JUDGMENT OF 26. 5. 1976 – CASE 103/75 AULICH v BUNDESVERSICHERUNGSANSTALT FÜR ANGESTELLTE

In Case 103/75 Reference to the Court under Article 177 of the EEC Treaty by the Landessozialgericht Berlin for a preliminary ruling in the action pending before that court between

THE COURT composed of: R. Lecourt, President, H. Kutscher and A. O'Keeffe, Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, M. Sørensen and Lord Mackenzie Stuart, Judges, Advocate-General: J.-P. Warner Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact

The facts, the procedure and the observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:

I — Facts and procedure

Mr Walter Th. Aulich, born on 18 January 1896, is of German nationality, lives at Eindhoven (Netherlands) and, by virtue of the general Netherlands law on old-age insurance (Algemene Ouderdomswet), is entitled to an old-age pension which is paid to him by the Netherlands social insurance institutions and, under the Angestelltenversicherungsgesetz (the German law governing employed persons' insurance), to a retirement pension from the Bundesversicherungsanstalt fur Angestellte, Berlin.

Mr Aulich left the Federal Republic of Germany in June 1970 to settle in the Netherlands. As a result of this change of residence, his sickness insurance at the Deutsche Angestelltenkrankenkasse (German employed persons' sickness fund) in Bielefeld ceased on 31 August 1970. But, with effect from 1 September 1970, Mr Aulich took out voluntary sickness insurance with the Eindhovens Algemeen Ziekenfonds (Eindhoven general sickness fund).

On 31 August 1970, Mr Aulich applied to the Bundesversicherungsanstalt für Angestellte to be granted the allowance towards sickness insurance contributions provided for under Article 381 (4) of the Reichsversicherungsordnung (RVO, German social insurance code). Under the terms of this provision, the holder of a pension under the employed persons' insurance scheme who does not come under the employed persons' compulsory sickness insurance scheme or who is voluntarily insured under a lawful sickness insurance scheme or is insured against sickness by a private insurance undertaking is entitled to an allowance towards his sickness insurance contributions from the competent institution in the field of pensions insurance.

Mr Aulich's application was dismissed by decision of 23 September 1970 on the ground that Article 22 (1) of Regulation No 3 of the Council of 25 September 1958 concerning social security for migrant workers (JO p. 561) provides, in respect of sickness insurance, as follows:

Where the beneficiary of pensions payable under the legislation of two or more Member States is permanently resident in the territory of a Member State in which one of the institutions liable for payment of his pensions is situated and he is entitled to benefits in kind under the legislation of that State, the benefits in kind shall be issued to him … by the institution of his place of permanent residence, as though he were the beneficiary of a pension payable only under the legislation of his country of permanent residence. The cost of the said benefits shall be borne by the institution of the country of permanent residence.

By judgment of 26 February 1971 the Sozialgericht, Berlin annulled the decision of the Bundesversicherungsanstalt fur Angestellte of 23 September 1970 and ordered it to pay Mr Aulich the allowance towards sickness insurance contributions with effect from 1 September 1970.

The Sozialgericht declared that the grant of the German allowance towards sickness insurance contributions could be refused only if the pensioner was, at no or, at least, very little cost to himself, adequately covered for sickness insurance in another Member State by a sickness insurance institution of that State. Furthermore, the conditions laid down in Article 22 of Regulation No 3 are not satisfied since Mr Aulich had no right to sickness insurance against an insurance institution in his country of origin.

On 25 May 1971, the Bundesversicherungsanstalt für Angestellte lodged an appeal before the Landessozialgericht, Berlin, against the judgment of the Sozialgericht, During the proceedings before the Landessozialgericht the defendant abandoned its contention that Article 22 of Regulation No 3 prevented payment abroad of the allowance in question after the Court of Justice of the European Communities gave judgment on 11 October 1973 in Case 35/73 (Ludwig Kunz v Bundesversicherungsanstalt für Angestellte [1973] ECR 1025). After the Algemeen Ziekenfonds had confirmed that Mr Aulich fulfilled the conditions for admission to the voluntary old-age sickness insurance scheme in the Netherlands, the Bundesversicherungsanstalt fur Angestellte challenged the judgment of the Sozialgericht in so far as it was ordered to pay the allowance towards sickness insurance contributions with effect from 1 October 1972, the date of entry into force of Regulation No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community (JO L 149, p. 2). In its original version (Article 27 of Regulation No 1408/71 was subsequently amended by the Act concerning the Conditions of Accession and the adjustments to the Treaties, annexed to the Treaty of 22 January 1972 concerning the Accession of the new Member States to the EEC and to the EAEC [OJ, English Special Edition, 27. 3. 1972, p. 14] and by Regulation No 2864/72 of the Council of 19 December 1972 [JO L 306, p. 1]) Article 27 of the regulation provides as follows:

A pensioner who is entitled to draw pensions under the legislation of two or more Member States and who is entitled to benefits in kind under the legislation of the Member State in whose territory he resides, taking account where appropriate of the provisions of Article 18 and Annex V, shall, with the members of his family, receive such benefits from the institution of the place of residence and at the expense of that institution as though he were a pensioner whose pension was payable solely under the legislation of the latter State.

Moreover, Section H (1) (a) of Annex V of Regulation No 1408/71, which covers the Netherlands, provides as follows:

A person receiving an old-age pension under Netherlands legislation and a pension under the legislation of another Member State shall, for the purposes of Article 27 and/or 28, be considered to be entitled to benefits in kind if, taking into account Article 9 where appropriate, he satisfies the conditions required for entitlement to voluntary sickness insurance for elderly persons.

As regards the extent to which the sickness insurance institutions are competent, under these provisions, Mr Aulich should have drawn since 1 October 1972, the benefits to which he was entitled from the institution of his place of residence in the Netherlands and at the expense of that institution as though he were a pensioner solely under Netherlands legislation. German sickness insurance for pensioners does not therefore come into the matter; an allowance towards contributions in accordance with paragraph 381 (4) of the RVO supplements the sickness insurance and cannot therefore be granted in the present case.

For his part, Mr Aulich contends that the contested judgment also remains valid as regards the period from 1 October 1972 because Regulation No 1408/71 did not create any new legal situation and could not, therefore, deprive him of an existing right.

By order of 13 August 1975, the 9th Chamber of the Landessozialgericht, Berlin, decided, under Article 177 of the EEC Treaty, to stay the proceedings until the Court of Justice gave a preliminary ruling on the following questions:

Is Article 27 of Regulation No 1408/71 of the Council of the EEC in conjunction with Annex No V H 1 (a) to be interpreted as meaning that it gives rise only to a right to benefit against the sickness insurance institution of the State of residence, or as meaning that in addition it exludes completely the provisions of the domestic law of the other Member State relating to the granting of allowances towards contributions to a contributory voluntary sickness insurance scheme in the State of residence? In this connexion, how should the provision in Article 27 that the pensioner shall receive benefits from the institution of his place of residence as though his ‘pension was payable solely under the legislation of the latter State’ be understood?

Is the pensioner thereby put in a position, with regard to the insurance institution of the other Member State, as though he received no pension from this Member State? Was it intended, by Article 27, so to extend the law of the European Communities (in particular Article 22 of Regulation No 3 of the Council of the EEC) that inter alia even rights arising under domestic law are affected?

The order of the Landessozialgericht, Berlin, was entered at the Court Registry on 29 September 1975.

Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by Mr Aulich on 29 October 1975, by the Commission of the European Communities on 3 December 1975 and by the Government of the Netherlands on 10 December 1975.

The Court, on hearing the report of the Judge-Rapporteur and the views of the Advocate-General, decided to open the oral procedure without any preparatory inquiry. It nevertheless invited the Government of the Netherlands and the Commission to reply to a question; the former supplied an answer in writing, the latter replied at the oral proceedings.

Pursuant to Article 26 (3) of the Rules of Procedure, the President of the Court designated Mr J. P. Warner as Advocate-General in the present case because the two Advocates-General assigned to the Second Chamber were prevented from attending.

II — Written observations submitted before the Court

Mr Aulich, the respondent, contends that Article 27 of Regulation No 1408/71 cannot usurp the German sickness insurance system applicable to old-age or retirement pensioners or transfer it to the Netherlands on change of residence. There is in the Netherlands no free sickness insurance for pensioners. The monthly premium to be paid for sickness insurance in the Netherlands was F1 178-10 in 1975 and a substantial increase has been announced for 1976. The German allowance towards sickness insurance contributions, at present DM 115, does not wholly cover the free insurance which Mr Aulich would enjoy if he lived in Germany, but it represents an improvement in his position. If this allowance were not paid to him his pension would be reduced by the extent of the premium which, in the Netherlands, he has to pay to the sickness fund.

The Government of the Kingdom of the Netherlands takes the view that Mr Aulich's circumstances are covered by Article 28 of Regulation No 1408/71 by virtue of which he should be entitled, in the Netherlands, to benefits in kind at the expense of the Federal Republic of Germany. At the same time, in view of the fact that, in the Netherlands, an old-age pension does not confer entitlement to benefits in kind, paragraph H (1) of Annex V of Regulation No 1408/71 introduces a system under which, for the purposes of Articles 27 and/or 28, the right to benefits in kind is treated as linked with the Netherlands pension of the Algemene Ouderdomswet (general law on the aged) for pensioners who satisfy the conditions required for admission to voluntary sickness insurance for the aged. Mr Aulich fulfils the conditons contained in the annex and, in consequence, is, under Articles 27 and/or 28 of Regulation No 1408/71, deemed to be entitled to benefits in kind.

In its judgment of 1 December 1965 in Case 33/65 (Dekker v Bundesversicherungsanstalt für Angestellte, reference for a preliminary ruling by the Landessozialgericht, Berlin, [1965] ECR 901), the Court ruled that the allowance towards sickness insurance contributions provided for under Article 381 (4) of the RVO is an allowance supplementary to a pension and does not constitute a sickness insurance benefit. It followed, that, as it was a supplementary benefit for those entitled to an old-age pension it was, in that case, at the expense of the (German) institution which provided the pension; since it did not constitute a sickness insurance benefit it could not, under the terms of Article 27 of Regulation No 1408/71 be at the expense of a Netherlands institution.

In the terms in which the Landessozialgericht made its reference to the Court it wrongly adopted a different view.

In its written reply of 24 February 1966 to a question put to it by the Court, the Government of the Kingdom of the Netherlands states that since the ‘Beitragszuschuß’ is a pension contribution, it is not affected by Article 27.

The Commission of the European Communities suggests that in the interests of clarity the questions referred by the Landessozialgericht, Berlin, should be re-cast as follows:

Does Article 27 of Regulation No 1408/71 give rise only to a right to benefit against the sickness insurance institution of the State of residence or does it wholly replace the provisions of the domestic law of the other Member States relating to sickness insurance for pensioners?

Does Article 27, where appropriate, also replace the provisions relating to the grant of allowances to contributions to a voluntary sickness insurance subject to contribution by the State of residence?

Does the provision in Article 27 that a pensioner shall receive benefits from the institution of the place of residence as though he were ‘a pensioner whose pension was payable solely under the legislation of the latter State’ place the pensioner, as against the insurance organization of the other Member State, in the same position as though he received no pension from the latter?

Is the effect of Article 22 of Regulation No 3 to be widened by Article 27 of Regulation No 1408/71 to the extent that, inter alia, it also impinges on existing rights under national legislation?

a) In its first question, the Landessozialgericht, Berlin, adopts the view that Article 27 of Regulation No 1408/71 creates rights to benefit against the institution of one Member State and takes the place of these rights against another Member State. This viewpoint does not take fully into account either the meaning of Article 27 or its place in the system of coordinating sickness insurance schemes established by the regulation. Regulation No 1408/71 coordinates the national sickness insurance schemes applicable to migrant workers by making the ‘competent’ insurance institution, namely the institution to which the insured is affiliated, responsible for payment of benefits in cash and, for practical reasons, makes the institution of the State of permanent or temporary residence responsible for the provision of any benefits in kind which are at the expense of the competent institution. Article 27 et seq. of the regulation apply this principle, in particular, to a pensioner entitled under the legislation of one or more Member States. Article 27 lays down that the institution of the place of residence is alone competent; it confines the right to benefit to a single institution and makes the latter solely responsible for it. Strictly speaking, Article 27 does not create a right to benefit: the obligation of the sickness insurance institution of the State of residence to grant the benefit is subject to the condition that the pensioner must fulfil the conditions laid down under the legislation of his country for entitlement to benefit. As a general rule the right to benefit as against the sickness insurance institution of the other Member State would automatically disappear were it not for the fact that the risk materializes outside the territory of the other Member State and this means that one of the conditions laid down under national legislation is not satisfied.

b) Neither the wording nor the meaning or objective of Article 27 justify the view that it replaces the provisions relating to the grant of allowances towards contributions to voluntary sickness insurance subject to contribution by the State of residence. These allowances towards sickness insurance constitute neither benefits in kind nor benefits in cash but a supplementary privilege for those entitled to old-age insurance benefits. In so far as it is based on national law, the right to an allowance towards contributions is subject to the principle of the maintenance of accrued rights defined in the 7th recital of the preamble to Regulation No 1408/71 as one of the objects of the coordination rules which it introduces; it would, moreover, conflict with Article 10 (1) of the regulation if an insurance institution refused to pay abroad the allowance towards the contributions in another Member State. The question whether Mr Aulich satisfies the conditions laid down in Article 381 (4) of the RVO for entitlement to an allowance to the contribution depends on German law; in terms of Regulation No 1408/71, residence abroad certainly does not prevent it.

c) The provision in Article 27 under which a pensioner shall receive benefits from the institution of his place of residence as though he were ‘a pensioner whose pension was payable solely under the legislation of the latter State’ refers to the relationship of the pensioner not with the insurance institution of the other Member State but with the insurance institution of the State of residence; its object is to emphasize the exclusive responsibility of the latter institution for granting the whole of the sickness insurance benefits relating to the whole of the insurance periods completed by the pensioner.

d) Since the answer to the first two questions is in the negative, the last no longer requires to be answered. Nevertheless, it may be desirable to state that the widening of the scope of Article 22 of Regulation No 3 effected by Regulation No 1408/71 does not mean any interference with the rights to which the pensioner is entitled under the national legislation of the country of the competent institution but that, on the one hand, under Article 27, he may, where appropriate, also receive cash benefits from the institution of his place of residence and at the latter's expense and, on the other hand, under Article 28 (1) he is in receipt of benefits in kind provided by the institution of the State of residence, even if he is not entitled to these benefits under the legislation of that State.

e) In the Commission's view the questions referred should be answered as follows:

Article 27 of Regulation No 1408/71 does not replace the national legislation of the other Member State in respect of the grant of allowances towards contributions to a contributory voluntary sickness insurance scheme in the State of residence. The provision of Article 27 under which the pensioner shall receive benefits from the institution of his place of residence as though he were ‘a pensioner whose pension was payable solely under the legislation of the latter State’ refers exclusively to the relationship which exists between the pensioner and the insurance institution of the State of residence.

III — Oral procedure

The Commission, represented by its Legal Adviser, Norbert Koch, submitted its oral observations and its reply to the question put by the Court at the hearing on 25 February 1976.

The Advocate-General delivered his opinion at the hearing on 7 April 1976.

Law

1. By order of 13 August 1975, which reached the Court of Justice on 29 September 1975, the Landessozialgericht, Berlin, has referred to the Court a question under Article 177 of the Treaty concerning the interpretation of Article 27 and of Section H (1) of Annex V to Regulation No 1408/71 (OJ, English Special Edition 1971 (II), p. 416).

2. The question was raised in connexion with a dispute between a German insurance fund and a retired person of German nationality who resides in the Netherlands, where he receives an old-age pension but not sickness insurance benefits. It is concerned with the point whether the person concerned can take advantage of Paragraph 381 (4) of the Reichsversicherungsordnung in order to compel the German insurance fund to contribute towards the payment of the contribution which he pays for a voluntary sickness insurance which he took out with a Netherlands insurer.

3. The question is, essentially, whether Article 27 of Regulation No 1408/71 of the Council and Section H (1) (a) of Annex V, taken together, could have affected any right of a retired person to receive an allowance from an insurance fund of a Member State, under the legislation of the latter, towards a voluntary sickness insurance taken out under the legislation of another Member State if the retired person has his place of residence in the latter State.

4. In its original version, which was in force from 1 October to 31 December 1972, Article 27 provided as follows: On the accession of the new Member States to the Communities, this passage was, under Article 1 (5) of Regulation No 2864/72 of the Council (JO L 306, p. 1) replaced by a new one, except in respect of the new Member States, in whose case the application of the regulation was postponed until 1 April 1973. In the case of the old Member States, Article 27 of Regulation No 1408/71 provided, with effect from 1 January 1973, that: Paragraph F 1 (a) of Annex V which, under the Act of Accession, became, with effect from 1 January 1973, Paragraph H 1 (a) provides as follows:

‘A pensioner who is entitled to draw pensions under the legislation of two or more Member States and who is entitled to benefits in kind under the legislation of the Member State in whose territory he resides, taking account where appropriate of the provisions of Article 18 and Annex V, shall, with the members of his family, receive such benefits from the institution of the place of residence and at the expense of that institution as though he were a pensioner whose pension was payable solely under the legislation of the latter State.’

‘A pensioner who is entitled to draw pensions under the legislation of two or more Member States, among which is the Member State in whose territory he resides, and who is entitled to benefits under the legislation of that Member State, taking account where appropriate of the provisions of Article 18 and Annex V, shall, with the members of his family, receive such benefits from the institution of the place of residence and at the expense of that institution as though he were a pensioner whose pension was payable solely under the legislation of the latter Member State.’

‘A person receiving an old-age pension under Netherlands legislation and a pension under the legislation of another Member State shall, for the purposes of Article 27 and/or 28 be considered to be entitled to benefits in kind if, taking into account Article 9 where appropriate, he satisfies the conditions required for entitlement to voluntary sickness insurance for elderly persons.’

5. The effect of Article 27, in both of its versions, is to prevent the competent organization in the State of residence, which is compelled by national legislation to pay a sickness or maternity benefit, from relieving itself wholly or in part from that obligation on the ground that the person concerned is entitled to a benefit under the legislation of another Member State. It is nevertheless necessary to consider whether Article 27 may also have the effect of abolishing a right to receive a benefit of the kind in question due under the legislation of a State other than the State in which the retired person is resident.

6. Article 4 of Regulation No 1408/71 lists the types of benefit to which the regulation applies and links each of them to the materialization of a specific risk.

7. Article 27 forms part of Chapter I of Title III of the regulation which comprises special provisions relating to sickness and maternity benefits. Article 27 can, therefore, refer only to sickness or maternity benefits after materialization of the risk insured against. Since a benefit of the type of the allowance towards the contribution in dispute is not granted after materialization of the risk designated by the person entitled, it cannot be limited or affected by Article 27 of Regulation No 1408/71. A distinction must, in fact, be drawn between the contribution and the benefit: the first governs acquisition of the right, the second assumes that the right exists. Thus allowances, to the extent to which they represent a share in the contribution to sickness insurance, cannot constitute benefits from that insurance.

8. The answer which, in consequence, must be given to the national court is that Article 27 of Regulation No 1408/71 refers only to sickness or maternity benefit granted by the competent institution of the State in which the retired person is resident after those risks have materialized and cannot affect any right of the retired person to receive under the legislation of other Member States a benefit of the type of the allowance towards the contribution to a voluntary sickness insurance scheme.

Costs

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

On those grounds, THE COURT in answer to the question referred to it by the Landesgericht, Berlin, by order of 13 August 1975 hereby rules: