JUDGMENT OF 14. 3. 1978 — CASE 83/77 NASELLI v CAISSE AUXILIAIRE D'ASSURANCE MALADIE-INVALIDITÉ

In Case 83/77 REFERENCE to the Court under Article 177 of the EEC Treaty by the Tribunal du Travail (Labour Tribunal), Brussels, for a preliminary ruling in the action pending before that court between

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

gives the following

JUDGMENT

Facts and issues

The facts, the procedure and the written 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 written procedure

Mr Naselli, an Italian national, who is the plaintiff in the main action has worked in Italy and Belgium. As he was disabled in Italy in 1958 he made an application for an invalidity pension. The competent Italian social security institution awarded him an apportioned pension as from 1 October 1958, his entitlement thereto being based on the aggregation of his insurance periods in Belgium and Italy. On the other hand the Belgian institution refused to award him any pension attributable to his periods of employment in Belgium on the ground that he had not fulfilled the conditions for paying contributions during a period sufficiently proximate to the date when his disablement began.

When Mr Naselli returned to Belgium where he appears to have worked between 1963 and 1965 he fell ill again and at that time obtained allowances for incapacity to work under Belgian legislation, increased by a supplement (cf. Article 28 (3) of Regulation No 3) to bring them up to the amount of the total Belgian pension (the proportion under Iulian law + the proportion under Belgian law + the Belgian supplement — the allowance payable under Belgian law alone).

These allowances were paid to him by the Caisse Auxiliaire d'Assurance Maladie-Invalidité (hereinafter referred to as ‘CAAMI’), the defendant in the main action. The Institut National d'Assurance Maladie-Invalidité (hereinafter referred to as ‘INAMI’), the body preparing the case and intervening in the main action, having learnt that the Italian insurance fund had recalculated as from 1 January 1969 the proportion which it paid to Mr Naselli, reduced the Belgian pension with retroactive effect pursuant to the rules against the overlapping of benefits laid down by Belgian legislation and made CAAMI responsible for recovering the amount overpaid (Bfrs 39576).

Mr Naselli brought the issue before the Tribunal du Travail (Labour Court), Brussels, which by a judgment of 23 June 1977 decided to stay proceedings and, pursuant to Article 177 of the EEC Treaty, to refer to the Court for a preliminary ruling the following two questions:

1) ‘Should Article 11 (2) of Regulation No 3 be interpreted as meaning that the plaintiff, having regard to the provisions of Article 70 (2) of the Law of 9 August 1963, could not draw the full amount of his Belgian pension as well as his Iulian pension, although his right to his Belgian pension was acquired independently of the regulations of the European Economic Community, that is, in other words, is the Belgian institution authorized or not to apply the national provisions prohibiting plurality in conjunction with Article 11 (2) of Regulation No 3 for the purpose of reducing the pension paid by virtue of the Belgian legislation alone?’

2) ‘Does Article 9 (2) of Regulation No 4 apply only to a case where the benefit that is to be reduced because it overlaps with another benefit or other income, is awarded by virtue of aggregation of insurance periods, that is, in other words, did the Belgian institution have to take into account a fraction and not the whole of the Iulian pension for the purpose of reducing the Belgian benefit although that benefit was acquired without having to apply regulations of the European Economic Community?’

The Community law applicable is:

Article 11 (2) of Regulation No 3:

‘Provisions in the legislation of one Member Sute for the reduction or suspension of benefit where there is plurality with other social insurance benefits, or other income, or because of gainful employment, shall apply to a beneficiary even in respect of benefits acquired under a scheme in another Member Sute, or in respect of income derived from, or employment in, the territory of another Member Sute; provided that this rule shall not apply where benefits of the same kind are acquired in accordance with the provisions of Articles 26 and 28 of this regulation.’

Article 9 (2) of Regulation No 4:

‘The provisions of the preceding paragraph notwithstanding and, subject to the provisions of the second sentence of Article 11 (2) of the regulation, where implementation of the provisions of the first sentence of Article 11 (2) of the regulation would entail reduction or suspension of an invalidity, old-age or death benefit (pensions), calculated according to the provisions of Article 28 of the regulation by the institution of a Member Sute, that institution shall take into account, for the purposes of the reduction or suspension, only a fraction of the benefits or income or remuneration giving rise to the reduction or suspension. Such fraction shall be determined in proportion to the length of the periods completed in accordance with Article 28 (1) (b) of the regulation: in calculating the amount for accounting purposes according to the said provision, the benefit or income or remuneration giving rise to the reduction or suspension of the pension shall not be taken into account.’

The national law applicable is:

Article 70 (2) of the Belgian Law of 9 August 1963:

‘The benefits provided for by this Law shall be granted only under conditions determined by the King, if the incapacity in respect of which a claim for benefits is made falls within the general law of some other legislation. In such cases insurance benefits shall not be added to the compensation arising under the other legislation; they shall be the responsibility of the social insurance institutions to the extent to which the incapacity covered by that legislation is not in fact made good. In every case the recipient must receive amounts which are not less than the amount of the insurance benefits.’

The judgment of the Tribunal du Travail was registered at the Court Registry on 5 July 1977.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory enquiry.

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

Mr Naselli is of the opinion that the issue should be determined in the light of the Court's interpretation of Article 11 (2) of Regulation No 3 in its judgment of 10 December 1969 (Case 34/69 Caisse d'assurance vieillesse des travailleurs salariés de Pans v Jeanne Duffy [1969] ECR 597) and its judgment of 15 May 1974 (Case 184/73 Bestuur van de Nieuwe Algemene Bedrijfsvereniging v H. W. Kaufmann [1974] ECR 517) according to which that article is ‘the counterweight to the advanuges which Regulations Nos 3 and 4 secure for workers’. The apparent consequence of this is that the institution of the Sute in which the entitlement to the pension has been acquired by applying Community rules, that is to say by aggregating the insurance periods (the Iulian institution), and not the institution of the Sute where the entitlement exists under an independent system (the Belgian institution), may properly apply where necessary the reduction of benefit.

With regard to the application of Article 28 (3) of Regulation No 3 which INAMI invokes as justification for reducing the supplement to the pension payable by Belgian insurance, Mr Naselli points out that this provision has no purpose if the worker is entitled to benefits solely under the laws of one Member State (judgment of 28 May 1974 in Case 191/73 Rudolf Niemann v Bundesversicherungsanstalt fur Angestellte [1974] ECR 571). Therefore the Belgian institution is not entitled to take account of increases in the Italian pension in order to reduce the supplement to the Belgian pension which is only one element of the benefit payable under Belgian legislation alone.

Should the Court answer the first question in the affirmative the Belgian pension would have to be reduced as provided for in Article 9 (2) of Regulation No 4 which would otherwise have no meaning. Since this provision applies, in the absence of any further indication, to benefits awarded pursuant to the provisions of Article 28 of Regulation No 3 it also applies to benefits entitlement to which is acquired under an independent system.

CAAMI relies on the judgment of 6 December 1973 (Case 140/73, Direction régionale de la sécurité sociale de la région parisienne and Caisse régionale d'assurance maladie de Paris v Carmela Mancuso and Caisse nationale d'assurance vieillesse des travailleurs salariés [1973] ECR 1449) to assen that if a Belgian pension cannot be apportioned the Belgian rules against the overlapping of benefits apply. Article 9 (2) of Regulation No 4 only applies when the benefit which has to be reduced has been acquired under a rule of aggregation, and this is not the case in the main action.

INAMI extracts from the case-law of the Court and the opinion of Mr Advocate General Trabucchi in the Mancuso case (referred to above) and in Case 50/75 Caisse de pension des employes privés v Helga Massonet [1975] ECR 1473 the principle that the advantage derived from Community regulations should be counterbalanced by the application of the Belgian provisions relating to the limitation of overlapping.

Article 9 (2) of Regulation No 4 does not apply here since it only applies where, for the purpose of awarding a benefit, the apportionment rules laid down at Community level and the rules on overlapping at national level have to be applied simultaneously.

The Commission points out that the first question in fan raises two questions concerning the interpretation of Article 11 (2) of Regulation No 3: on the one hand the question what is a provision for reduction or suspension within the meaning of the before-mentioned Article 11 (2) and especially whether Article 70 (2) of the Law of 9 August 1963 is such a provision and, on the other hand, the question in what circumstances such provisions may be applied in accordance with Article 11 (2) and, in particular, the question whether these provisions are applicable if the benefits were acquired without Regulations Nos 3 and 4 having to be applied.

Article 70 (2) of the Law of 9 August 1963 does not seem to be a general clause forbidding the overlapping of invalidity benefits and other social security benefits or other income or because of gainful employment but a provision which specifically applies when benefits for incapacity for work have been granted as a result of an injury; that is to say primarily as a result of an accident, which gives rise to a claim for compensation either under the general law or under some other law. Such an interpretation is supported by the last paragraph of the said article which states on the one hand, that the body providing the insurance is automatically subrogated to the recipient and, on the other hand, that the agreement between the person liable to pay the compensation and the recipient is not enforceable against the body providing the insurance without the consent of the latter.

Even if the illness is presumed to be an injury can the Italian institution which awards Mr Naselli a proportional invalidity pension be regarded as being liable to pay the compensation for the injury? That appears to be absurd in so far as it was in fact in Belgium that Mr Naselli fell ill, obtained allowances for prolonged incapacity and long-term sickness benefit all of which were later converted into an invalidity pension.

If the provisions of the abovementioned Article 70 are compared with those of Article 23 (1) of the Royal Decree of 19 November 1970 relating to the system of invalidity pensions for mine-workers it can be seen that Article 23 (1) does not refer either to injury or to compensation arising under the general or any other law or to the subrogation of the body providing the insurance or to any agreement between the party liable to pay the compensation and the recipient. Why did not the Belgian legislature, which was concerned with the same risk, reproduce the same wording as that used in the Law of 1963 if it intended to attain the same objective in these two provisions? However it is for the trial judge to determine the meaning of his own country's legislation and it is advisable, for the purpose of answering the questions raised, to consider whether the article in question might be a national provision against the overlapping of benefits.

Article 11 (2) of Regulation No 3 first of all lays down a principle, namely that provisions against the overlapping of benefits in national legislations may be applied to workers covered by Regulation No 3 except in the case of benefits of the same kind — invalidity, old-age and death benefits (pensions) — acquired in accordance with Article 28. Only apportioned pensions of the same kind acquired by aggregation fall within the exception provided by the last sentence of Article 11 (2). The logical consequence is that, where an old-age or invalidity pension acquired under national legislation alone and another pension of the same kind acquired under the legislation of another Member State overlap, the national provisions against the overlapping of benefits apply as provided for in the first sentence of Article 11 (2). This inference does not seem to be so logical if the Court's interpretation of Article 11 (2) (in the before-mentioned Kaufmann judgment [1974] ECR 517 and the Duffy judgment [1969] ECR 597) is considered. If therefore Article 11 (2) were to mean that national provisions against the overlapping of benefits are enforceable against the person entitled to an invalidity or old-age pension acquired under national legislation alone it would be a provision similar to the one which the Court correctly held to be incompatible with Article 51 of the Treaty (cf. Case 24/75 Teresa and Silvana Petroni v Office nationale des pensions pour travailleurs selariés (ONPTS) [1975] ECR 1149 and Case 62/76 Josef Strehl v Nationaal Pensioenfonds voor Mijnwerkers [1977] ECR 211).

In the main action in this case the Belgian institution made an apportionment and awarded a supplement on the basis of Article 28 (3) of Regulation No 3 which in the meantime the Court in the above-mentioned Case 191/73 (Niemann [1974] ECR 571) had held to be incompatible with Article 51 of the Treaty. The Belgian institution has therefore made a mistake and should have awarded Mr Naselli the pension acquired under national legislation alone. But could it then avail itself of Article 11 (2) for the purpose of applying its national provision against the overlapping of benefits? If account is taken of the above-mentioned decided cases of the Court the answer is in the negative. In fan Mr Naselli had not acquired the Italian proportion of his pension or his Belgian pension on the basis of Regulation No 3 which did not enter into force until 1 January 1959. The Commission is of the opinion that the apportioned Italian pension could have been awarded on the basis of a bilateral Convention between Belgium and Italy (moreover the Belgian institution at the time refused to award him an invalidity pension which it could not do pursuant to Article 27 which provides for the aggregation of periods in order to maintain the right to benefit).

The second question is limited to asking whether Article 70 (2) of the Law of 9 August 1963 is in fact a provision for reduction of benefit within the meaning of Article 11 (2). Article 9 (2) of Regulation No 4 only applies to the reduction of pensions calculated pursuant to Article 28 of Regulation No 3, that is to say of apportioned and not independently awarded pensions, since in the converse case it is impossible to know by what proportion the amount to be deducted must be reduced. This system may appear to be illogical in so far as the national provisions against the overlapping of benefits are not under the provisions of Article 11 (2) applicable to pensions acquired under Article 28. But the last sentence of Article 11 (2) states clearly that the benefits in question must be of the same kind. The national rule against the overlapping of benefits may therefore only be applied to the apportioned pension within the limits laid down by Article 9 (2) of Regulation No 4 where invalidity or old-age benefit acquired in accordance with Article 28 of Regulation No 3 overlaps another social security benefit, for example sickness insurance.

The Commission therefore submits the following answers to the questions referred to the Court:

1) Provisions in the legislation of one Member Sute for the reduction or suspension of benefits overlapping other social security benefits only apply under Article 11 (2) of Regulation No 3 to insured persons as far as concerns the benefits acquired by applying the said regulation.

2) Article 9 (2) of Regulation No 4 must be interpreted as meaning that where a pension awarded in pursuance of Article 28 of Regulation No 3 may be reduced under Article 11 (2) of the same regulation the amount to be deducted shall be apportioned in the same proportions as the benefit has itself been reduced pursuant to Article 28 of the regulation.

The plaintiff in the main action represented by Mr D. Rossini, Director of the social security service ‘Patronato A.C.L.I.’, INAMI, represented by Mr Masquelin, Advocate at the Brussels Bar, and the Commission of the European Communities represented by its Legal Adviser, Mrs M.J. Jonczy, acting as Agent, presented oral argument at the hearing on 17 November 1977.

The Advocate General delivered his opinion at the hearing on 15 February 1978.

Decision

1. By order of 23 June 1977 which was received at the Court on 5 July 1977 the Tribunal du Travail, Brussels, referred to the Court, pursuant to Article 177 of the EEC Treaty, for a preliminary ruling two questions relating to the interpretation of Article 11 (2) of Regulation No 3 of the Council of 25 September 1958 concerning social security for migrant workers (Journal Officiel 1958, p. 561) and of Article 9 (2) of Regulation No 4 of the Council of 3 December 1958 on implementing procedures and supplementary provisions in respect of Regulation No 3 concerning social security for migrant workers (Journal Officiel 1958, p. 597).

2. These questions have been raised in an action concerning the calculation by the competent Belgian institution of the invalidity pension of an Italian national, Mr Naselli, the plaintiff in the main action, who has worked in Italy and Belgium.

3. Since Mr Naselli had been disabled he was granted an apportioned invalidity pension in Italy, as from 1 October 1958, apparently pursuant to the provisions of a Convention between Italy and Belgium.

4. Having worked again in Belgium in 1964 and 1965 Mr Naselli fell ill and obtained, as from 23 June 1965, sickness benefit, converted later on into an invalidity pension, payable under Belgian insurance.

5. He fulfilled the requisite conditions in Belgium under national legislation for entitlement to an invalidity pension without availing himself of Articles 27 and 28 of Regulation No 3.

6. The Belgian institution, relying on the rules against the overlapping of benefits laid down by its national legislation, reduced with retroactive effect the amount of the pension which it had previously awarded Mr Naselli and claimed repayment of the amount overpaid.

7. The first question referred is: ‘Should Article 11 (2) of Regulation No 3 be interpreted as meaning that the plaintiff, having regard to the provisions of Article 70 (2) of the Law of 9 August 1963, could not draw the full amount of his Belgian pension as well as his Italian pension, although his right to his Belgian pension was acquired independently of the regulations of the European Economic Community, that is, in other words, is the Belgian institution authorized or not to apply the national provisions prohibiting plurality in conjunction with Article 11 (2) of Regulation No 3 for the purpose of reducing the pension paid by virtue of the Belgian legislation alone?’

8. The second question referred is: ‘Does Article 9 (2) of Regulation No 4 apply only to a case where the benefit that is to be reduced because it overlaps with another benefit or other income, is awarded by virtue of aggregation of insurance periods, that is, in other words, did the Belgian institution have to take into account a fraction and not the whole of the Iulian pension for the purpose of reducing the Belgian benefit although that benefit was acquired without having to apply regulations of the European Economic Community?’

First Question

9. The Court has already held in its judgment of 6 December 1973 in Case 140/73 Direction régionale de la sécurité sociale de la région parisienne and Caisse régionale d'assurance maladie de Paris v Carmela Mancuso and Caisse nationale d'assurance vieillesse des travailleurs salariés [1973] ECR 1449 that the application by analogy of Article 27 and 28 of Regulation No 3 to the cases referred to in Article 26 (1) implies that benefits may only be apportioned if it has been necessary, in order to give rise to entitlement, to aggregate beforehand the periods completed under different legislations.

10. Therefore the provisions of Articles 27 and 28 of Regulation No 3 do not have be applied in the case of a pension acquired in pursuance of a national law alone.

11. Article 11 (2) of the said regulation reads ‘Provisions in the legislation of one Member State for the reduction or suspension of benefit where there is plurality with other social insurance benefits, or other income, or because of gainfull employment, shall apply to a beneficiary even in respect of benefits acquired under a scheme in another Member State, or in respect of income derived from, or employment in, the territory of another Member State; provided that this rule shall not apply where benefits of the same kind are acquired in accordance with the provisions of Article 26 and 28 of this regulation.’

12. As the Court has already held, with special reference to its judgment of 15 May 1974 in Case 154/73 Bestuur van de Nieuwe Algemene Bedrijfsvereniging v H. W. Kaufmann [1974] ECR 517 this article, interpreted in the light of Article 48 to 51 of the Treaty, is the counterweight to the advantages which Regulations Nos 3 and 4 procure for workers by enabling them to claim the simultaneous application of the social security laws of several Member States and its purpose is to prevent them from deriving from that application advantages which the national legislation considers excessive.

13. Therefore the restrictions referred to in Article 11 (2) only apply to insured persons in so far as the benefits acquired by applying those regulations are concerned.

14. On the other hand consideration of the other provisions of Regulation No 3 shows that none of them precludes the application to benefits acquired by virtue of national legislation alone of national rules against the overlapping of benefits.

15. Nevertheless the Belgian institution draws attention to the provisions of Article 70 of the Belgian Law of 9 August 1963 on sickness and invalidity insurance which read as follows: ‘The benefits provided for by this Law shall be granted only under conditions determined by the King, if the incapacity in respect of which a claim for benefits is made falls within the general law or some other legislation. In such cases insurance benefits shall not be added to the compensation arising under the other legislation; they shall be the responsibility of the social insurance institutions to the extent to which the incapacity covered by that law is not in fact made good. In every case the recipient must receive amounts which are not less than the amount of the insurance benefits.’

16. It is for the national court to consider the question whether this provision is a rule against the overlapping of benefits applicable to the benefits in a case such as the one in the main action or whether it is on the other hand only a provision granting the right of subrogation.

17. It is also for the national court to consider whether under this provision the reduction óf a Belgian pension by taking account of benefits acquired under the system of another Member State is possible without invoking the provisions of Article 11 (2) of Regulation No 3.

Second Question

18. Article 9 (2) of Regulation No 4 provides: ‘The provisions of the preceding paragraph notwithstanding and, subject to the provisions of the second sentence of Article 11 (2) of the regulation would entail reduction or suspension of an invalidity, old-age or death benefit (pensions), calculated according to the provisions of Article 28 of the regulation by the institution of a Member State, that institution shall take into account, for the purposes of the reduction or suspension, only a fraction of the benefits or income or remuneration giving rise to the reduction or suspension. Such fraction shall be determined in proportion to the length of the periods completed in accordance with Article 28 (1) (b) of the regulation: in calculating the amount for accounting purposes according to the said provision, the benefit or income or remuneration giving rise to the reduction or suspension of the pension shall not be taken into account.’

19. It emerges clearly from the wording of this provision that it only applies when the benefit in question has been awarded through the application of the processes of aggregation and apportionment.

Costs

20. The costs incurred by the Commission of the European Communities which submitted observations to the Court are not recoverable.

21. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of 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 questions referred to it by the Tribunal du Travail, Brussels, by judgment of 23 June 1977 hereby rules:

1 Consideration of the provisions of Regulation No 3 shows that none of them precludes the application to benefits acquired by virtue of national legislation alone of national rules against the overlapping of benefits.

2 Article 9 (2) of Regulation No 4 applies only when the benefit in question has been awarded through the application of the processes of aggregation and apportionment.