C-180/78

JUDGMENT OF THE COURT OF 19 JUNE 1979 1

Mrs Brouwer-Kaune v Bestuur van de Bedrijfsvereniging voor het Kledingbedrijf (preliminary ruling requested by the Centrale Raad van Beroep, Utrecht)

Case 180/78

Social security for migrant workers — Invalidity insurance — Benefits — Overlapping — Application by analogy with provisions relative to old-age and death benefits — Scope of analogy (Regulation No 1408/71 of the Council, Art. 40 (1))

Article 40 (1) of Regulation No 1408/71 concerned, before the acquisition of such of the Council must be interpreted as right, had already become entitled, by meaning that it also relates to the award virtue of the legislation of another of invalidity benefits in a Member State Member State not being of that type, to in which the right to such benefits has an old-age benefit resulting from the been acquired by a worker on the basis conversion of an earlier invalidity of legislation of the type referred to in benefit. Article 37 (1) in a case where the person

In Case 180/78

THE COURT

composed of: J. Mertens de Wilmars, President of the First Chamber, acting as President, Lord Mackenzie Stuart (President of the Second Chamber), P. Pescatore, M. Sørensen, A. O'Keeffe, G. Bosco and A. Touffait, Judges,

Advocate General: F. Capotorti Registrar: J. A. Pompe (Deputy Registrar)

gives the following

JUDGMENT

Facts and Issues

Netherlands social security legislation. Article 1 of the Koninklijk Besluit [Royal Although she was subject to compulsory Decree] of 22 December 1972 adopted insurance in the Netherlands she pursuant to Article 52 of the Wet op de continued none the less to contribute arbeidsongeschiktheidsverzekering. voluntarily to the German insurance from 1950 to 1957 in order to have the Considering inter alia that there was no necessary number of years of contri overlapping in any particular period butions to become entitled to a pension. between the German old-age pension As from 20 July 1970 Mrs Brouwer- and the Netherlands invalidity benefit, Kaune was recognized to be suffering Mrs Brouwer-Kaune brought an action from a partial incapacity for work and against the decision of the Netherlands obtained, as from 1 August 1970, an institution before the Raad van Beroep occupational invalidity pension (Berufs- [Social Security Court], Amsterdam. unfähigkeitsrente) from the competent German institution.

voor het Kledingsbedrijf [Trade Working on the assumption that Article Association for the Clothing Trade], by a 43 of Regulation No 1408/71 did not decision of 25 October 1973, granted her envisage the type of case in question, at a benefit for incapacity for work under least not directly, the Centrale Raad van the Netherlands law on insurance against Beroep raised the question whether incapacity for work (Wet op de ar- Article 40 (1) of that regulation was

liminary ruling: 1973, convened the invalidity pension previously awarded to Mrs Brouwer- Kaune into an early old-age pension "Must Article 40 (1) of Regulation No ("vorgezogenes Altersruhegeld"). By a 1408/71 considered in the light of decision of 13 January 1976 the Article 43 be interpreted to mean that Netherlands institution then reduced the Chapter 3 (especially Article 46) is also invalidity pension paid to the appellant in applicable by analogy when there is a the main action by the amount of the right to invalidity benefit under the German old-age pension with effect legislation of a Member State of the type from 2 October 1973; it was thus referred to in Article 37 (1) of the regu applying the national provision against lation and the interested party satisfies the overlapping of benefits contained in the conditions laid down in one of the

legislations, not listed in Annex III, of II — Written observations sub­ another Member State for the right to mitted pursuant to Article benefit if the first-mentioned benefit 20 of the Protocol on the must be awarded to a person who Statute of the Court of already has a claim to an old-age Justice of the EEC pension under the legislation of the last- mentioned Member State?" A — Observations of the Government of the Kingdom of the Netherlands 2. Article 40 (1) of Regulation No The Netherlands Government remarks in 1408/71 provides that: essence that the preliminary question submitted by the Centrale Raad van "A worker who has been successively or Beroep is based on the assumption that alternately subject to the legislations of the appellant in the main action two or more Member States, of which at continues, after the date on which she least one is not of the type referred to in was granted a German old-age pension, Article 37 (1), (that is to say, legislation to satisfy the conditions on which under which the amount of invalidity entitlement to benefits depends under benefit is independent of the duration of the German legislation on invalidity periods of insurance), shall receive insurance (not mentioned in Annex III benefits under the provisions of Chapter 3, to Regulation No 1408/71). The which shall apply by analogy, taking into Netherlands Government considers that account the provisions of paragraph (3)". assumption false, claiming that the over­ lapping of an old-age pension and an invalidity pension is not possible in any Article 43 of the said regulation concerns of the Member States of the European the conversion of invalidity benefits into Economic Community. Hence it old-age benefits and Article 46, which considers that, as from the date on which belongs to Chapter 3 of the said regu­ a retirement pension was granted, it lation, deals with the award of old-age benefits and death benefits. ceases to be possible under German law to benefit from an invalidity pension, with the result that the appellant in the main action no longer satisfies those 3. The order making the reference was conditions. The Netherlands Govern­ received at the Court Registry on 5 ment considers that, if its analysis is September 1978. correct, it would have to be admitted that the situation envisaged by the pre­ Pursuant to Article 20 of the Protocol on liminary question cannot arise, with the the Statute of the Court of Justice of the result that it is not necessary for Regu­ EEC, written observations were lation No 1408/71 to apply to it. submitted by the Government of the The Netherlands Government takes the Kingdom of the Netherlands and by view that Article 40 (2) of Regulation the Commission of the European Communities. No 1408/71 is applicable in this case, in particular because, as she is in receipt of an old-age pension under the legislation After hearing the report of the Judge- of a Member State, the appellant in the Rapporteur and the views of the main action ceases henceforth to satisfy Advocate General, the Court decided to the conditions on which entitlement to open the oral procedure without any benefits depends under that Member preparatory inquiry. State's legislation on invalidity, which is

not mentioned in Annex III. Thus there is only a partial overlapping Consequently the Government of the and it would be more just, in so far as Kingdom of the Netherlands does not the Netherlands rule against overlapping consider it appropriate to examine the is applicable, to apply it only to that part preliminary question more deeply. of the Netherlands benefit which overlaps with a fraction of the German old-age pension corresponding to the pan-time employment. Finally, the Commission emphasizes that from 1950 B — Observations of the Commission to 1957 the appellant in the main action continued to pay voluntary contributions to the German insurance organization, while at the same time being Before submitting its observations on the compulsorily insured in the Netherlands. question of interpretation as such, the It follows that the present case raises the Commission first makes some pre­ question whether, in applying the liminary remarks. It points out that it is national rule against overlapping, surprising to find that, although the account must be taken of the voluntary minimum rate of incapacity for work insurance periods which are required in order to become entitled to superimposed on compulsory insurance a pension under the Netherlands periods. That question depends on the legislation, which is based on the risk application of Article 46 of Regulation involved, is lower than that required by No 574/72 of the Council of 21 March the German legislation, the appellant in 1972, fixing the procedure for the main action did not receive invalidity implementing Regulation No 1408/71 benefits from the competent Netherlands (Official Journal, English Special Edition institution in 1970 and her invalidity was 1972 (I), p. 159). The Court was asked not recognized in the Netherlands until to interpret that article in Case 176/78, October 1972. It goes on to point out Schaap v Bestuur van de Bedrijfs- that the German invalidity pension was vereniging voor Bank en Verze- granted in 1970 in respect of partial keringswezen, Groothandel en Vrije incapacity, while the Netherlands Beroepen. The Commission refers to the invalidity pension relates to total observations which it submitted in that incapacity for work. It seems then that case.

overlapping between benefits of the same by that article and also the ratio legis of type, in particular invalidity benefits, the provision in question. With regard here it is a question of overlapping more particularly to paragraphs (2) and between two benefits which are not of (3) of Article 43, the Commission the same type, namely in the one case an observes essentially that they concern old-age benefit resulting from the invalidity benefits which are not or have conversion of an invalidity pension and not yet been converted into old-age in the other case an invalidity benefit. benefits. According to paragraph (2) the The Commission goes on to state that institution responsible for providing the Regulation No 1408/71 contains a invalidity benefit must continue to pay it special provision covering the problem of until such time as it must convert that overlapping between such an old-age benefit into an old-age pension.

pension. As the said Article 43 authorizes No 1408/71 is excluded and thus the overlapping of the two benefits national provisions against overlapping within certain limits, the question are not applicable. As regards Article 43 submitted to the Court of Justice by the (3), that provision covers the particular national court in fact amounts to asking situation of an individual who has been whether in the case in question, where subject exclusively to legislation of type entitlement to the Netherlands pension arose after the conversion of the German A and is at a given moment entitled to an old-age pension under the legislation invalidity pension into an old-age of at least one Member State which did pension, it is proper to apply Chapter 3 of Regulation No 1408/71, which would not grant him any invalidity pension, whilst he remains entitled to a full in all cases allow workers to be guaranteed a pro rata pension where the invalidity pension under the legislation to which he was subject at the time when application of the national legislation the risk materialized. In such a case against overlapping proves less favourable than the scheme established where Chapter 3 has not been applied by Article 46 of Regulation No 1408/71. for the award of the invalidity pension, paragraph (3) of Article 43 provides a corrective factor in relation to paragraph (2) of the same provision.

BROUWER-KAUNF. v BEDRIJFSVERENIGING VOOR HET KLEDINGBEDRIJF

have been completed. The said Article 49 paragraph (3), Article 43 of Regulation belongs to Chapter 3 of Regulation No No 1408/71 excludes the application of 1408/71 which, in accordance with national provisions against overlapping. Article 40 (1), applies by analogy for the In fact, if Chapter 3 of Regulation No award of invalidity pensions when one of 1408/71 was applied for the award of the bodies of legislation to which the invalidity pensions, the invalidity pension worker has been subject is not of the which is not converted into an old-age type referred to in Article 37 (1) (type pension and which therefore continues to

For that reason the provisions of Chapter 3 must be Article 43 (3) introduced a corrective applied. Article 49, and more particularly factor permitting the reduction to be paragraph (1) (b) (ii) thereof, is the applied which had not taken place when provision applicable to this case. The the invalidity pension was awarded. application of that provision entails the granting of an independent invalidity pension, the overlapping of which with an old-age pension may entail the application of the national provisions The Commission goes on to observe that against overlapping of benefits by virtue it is none the less worth noting that it is of the first sentence of Article 12 (2) of clear from the very wording of Article 43 Regulation No 1408/71. One is then in a of Regulation No 1408/71 that it surprising situation, to say the least, presupposes that the entitlement to an whereby, according as the right to invalidity pension under the legislation of old-age benefits arises after or before the one Member State precedes entitlement acquisition of the right to the invalidity to the old-age pension under the benefit, overlapping is either permitted

"Article 40 (1) of Regulation No 1408/71 must be interpreted as meaning The Advocate General delivered his that when a worker has been successively opinion on 16 May 1979.

Decision

1 By an order of 16 May 1978 which was received at the Court on 5 September of the same year, the Centrale Raad van Beroep requested a preliminary ruling, pursuant to Article 177 of the EEC Treaty, on the in­ terpretation of Article 40 (1) 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 (Official Journal, English Special Edition 1971 (II), p. 416).

BROUWER-KAUNE v BEDRIJFSVERENIGING VOOR HET KLEDINGBEDRIJF

2 The question has arisen in the context of a dispute concerning the calcu­ lation, by the competent Netherlands institution, of an invalidity pension payable to a worker who, after working in Germany between 1928 and 1950, settled in the Netherlands, where she worked as an employed person from 1951 to 1972. It emerges from the letter by which the Centrale Raad van Beroep transmitted its decision to the Court that, from 1 August 1970, the person concerned received in Germany an occupational invalidity pension which was converted into an early old-age pension with effect from 1 August 1973. In the Netherlands she was granted benefit for incapacity for work as from 2 October 1973, that is to say, as from a date subsequent to the conversion of the German invalidity pension into an old-age pension.

3 Because of the order in which those benefits were granted the Centrale Raad van Beroep considered that Article 43 of Regulation No 1408/71 on the conversion of invalidity benefits into old-age benefits is not applicable, at least not directly, in the present case. In fact, that article deals with the case where invalidity benefits are acquired in two Member States before conversion into old-age benefits and paragraph (2) provides that, even after such a conversion in one of the Member States, the institution responsible for providing invalidity benefits in the other Member State shall continue to provide the recipient with the invalidity benefits to which he is entitled under the legislation which it administers.

6 In a series of judgments, the last of which was delivered on 14 March 1978 in Case 98/77 Schaap [1978] ECR 707, the Court has ruled that, 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 scheme set up by Article 46 of the regulation, the provisions of that article must be applied. As regards Article 46 (3), however, the Court ruled in its judgment of 21 October 1975 in Case 24/75 Petroni v ONPTS [1975] 2 ECR 1149 that that provision 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.

7 That case-law, which concerns in the first place cases in which a worker has been subject to the legislation of two or more Member States in the field of old-age insurance, has been extended without modification, by virtue of Article 40 (1), to cases of invalidity insurance. A similar effect is produced by Article 43, as mentioned above, in cases where one of two invalidity benefits already acquired is converted into an old-age benefit. The problem in this case is to know whether a different solution must be found solely for a case in which the conversion of the invalidity benefit in one Member State took place before the award of the invalidity benefit in another Member State.

Costs

10 The costs incurred by the Government of the Netherlands and by the Commission of the European Communities, which have submitted written observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, 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 question referred to it by the Centrale Raad van Beroep by order of 16 May 1978, hereby rules:

JUDGMENT OF 19. 6. 1979 — CASE 180/78