JUDGMENT OF 6. 12. 1973 — CASE 140/73 SÉCURITÉ SOCIALE PARIS v MANCUSO

In Case 140/73 Reference to the Court under Article 177 of the EEC Treaty by the Court of Appeal, Paris for a preliminary ruling in the action pending before that court between

THE COURT composed of: R. Lecourt, President, M. Sørensen, President of Chamber, R. Monaco, J. Mertens de Wilmars (Rapporteur), P. Pescatore, H. Kutscher, C. Ó Dálaigh, Judges, Advocate-General: A. Trabucchi Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

The facts claim and the observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice have given rise to the following report for the hearing:

I — Facts and procedure

On the subject of old age pensions Articles 27 and 28 of Regulation No 3 establish a system of aggregation of the periods of insurance and the corresponding apportionment of the amount of benefits.

The Court of Justice of the European Communities has interpreted these provisions to the effect that there is no point in aggregation and apportionment when there is a right to benefit in a Member State without there being a need to rely on periods completed under the legislation of other Member States.

Articles 24, 25 and 26 of the same Regulation, which relate to the system of invalidity insurance, provide that when an insured has completed periods of insurance in different Member States under legislations one of which at least is of type B (i.e. under which invalidity benefits are calculated according to the length of insurance periods completed), the system of aggregation and apportionment provided for in Article 27 and 28 as regards old-age pensions shall apply by analogy.

The application for a preliminary ruling which the Court of Appeal, Paris has made to the Court concerns the question of whether the interpretation which the Court has given to Articles 27 and 28, as regards the case where no apportionment has to be made, applies equally in the event of analogous application of these Articles to the system of invalidity insurance.

Madame Mancuso, the first defendant and respondent in the main action, of Italian nationality, received under French legislation as from 25 November 1955 an invalidity pension, converted on 1 January 1965 into an old-age pension.

The second plaintiff, having learnt in 1967 that the first defendant was also receiving as from 1 May 1964 in Italy where she had worked from 1957 to 1964, an Italian invalidity pension, amended the French invalidity pension for the period from 1 May 1964 to 1 January 1965 under the apportionment rules provided in Article 28 (1) of Regulation No 3 of the Council.

On application by the first defendant, the Commission de Premiere Instance du contentieux de la sécurité sociale de Paris sent the case to the Caisse Régionale to have the calculation of the pension made ‘solely according to the rules of the French system, without apportionment with the Italian system’.

The first and second plaintiffs having appealed, the Court of Appeal, Paris, taking the view that questions of interpretation of Community law arose, stayed the proceedings by order of 3 May 1973 and referred the following questions to the Court for a preliminary ruling:

‘Whether the relationship between Articles 27 and 28 of Regulation No 3 and their complementary and simultaneous application as established with regard to old age must be compulsorily transposed to the area of invalidity; Whether, in. particular, the provisions of Article 28 on apportionment and more especially the provisions of Article 28 (3) can be applied to invalidity pensions, when there is no need to have recourse to the application of Article 27 for the acquisition of pension rights.’

The request for a preliminary ruling dated 3 May 1973 was regstiered at the Court on 13 June 1973.

After hearing the report of the Judge-Rapporteur and the opinion of the Advocate-General, the Court decided to proceed without a preparatory inquiry.

Written observations were submitted by the first plaintiff, the Commission and the Italian Government.

II— Observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice

A — Observations by the first plaintiff

As regards the first question, the first plaintiff observes that according to the terms of Article 26 of Regulation No 3 of the Council (OJ No 30, 16.12. 1958, p. 561/58) concerning social security for migrant workers, Articles 27 and 28 of this Regulation apply also to invalidity benefits when under one of the legislations applicable such benefits depend on the duration of insurance periods (legislation called type B).

As regards the second question, the first plaintiff observes that the legal principle confirmed in the judgments of 15 July 1964 (Case 100/63, van der Veen, Rec. 1964, p. 1108) and of 5 July 1967 (Case1/67 and 2/67, Ciechelski and de Moor, Rec. 1967 p. 234 and p. 256) according to which apportionment is excluded in the case of a pension the right to which arises only from those insurance periods completed under the legislation of one Member State, could not be extended to invalidity pensions by reason ‘of the fundamental difference in nature between old-age and invalidity risk’. In this respect it points out that the right to an invalidity pension usually, and particularly in France, arises after a relatively short period, so that the principle excluding apportionment would be involved much more frequently than in the case of old-age pensions, and if it were applied generally it would result in an accumulation of benefits relating to one and the same period, an accumulation prohibited by Article 11 of Regulation No 3. The Court itself said in the judgment in Ciechelski of 5 July 1967 (Case 1/67, Rec. 1967 p. 245) that in this event an exception must be made to the rule it had stated.

The plaintiff thus considers that in the case in question the principle of apportionment ought to be applied to the calculation of the invalidity pension.

B — Observations by the Commission

The Commission refers to the case law of the Court and in particular to the judgments in Ciechelski and de Moor, from which it appears that apportionment of a benefit is possible only if the aggregation of periods of work completed in one or more other Member States was necessary to confer the entitlement to benefit in the State concerned. Otherwise recourse to apportionment would infringe Article 51 of the Treaty. Apportionment is possible only in a State where aggregation of periods is required.

The Commission observes that one could indeed join with the first plaintiff in fearing that the application to invalidity pensions of rules applying to old-age pensions would result in an accumulation of benefits. Of the six Member States to whom Regulation No 3 applied, three have, as regards invalidity pensions, legislation which does not make the amount of benefits depend on the duration of insurance, whereas the legislation of another takes account of the duration of insurance only for a part of the pension. Thus the grant of a complete invalidity pension under legislation of type A and an apportionment of a pension under legislation of type B could involve an accumulation of undue benefits, insofar as the aggregate of the benefits paid could exceed the theoretically highest amount, and even in certain cases the earnings of the person concerned before the claim arose.

According to the Commission this objection could be rebutted as follows.

A recent judgment of the Court (Case 27/71, Keller, judgment dated 10 November 1971, Rec. 1971 p. 885) has stated that the benefit for a migrant worker arising from the exclusion in certain cases of aggregation and apportionment ‘arose not from the interpretation of Community law but from the system at present in force, which, in the absence of a common system of social security, rests on a simple coordination of national legislations, which have not yet been harmonized’.

Moreover, although the Court has not had to express an opinion on the interpretation of Articles 27 and 28 of Regulation No 3 in the case of invalidity pensions, it has already applied the said principles to old-age pension schemes of the same type as invalidity pensions, in particular to schemes providing benefits comprising a part proportionate to the duration of the insurance and a fixed part independent of that duration (judgment dated 5 July 1967, Case 2/67, de Moor, Rec. 1967 p. 255) and even to the case of legislation of type A (judgment dated 15 July 1964, Case 100/63, van der Veen, Rec. 1964 p. 1125). According to the Commission it may be deduced by analogy from the van der Veen judgment that the rule that apportionment applies only if aggregation is a prior condition for entitlement applies equally to the calculation of invalidity pensions.

The first question must therefore be answered in the affirmative.

As to the second question the Commission considers that in view of the principle referred to above there is no point in applying Article 28 (3) of Regulation No 3 expressly referred to by the Court of Appeal, Paris. Indeed, this provision, which provides for the grant of a supplement when the amount of the benefits calculated under Article 28 (1) and (2) is lower than the benefit which would atise under the legislation of one Member State alone, no longer has any effect, since if entitlement to benefit under the legislation of one Member State alone exists, this benefit must be granted according to the rules of that legislation alone, without the application of Article 28 (1) and (2).

It is proper too to point out that, taking account of the principles developed by the Court, Regulation No 1408/71 of the Council, which henceforth replaces Regulation No 3, has repeated such a provision.

C — Observations of the Italian Government

The Italian Government is of the opinion that the interpretation given by the Court with regard to old-age pensions can be applied to invalidity pensions. If entitlement to benefits arises in a Member State without it being necessary to take into account periods completed in other Member States, the competent insurance body may not apply Articles 27 and 28 of Regulation No 3 and reduce the amount of benefits which it is due to pay under its own legislation, insofar as these benefits are not due by reference to periods already taken into account for the calculation of benefits paid by the competent insurance body of another State. Apportionment applies only in the case where entitlement to a pension arises as a result of aggregation of insurance periods.

In the view of the Italian Government there is no fundamental difference between the entitlement to invalidity pension and the entitlement to old-age pension, justifying different rules of Community law. Moreover, Article 26 of the Regulation provides for the application by analogy of the provisions relating to old age and to death.

Subsequent to the report for the hearing set out above, the oral hearing took place.

The oral observations made by the Italian Government, represented by A. Maresca, and the Commission, represented by Miss M. J. Jonczy, were made at the hearing on 6 November 1973.

The Advocate-General delivered his opinion at the hearing on 21 November 1973.

Grounds of judgment

1. By order dated 3 May 1973 filed at the Registry on 13 June 1973 the Court of Appeal, Paris, referred to the Court for a preliminary ruling under Article 177 of the Treaty two questions of interpretation regarding the extent of application of Articles 27 and 28 of Regulation No 3 of the Council concerning social security for migrant workers.

2. It appears from the file that the first defendant, who is of Italian nationality, has received as from 25 1 November 1955 under French legislation on invalidity benefits (referred to in Annex F of the Regulation as being of type A, i.e. according to which the benefits are usually calculated independently of the duration of the periods completed) an invalidity pension converted, as from her sixtieth birthday in 1965, into an old-age pension, although from 1 May 1964 she has been receiving in Italy, where she worked from 1957 to 1964, a second invalidity pension under Italian legislation (referred to as being of type B, i.e. according to which benefits are usually calculated taking into account the duration of the periods completed).

3. The main action basically relates to the question whether, having regard to this last fact, the French institution responsible for the invalidity pension is entitled to reduce it by applying the provisions of Article 28 (1) and (3) of Regulation No 3 in the calculation of its amount.

4. Thus the questions raised are basically aimed at defining the respective relationships between Articles 26, 27 and 28 of Regulation No 3 and, in particular, at ascertaining whether the apportionment of the amount of benefits provided for by Article 28 in the case of old-age pensions and pensions on death must be applied to invalidity pensions ‘although there is no need to have recourse to the application of Article 27 for the acquisition of pension rights’.

5. According to Article 26 of Regulation No 3, Articles 27 and 28 relating to old-age and death pensions ‘shall apply by analogy’ to the payment of invalidity benefits when the insured has completed periods under different legislations of which at least one is of type B.

6. The basis, framework and limits of the Regulations on social security are contained in Articles 48 to 51 of the Treaty, intended to secure freedom of movement for workers.

7. From this point of view, Article 51 of the Treaty and Article 27 of Regulation No 3 refer in essence to the case where the legislation of a Member State on its own does not entitle the person concerned to a benefit by reason of the insufficient time completed under this legislation.

8. To remedy this situation these provisions provide, for the benefit of the worker who has been subject successively or alternately to the legislation of two or more Member States, for the aggregation of periods of insurance completed under the legislation of each of these States.

9. As regards old-age and death pensions, Articles 27 and 28 of Regulation No 3 apply to this situation, but not when in a State the object sought by Article 51 is attained under the national legislation alone.

10. The scheme of Articles 27 and 28 thus implies a simultaneous application of these two provisions.

11. As a result, apportionment of benefits may not be made, unless it has been necessary, in order to give rise to entitlement, to aggregate beforehand the periods completed under different legislations, but it may not be used to reduce the benefits which the person concerned can claim under the legislation of a single State.

12. The same considerations require the application of the same rules when the problem arises of the application by analogy of Articles 27 and 28 to invalidity pensions.

13. It is even more so when certain national legislations, as the present case shows, provide for the converting of invalidity pensions into old-age pensions beyond a certain age limit.

14. It is not possible to refer to the existence of a fundamental difference between the systems of old-age pensions and invalidity pensions to justify, as regards invalidity pensions, the application of Article 28 without first applying Article 27.

15. Indeed the possible combination of systems of types A and B arises likewise in the case of old-age pensions, but this fact does not permit the application, contrary to the terms of Article 28, of apportionment of the benefit, when there is no need of the simultaneous application of Article 27 to give rise to entitlement to this benefit.

16. A different interpretation would lead to a discrimination at the expense of the migrant worker by giving him, in the same legal circumstances, smaller rights than those accorded to the worker who completes the whole of his occupational career in a single Member State.

17. If this interpretation is capable of leading in certain cases to an accumulation of pensions, this consequence follows not from the interpretation of Community law but from the system at present in force, which, in the absence of a common social security scheme, rests on a simple coordination of national legislations which have not yet been harmonized.

18. It follows from Article 11 of Regulation No 3 that the national legislations could deal with this situation if it is a question of benefits acquired outside the application of Articles 27 and 28 of this Regulation.

Costs

19. The costs incurred by the Commission of the European Communities and the Italian Government, which have submitted observations to the Court, are not recoverable, and as these proceedings are, insofar as the parties to the main action are concerned, a step in the action pending before a national court, the decision on costs is a matter for that court.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the oral observations of the Commission of the European Communities and the Italian Government; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Articles 51 and 177; Having regard to Regulation No 3 of the Council concerning social security for migrant workers; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities; THE COURT in answer to the questions referred to it by the Court of Appeal, Paris, by order of that court dated 3 May 1973, hereby rules: