EUROPEAN COMMISSIONEMPL/01896/10 –EN
AdvC04/10The case law of the European Court of Justice on free movement of workers and coordination of social security (mid-2009 to mid-2010)
SECRETARIAT – 27.09.2010
Orig. DE
ADVISORY COMMITTEE
FOR THE COORDINATION OF SOCIAL SECURITY SYSTEMS
The case law of the European Court of Justice on free movement of workers and coordination of social security (mid-2008 to mid-2009)
(Mid-2009 to mid-2010)
Note from the Secretariat of 27 September 2010
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Contents
1.Case law on Article 45 TFEU (Article 39 EC) in conjunction with Regulation No 1408/71
1.1.C-3/08, Ketty Leyman v INAMI......
1.2.C-363/08, Slanina......
1.3.C-286/09 and C-287/09, Luigi Ricci et al
2.Case law relevant to social security relating to Articles 43 and 49 EC (Articles 43 and 56 TFEU)
2.1.C-314/08, Filipiak......
2.2.C-351/08, Grimme......
1.Case law on Article 45 TFEU (Article 39 EC) in conjunction with Regulation No 1408/71
1.1.C-3/08, Ketty Leyman v INAMI
Operative part of the judgment:
Article 39 EC must be interpreted as precluding application by the competent authorities of a Member State of national legislation which, in accordance with Article 40(3)(b) of 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, in the version amended and updated by Council Regulation (EC) No 118/97 of 2 December 1996, as amended by Regulation (EC) No 647/2005 of the European Parliament and of the Council of 13 April 2005, makes acquisition of the right to invalidity benefits subject to the condition that a period of primary incapacity of one year has elapsed, where such application has the result that a migrant worker has paid into the social security scheme of that Member State contributions on which there is no return and is therefore at a disadvantage by comparison with a non-migrant worker.
The facts of the case:
Ms Leyman was employed in Belgium from 1971 until 2003. Since 1999, she has been living in Luxembourg and, since August 2003, has been subject to the Luxembourg social security system.
On 8 July 2005, Ms Leyman was found to be incapable of work by the competent Luxembourg authorities for the period from 8 July 2005 until 29 February 2012, the date when she becomes entitled to an old-age pension. She was therefore granted an invalidity allowance in respect of the periods of insurance completed in Luxembourg. The monthly amount of the allowance granted by the Luxembourg institution is EUR322.83.
Having received an application from Ms Leyman for payment of invalidity allowances in respect of the periods of insurance completed in Belgium, the INAMI, by decision of 23 June 2006, granted that allowance in the monthly amount of EUR737.10 with effect from 8 July 2006, in accordance, in the view of that institute, with Article 40(3)(b) of Regulation No 1408/71 and Article 93 of the Law of 1994.
Ms Leyman brought an appeal before the referring court against the decision of the INAMI, requesting that the payment of the invalidity allowance thus granted to her be made with effect from 8 July 2005.
Extracts from the grounds for the judgment:
The sickness insurance and invalidity insurance in Belgium is combined to form a single system so that a worker who has become incapable of work first comes under a scheme for temporary incapacity ("for primary incapacity") and then only after a certain period comes under a scheme to cover total or partial long-term or definitive incapacity and receives an invalidity allowance.
Conversely, the Luxembourg system distinguishes between sickness insurance and invalidity insurance so that, if the worker is deemed to be temporarily incapable of work, he is covered by the sickness insurance scheme which entitles him to sickness allowances, whereas if he is deemed to be definitively or permanently incapable of work he is covered by an invalidity insurance scheme which entitles him to invalidity allowances.
In systems where sickness insurance and invalidity insurance are combined such as the Belgium system, there is no provision for the recognition of invalidity without there first being a period of incapacity and consequently that recognition granted in another Member State such as the Grand Duchy of Luxembourg presents difficulties in the coordination of the social security systems where, as in the main proceedings, the procedure to determine benefits under different systems must be implemented by applying the rules in Articles 40 and 46 of Regulation No 1408/71.
Whilst under Luxembourg legislation the right to invalidity allowance is acquired from the first day of incapacity to work, payment of that allowance does not begin, under application of the Belgian legislation, until one year has expired, during which time a worker resident in Belgium who is incapable of work receives a primary incapacity allowance..
Article 40(3)of Regulation No 1408/71
Article 40(3)of Regulation No 1408/71 contains two different types of coordination rules.
On the one hand, the rule laid down in Article 40(3)(a)of Regulation No 1408/71 merges and groups the events which occurred in the periods completed under legislation of the second Member State in order to establish whether the conditions set by the legislation of the first Member State for acquisition of the right to invalidity benefits are met.
On the other hand, the rule set out in Article 40(3)(b)of Regulation No 1408/71 fixes a time limit for the acquisition of the right to invalidity benefits in the first Member State by recognising, in particular, that that State may make the grant of these benefits subject to the expiry of an initial period during which the person concerned has either been incapable of work or has received cash sickness benefits, which entitlement the Belgian legislator has used by providing, in Article 93 of the Law of 1994, for the expiry of the period of primary incapacity of one year before the right to such benefit is acquired.
Freedom of movement for workers
As regards freedom of movement for workers, Article 42 EC leaves in being differences between the Member States’ social security systems and, consequently, in the rights of persons working in the Member States. It follows that substantive and procedural differences between the social security systems of individual Member States and hence between the entitlements of their insurees are unaffected by Article 42 EC (see the judgments of 7 February 1991 in Case C227/89 Rönfeldt [1991] ECR I323, paragraph 12, and of 5 October 1994 in Case C165/91 van Munster [1994] ECR I4661, paragraph 18).
It is not, however, in dispute that the aim of Article 39 EC would not be met if, through exercising their right to freedom of movement, migrant workers were to lose social security advantages guaranteed to them by the laws of a Member State. Such a consequence might discourage Community workers from exercising their right to freedom of movement and would therefore constitute an obstacle to that freedom (see the judgments of 4 October 1991 in Case C349/87 Paraschi [1991] ECR I4501, paragraph 22, and invan Munster, paragraph 27).
In the present case, although Articles 87 and 93 of the Law of 1994 do not draw a distinction between workers who have exercised their right to freedom of movement and those who have not done so, application of those articles nevertheless causes a disadvantage for the first year for workers who are in a situation such as that of the applicant in the main proceedings compared with workers who are also definitively or permanently incapable of work but who have not exercised their right to freedom of movement.
Although the latter workers have the right to primary incapacity allowance in Belgium, Ms Leyman has the right neither to that allowance nor to another analogous allowance in Luxembourg, having regard to the fact that she already receives invalidity benefit in that Member State.
In addition, since payment of the invalidity allowance in respect of the periods of work completed and contributions paid in Belgium does not begin until the period of one year’s primary incapacity has elapsed, application of Articles 87 and 93 of the Law of 1994 as advocated by the Belgian competent authorities means that workers who are in a situation such as that of Ms Leyman have paid social contributions on which there is no return so far as the first year of incapacity is concerned.
The Court has already held, in this respect, that the EC Treaty offers no guarantee to a worker that extending his activities into more than one Member State or transferring them to another Member State will be neutral as regards social security. Given the disparities in the social security legislation of the Member States, such an extension or transfer may be to the worker’s advantage in terms of social security or not, according to circumstance. It follows that, even where its application is less favourable, such legislation is still compatible with Articles 39 EC and 43 EC if it does not place the worker at a disadvantage as compared with those who pursue all their activities in the Member State where it applies or as compared with those who were already subject to it and if it does not simply result in the payment of social security contributions on which there is no return (see the judgment of 19 March 2002 in Joined Cases C393/99 and C394/99 Hervein and Others [2002] ECR I2829, paragraph 51, and Case C493/04 Piatkowski [2006] ECR I2369, paragraph 34).
In a situation such as that in the main proceedings, if application of Articles 87 and 93 of the Law of 1994 as advocated by the competent authorities in Belgium leads to a refusal to grant, for the first year of incapacity, any benefit to a worker who has exercised his right to freedom of movement, it must be held that such an application is contrary to Community law, given that, firstly, it places that worker at a disadvantage in relation to those who are in the same situation of definitive incapacity to work but who have not exercised their right of freedom of movement and, secondly, it results in payment of social contributions on which there is no return.
1.2.C-363/08, Slanina
Operative part of the judgment:
1.Article 73 of Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, in the version amended and updated by Council Regulation (EC) No 118/97 of 2 December 1996, must be interpreted as meaning that a divorced person who was paid family allowances by the competent institution of the Member State in which she was living and where her ex-husband continues to live and work maintains in respect of her child, provided that child is recognised as a ‘member of the family’ of the ex-husband within the meaning of Article 1(f)(i) of that regulation, entitlement to such allowances even though she leaves that State and settles with her child in another Member State, where she does not work, and even though her ex-husband could receive those allowances in his Member State of residence.
2.The fact that a person in a situation such as that of the applicant in the main proceedings is in employment in her Member State of residence, giving entitlement to family allowances, has, under Article 76 of Regulation No 1408/71, in the version amended and updated by Regulation No 118/97, the effect of suspending entitlement to family allowances payable under the legislation of the Member State in whose territory her ex-husband is in employment, up to the sum provided for by the legislation of her Member State of residence.
Facts of the case
Ms Slanina is the mother of a daughter, Nina, born in 1991. When family allowances were first paid to Ms Slanina the conditions for granting them were met. Since summer 1997, Ms Slanina has been living in Greece and Nina has been at school there since autumn that year. The applicant in the main proceedings exercises sole parental authority over her daughter. Nina’s father, Ms Slanina’s ex-husband and an Austrian national, lives and is in employment in Austria. The child’s father is required to pay maintenance but does not do so.
From 1 January 1998 to 31 October 2003 Ms Slanina received family allowances and tax credits in Austria in respect of her daughter Nina totalling EUR 10884.95 (…). By decision of the Finanzamt (Tax Office) of Mödling (Austria) of 22 October 2003, she was ordered to repay those amounts on the ground that since 1997 she had been living permanently with her daughter in Greece. The Finanzamt considered that one of the conditions for granting family allowances under Paragraph 2(8) of the FLAG, namely the condition relating to the child’s centre of interests and permanent residence in Austria, was not met.
Until 2001 Ms Slanina was neither in employment nor registered as seeking work in Greece. She lived on contributions from her relations and on her savings. Since 2001 she has been working for a Greek company as a seasonal tourist guide from May until the beginning of October each year.
Extracts from the grounds for the judgment
By its first and second questions the referring court asks essentially whether Article 73 of Regulation No 1408/71 must be interpreted as meaning that a divorced person who was paid family allowances by the competent institution of the Member State in which she was living and where her ex-husband continues to live and work maintains her entitlement to those allowances even though she leaves that State and settles with her child in another Member State, where she does not work, and even though her ex-husband, the father of the child, could receive those allowances in his State of residence.
Ms Slanina is the ex-wife of an employee who during the period relevant to the dispute in the main proceedings was subject, under Article 13(1) and (2) of Regulation No 1408/71, to the legislation of the Republic of Austria, the Member State in which he worked.
Article 73 of Regulation No 1408/71 provides that an employed or self-employed person subject to the legislation of a Member State is entitled, in respect of the members of his family who are residing in another Member State, to the family benefits provided for by the legislation of the former State, as if they were residing in that State.
The purpose of Article 73 is to guarantee members of the family of a worker subject to the legislation of a Member State who are residing in another Member State the grant of the family benefits provided for by the applicable legislation of the former State
It is for the referring court to establish whether the condition laid down in Article 1(f)(i) of Regulation No 1408/71 is met in the present case, that is to say, whether the child, although not having lived with her father during the period at issue in the main proceedings, could be regarded for the purposes of national law as a ‘member of the family’ of her father and, if that is not the case, whether she could be regarded as being ‘mainly dependent on’ him. It is irrelevant whether the father actually pays maintenance.
Family benefits by their nature cannot be regarded as rights payable to an individual in isolation from his or her family circumstances. It is therefore irrelevant that the person to whom the family benefits are to be awarded is Ms Slanina rather than the worker himself, namely, MsSlanina’s ex-husband.
With regard to Ms Slanina's temporary employment the Court heldthat the fact that a person is in employment in her Member State of residence, giving entitlement to family allowances, has, under Article 76 of Regulation No 1408/71, the effect of suspending entitlement to family allowances payable under the legislation of the Member State in whose territory her ex-husband is in employment, up to the sum provided for by the legislation of her Member State of residence.
1.3.C-286/09 and C-287/09, Luigi Ricci et al
Operative part of the judgment:
Article 10 EC, together with the Staff Regulations of Officials of the European Communities, must be interpreted as precluding national legislation which does not permit account to be taken of years worked by a European Union citizen in a European Union institution, such as the Commission of the European Communities, or in a European Union body, such as the Economic and Social Committee, with regard to the establishment of a right to a retirement pension under the national scheme, regardless of whether the person involved takes early retirement or retires at the usual age.
Facts of the case:
The two plaintiffs worked for 191 and 96 weeks respectively in Italy and were then employed by a European Union institution. After retiring from this institution and receiving a Community pension, they made an application to the Istituto nazionale della providenza sociale(INPS – National Institute for Social Security) for payment of a pro rataretirement pension for the period of employment in Italy. These applications were rejected with the argument that the weekly contributions paid were lower than the legal minimum.
The national authorities further argued that periods of employment in a Union body or institution were not be taken into account to support the claim since Regulation No 1408/71 covered only periods of contribution in a Member State.
Extracts from the grounds for the judgment:
The Court first establishes that Article 17 and 42 ECand Regulation No 1408/71 are not relevant to the decision in this case.
The system for transferring pension rights as provided for in Article 11(2) of Annex VIII to the Staff Regulations of Officials of the European Communities is intended to make it easier to transfer from private or public employment to Union institutions and therefore to ensure that the Union is in the best possible position to select qualified staff with the corresponding professional experience.
In particular, the Court has already ruled that a Member State could, by its refusal to take the measures necessary for the transfer, under Article11(2) of the Annex to the Staff Regulations, of the actuarial or the flat-rate repurchase value of the pension entitlement acquired in the national system to the Community system, make it difficult for the Communities to recruit national officials with a certain degree of seniority, becausethe change from national to Community employment would lead to a loss of the pension rights to which they would be entitled if they had not entered the service of the Communities (judgments of 20October 1981 in Case C-137/80, Commission v Belgium, ECR[1981], 2393, paragraph 19 and 16December 2004 in Case C-293/03, Gregorio My v Office national des pensions (ONP), ECR[2004], 12013, paragraph 45).
This is, however, also the case when, as ruled in theMyjudgment (C-293/03), a Member State refuses to take into account periods of employment in the Community system to support a claim for early retirement pension under its system. This applies regardless of whether this is an early or normal retirement pension.
National rules like those in question in the main proceedings can be an obstacle and hence a disincentive to employment with a European Union body because an employee who previously came under a national pension system runs a risk, if he accepts a post with such abody, of no longer being able to claim a retirement pension under this system to which he would have been entitled had he not taken up the post.