C-176/78

JUDGMENT OF 5. 4. 1979 - CASE 176/78

In Case 176/78

REFERENCE to the Court under Article 177 of the EEC Treaty by the Centrale Raad van Beroep, Utrecht, for a preliminary ruling in the action pending before that court between

Max Schaap, Amsterdam,

and

Bestuur van de BEDRIJFSVERENIGING voor BANK- en VERZEKERINGSWEZEN, Groothandel en VRIJE BEROEPEN [Board of the Trade Association for Banking, Insurance, the Wholesale Trade and the Professions], Amsterdam,

JUDGMENT

Facts and Issues

The order for reference and the written insurance against incapacity for work observations submitted under Article 20 (Wet op de arbeidsongeschiktheids­ of the Protocol on the Statute of the verzekering, hereinafter referred to as Court of Justice of the EEC may be "the WAO"). At the same time Mr summarized as follows: Schaap was awarded a pension under the German legislation which was higher than that to which he would have been entitled on the basis only of the I - Facts and written procedure compulsory periods of insurance which he had completed in Germany; he had in fact voluntarily paid contributions for the The Centrale Raad van Beroep [Court of back period from 1934 to 1945 in respect last instance in social security matters] of pension insurance in accordance with has referred a question to the Court of the opportunity afforded by the Justice for the second time within the legislation on the payment of damages to context of the same proceedings. In fact, the victims of Nazi persecution. that court submitted to the Court by order of 12 July 1977 a question on the In pursuance of Article 46 (3) of Regu­ interpretation of Articles 12 (2) and 46 lation (EEC) No 1408/71, the Fund of Regulation (EEC) No 1408/71. That deducted the amount of the German question was answered by judgment of pension from that of the Netherlands 14 March 1978 (Case 98/77, Max Schaap pension. Mr Schaap contested this v Bestuur van de Bedrijfsvereniging voor decision before the Raad van Beroep Bank- en Verzekeringswezen Groothandel [Court of Appeal in social security en Vrije Beroepen, [1978] EC R 707). matters], Amsterdam, then lodged an appeal before the Centrale Raad van Beroep, Utrecht, complaining that the The facts of the main action may be Fund had taken into account the whole recalled as follows: of his German pension whereas by virtue of Article 46 (2) of the above-mentioned Mr Schaap, a Netherlands national, Regulation No 574/72, it should only worked as an employed person in have deducted from the Netherlands

"Where a worker has been subject to the legislation which grants a worker the legislation of two or more Member right to buy in the insurance for this States, to what extent do Articles 12 (2) period are to be regarded as falling and 46 of Regulation (EEC) No within this provision". 1408/71 prevent the application of national rules against the overlapping of The Fund considers in fact that in the benefits such as those in force pursuant present case there is no overlapping of to the WAO, where entitlement to periods since Mr Schaap's German and benefit has been obtained pursuant to Netherlands pensions were acquired national legislation alone without its without the need to have recourse to the being necessary to apply the regulation aggregation procedure. It therefore for that purpose?" deduces from this that the above- mentioned Article 46 (2) which must be interpreted in conjunction with the The Court held: preceding paragraph and the heading of the article itself does not apply to Mr "So long as a worker is receiving a Schaap and that this provision refers pension by virtue of national legislation only to cases in which aggregation of the alone, the provisions of Regulation No periods completed and apportionment of the benefit have occurred. 1408/71 do not prevent the national legislation, including the national rules against the overlapping of benefits, from In the light of these considerations, the being applied to him in its entirety, Centrale Raad van Beroep found that it provided that if the application of such was necessary to refer to the Court of national legislation proves less favourable Justice under Article 177 of the EEC than the application of the rules laid Treaty a further question for a pre­ down by Article 46 of Regulation No liminary ruling. By order of 11 July 1408/71 the provisions of that article 1978, transmitted to the Court by letter must be applied". of 15 August 1978, the Centrale Raad van Beroep referred to the Court the following questions for a preliminary When the proceedings in this case were ruling: resumed before the national court and it had been decided to re-open the oral "1. Is the heading of Article 46 of Regu­ proceedings the Fund raised the question lation No 574/72 an integral part of of the interpretation of paragraphs 8 and that article in the sense that the 9 of the Decision of the Court. content of the article is also determined by that heading? "Article 46 (2) of Regulation No 574/72 of the Council of 21 March 1972 2. Having regard to Article 46 (2) (d) of Regulation No 1408/71 are the (Official Journal, English Special Edition 1972 (I), p. 159) provides that for the second subparagraph of paragraph purposes of Article 46 (3) of Regulation (1) and paragraph (2) of Article 46 No 1408/71 the amounts of benefit of Regulation No 574/72 read together with the first subparagraph corresponding to periods of voluntary or optional continued insurance shall be of paragraph (1) and the heading taken into account. above the article relates only to benefits calculated in accordance with Article 46 (2) (a) and (b) of It is obvious that benefits attributable to Regulation No 1408/71 in cases an insurance period which has been where aggregation of periods has bought in pursuant to the provisions of occurred and in connexion with

of account periods of voluntary or optional continued insurance in calculating the benefits?" In the opinion of the Commission, the Fund seems to confuse the concept of overlapping of periods and that of aggre­ gation of periods and apportionment of The order for reference was received at benefits. However, the facts might show the Court on 17 August 1978. that from 1934 to 1940 Mr Schaap was not compulsorily insured in the Netherlands because for example he After hearing the report of the Judge- worked there as a self-employed person Rapporteur and the views of the and that no overlapping of periods has Advocate General, the Court decided to therefore occurred but that it was open the oral procedure without any necessary in one of the two Member preparatory inquiry. States in question, or even in both, to have recourse to the aggregation procedure for the purpose or the acquisition of the right to benefits. Conversely, it might occur that from II - Summary of the written 1934 to 1940 Mr Schaap was insured observations submitted to compulsorily in the Netherlands and that the Court under Article 20 overlapping of periods therefore occurs of the Protocol on the without its however being necessary to Statute of the Court of have recourse to the aggregation Justice of the EEC procedure in one or other or even both Member States.

- either to fill a gap in his insurance 2. Is Article 46 of Regulation No 574/72 record; of the Council to be understood as meaning that it relates solely to benefits calculated in accordance with - or to improve the protection given Article 46 (2) (a) and (b) of Regu­ him under compulsory insurance. lation No 1408/71 or as meaning that it also relates to benefits calculated on the basis of national legislation alone In the first case, the voluntary insurance pusuant to Article 46 (1) of Regu­ lation No 1408/71? appears to be a substitute for compulsory insurance. In the second case overlapping of periods occurs and the voluntary insurance may be considered as complementary insurance and the The first question advantages of that insurance expected by the person concerned should not be affected by the methods of calculation of benefits laid down by the regulation. The problem whether the two over­ lapping periods (compulsory insurance According to the Commission, it is period and voluntary or optional impossible to interpret Article 46 (2) of continued insurance period) should be Regulation No 574/72 as relating solely taken into account for the purpose of the calculation of the theoretical amounts to pensions acquired after aggregation of the periods and apportionment of the and for the purpose of the calculation of benefits. This follows from: the amount of the benefits and the amount of the reduction, which was not resolved by Article 15 of Regulation No - The very wording of that provision 574/72 (headed "General rules for the which refers generally to "the aggregation of insurance periods"), is purposes of Article 46 (3) of the regu­ resolved by Article 46 of the same regu­ lation", that is Regulation No lation. According to the Commission, the 1408/71, for which the amounts of latter provision does not relate to all benefit corresponding to periods of cases where there is a period of voluntary or optional continued compulsory or optional continued insurance are not be taken into insurance in a Member State but only account; those where that period coincides with a period of compulsory insurance in another Member State. It is for the - The logic of the system introduced national court to decide as a matter of by Article 46 (3). Where voluntary fact whether overlapping of periods has insurance overlaps with compulsory occurred, in other words whether a insurance it is necessary, even in the period of voluntary insurance coincides case of pensions acquired under with a period of compulsory insurance. national legislation alone, to take

To limit the application of Article 46 of In the alternative, the Commission takes Regulation No 574/72 solely to pensions the view that it is necessary to consider calculated on a pro rata basis would that the rule laid down in Article 46 (2) amount to stating that where a pension of Regulation No 574/72 remains has been acquired under the national applicable mutatis mutandis where legislation alone the fact that the pensions acquired under national amounts of benefit corresponding to legislation alone are reduced on the basis periods of voluntary insurance are taken of the domestic rule against the over­ into account does not adversely affect lapping of benefits. Such a solution the worker. The Commission shows on would enable the intention of the the contrary by a specimen calculation Community legislature to be complied the loss which would be suffered if that with; in any case the legislature did not provision did not limit the effect of the intend to affect adversely rights arising reduction provided for in Article 46 (3) under voluntary insurance. of Regulation No 1408/71 and that there would also be a loss where two The Commission considers that the benefits overlapped when calculated in accordance with Article 46 (1) of Regu­ following replies might be given to the lation No 1408/71, in other words by questions referred to the Court: virtue of national legislation alone.

1. Article 46 of Regulation No 574/72 of the Council does not refer to all The system introduced by Regulations cases in which a worker has taken out Nos 1408/71 and 574/72 is therefore voluntary insurance during his career absolutely consistent. In fact: in a Member State but only to those in which overlapping of periods of insurance occurs, in other words 1. In so far as voluntary insurance where a period of voluntary insurance replaces compulsory insurance and in a Member State coincides with a does not therefore lead to overlapping period of compulsory insurance in of insurance periods of voluntary another Member State.

By order of 11 July 1978, which was received at the Court on 17 August 1978, the Centrale Raad van Beroep referred to the Court of Justice under Article 177 of the EEC Treaty two questions for a preliminary ruling on the interpretation of Article 46 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 (Official Journal, English Special Edition 1971 (II), p. 416) and of Article 46 of Regulation (EEC) No 574/72 of the Council of 21 March 1972 fixing the procedure for implementing Regulation (EEC) No 1408/71 (Official Journal, English Special Edition 1972 (I), p. 159). These questions have arisen within the context of proceedings relating to the calculation by the competent Netherlands institution of the invalidity pension of a Netherlands national, the plaintiff in the main action, who worked in the Federal Republic of Germany from 1929 to 1933 and afterwards in the Netherlands.

2 The plaintiff in the main action availed himself of the opportunity afforded by German legislation relating to the victims of Nazi persecution and, with reference to his pension insurance, bought in voluntarily the back period from 1934 to 1945 so as to be able to claim a higher German pension. The Netherlands Fund, taking into account the German pension, reduced the amount of the benefit payable to the plaintiff in the main action under Netherlands legislation on pension insurance in application of the Netherlands Royal Decree of 22 December 1972, enacted in implementation of Article 52 of the Wet op de arbeidsongeschiktheidsverzekering (Law on

For the reasons set out in its judgment of 14 March 1978 (Case 78/77 [1978] ECR 707), the Court gave the following reply:

"So long as a worker is receiving a pension by virtue of national legislation alone, the provisions of Regulation No 1408/71 do not prevent the national legislation, including the national rules against the overlapping of benefits, from being applied to him in its entirety, provided that if the application of such national legislation proves less favourable than the application of the rules laid down by Article 46 of Regulation No 1408/71 the provisions of that article must be applied."

JUDGMENT OF 5. 4. 1979 - CASE 176/78

5 The Centrale Raad van Beroep, sharing the doubts expressed by the Netherlands Fund, the defendant in the main action, on the interpretation of Article 46 (2) of Regulation No 574/72, referred to the Court once more the following questions:

"1. Is the heading of Article 46 of Regulation No 574/72 an integral part of that article in the sense that the content of the article is also determined by that heading?

2. Having regard to Article 46 (2) (d) of Regulation No 1408/71 are the second subparagraph of paragraph (1) and paragraph (2) of Article 46 of Regulation No 574/72 read together with the first subparagraph of paragraph (1) and the heading above the article to be understood as meaning that the whole article relates only to benefits calculated in accordance with Article 46 (2) (a) and (b) of Regulation No 1408/71 in cases where aggregation of periods has occurred and in connexion with which periods of voluntary or optional continued insurance were not taken into account, or do those provisions, or does one of them, also apply to cases in which the benefits were not calculated in accordance with Article 46 (2) (a) and (b) of Regulation No 1408/71 and there has been no question of leaving out of account periods of voluntary or optional continued insurance in calculating the benefits?"

2. Where a worker has been subject to the legislation of a Member State and does not satisfy the conditions for entitlement to benefits unless account is taken of the provisions of Article 45, the competent institution of that Member State shall apply the following rules: (a) The institution shall calculate the theoretical amount of benefit that the person concerned could claim if all the insurance periods completed under the legislations of the Member States to which he has been subject had been completed in the State in question and under the legislation administered by it on the date the benefit is awarded. If, under that legislation, the amount of the benefit does not depend on the length of the insurance periods, then that amount shall be taken as the theoretical amount referred to in this subpara­ graph; (b) The institution shall then establish the actual amount of the benefit on the basis of the theoretical amount referred to in the preceding subparagraph and in the ratio which the length of the insurance periods completed before the materialization of the risk under the legislation administered by that institution bears to the total length of the insurance periods completed before materialization of the risk under the legislations of all the Member States concerned; (c) …

(d) The procedure for taking into account duplicate periods when applying the rules of calculation laid down in this paragraph shall be laid down in the implementing regulation referred to in Article 97.

JUDGMENT OF 5. 4. 1979 - CASE 176/78

3. The persons concerned shall be entitled to the total sum of the benefits calculated in accordance with the provisions of paragraphs 1 and 2 within the limit of the highest theoretical amount of benefits calculated according to paragraph 2 (a). Where the amount referred to in the preceding subparagraph is exceeded, any institution applying paragraph 1 shall adjust its benefit by an amount corresponding to the proportion which the amount of the benefit concerned bears to the total of the benefits determined in accordance with paragraph 1."

SCHAAP » BEDR1JFSVEREN1GING VOOR BANK- EN VERZEKERINGSWEZEN, GROOTHANDEL EN VRIJE BEROEPEN

10 It is clear from the provisions quoted above that for the purpose of the calcu­ lation of the actual amount of benefit in accordance with Article 46 (2) of Regulation (EEC) No 1408/71, the regulation aims to ensure that a period of insurance completed under voluntary or optional continued insurance under the legislation of one Member State which coincides with a period of insurance or residence completed under compulsory insurance under the legislation of another Member State is not taken into account for the purpose of the aggregation of periods without this however depriving the worker of the benefit of that period. It follows from all the foregoing that where there can be no question of periods coinciding because one body of legislation in question is of type A the regulation also allows the worker the benefits corresponding to any period of voluntary or optional insurance.

11 Therefore although Article 46 (2) of Regulation No 574/72 appears under the heading "Calculation of benefits in the event of overlapping of periods", it must be applied to all cases coming under Article 46 (3) of Regulation No 1408/71 so that, for the purpose of the application of that paragraph, the competent institution cannot take account of benefits corresponding to periods completed under voluntary or optional insurance.

Costs

12 The costs incurred by the Belgian Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since the proceedings are, so far as the parties to the main action are concerned, a step in the action pending before the Centrale Raad van Beroep, the decision on costs is a matter for that court.

Sørensen O'Keeffe Bosco Touffait

Delivered in open court in Luxembourg on 5 April 1979.

A. Van Houtte J. Mertens de Wilmars Registrar President of the First Chamber

acting as President

OPINION OF MR ADVOCATE GENERAL WARNER DELIVERED ON 14 MARCH 1979

My Lords, preliminary ruling by the Centrale Raad van Beroep. On the first occasion it bore number 98/77. The Judgment delivered This case comes to the Court, for the by the Court on that occasion is reported second time, by way of a reference for a at [1978] ECR 707.