C-793/79

JUDGMENT OF 26. 6. 1980 — CASE 793/79

In Case 793/79

REFERENCE to the Court under Article 177 of the EEC Treaty by the Bundessozialgericht [Federal Social Court] for a preliminary ruling in the action pending before that court between

ALASTAIR MENZIES, Offenbach-Waldheim,

and

BUNDESVERSICHERUNGSANSTALT FÜR ANGESTELLTE [Federal Insurance Office for Clerical Staff], Berlin,

Facts and Issues

I •—• F a c t s and p r o c e d u r e incapacitated for work. Up to that date the plaintiff had paid 24 monthly contri- 1. Mr Menzies, the plaintiff in the main butions to the German invalidity and action, born on 15 July 1937, is a old-age pension insurance fund and had national of the United Kingdom living in 248 months of insurance paid to a Germany. In December 1975 he became United Kingdom fund.

MENZIES ν BUNDESVERSICHERUNGSANSTALT FÜR ANGESTELLTE

By pension on the basis of Article 46 (2) (a) an order of 19 September 1979 that and (b) of that regulation. When court stayed the proceedings and determining the theoretical amount of referred the following question to the the benefit referred to in subparagraph Court of Justice for a preliminary ruling: (a) thereof, besides the 24 months of "Must the expressions 'periods of German insurance and the 248 months insurance . . . completed' and 'periods of of United Kingdom insurance, the insurance . . . completed . . . before the defendant took into account as relevant risk materializes' contained in Article 46 "years of insurance" within the meaning (2) (a) and (b) of Regulation (EEC) No of Article 35 of the German Law on 1408/71 of the Council of the European invalidity and old-age pension insurance Communities be interpreted as also for clerical staff (Angestelltenversiche- including those periods treated as such rungsgesetz, hereinafter sometimes within the meaning of Article 1 (r) of the referred to as the "AVG") a sup- regulation which can only start to run plementary period of 199 months on the when the risk materializes but which basis of Article 37 of that Law.

date on which the insured person reaches the age of 55. The considerations which led the Bun- dessozialgericht to refer this question to In order to calculate the amount of pro the Court are basically these: rata pension actually payable under 1. Although according to the seemingly Article 46 (2) (b), however, the unambiguous wording of Article 46 defendant did not take account of the (2) (b) of Regulation No 1408/71, to supplementary period. The apportion- Decision No 95 of the Commission and ment ratio was thus 24 : 24 + 248. On to academic opinion, supplementary that basis the defendant fixed the amount periods are not periods completed of the pension at 8.82% of the before the risk materializes, theoretical amount which amounted to a monthly benefit of DM 82,90. nevertheless the context of the provision should also be taken into consideration, The plaintiff, on the other hand, argued as well as its spirit and purpose. that the notional supplementary period 2. Article 37 of the German Law on must also be taken into account in invalidity and old-age pension the calculation of the actual amount insurance for clerical staff provides that of the benefit. He argued that the supplementary periods must be added correct ratio of the benefits was to completed periods of insurance.

5. The interpretation which the plaintiff 1. By Article 1 (r) of Regulation No wishes to see upheld would in any 1408/71 "periods of insurance" means case assist in providing freedom of "periods of contribution or periods of movement for workers. employment as defined or recognized as periods of insurance by the legislation under which they were completed or 3. The order making the reference was considered as completed, and all periods received at the Court Registry on 5 treated as such, where they are regarded November 1979. by the said legislation as equivalent to periods of insurance". Therefore by this Having verified that no Member State definition periods which are "considered and no institution, being a party to the as completed" by national law are also case, has requested that it be dealt with periods of insurance. This is also true of by the full Court, the Court by an order the supplementary period within the of 12 March 1980 assigned the case to meaning of Article 37 of the AVG. This the Third Chamber pursuant to Article latter period must be considered as 95 (1) and (2) of the Rules of Procedure. "completed before the risk materializes"

MENZIES ν BUNDESVERSICHERUNGSANSTALT FÜR ANGESTELLTE

2. The interpretation of Article 46 indicated in Article 51 of the EEC advocated by the defendant would cut Treaty. down the rights which the national legislation of the Federal Republic of Germany gives to the plaintiff. The EEC B — In support of its contention that Treaty does not empower the Com- the supplementary period referred to in munity legislature to cut down rights Article 37 of the AVG must be taken in this way. By Articles 2, 7 and 51 of into account only when the theoretical the EEC Treaty, upon which the Coun- amount is determined, the Bundesversi- cil expressly based the adoption of this cherungsanstalt für Angestellte argues as regulation, the Council has power to follows: harmonize social security laws only to the extent to which such harmonization assists in providing freedom of 1. This contention is supported by movement for workers and consequently Decision No 95 of the Administrative positively promotes the establishment of Commission of the European Com- the Common Market. The Bundesversi- munities on Social Security for Migrant cherungsanstalt would not suffer any loss Workers of 24 January 1974 (Official · if it recognized that the plaintiff is Journal C 99, p. 5). entitled to a supplementary period.

3. In the way in which it is interpreted insurance, and so a formula had to be by the defendant, Article 46 (2) (b) of found to evaluate a pension granted to a Regulation No 1408/71 is contradictory: premature invalid or his or her survivors. on the one hand it is supposed to exempt From among all the conceivable the insured person from proving that he formulae (granting of a supplement, has paid a given number of minimum revaluation of contributions or even, in

certain cases, the granting of a minimum in the determination of a pro rata pension) German legislation opted for pension than the States which have opted that contained in Article 37 of the AVG. for other formulae such as a minimum The supplementary period referred to in benefit for example. that provision is not based on any contri- butions and is therefore extraneous to 6. Finally the argument advanced by the pension system itself. the plaintiff in the main action would be contrary to the purpose of Articles 48 to

question of any disadvantage suffered by 4. The theoretical amount calculated by the plaintiff owing to his change of taking into account the amount of the residence within the Community since in benefit relating to the supplementary the absence of the provisions of Regu- period is only payable pro rata by the lation No 1408/71, he would not have institution of the Member State, in been entitled to a pension within the accordance with Article 46 (2) (b) of German invalidity and old-age pension Regulation No 1408/71. That provision insurance scheme and consequently reflects the actual situation in the would not have been entitled to a part of Community characterized as "mere co- the benefits relating to a supplementary ordination" of the social security period either.

Member States in question before the Commission to consider whether that risk materialized. From the wording of period should be regarded as a period of that provision it can be seen that it refers insurance or as just a factor in calcu- to the periods actually completed before lation. Having weighed up all the the risk materialized and not to any arguments the Commission is rather notional periods later calculated in inclined to regard the supplementary addition. period as a factor in the calculation used in national law which is binding only on the national German insurance

MENZIES ν BUNDESVERSICHERUNGSANSTALT FÜR ANGESTELLTE

of insurance . . . completed' in Article 46 account in the calculation of the amount (2) (a) of that regulation means all of the pension without directly linking periods of insurance and periods treated them to the period of insurance as such, completed or considered as completed, but regard them as equivalent completed under national legislation. to periods of insurance." The phrase 'periods of insurance . . . completed before the risk materializes' contained in Article 46 (2) (b) of the III — Oral p r o c e d u r e regulation includes all periods of insurance and periods treated as such, completed or considered as completed Mr Menzies represented by H. under national legislation before the risk Plagemann and the Commission of the materializes. The same applies to periods European Communities represented by treated as such provided that the N. Koch presented oral argument at the legislations under which they were sitting on 24 April 1980. completed or are considered as having The Advocate General delivered his been completed not only take them into opinion at the sitting of 28 May 1980.

Decision

1 By an order of 19 September 1979 received at the Court Registry on 5 November 1979 the Bundessozialgericht referred a question to the Court of Justice under Article 177 of the Treaty on the interpretation of Article 46 (2) 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).

4 In order to determine the amount of the occupational invalidity pension to which the plaintiff was entitled, the defendant, for the purpose of calculating the theoretical amount referred to in Article 46 (2) (a) of Regulation No 1408/71, took into account not only periods of insurance actually completed by him in Germany and in the United Kingdom but also a supplementary period (Zurechnungszeit) of 199 months pursuant to Article 37 of the Law on Insurance of Clerical Staff (Angestelltenversicherungsgesetz). That sup- plementary period which is intended to help evaluate the benefits granted in the case of premature invalidity or death of an insured person, is credited to insured persons who have suffered occupational invalidity before reaching the age of 55 and is equal to the period between the month in which the risk materialized and the last month of the year in which the insured person reaches the age of 55. In the calculation of the actual amount of the benefit pursuant to Article 46 (2) (b) of Regulation No 1408/71 the defendant refused however to take that supplementary period into account and consequently calculated the time-apportioned ratio of the benefits on the following basis: 2 4 : 2 4 + 248, amounting to 8.82% of the theoretical amount in Germany.

7 The question referred to the Court by the Bundessozialgericht is meant to establish the extent to which a supplementary period such as that provided for by Article 37 of the Angestelltenversicherungsgesetz must be taken into account in the calculation of the benefits referred to in subparagraphs (a) and (b) of Article 46 (2) of Regulation No 1408/71, bearing in mind Article 1 (r) of that regulation which defines "periods of insurance" as meaning " periods of contribution or periods of employment as defined or recognized as periods of insurance by the legislation under which they were completed or considered as completed, and all periods treated as such, where they are regarded by the said legislation as equivalent to periods of insurance".

8 It should be observed at the outset that the answer to the question referred to the Court must be sought first in the light of the provisions and the purpose of Article 46 (2) of the regulation quoted which governs the calcu- lation of the benefits in question. If it emerges that taking the supplementary period into account at some stage in the calculation provided for by Article 46 (2) runs counter to the scheme of that provision, that period must be left aside and its exclusion may not be called in question by invoking Article 1 (r) of the said regulation.

9 The calculation of the benefits referred to in Article 46 (2) can be broken down into two stages. At the first stage referred to in subparagraph (a) of that provision, where a worker has been subject to the legislation of a Member State, the competent institution of that Member State must first

1 1 Such a period, which is intended to ensure that the level of benefits is calculated as if an insured person was at least 55 years of age at the time at which the risk materialized, irrespective of his true age, cannot however be taken into account in the calculation of the actual amount referred to in subparagraph (b). Although the calculation to be carried out under subpa- ragraph (a) is intended to give a worker the maximum theoretical amount which he could claim if all periods of insurance had been completed in the State in question, the purpose of the calculation under subparagraph (b) is different. The latter provision is intended solely to apportion the respective burdens of the benefit between the institutions of the Member States concerned in the ratio of the length of the periods of insurance completed in each of the said Member States before the risk materialized. The taking into account, in the calculation of the apportionment, of a supplementary period

MENZIES ν BUNDESVERSICHERUNGSANSTALT FÜR ANGESTELLTE

like the one in this case, which does not correspond to any period of insurance or even of actual residence in the Member State in question completed before the risk materialized, results in unilaterally and artificially upsetting the balance of the burden of the benefits existing between Member States in a way which is incompatible with the scheme of Article 46 (2).

12 Consequently the answer to the question referred to the Court should be that a supplementary period (Zurechnungszeit) which the legislation of a Member State adds to the periods of insurance completed before the risk materialized in order to evaluate the benefit awarded in the event of the premature invalidity or the premature death of an insured person must be taken into account in the calculation of the theoretical amount referred to in Article 46 (2) (a) but not in the calculation of the actual amount referred to in Article 46 (2) (b) of Regulation No 1408/71.

OPINION OF MR REISCHL — CASE 793/79

be taken into acount in the calculation of the theoretical amount referred to in Article 46 (2) (a) but not in the calculation of the actual amount referred to in Article 46 (2) (b) of Regulation No 1408/71.

Kutscher Mertens de Wilmars Mackenzie Stuart

Delivered in open court in Luxembourg on 26 June 1980.

A. Van Houtte H. Kutscher Registrar President

O P I N I O N OF MR ADVOCATE GENERAL REISCHL DELIVERED O N 28 MAY 1980 1