C-24/75

JUDGMENT OF THE COURT OF 21 OCTOBER 1975 1

Teresa and Silvana Petroni v Office national des pensions pour travailleurs salaries (ONPTS) (preliminary ruling requested by the Tribunal du travail Bruxelles)

Case 24/75

Summary

1. Social security for migrant workers — Social security benefits — Rights created by the Treaty — Exercise — Detailed rules — Power of the Council (EEC Treaty, Article 51)

2. Social security for migrant workers — Social benefits — Overlapping — Limitation — Entitlement by virtue of national legislation alone — Reduction — Prohibition

JUDGMENT OF 21. 10. 1975 — CASE 24/75

Mrs Silvana Amarelli (neé Petroni), residing at Fano (Italy),

and

L'Office national des pensions pour travailleurs salariés (ONPTS), 1060 Brussels,

on the validity and interpretation of Article 46 (3) 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 (OJ L 149 of 5.7.1971, p. 18),

THE COURT

PETRONI v ONPTS

However, to this amount States? the competent institution applied Article 46 (3), according to which the total sum 2. If the above question is answered in of the Belgian pension and the Italian the affirmative, is that provision pension must be limited to the higher applicable: theoretical amount of the two pensions. (a) to a pension granted to a migrant worker on the basis of insurance These theoretical amounts, consisting of the aggregated total before periods which are not duplicated apportionment, were equal, for the by any of the periods forming the Italian pension to Lit. 465 920, and for basis for calculating the pension the Belgian pension, to Bfrs 45 812 that granted in other countries of the is, Lit 594 181.

1974. After the death of Mrs Petroni, her March 1975. After hearing the report of daughters continued the proceedings the Judge-Rapporteur and the views of before the Belgian court with a view to the Advocate-General, the Court decided establishing that since Mr Petroni's right to open the oral procedure without any to the Belgian pension existed in preparatory inquiry. dependently of the insurance periods completed by him in Italy, the reduction In accordance with Article 20 of the was unjustified and that Article 46 (3), at Protocol on the Statute of the Court of least if it is interpreted and applied as Justice of the EEC, written observations was done by the Belgian institution, is were submitted by the parties to the contrary to Article 51 of the Treaty. main action, the Council, the The Tribunal du travail of Brussels, Commission and the Italian Govern taking the view that the outcome of the ment

II — Observations submitted in successors may claim under the laws of accordance with Article 20 the Member States. of the Protocol on the Statute of the Court of Although the Community legislature is Justice of the EEC competent to create a right it must be accepted too that that same legislature is 1. Observations of the Council competent to decide upon the exercise of it and to limit the application of it to the The Council states, in the light of the extent to which this is not prohibited by case-law of the Court on the Article 51 of the Treaty. The fixing of a interpretation of Articles 27 and 28 of limit in the first subparagraph of Article Regulation No 3, that the objectives of 46 (3) in no way infringes the principles Article 51 would be circumvented if, as a established by the case-law of the Court result of the entry into force of a (protection of the acquired rights of Community regulation, a worker had, in migrant workers and the capacity of order to make use of the freedom of Member States to take measures to movement which is guaranteed to him, prevent unjustified overlapping). In fact, to suffer the loss of rights already in that the limit to the right of the acquired in one of the Member States migrant worker is fixed at the highest under the legislation of the latter State theoretical amount of the benefits that alone. The fact of granting a migrant the person concerned could claim if all worker less extensive rights than those the insurance periods completed had granted to a worker who spends the been completed in only one of the States whole of his working life in a single in question, the migrant worker is Member State, would constitute assured of suffering no loss of acquired discrimination against former.the rights. Although the Court has on several Nevertheless, although it is proper to occasions stated that the regulations prevent any discrimination against adopted in application of Article 51 are migrant workers, it is permissible to put intended to favour the migrant worker in certain limits on the application of such relation to the situation which would a system to avoid giving rise to a new arise for him from the exclusive discrimination against workers subject to application of national law, it has a single system of law. At the time of nevertheless said that such an objective drafting of Regulation No 1408/71 the concerns only 'certain aspects' of his Council took account of these principles. situation and that no general conclusion can be drawn from it. In the same way, As regards more particularly Article 46 when the Court refers to the 'duplication (3) of Regulation No 1408/71, of insurance periods' as authorizing, to introducing a limit to the overlapping of the extent to which it forms the basis for benefits, the Council considers that it is overlapping, the limitation of that necessary to distinguish the first overlapping, it does so by way of subparagraph, which concerns the example, and such reference cannot be beneficiary or those entitled under him, understood as a prohibition of the from the second, which concerns the limitation of instances of overlapping national institution. which may have a different origin.

recital of Regulation No 1408/71). On As it neither derogates from the the other hand, as appears expressly from provisions of the first subparagraph of Article 12 (2) of Regulation No 1408/71, Article 46 (3) nor departs from the the Member States have henceforth lost case-law of the Court, the second the power to limit the overlapping of subparagraph is therefore also in benefits, a power which, according to the accordance with Article 51 of the Treaty. case-law of the Court concerning Regulation No 3, they previously held. The Council considers that the reply to Referring to the judgment of the Court be given to the court making the reference should be as follows: of 28 May 1974 (Case 191/73, Niemann

article. As that limit coincides with the Treaty, the Council submits that the fixing of a limit equivalent to the highest highest theoretical amount of benefits calculated in accordance with Article 46 theoretical amount does not contravene the said article. (1) and (2), Article 46 (3) of Regulation No 1408/71 of the Council conforms to Examining the next second sub Article 51 of the Treaty and must be paragraph of Article 46 (3), the Council applied to that effect by competent considers that this provision has the sole institutions of the Member States. purpose of governing the distribution of any amount which may exceed the highest theoretical amount between the 2. Observations of the Commission institutions which apply subparagraph (1), that is to say, the competent The Commission notes that although, on institutions of the Member States in the matter of old age pensions, which the right to benefit exists under Regulation No 1408/71 has not yet been the legislation of these States alone. It is the subject of interpretation by the Court said to follow from this, that 'if the total of Justice, the case-law relating to the of the benefits mentioned in the first

JUDGMENT OF 21. 10. 1975 — CASE 24/75

periods provided for in Article 51 of The Commission accepts that the the EEC Treaty; Community legislature can fix rules for — Although it is not necessary for the the reduction of overlapping benefits within the limits which follow from the acquisition, maintenance, or recovery of a right to benefit to resort to the principles laid down by the case-law of aggregation of insurance periods the Court. In this respect it mentions (Article 27 of Regulation No 3), that although the judgment of 13 apportionment would be contrary to December 1967 (Case 12/67 Guissart v Article 51 of the Treaty, because it Belgian State [1967] ECR 425) states that could result in the loss of rights it is for the national authority, and not already acquired in a Member State; the Community authority, to limit — The overlapping of pensions does not certain instances of overlapping, that statement must however be understood in itself amount to an abuse and the reduction of the pension is possible as leaving to the national authorities the only in the event of duplication of possibility of applying the principle of insurance periods; the prevention of duplication of — Even if in certain cases the insurance periods without however prohibition of apportionment without excluding the power of the Community aggregation were to lead to an legislature itself to reduce that limit. advantage being given to a migrant As to (b)

It is necessary however to subparagraph of Article 46 (3), the qualify the negative" view thus put Council intended to translate the forward by distinguishing between various situations: principles laid down by the Court into legislative terms, then nevertheless, — in the case of a benefit granted under according to the Commission, the legislation of type A, that is to say questions remain: based on risk, which overlaps with (a) to what extent are the limits imposed another benefit, the reduction is not in the second subparagraph of Article contrary to Article 51, because a law 46 (3) in conformity with the based on the materialization of a risk possibilities of reduction accepted by may be regarded as being founded on the Court, and is there in fact the taking into account of fictitious improper overlapping of benefits periods;

— in the case of a benefit granted under main action, points out that Regulation legislation of type B, which No 1408/71 organized a system for nevertheless takes account of ficitious coordination conferring on the periods duplicating real periods beneficiary the right to benefits equal to which have been used in the the highest amount of the theoretical calculation of a benefit under the pension. That limit applies equally to a legislation of another Member State, national pension paid without resort the reduction may also take place, as to aggregation. Henceforward the indicated by the Court, by deduction beneficiary therefore possesses rights of those periods which are only by virtue of Community law.

It is In Mr Petroni's case the application of therefore in accordance with Article 51 Article 46 (3) would lead to a totally of the Treaty which, with a view to the unjustified reduction in the Belgian achievement of these specific objectives, benefit. Reduction would be possible makes general provision for aggregation, only if aggregation had been necessary to accompanied by apportionment. Within create the entitlement, or if there was an the framework of Regulation No 3 the overlapping of benefits through the Court of Justice has based itself on the duplication of periods. wording of Article 27 of that regulation If the reduction were permissible in the to exclude aggregation in cases where it case of Mr Petroni — quod non — it could merely have the effect of could in any case be applied only to the maintaining or of varying the content of proportion paid by Italy, since the a right already acquired, by virtue of calculation of the Belgian pension took national legislation alone.

3. Observations of the defendant in the main action to which the person concerned is entitled will depend úpon the amounts The Office national des pensions pour resulting from aggregation, not on the travailleurs salariés, the defendant in the combined total ofa national amount and

an apportioned amount nor on the total Article 46 (3) of Regulation No 1408/71 of national pensions. Article 46 (3) is to the pension to which their mother was therefore in accordance with Article 51 entitled should have been applied to the of the Treaty. theoretical amount of the pension (Bfrs 45 812), not to the amount of the Any amount exceeding the limit national pension (Bfrs 34 358). provided for in Article 46 (3) cannot be set offer against the apportioned amount, Article 46 (3) is not compatible with since the latter has already been Article 51 of the Treaty as interpreted by apportioned in relation to the total the Court of Justice. The limitation laid number of insurance periods. It must down in Article 46 (3) was introduced, therefore be set off against the national according to the eighth recital of amount which is greater than the Regulation No 1408/71, in order to avoid apportioned amount. The defendant in unjustified overlapping of benefits.

. . periods completed different schemes, that fact would be under the legislations of other Member States shall be taken into account for the irrelevant since the Belgian theoretical amount, which is the basis of the whole granting of such benefits only if operation, is by definition calculated completed under such a scheme'. The exclusively on the basis of the Belgian Belgian institution was not therefore legislation. required to take account, for subsequent apportionment, of the insurance periods 4. Observations of the plaintiffs in the completed in Italy under the general main action scheme, since the Belgian pension was granted within the framework of the The plaintiffs in the main action point special scheme reserved for mine out that the correction made by applying workers.

insurance periods completed under the legislation of that State, without The negative reply proposed by the its being necessary to have recourse .Italian Government to the first question to insurance periods completed under renders a reply to the other two the legislation of other Member questions unnecessary. States, the competent institution of the first Member State is not By letter from the Registrar of 10 July empowered to apply Article 46 (3) of 1975, the Court requested the plaintiffs Regulation No 1408/71 to reduce the in the main action, the Commission and pension which it is bound to pay the Council to reply to Question 2 (b) of under its own legislation. the court making the reference, setting 3. A pension acquired in a Member State out their views on the concept of a by virtue of insurance periods 'special scheme' within the meaning of completed in an occupation subject Article 45 of Regulation No 1408/71 and to a special scheme cannot be on its impact on the possible application reduced as a result of the fact that a of Article 46 and more particularly of right to a pension exists in another Article 46 (3). Member State in respect of insurance periods completed within the According to the Council, 'special framework of the general scheme. schemes' are those adopted in respect of particular occupational categories, 5. Observations of the Italian Govern­ notably in recognition of the special ment nature of conditions of work in those categories. The Italian Government recalls that according to the interpretation given by Unlike the scheme existing under the Court in its judgment of 28 May Regulation No 3, the provisions 1974 (Case 191/73, Niemann [1974] ECR concerning special schemes contained in 579), 'Article 51 of the Treaty deals Article 45 of Regulation No 1408/71 are essentially with the case in which the intended to be applied only in the case laws of one Member State do not by where apportionment is necessary within themselves allow the person concerned the meaning of subparagraph (b) of the right to benefits by reason of the Article 46 (2). insufficient number of periods completed under its laws, or only allow him benefits As concerns the impact of the concept of which are less than the maximum'. It is the special scheme on the application of to remedy this situation that the Article 46, it is limited in all cases where possibility of aggregation is provided for. a worker already fulfils the conditions

Law

1 By a judgment of 24 February received at the Court Registry on 6 March 1975, the Tribunal du travail of Brussels referred three questions under Article 177 of the EEC Treaty concerning the validity and the interpretation of Article 46 (3) 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 (OJ L 149 of 5. 7. 1971, p. 18).

2 These questions have been raised within the framework of proceedings between the Belgian institution responsible for the payment of pensions to employed persons and the successors of a migrant worker in relation to the calculation of the retirement pension to which the latter was entitled until the time of his death.

3 The worker, who had completed insurance periods in Belgium and in Italy, fulfilled in the first Member State all the conditions required by the national

PETRONI v ONPTS

legislation for entitlement to benefit, which, calculated on the basis of that legislation, amounted to Bfrs. 34 358.

On the first question and the first part of the second question

10 These questions ask whether Article 46 (3) of Regulation No 1408/71 of the Council is in conformity with Article 51 of the Treaty and, if so, whether it

JUDGMENT OF 21. 10. 1975 — CASE 24/75

must be applied to the pension granted to a migrant worker on the basis of insurance periods not duplicated by any of the periods used as the basis for calculating the pension granted in other countries of the Community.

11 The regulations in the field of social security for migrant workers have as their basis, their framework and their bounds Article 48 to 51 of the Treaty.

12 Article 51 requires the Council to adopt in the field of social security measures as are 'necessary' to provide freedom of movement for workers, providing for the aggregation, in particular for the purpose acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of the several countries.

18 That interpretation is expressly confirmed by Article 45 of Regulation No 1408/71 according to which an institution of a Member State whose legislation makes the acquisition, retention or recovery of the right to benefits conditional upon the completion of periods of insurance or of residence shall take into account periods of insurance or of residence completed in other Member States only 'to the extent necessary'.

19 Thus, in adopting Regulation No 1408/71, the Council intended to align the implementing rules which it lays down with the requirements of Article 51 of the Treaty.

20 Article 46 (3) appears to be a rule limiting overlapping and the Council, in the exercise of the powers which it holds under Article 51 concerning the coordination of the social security schemes of the Member States, has the power, in conformity with the provisions of the Treaty, to lay down detailed rules for the exercise of rights to social benefits which the persons concerned derive from the Treaty.

21 However, a limitation on the overlapping of benefits which would lead to a diminution of the rights which the persons concerned already enjoy in a Member State by virtue of the application of the national legislation alone is incompatible with Article 51.

22 It is therefore proper to conclude that Article 46 (3) is incompatible with Article 51 of the Treaty to the extent to which it imposes a limitation on the overlapping of two benefits acquired in different Member States by a reduction in the amount of the benefit acquired under national legislation alone.

THE COURT

in answer to the questions referred to it by the Tribunal du travail of Brussels, 11th Chamber, by judgment of 24 February 1975 hereby rules:

Article 46 (3) of Regulation No 1408/71 of the Council is incompatible with Article 51 of the Treaty to the extent to which it imposes a limitation on the overlapping of two benefits acquired in different Member States by a reduction in the amount of a benefit acquired under national legislation alone.

Lecourt Monaco Kutscher Donner Mertens de Wilmars

Pescatore Serensen Mackenzie Stuart O'Keeffe

Delivered in open court in Luxembourg on 21 October 1975.