Report for the Hearing in Case C-243/90

I — Facts and written procedure

1. In the United Kingdom, section 20 of the Social Security Act 1986 introduced a statutory housing benefit scheme, the detailed rules for the application of which are set out in the Housing Benefit (General) Regulations 1987. The benefit is calculated on the basis of the relation between the beneficiary's income and an ‘applicable amount’. The applicable amount may be increased inter alia by including the higher pensioner premium provided for in paragraph 10 of Part III of Schedule 2 of the 1987 Regulations; the premium is applicable inter alia to single persons aged less than 80 but not less than 60 who satisfy the additional condition specified in paragraph 12 which provides, inter alia, that such persons must be in receipt of an invalidity pension.

2. Section 15 of the Social Security Act 1975 provides that an invalidity pension is payable to a person up to pensionable age, which is fixed by section 27 at 65 years for men and 60 for women; it remains payable thereafter for a maximum period of five years to any person over that age who remains in regular employment. Section 30(3) of the Social Security Act 1975 and the Social Security (Widows' Benefit and Retirement Pension) Regulations 1979 provide that a person who has retired but is, in the case of a woman, under the age of 65 or, in the case of a man, under the age of 70 may elect to de-retire in order to obtain an invalidity pension.

3. Florence Rose Smithson was in receipt of an invalidity pension for the five years prior to her 60th birthday. From then on, for reasons not explained, she drew a retirement pension. She was refused application of the higher pensioner premium on the ground that she did not fulfil the additional condition of being in receipt of an invalidity pension. Since her age at the time of the facts relevant to the main proceedings was 67, she was unable to elect to de-retire and opt for an invalidity pension.

4. Miss Smithson made an application for judicial review based on the argument that the national legislation was incompatible with the prohibition of discrimination in Article 4 of Council Directive 79/7/EEC of 19 December 1978 on the progressive implementation of the principle of equal treatment for men and women in matters of social security (Official Journal 1978 L 6, p. 24), inasmuch as she was refused application of the higher pensioner premium for housing benefit whereas a man in the same situation could claim it.

5. By an order of 26 June 1990 the High Court of Justice, Queen's Bench Division, ruled that because the case depended on an interpretation of Directive 79/7 the proceedings should be stayed pending a preliminary ruling from the Court of Justice of the European Communities pursuant to Article 177 of the EEC Treaty on the following questions:

‘1. Does the inability of a woman aged between 65 and 70 to claim and receive higher pension premium on the basis of paragraph 10(l)(b)(i) of Schedule 2 to the Housing Benefit (General) Regulations 1987 contravene Article 4 of Council Directive 79/7?

2. Is a woman aged between 65 and 70 entitled, by reason of the combined effect of Section 2 of the European Communities Act 1972 and Article 4 of Council Directive 79/7, to give notice of de-retirement pursuant to Section 30(3) of the Social Security Act 1975, to claim and receive (if otherwise eligible) invalidity benefit under Section 15 of that Act, and to claim and receive higher pension premium on the basis of paragraph 10(l)(b)(i) of Schedule 2 to the Housing Benefit (General) Regulations 1987?’

6. The order made by the High Court of Justice, Queen's Bench Division, was lodged at the Court Registry on 9 August 1990.

7. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were lodged on 26 November 1990 by Horence Rose Smithson, represented by Nicholas Warren, Solicitor, of Birkenhead, Merseyside; on 4 December 1990 by the United Kingdom, represented by J. E. Collins of the Treasury Solicitor's Department, acting as Agent, assisted by Richard Plender QC and David Pannick, Barrister; and on 19 November 1990 by the Commission of the European Communities, represented by Nicholas Khan, a member of the Commission's Legal Service, acting as Agent.

8. 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 inquiry.

9. Pursuant to Article 95(1) and (2) of the Rules of Procedure the Court decided on 15 May 1991 to refer the case to the Sixth Chamber.

II — Written observations submitted to the Court

1. For Miss Smithson, it is stated that the first question concerns the discriminatory linking of entitlement to the higher pensioner premium to entitlement to an invalidity pension, that pension not being payable to a woman who is over the age of 65. It seeks to know whether housing benefit, or at least the higher pensioner premium, falls within Article 3 of the directive and whether such discrimination is covered by Article 7(l)(a). The second question concerns the discriminatory compulsory termination of entitlement to an invalidity pension five years after pensionable age, the invalidity pension being undoubtedly a social security benefit. Unless such discrimination is covered by Article 7(1 )(a), the second question must be answered in the affirmative, regardless of whether housing benefit falls within Article 3 of the directive. (a) As regards the first question, it is submitted that housing benefit calculated on the basis of the higher pensioner premium is either a statutory scheme providing protection against the risk of old age or a form of social assistance intended to supplement or replace such a scheme, within the meaning of Article 3(l)(b) of the directive. An examination of housing benefit, both as regards practice and as regards the intentions of the legislature, makes it plain that it plays a very important role in providing protection against the risks of old age. The Social Assistance Report of 1978 and statistics for 1988 show the relationship between the contributory retirement pension and housing benefit. The principle of equal treatment as regards benefits relating to the risks set out in Article 3 must apply both as regards contributory schemes and as regards means-tested schemes. In order to determine the scope of Article 3 it is important to take into account the exclusions expressly listed in Article 3(2); there is no sign on the face of the directive that it was considered necessary to expressly exclude benefits of the same general type as housing benefit. The scope of Directive 79/7 cannot be determined by reference to Regulation (EEC) 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 (Official Journal 1971 L 149, p. 2). Whereas the major issue dealt with by Direttive 79/7 is that of equal treatment for men and women, Regulation No 1408/71 operates in a different legal context and raises inter alia the issue of whether a benefit is exportable. The wording of Article 4 of Regulation No 1408/71 is also different: it employs the narrower term ‘benefits’ rather than ‘statutory schemes which provide protection against the following risks’, the words used in Directive 79/7. Moreover, the Court of Justice has held that even if a benefit does not fall under Regulation No 1408/71 it may nevertheless be regarded as a ‘social advantage’ within the meaning of Article 7(2) of Regulation (EEC) No 1612/68 of the Council of 15 October 1968 on the free movement of workers within the Community (Official Journal 1968 L 257, p. 2), thus enabling the principle of nondiscrimination to be preserved. However, there is no such saving provision available in the case of Directive 79/7. Another argument which must be rejected is the argument that Directive 79/7 is merely a step in the programme for the progressive implementation of the principle of equal treatment: an examination of the programme reveals that Directive 79/7 is the only text under which the applicant in the main proceedings may obtain a remedy. Even if housing benefit, including the higher pensioner premium, does not constitute one of the statutory schemes referred to in Article 3(l)(a), it should be regarded as social assistance which is intended to supplement or replace such a scheme, within the meaning of Article 3(l)(b). As regards the scope of the exclusion contained in Article 7(1 )(a) of Directive 79/7, it is observed that the discrimination first arose when housing benefit was introduced, in 1986 and 1987, and that Member States should not be permitted to create fresh discrimination after the entry into force of Directive 79/7. In any event, Article 7(l)(a) only applies where the Member State has consciously adopted a measure in exercise of the powers conferred on it by that article, for which there is no evidence in this case. Be that as it may, Article 7(1 )(a) permits differences between men and women solely as regards the determination of pensionable age for the purposes of granting old-age and retirement pensions and the possible consequences thereof for other benefits. The age fixed for both the basic premium and the higher pensioner premium is the same, however; the only difference is that women have five years less time in which to qualify for the higher pensioner premium. Finally, reference is made to the judgment of the Court of Appeal of 31 July 1970 in Seaetary of State for Social Security v Thomas, in which Slade LJ pointed out that Article 7(1 )(a) gives Member States authority to prescribe or retain different age limits for men and women as regards benefits other than old-age and retirement benefits only when that is a necessary consequence of their having defined the qualifications for entitlement to old-age or retirement benefits by reference to different age limits, and only in a manner which is appropriate to meet that necessity. (b) As regards the second question, it is discriminatory to fix different ages for men and women for opting between a retirement pension or an invalidity pension, which fall manifestly within Article 3(l)(a) of the directive. That difference in treatment is not a consequence of the determination of different pensionable ages for men and women within the meaning of Article 7(1 )(a). Thus in Thomas, Slade LJ pointed out, in relation to severe disablement allowances and invalid care allowances, that a uniform cutoff age would not render those schemes administratively unworkable. Those observations apply with even more force to a benefit such as invalidity benefit, which continues beyond pensionable age. Article 7(l)(a) is to be construed strictly and the reference to ‘possible consequences’ must be taken to refer to the immediate consequence of the grant of the retirement pension. Entitlement to invalidity benefit is not such a consequence. For those reasons, it is suggested that both questions should be answered in the affirmative.

2. The United Kingdom observes that the first question seeks to know whether a statutory scheme providing for the payment of housing benefit is to be regarded as a statutory scheme which provides protection against the risk of old age or invalidity, within the meaning of Article 3(1) of Directive 79/7. The second question, which concerns invalidity benefit, should be understood as follows: where in a Member State pensionable age is fixed at 65 for men and 60 for women, and both men and women may de-retire within five years of attaining pensionable age, and an invalidity pension is payable for a period no longer than five years after pensionable age is reached to persons whose employment has been interrupted by sickness, is the difference of treatment as between men and women a ‘possible consequence’ for other benefits of the determination of pensionable age, within the meaning of Article 7(1 )(a) of Directive 79/7? (a) As regards the first question, the United Kingdom submits that the reply should be that housing benefit does not fall within the scope of Directive 79/7. On 24 June 1986 the Court of Justice held, in Drake (Case 150/85 [1986] ECR 1995), that in order to fall within Article 3(1) of Directive 79/7 a benefit must constitute a whole or part of a statutory scheme providing protection against one of the specified risks or a form of social assistance having the same objective. Housing benefit is an income-related benefit intended to cover housing costs. The materialization of one of the risks referred to in Article 3(1) does not automatically confer entitlement to the benefit, which may, in any event, be payable to persons who have not incurred any of those risks. Housing benefit is also not ‘social assistance’ within the meaning of Article 3(l)(b). It is not aid given on the basis of consideration of the individual case, but a statutory scheme applicable to persons in a legally defined position. Even if it were described as a form of social assistance, housing benefit is not intended to replace one of the schemes referred to in Article 3(1 )(a), or to supplement such a scheme. The United Kingdom relies in that regard on two judgments of 27 March 1985, Hoeckx (Case 249/83 [1985] ECR 982) and Scrivner (Case 122/84 [1985] ECR 1029), in which the Court held that the Belgian ‘minimex’ was a general benefit which fell outside the ambit of Article 4(1) of Regulation No 1408/71. Since housing benefit is an income-related benefit it is natural that it is payable to pereons who have suffered the risks listed in Article 3(1 )(a) of Directive 79/7. Many of those who receive it, however, will have suffered other risks, whilst many who have suffered those risks will be ineligible for housing benefit. The higher pensioner premium is only one of the elements which may be taken into account for the purposes of determining eligibility for housing benefit. Indeed, it does not always lead to payment of housing benefit or increase of that benefit; in particular, a person whose income is below the applicable amount will obtain 100% of his or her rent as a benefit, regardless of any premium. Housing benefit cannot be included within the ambit of the directive solely because some of the factors taken into account for its calculation are attributable to one of the risks set out in Article 3(1). (b) If the Court considers that housing benefit falls within Directive 79/7, or that it is appropriate to consider the question of invalidity benefit despite the fact that the applicant has an interest in it solely because of its effect on housing benefit, the United Kingdom submits that the difference in treatment between men and women is a consequence, within the meaning of Article 7(1 )(a) of the directive, of the difference in pensionable age for the purposes of granting old-age pensions. No distinction is drawn between men and women as regards payment óf housing benefit or invalidity pensions. Fixing the same age limit for entitlement to an invalidity pension for both men and women, whilst maintaining different pensionable ages for them, would result in giving men less favourable treatment than women. If Member States were obliged to create an indefinite right to de-retire or to abolish the qualifying condition for the higher pensioner premium, that would mean that Directive 79/7 required them to abolish any element in a benefit capable of having any effect whatsoever on that benefit of the maintenance of separate pensionable ages. The Court of Justice has held (in Burton, Case 19/81 [1982] ECR 555, and Marshall, Case 152/84 [1986] ECR 723) that Member States must observe the principle of proportionality when applying Article 7(l)(a) of the directive, which means that when they decide to link the conditions for entitlement to another benefit to the separate pensionable ages for men and women, they must not exceed the bounds of what is appropriate and necessary to attain the aim of that benefit. In making provision for de-retirement within five years of pensionable age, the legislature sought to temper the strict rule governing pensionable age and to take account of the fact that many people who leave their jobs on attaining pensionable age take up new ones subsequently. The link between the invalidity pension and pensionable age established by section 15 of the Social Security Act 1975 is based on the fact that the invalidity pension is designed to replace the earnings which a person of working age could expect to receive. The link between the higher pensioner premium and the invalidity pension is explained by the fact that Parliament wished to ensure that the applicable amount was available for living expenses after rent had been paid.

3. The Commission points out that only the first question falls to be answered by the Court within the jurisdiction conferred on it by Article 177 of the Treaty; the second concerns only the means by which the applicant in the main proceedings may be able to assert her rights if the first question is answered in the affirmative. As regards the first question, which concerns Articles 3 and 7 of Directive 79/7, the Commission points out that the case is concerned not with housing benefit itself, but with the higher pensioner premium. Although that premium forms part of the housing benefit, it should be regarded as a separate benefit scheme by reason of the special criteria governing its application. Without considering it necessary to comment on whether or not housing benefit falls within Article 3(1 )(a) of the directive as a means-tested benefit payable irrespective of the status of the claimant, the Commission submits that there is nothing which excludes another benefit, in this case the higher pensioner premium, from that provision. The higher pensioner premium must be regarded as constituting the whole or part of a statutory scheme providing protection against one of the risks listed, within the meaning of the judgment in Drake (cited above). In order to qualify for the higher pensioner premium the claimant must be in receipt of another benefit which, in the case of an invalidity pension, was admitted by the respondent in the main proceedings as falling within Article 3 of the directive. Application of the exemption from the requirement of equal treatment authorized in Article 7(1 )(a) of the directive is subject to compliance with the principle of proportionality; Slade LJ rightly stated in Thomas (cited above) that the words ‘possible consequences for other benefits’ in Article 7(1 )(a) of Directive 79/7 concern merely the necessary consequences of the definition by Member States of the qualifications for entitlement to old-age or retirement benefits by reference to different age limits for men and women, and only in a manner which is appropriate to meet that necessity. That cannot be said in this case. The rules on de-retirement are not relevant to establishing a sufficient causative link between the rules governing the grant of the higher pensioner premium and the difference in pensionable age. Maintaining the difference in treatment can in no way be regarded as indispensable for the coherence of the benefit scheme. By means of examples of cases which might arise under United Kingdom law, the Commission concludes that there is no apparent necessary causative link between the difference in pensionable age and the anomalies produced by the rules governing the grant of the higher pensioner premium. Since retirement pensions and invalidity pensions are of equal amount, there is also no justification for linking the higher pensioner premium to receipt of the invalidity benefit on the ground that the premium is covered by a higher rate of retirement pension. Although the national court did not refer any question concerning Article 4 of Directive 79/7, the Commission submits that the Court should also take that provision into account and state that making entitlement to the higher pensioner premium subject to the rules providing for different pensionable ages for men and women constitutes discrimination contrary to Article 4(1) of the directive. Consequently, the Commission submits that the Court should answer the questions as follows :

‘(a) A social security benefit such as the higher pensioner premium payable to persons of limited means, eligibility for which is further delimited by reference to the claimant's invalidity and old age, constitutes a statutory scheme providing protection against those risks within the meaning of Article 3(l)(a) of Directive 79/7/EEC.

b) A condition determining the eligibility of the above benefit by reference to rules relating to the existence of different statutory pensionable ages for men and women is not a necessary consequence of the existence of different statutory pensionable ages within the meaning of Article 7(1 )(a) of Council Directive 79/7/EEC.

c) The application of such a condition to the above benefit constitutes discrimination contrary to Article 4(1) of Directive 79/7/EEC.’

F. A. Schockweiler

Judge-Rapporteur

1 Language of the case: English.