1 This request for a preliminary ruling concerns the interpretation of Article 90 of Regulation (EC) No 987/2009 of the European Parliament and of the Council of 16 September 2009 laying down the procedure for implementing Regulation (EC) No 883/2004 on the coordination of social security systems (OJ 2009 L 284, p. 1) and of Decision No H3 of the Administrative Commission for the Coordination of Social Security Systems of 15 October 2009 concerning the date to be taken into consideration for determining the rates of conversion referred to in Article 90 of Regulation No 987/2009 (OJ 2010 C 106, p. 56; ‘Decision No H3’).
2 The request has been made in proceedings between GP and the Bundesagentur für Arbeit - Familienkasse Baden-Württemberg West (Federal Employment Agency - Family Allowances Office, Baden-Württemberg West, Germany) (‘the Family Allowances Office’) concerning the grant in Germany of a differential supplement to child allowance received in Switzerland.
3 Article 8 of the Agreement on the Free Movement of Persons between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other part, signed in Luxembourg on 21 June 1999 and approved on behalf of the European Community by Decision 2002/309/EC, Euratom of the Council and of the Commission as regards the Agreement on Scientific and Technological Cooperation, of 4 April 2002 on the conclusion of seven Agreements with the Swiss Confederation (OJ 2002 L 114, p. 1) (‘the Agreement on the free movement of persons’), provides: ‘The Contracting Parties shall make provision, in accordance with Annex II, for the coordination of social security systems with the aim in particular of: (a) securing equality of treatment; (b) determining the legislation applicable; … (d) paying benefits to persons residing in the territory of the Contracting Parties; …’
4 Annex II to the Agreement on the free movement of persons, entitled ‘Coordination of social security schemes’, as amended by the annex to Decision No 1/2012 of the Joint Committee established under that agreement of 31 March 2012 (OJ 2012 L 103, p. 51) (‘Annex II to the Agreement on the free movement of persons’), entered into force on 1 April 2012.
5 Article 1 of Annex II to the Agreement on the free movement of persons states: ‘1. The contracting parties agree, with regard to the coordination of social security schemes, to apply among themselves the legal acts of the European Union to which reference is made in, and as amended by, section A of this Annex, or rules equivalent to such acts. 2. The term “Member State(s)” contained in the legal acts referred to in section A of this Annex shall be understood to include Switzerland in addition to the States covered by the relevant legal acts of the European Union.’
6 Article 2(1) of Annex II to the Agreement on the free movement of persons provides as follows: ‘For the purposes of applying the provisions of this Annex, the contracting parties shall take into due account the legal acts of the European Union referred to in section B of this Annex.’
7 Section A of Annex II to the Agreement on the free movement of persons makes reference to Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ 2004 L 166, p. 1, and corrigendum OJ 2004 L 200, p. 1), as amended by Regulation (EC) No 988/2009 of the European Parliament and of the Council of 16 September 2009 (OJ 2009 L 284, p. 43) (‘Regulation No 883/2004’), and to Regulation No 987/2009. Section B of Annex II makes reference to Decision No H3.
8 Article 68(1) and (2) of Regulation No 883/2004 provides: ‘1. Where, during the same period and for the same family members, benefits are provided for under the legislation of more than one Member State the following priority rules shall apply: (a) in the case of benefits payable by more than one Member State on different bases, the order of priority shall be as follows: firstly, rights available on the basis of an activity as an employed or self-employed person, secondly, rights available on the basis of receipt of a pension and finally, rights obtained on the basis of residence; … 2. In the case of overlapping entitlements, family benefits shall be provided in accordance with the legislation designated as having priority in accordance with paragraph 1. Entitlements to family benefits by virtue of other conflicting legislation or legislations shall be suspended up to the amount provided for by the first legislation and a differential supplement shall be provided, if necessary, for the sum which exceeds this amount. …’
9 Article 90 of Regulation No 987/2009 is worded as follows: ‘For the purposes of applying [Regulation No 883/2004] and [Regulation No 987/2009], the exchange rate between two currencies shall be the reference rate published by the European Central Bank. The date to be taken into account for determining the exchange rate shall be fixed by the Administrative Commission [for the Coordination of Social Security Systems, referred to in Article 71 of Regulation No 883/2004].’
10 Recital 1 of Decision No H3 states: ‘Many provisions such as e.g. … [Article] 68(2) of Regulation [No 883/2004] and Articles … of Regulation [No 987/2009] contain situations, where for the purpose of the payment, calculation or recalculation of a benefit …, the exchange rate needs to be determined.’
11 Paragraphs 2 to 5 of Decision No H3 are worded as follows: ‘2. If not otherwise stated in this Decision, the rate of conversion shall be the rate published on the day when the operation is performed by the institution. 3. An institution of a Member State, which for the purpose of the establishment of an entitlement and for the first calculation of the benefit has to convert an amount into the currency of another Member State, shall use: (a) when, according to national legislation, an institution takes into account amounts, such as earnings or benefits, during a certain period before the date for which the benefit is calculated, the rate of conversion published for the last day of that period; (b) when, according to national legislation, for the purpose of calculation of the benefit an institution takes into account one amount, the rate of conversion published for the first day of the month immediately preceding the month when the provision must be applied. 4. Paragraph 3 shall apply mutatis mutandis when an institution of a Member State for the recalculation of the benefit due to changes in the factual or legal situation of the person concerned, has to convert an amount in the currency of another Member State. 5. An institution which pays benefit that is regularly indexed according to the national law, and where the amounts in other currency have an impact on that benefit, shall, when recalculating it use the rate of conversion applicable on the first day of the month preceding the month when the indexation is due, unless provided for differently in the national legislation.’
12 The rules on child allowance for persons subject to unlimited income tax liability in Germany are defined in Paragraph 62 et seq. of the Einkommensteuergesetz (Law on Income Tax, BGBl. 2009 I, p. 3366; ‘the EStG’).
13 According to point 2 of the first sentence of Paragraph 65(1) of the EStG, child allowance is not to be paid for a child in respect of whom benefits comparable to child allowance are granted abroad.
14 The applicant in the main proceedings, GP, and her husband reside in Germany and carry out paid employment in Switzerland. They have two children. From February 2012 onwards, the husband received two monthly child allowance payments in Switzerland, each of 200 Swiss francs (CHF) (around EUR 179).
15 On 19 August 2015, GP applied to the Family Allowances Office for the payment of a differential supplement to child allowance.
16 By decision of 8 September 2015, confirmed, following an objection, on 14 October 2015, the Family Allowances Office rejected GP’s application in respect of the period from April 2012 to December 2014. The Family Allowances Office referred to Article 90 of Regulation No 987/2009 and to Decision No H3 in finding that, in order to determine whether there was entitlement to a differential supplement and, if so, the amount thereof, the exchange rate to be used was that published on the first day of the month preceding the month during which the calculation was made. Since that calculation had been made on the day when the decision of 8 September 2015 was adopted, the relevant exchange rate was that published on 1 August 2015. On the basis of that rate, the amount of CHF 200 equated to EUR 188.71, that is to say, an amount greater than the amount of child allowance granted for the years 2012 to 2014 by the Federal Republic of Germany, namely EUR 184 per month for the first two children. Accordingly, the Family Allowances Office took the view that no differential supplement to child allowance was payable for the period in question.
17 GP brought an action before the referring court, the Finanzgericht Baden-Württemberg (Finance Court, Baden-Württemberg, Germany), against the decisions of 8 September and 14 October 2015 of the Family Allowances Office and one subsequent decision made by it. GP submitted before the referring court that paragraph 3(b) of Decision No H3 is applicable to her case and that the words ‘the month when the provision must be applied’ in that paragraph must be interpreted as referring, in the case in point, to April 2012, being the month from which Regulations No 883/2004 and No 987/2009 became applicable to her situation, as a result of Annex II to the Agreement on the free movement of persons entering into force at that time. Consequently, the rate of conversion applicable under paragraph 3(b) of Decision No H3 is that published on 1 March 2012. Since use of that rate leads to the Swiss child allowance for the two children being converted to a figure of EUR 331.90 (EUR 165.95 per child), GP claims payment of a monthly differential supplement of EUR 36.10 (EUR 18.05 per child) for the period from April 2012 to December 2014.
18 The referring court considers that the outcome of the dispute before it turns on the interpretation of Decision No H3. It expresses doubts as to the applicability of paragraph 3(b) of that decision given that, under that provision’s wording, it applies to the conversion of a sum by the relevant institution of one Member State into the currency of another Member State when the institution in question must according to national law take an amount into account, whereas, in the case in point, the Family Allowances Office has to convert an amount denominated in Swiss francs into euro - that is to say, carry out a conversion into the currency of its own Member State - according to EU law, namely Regulation No 883/2004. The referring court states that there is also a similar uncertainty in relation to paragraph 4 of Decision No H3.
19 In the event that, it not being otherwise stated in Decision No H3, the provisions of paragraph 2 thereof are to be applied, the referring court asks, in relation to the words ‘the operation is performed by the institution’ in that paragraph, which State and which operation are meant.
20 Finally, the referring court wonders about the possible application of paragraph 5 of Decision No H3 which, in its opinion, also raises problems of interpretation.
21 In those circumstances, the Finanzgericht Baden-Württemberg (Finance Court, Baden-Württemberg) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) Which provision of Decision No H3 … is to be applied in circumstances such as those in the main proceedings for the purposes of a currency conversion of family benefits relating to children and taking the form of child allowance? (2) How is the applicable provision of that decision to be interpreted specifically for the purposes of determining the amount of the differential supplement to child allowance, which is dependent on the exchange rate? (a) If paragraph 2 of Decision No H3 is to be applied: within the meaning of that provision, which day is the day “when the operation is performed by the institution”? (b) If paragraph 3(b) (where necessary, in combination with paragraph 4) of Decision No H3 is to be applied: within the meaning of that provision, which month is the month “when the provision must be applied”? (c) If paragraph 5 of Decision No H3 is to be applied: is the saving clause relating to national law compatible with the enabling provision in Article 90 of [Regulation No 987/2009]? If yes: in order for it to be “provided for differently” in national legislation, is legislation under a formal statute necessary or is an administrative instruction from the national administrative authorities sufficient? (3) Are there any special features to be taken into account specifically in the case of a currency conversion of Swiss child allowance by the German family allowances office? (a) When Decision No H3 is applied in relation to Switzerland, is it significant that the German national rule in point 2 of the first sentence of Paragraph 65(1) of [the EStG] in itself lays down an exclusion from the payment of benefits? (b) Is the relevant date for the purposes of the currency conversion pursuant to Decision No H3 the date on which the Swiss institution granted or paid the family benefits? (c) Is the relevant date for the purposes of the currency conversion pursuant to Decision No H3 the date on which the German institution refused or granted the differential supplement to child allowance?’
22 Since Question 3 relates to the potential impact of converting benefits paid in Swiss francs by a Swiss institution into the currency of a Member State on the application and interpretation of the provisions of EU law referred to in Questions 1 and 2, it is Question 3 that should be answered first.
23 By this question, the referring court asks, in essence, whether, as regards the currency conversion of child allowance in order to determine the amount of any differential supplement under Article 68(2) of Regulation No 883/2004, the application and interpretation of Article 90 of Regulation No 987/2009 and of Decision No H3 are affected by the fact that that allowance is paid in Swiss francs by a Swiss institution.
24 In that regard, it should be borne in mind that, under Article 8 of the Agreement on the free movement of persons, the contracting parties are to make provision, in accordance with Annex II to that agreement, for the coordination of social security systems with the aim in particular of determining the legislation applicable and paying benefits to persons residing in the territory of the contracting parties. Section A of Annex II provides for the application, between the contracting parties, of Regulations No 883/2004 and No 987/2009. Thus, and since, according to Article 1(2) of Annex II, ‘the term “Member State(s)” contained in the legal acts referred to in section A of this Annex shall be understood to include Switzerland in addition to the States covered by the relevant legal acts of the European Union’, the provisions of those regulations also cover the Swiss Confederation (see, to that effect, judgment of 14 March 2019, Dreyer, C‑372/18, EU:C:2019:206, paragraph 29 and the case-law cited). The same is true of the provisions of Decision No H3, since Section B of Annex II to the Agreement on the free movement of persons provides that the contracting parties are to take account of that decision.
25 That being so, the situation of GP, who resides in Germany and works in Switzerland, as does her husband, who receives family allowances granted by a Swiss institution, falls within the scope of Regulations No 883/2004 and 987/2009 and of Decision No H3 (see, by analogy, judgment of 14 March 2019, Dreyer, C‑372/18, EU:C:2019:206, paragraph 30).
26 It follows that, under those EU acts, the aforesaid allowances and the currency conversion of the amount concerned must be treated in the same way as allowances received in an EU Member State. In particular, with regard to Question 3(a) asked by the referring court, relating to the significance of the exclusion, under point 2 of the first sentence of Paragraph 65(1) of the EStG, of child allowance in Germany when a comparable benefit is granted abroad - in the case in point, in Switzerland - a rule against overlapping laid down by a Member State’s national law cannot be applied if the application thereof is found to be contrary to EU law (see, to that effect, judgment of 12 June 2012, Hudzinski and Wawrzyniak, C‑611/10 and C‑612/10, EU:C:2012:339, paragraph 71).
27 It should be added that a different application of Regulations No 883/2004 and No 987/2009 and of Decision No H3 in a situation such as that at issue in the main proceedings would be contrary to the objective of equal treatment that the coordination of social security systems which is provided for in Article 8 of the Agreement on the free movement of persons is intended to achieve.
28 Accordingly, the answer to Question 3 is that, as regards the currency conversion of child allowance in order to determine the amount of any differential supplement under Article 68(2) of Regulation No 883/2004, the application and interpretation of Article 90 of Regulation No 987/2009 and of Decision No H3 are not affected by the fact that that allowance is paid in Swiss francs by a Swiss institution.
29 By its first question, the referring court seeks, in essence, to ascertain which provision of Decision No H3 applies when the currency in which child allowance is paid is converted in order to determine the amount of any differential supplement under Article 68(2) of Regulation No 883/2004.
30 In order to answer this question, it should be recalled, first, that Decision No H3 is a measure implementing Regulations No 883/2004 and No 987/2009. According to settled case-law of the Court, an implementing act must be given, if possible, an interpretation that is consistent with the provisions of the basic act (see, to that effect, judgments of 14 May 2009, Internationaal Verhuis- en Transportbedrijf Jan de Lely, C‑161/08, EU:C:2009:308, paragraph 38, and of 19 July 2012, Pie Optiek, C‑376/11, EU:C:2012:502, paragraph 34).
31 Second, whilst recital 1 of Decision No H3 refers to Article 68(2) of Regulation No 883/2004 as being a provision containing ‘situations, where for the purpose of the payment, calculation or recalculation of a benefit …, the exchange rate needs to be determined’, neither paragraph 2 of that decision nor paragraphs 3 to 5, which specify the rates of conversion which must be used in certain specific situations relating to benefits, expressly state to which provisions of Regulations No 883/2004 and No 987/2009 they apply.
32 That being so, in order to determine which provision of Decision No H3 applies in the situation referred to in Question 1, account must be taken of the nature and purpose of the benefit concerned.
33 In that regard, the benefit at issue in the main proceedings, which is a differential supplement potentially payable in respect of monthly family allowances, has its basis in Article 68 of Regulation No 883/2004. Under Article 68(1)(a), where, during the same period and for the same family members, benefits are provided for under the legislation of more than one Member State on different bases, the rights available on the basis of an activity as an employed or self-employed person take priority over rights obtained on the basis of residence. Article 68(2) provides that, in the case of overlapping entitlements, family benefits are to be provided in accordance with the legislation thus designated as having priority, and entitlements to family benefits by virtue of other legislations are to be suspended up to the amount provided for by the first legislation, a differential supplement being paid, if necessary, for the sum exceeding that amount.
34 The Court has held that a rule such as this against overlapping benefits seeks to ensure that the person entitled to benefits paid by several Member States receives a total amount of benefits which is equal to the amount of the most favourable benefit to which he is entitled under the legislation of just one of those States (judgment of 30 April 2014, Wagener, C‑250/13, EU:C:2014:278, paragraph 46 and the case-law cited).
35 In order to ensure that the total amount paid is equal to the amount of the most favourable benefit in a case where the sums to be compared are in different currencies, it is necessary to use the reference exchange rate published by the European Central Bank on a date as close as possible to that of the payment of the benefits. In a situation where benefits are paid at regular intervals - in the case in point, monthly - over a long period of time, that entails the use of a different exchange rate for each payment.
36 To apply a single rate of conversion for such a period, even though rates are liable to be subject to significant fluctuations over the course of that period, could well either deprive the recipient of the benefits of part of the amount of the most favourable benefit or result in him or her being awarded an amount in excess of that benefit.
37 Although, as the German Government asserts in its written observations, the need to make a calculation on the basis of a new exchange rate for each payment causes an additional administrative burden for the competent social security institutions, the greater convenience of another calculation method cannot prevail over compliance with the wording of a clear provision and with the purpose underlying it (see, by analogy, judgment of 30 April 2014, Wagener, C‑250/13, EU:C:2014:278, paragraph 38).
38 As regards the provisions of Decision No H3 which may be applicable to the dispute in the main proceedings, paragraph 2 of that decision provides that, if not otherwise stated in the decision, the rate of conversion to be used is the rate published on the day when the operation is performed by the institution.
39 The application of that rule to the benefit at issue in the main proceedings is liable to lead to the use of a new rate of conversion for each payment of the family benefit concerned and, as the case may be, to the use of a differential supplement, a situation which, as is apparent from paragraphs 34 to 36 of the present judgment, is consistent with the objective of the payment of a differential supplement under Article 68(2) of Regulation No 883/2004, namely to ensure payment of a total amount equal to the amount of the most favourable benefit.
40 It must, however, be pointed out that the wording of paragraph 2 of Decision No H3 makes the residual nature of that paragraph clear, in that it is to be applied in determining the rate of conversion to be used with regard to the provisions of Regulations No 883/2004 and No 987/2009 that are covered by Decision No H3 only if that decision does not otherwise provide. Consequently, it is necessary to examine whether paragraphs 3 to 5 of Decision No H3, mentioned by the referring court, apply to a situation such as that at issue in the main proceedings.
41 In that regard, it must be stated, first of all, that the very wording of paragraph 3 of Decision No H3 precludes the application of that provision in such a situation. First, that provision is intended to apply to situations where an institution of a Member State ‘has to convert an amount into the currency of another Member State’. The dispute in the main proceedings concerns the opposite situation, namely a social security institution of a Member State converting into its own currency an amount in the currency of another State.
42 Secondly, Paragraph 3(a) and (b) refers to amounts being taken into account ‘according to national legislation’ whereas, in the situation at issue in the main proceedings, the obligation to take into account the amount of benefits paid in Switzerland when calculating any differential supplement payable in Germany results from the application of Article 68(2) of Regulation No 883/2004 and of the Agreement on the free movement of persons.
43 Next, paragraph 4 of Decision No H3 cannot be applicable since it too relates to situations where the institution of a Member State has to convert an amount into the currency of another State. In addition, it is clear from the wording of that paragraph, in particular from the words ‘paragraph 3 shall apply mutatis mutandis when an institution of a Member State for the recalculation of the benefit … has to convert an amount …’, that it constitutes a specific application of paragraph 3 of the decision.
44 Finally, paragraph 5 of Decision No H3 applies for the purposes of recalculating a benefit that is regularly indexed according to the national law, where the amounts in other currency have an impact on that benefit. The wording of that provision does not, in principle, preclude its application for the purposes of determining any differential supplement that may be payable where the family allowance of a Member State which is suspended up to the amount provided for by the legislation designated as having priority under Article 68(2) of Regulation No 883/2004 is regularly indexed.
45 However, the referring court points out that child allowance in Germany remained unchanged from 2010 to 2014, at EUR 184 for each of the first two children, and increased once per year from 2015. It follows that there was no increase in that benefit during the period for which a differential supplement is claimed in the case in point, namely between April 2012 and December 2014.
46 Accordingly, it cannot be found that that benefit was regularly indexed, within the meaning of paragraph 5 of Decision No H3. To allow that provision to be applied would lead to the use of an exchange rate published on a date too far removed from the majority of the monthly family benefits at issue in the main proceedings, which would conflict with the objective of Article 68(2) of Regulation No 883/2004 as described in paragraph 34 of the present judgment.
47 Since none of paragraphs 3 to 5 of Decision No H3 applies in a situation such as that at issue in the main proceedings, it is paragraph 2 which must be applied, as is apparent from paragraph 40 of the present judgment.
48 Accordingly, the answer to Question 1 is that Decision No H3 must be interpreted as meaning that paragraph 2 thereof is applicable when the currency in which child allowance is paid is converted in order to determine the amount of any differential supplement under Article 68(2) of Regulation No 883/2004.
49 By Question 2(a), referred in the event that paragraph 2 of Decision No H3 is held to be applicable to a situation such as that at issue in the main proceedings, the referring court asks, in essence, what the scope is of the concept of ‘the day when the operation is performed by the institution’, within the meaning of that provision.
50 It must be held that, in circumstances such as those of the dispute in the main proceedings, that concept refers to the day on which the competent institution of the State of employment, which has prime responsibility for payment of the family benefit in question, makes that payment. That payment is made in all circumstances, whereas payment of the benefits provided for by the State of residence, in the form of a differential supplement, is made only in specific circumstances, and is therefore conditional and uncertain. It is not until the benefit has been paid by the State of employment and the amount has been converted into the currency of the State of residence that the person concerned may be entitled to that supplement in the latter State, if the amount converted is lower than the amount due by way of the same benefit under the legislation of the State of residence (see, by analogy, judgment of 30 April 2014, Wagener, C‑250/13, EU:C:2014:278, paragraphs 45 and 47).
51 That interpretation is, moreover, consistent with the purpose of the rule against overlapping entitlements in Article 68(2) of Regulation No 883/2004, as set out in paragraph 34 of the present judgment.
52 Accordingly, the answer to Question 2(a) is that paragraph 2 of Decision No H3 must be interpreted as meaning that, in a situation such as that at issue in the main proceedings, the concept of ‘the day when the operation is performed by the institution’, within the meaning of that provision, refers to the day on which the competent institution of the State of employment makes payment of the family benefit in question.
53 In view of the answer to Question 1, it is unnecessary to examine Question 2(b) and (c).
54 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.