamin was entitled to receive the full amount of child benefit due under the United Kingdom regulations on the ground that she was, under the Irish legislation, entitled to child benefits payable by Ireland and that she was not exercising or pursuing a professional or trade activity in Ireland. The Social Security Commissioner concluded that the benefits payable by the United Kingdom were no longer to be suspended.
8 The Adjudication Officer appealed only against that decision to the Court of Appeal in Northern Ireland, the effect of the Social Security Commissioner' s decision being to throw the full charge of the relevant child benefit on to the public funds of the United Kingdom.
9 The Court of Appeal in Northern Ireland held that the dispute raised problems of the interpretation of Community law, stayed the proceedings and referred the following questions to the Court for a preliminary ruling: "1. Whether, by reason of the provisions of Article 13 of Council Regulation (EEC) No 1408/71 (the effect of which appears to be that the Respondent is to be treated as subject to United Kingdom legislation only) the words 'the person entitled to the family benefits or family allowances' in Article 10(1)(b)(i) of Council Regulation (EEC) No 574/72 (as amended) do not apply to the Respondent despite the fact that under the Republic of Ireland legislation (and apart from the said Article 13) she is the person entitled to child benefit. 2. Whether, since the Respondent' s husband is exercising or pursuing a professional or trade activity in the Republic of Ireland and is entitled to child benefit under the Republic of Ireland legislation if, for any reason, the Respondent either loses, or is unable to assert, her title to that benefit, the said Article 10(1)(b)(i) (as amended) operates to suspend the Respondent' s right, under Article 73(1) of Council Regulation (EEC) No 1408/71, to child benefit in the United Kingdom."
10 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.
11 In its two questions, which it is appropriate to examine together, the national court raises the issue of the application of Articles 13 and 76 of Regulation No 1408/71 and of Article 10(1)(b)(i) of Regulation No 574/72 to a situation such as that in the main proceedings which is characterized by the fact that under the legislation of the State of residence the frontier worker, who is entitled to allowances paid by the State of employment, is also entitled to allowances paid by the State of residence in whose territory only her spouse is working.
12 According to the Adjudication Officer, Article 13 of Regulation No 1408/71 resolves the problem. That article provides that a migrant worker is to be subject exclusively to the legislation of the State where he is employed. Such a worker accordingly ceases to be subject to the legislation of the State where he resides and is therefore no longer entitled to the family allowances provided for by the legislation of that country. It would then suffice to resolve the problem of the overlapping of the migrant worker' s right to allowances from the State of employment (provided for by Article 73) and the spouse' s right to allowances from the State of residence, where he works. At the hearing the Commission endorsed that view.
13 The Adjudication Officer and the Commission maintain that Mrs McMenamin is subject, under Article 13, to the legislation only of the State of employment, in this instance the United Kingdom, to the exclusion of the legislation of Ireland where she resides; as a result, it is no longer Mrs McMenamin but her husband who holds the right to benefits under the legislation of the State of residence, namely Ireland. Since her husband exercises a professional or trade activity in Ireland, the conditions of Article 10 of Regulation No 574/72 are met and the benefits paid by the United Kingdom should accordingly be suspended.
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.
15 This case must therefore be considered in the light of the provisions against overlapping, namely Article 76 of Regulation No 1408/71 and Article 10 of Regulation No 574/72, which lay down rules to prevent the overlapping of entitlement under the legislation of the State of residence with that under the legislation of the State of employment.
16 In order to reply to the national court' s questions it is therefore necessary to examine whether the exercise of a professional or trade activity in the Member State of residence by the spouse of the person entitled to family allowances within the meaning of Article 73 of Regulation No 1408/71 is such as to suspend the right laid down by Article 73 even though the spouse is not, under the legislation of the State of residence, the "person entitled to the family benefits or family allowances, or the person to whom they are paid" within the meaning of Article 10(1)(b)(i) of Regulation No 574/72.
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.
19 Under that provision the professional or trade activity, which has the effect of reversing the priorities, must be exercised or pursued in the State of residence by "the person entitled to the family benefits or family allowances, or the person to whom they are paid".
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.