C-807/79

JUDGMENT OF 9. 7. 1980 — CASE 807/79

under the legislation of another of the other Member State alone the Member State alone. Where the orphan is entitled to supplementary amount of the benefits actually benefits, payable by the competent received in the Member State of institution of the latter State, equal to residence is less than that of the the difference between the two benefits provided for by the legislation amounts.

In Case 807/79

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

GIACOMO GRAVINA, GIUSEPPE GRAVINA, ROSA GRAVINA, CATALDO GRAVINA AND FRANCESCO GRAVINA

and

GRAVINA v LANDESVERSICHERUNGSANSTALT SCHWABEN

JUDGMENT

Facts and Issues

JUDGMENT OF 9. 7. 1980 — CASE 807/79

choose any means which, viewed objectively, are justified. Thus, according to the defendant, the court (b) The defendant's contention is ques- has regarded as proper a change of tionable in that it would result in responsibility for payment of family depriving a migrant worker or a survivor allowances in the event of a transfer of a right acquired under the national of the residence of the beneficiary. legislation of a Member State — which Any hardships likely to arise are would be incompatible with the solely attributable to deficiencies in principles of the Petroni judgment of 21

Further- more, Article 78 (2) of Regulation No 1408/71 does not amount to a special According to information supplied to the prohibition against overlapping going defendant in November 1978 the beyond the general rules set forth in Article 12 of the said regulation; plaintiffs have been paid survivors' pension retroactively by the competent Italian institution with effect from August 1973. (c) Finally, the defendant's contention leads to a problem of compatibility In their action before the Sozialgericht between Article 78 as so interpreted and Augsburg the plaintiffs contend that the the Grundgesetz [Basic Law] of the approach adopted by the Landesversi- Federal Republic of Germany.

Bundessozialgericht in a question The Sozialgericht Augsburg has regard submitted to the Court in the Maggio to the following considerations, namely: case.

The Sozialgericht Augsburg has After hearing the report of the Judge- accordingly submitted the following Rapporteur and the views of the questions to the Court of Justice: Advocate General, the Court decided to " 1 . In the event of the residence of open the oral procedure without any orphans being transferred to another preparatory inquiry. Member State does Article 78 (2) of Regulation (EEC) No 1408/71 of the Council of 14 June 1971 have the effect of enabling the competent II — W r i t t e n o b s e r v a t i o n s s u b - institution of a Member State to m i t t e d p u r s u a n t to A r t i c l e withdraw benefits, within the 20 of the P r o t o c o l on the meaning of Article 78 (1) of the S t a t u t e of the C o u r t of regulation, which have already been J u s t i c e of the E E C duly awarded in that Member State if, when the benefits were awarded for the first time pursuant to Article 78 (2) of the regulation, the A — Observations of the plaintiffs in the institution of that other Member main action State was the competent institution? 2. If such is the case, is withdrawal In a preliminary observation the plaintiffs justified even where entitlement to in the main action state that the in- benefits within the meaning of terpretation given by the defendant to Article 78 (1) of Regulation No Articles 78 and 79 of Regulation No 1408/71 is conferred by national law 1408/71 does not accord with the alone?" intention of the European legislature on the ground that "it would completely undermine the principle whereby The order making the reference was insurance benefits are independent of the received at the Registry of the Court on place of residence of those entitled". 28 November 1979. In accordance with Furthermore, the solution provided for Article 20 of the Protocol on the Statute in Chapter 8 of Regulation No 1408/71 of the Court of Justice of the EEC, had the aim of remedying the delays written observations were submitted on 4 which were caused by the system under February 1980 by the Commission of the Regulations (EEC) Nos 3 and 4. But in European Communities, represented for the present case the delay has been no these purposes by its Legal Adviser, less. Norbert Koch, acting as Agent; on 15 February 1980 by the Landesversiche- rungsanstalt Schwaben, represented for these purposes by its Director, Dr (a) First question Wanders, acting as Agent; on 18 February 1980 by the plaintiffs in the The plaintiffs in the main action point main action, represented for these out that the court making the reference purposes by L. Fazi, Secretary to the followed the view of the defendant and liaison bureau in matters of pensions of accepted the existence of entitlement to Patronato ACLI, a consultative and an Italian orphans' pension by virtue of representative body in regard to workers' Italian national law alone although no social security rights; and on 27 entitlement to an Italian pension is February 1980 by the Government of the available to the orphans without aggre- Italian Republic, represented and assisted gation and assimilation of the German for these purposes by Franco Favara and and Italian contributions. Proceeding Oscar Finnara, Avvocati dello Stato. upon that premise, the question is asked

whether any transfer of residence may whose territory the orphan . . . is entail a fresh determination of the resident". That is confirmed by the competent insurance institution. The Council Protocol on Article 78 (2) (b) answer to that question should be in the (ii) which — giving an official in- negative for the following reasons: terpretation of the regulation — provides that the determination of the competent institution is made once and for all. It is also confirmed by the provision at the

2. That interpretation, which involves insured person who was not yet in the loss of benefits acquired under receipt of a pension. German law alone, is not in accordance with Article 51 of the EEC Treaty which guarantees the retention of entitlement to benefit acquired by the worker for 4. Only the continued payment of himself and for his dependants. Given accrued benefits is such as to ensure a that the Court has already recognized balance in the financial burdens to be (see judgment of 13 July 1976 in Case borne by the Member States.

Member State. provided for in Article 12 of the said regulation, the said Article 78 would be contrary to the Treaty. 5. Orphans must be guaranteed, if possible, a standard of living equivalent 3. The European legislature has to that with which the deceased worker decided that the entitlement to benefit provided them. It is that guarantee which and the competent insurance institution the Community legislature had in mind should be determined once and for all on in providing that orphans' benefits must the materialization of the risk. Only that be granted in accordance with the objective can give meaning to the first legislation of the State to which the sentence of Article 78 (2) which states deceased worker had been subject for that "Orphans' benefits shall be granted the longest period (Article 78 (2) (b) . . . irrespective of the Member State in (ii)).

Not to grant the plaintiffs that right (b) Second question would be equivalent to treating a Community citizen less favourably than other foreigners and would constitute, It is not disputed that the plaintiffs' right furthermore, an infringement of Article 3 to benefits exists by virtue of German of the Grundgesetz of the Federal legislation and it is only for nationals of Republic of Germany. a Member State of the Community that that right is not recognized, while under the existing case-law of the Court Accordingly, the Court should answer orphans are entitled to the grant of the second question as follows: orphans' pension independently of their place of residence. Thus in Case 24/75, cited above, the Court held that the aim "Where entitlement to benefits within of Articles 48 to 51 would not be the meaning of Article 78 of Regulation attained if, as a consequence of the (EEC) No 1408/71 is conferred by the exercise of the right to freedom of legislation of a Member State, Article 78 movement, workers were to lose does not have the effect that a stay in advantages in the field of social security another Member State may entail the guaranteed to them in any event by the extinction, withdrawal, reduction or laws of a single Member State. Thus also suspension of the entitlement to that in its judgment of 20 November 1975 in benefit."

JUDGMENT OF 9. 7. 1980 — CASE 807/79

recognized by Article 79 of the said regulation. In Case 100/78, Rossi v Finally, the Italian Government submits Caisse de Compensation pour Allocations that — since it contains only provisions Familiales [1979] ECR 831, the Court against overlapping — the said Article 78 held that Article 79 (3), "designed to may not adversely affect the treatment prevent the overlapping of family afforded to the plaintiffs by German allowances, is applicable only to the legislation and must be interpreted as extent to which it does not, without meaning that the recipients have the cause, deprive the persons concerned of right to retain the treatment which is the benefit of a part of the legislation of most favourable to them, which a Member State". proposition follows from the judgment in Case 100/78, cited above. The principle which prohibits a fresh In conclusion, the Italian Government award of benefits follows from the suggests that both of the questions put statement contained in the Council should be answered in the negative. Protocol of 14 June 1971, although that statement expressly concerns only Article

GRAVINA v LANDESVERSICHERUNGSANSTALT SCHWABEN

question. Regulations Nos 3 and 4, apply to orphans' pensions. under which each competent institution concerned in a Member State was bound to pay a part of an orphan's pension, did not do justice to "the social policy objective of orphans' pensions as a sub- stitute means of maintenance" and when they produced unjust results a new system was adopted "which, as a general rule, is based on the situation in the State The defendant adds that its interpret- of residence". It is thus the institution in ation of the rules may also bring the place of residence which is bound to advantages for recipients of benefits who pay orphans' pensions, taking into transfer their residence, for example account insurance periods completed in from Italy to the Federal Republic of other Member States.

In either, for that statement only makes fact, at that moment in time, the sense in relation to subparagraph (ii) and dependants would benefit from a pension expressly refers to that subparagraph and paid in the Federal Republic of Germany not subparagraph (i) which is the on the total of the periods of relevant provision in the present case. employment completed and such The absence of any corresponding pension, according to the plaintiffs, statement relating to subparagraph (i) would be owed to them in its entirety, points in favour of the argument that, in even in the event of a transfer of their accordance with the intention of the residence to Italy; however, in such a Community legislature, there is meant to case they also retain an Italian be a transfer of responsibility where the entitlement on the basis of the insurance residence of the orphans is transferred. periods completed in Italy.

(b) Second question benefits is to be determined in accordance with the legislation of a The Landesversicherungsanstalt Schwa- single Member State and where the ben stresses at the outset that, in its view, deceased worker has been subject to the orphans' pensions must be awarded legislation of two or more Member pursuant to Chapter 8 of Regulation No States the decisive test for determining 1408/71 and not pursuant to Chapter 3. the law applicable is the residence of the Articles 78 and 79 introduced a single orphans. "total benefit", unlike Article 46 (1) which distinguishes between national As the plaintiffs in the main action are benefits and "proportional benefits" entitled to benefits in Italy and in the (Verhältnisrenten). Accordingly, it Federal Republic of Germany the rules matters little to establish whether a for determining which legislation applies national entitlement exists. That system are the following: is justified by the fact that, as distinct from other pensions, the grant of "If the plaintiffs reside in the Federal orphans' pensions is subject to very Republic, orphans' pension is provided in different rules in the various Member accordance with German legislation; States. If the plaintiffs reside in Italy, orphans' Finally, the defendant submits that its pension is provided in accordance with interpretation of Article 78 does not Italian legislation; constitute an unlawful restriction on freedom of movement and does not If the plaintiffs reside in a Member State offend against the principles laid down other than the Federal Republic of by the Court of Justice in regard to Germany or Italy, orphans' pension is Article 51 of the EEC Treaty. The rules provided in accordance with the German as to responsibility for payment in the legislation". event of a transfer of residence of orphans must be considered in the That effect of Article 78 is intentional context of the rules as a whole, which and is confirmed by Article 92 of Regu- guarantee payment of a pension to lation No 574/72, according to which orphans in every case. In that regard the any transfer of residence of orphans defendant reminds the Court that the must be notified to the institution reverse case — the transfer of the responsible for payment. Accordingly, residence of orphans from Italy to the the legislation applicable pursuant to Federal Republic of Germany — would Article 78 is not determined once and for have demonstrated the questionable all. That applies even in the case of a character of the plaintiffs' interpretation. transfer of residence to a Member State the legislation of which does not provide any entitlement to benefit. Consequently, the defendant suggests that an affirmative answer should be given to the two questions submitted. 2. The calculation of the benefit

were resident in the Federal Republic of Article 46 (3) of the regulation, which Germany, the Landesversicherungsanstalt restriction has been declared to be Baden had to pay benefits on the basis of incompatible with Article 51 of the EEC the Italian and German entitlement Treaty. And the Commission reiterates without any opportunity of obtaining a that Article 78 does not entail a reimbursement from the Italian prohibition on overlapping but institution; but as from the time when constitutes a conflict rule determining the orphans became resident in Italy it the applicable law, which obliges the was for the Italian institution to pay to competent institution to provide benefits them the total amount of benefits. corresponding to the insurance periods completed in other Member States. The scheme of Article 78 "must therefore be regarded as a whole from which partial 3. The compatibility of Article 78 (2) of entitlement by virtue of the legislation of Regulation No 1408/71 with Article a single Member State may not be 51 of the Treaty dissociated".

JUDGMENT OF 9. 7. 1980 — CASE 807/79

result of that is "a deterioration in the 2. The legal, consequences of Article 78 position of the person entitled, that (2) (b) (i) arise in the event of a deterioration must be regarded as a transfer of residence to the territory restriction which is necessary in the of another Member State, even interest of freedom of movement for where an entitlement to benefits workers". within the meaning of Article 78 (1) In conclusion, the Commission suggests of Regulation No 1408/71 existed that the questions submitted should be by virtue only of the legislation of answered thus: the Member State on the territory of which the orphans resided before " 1 . Where a deceased worker has been transferring their residence". subject to the legislation of several Member States, orphans' benefits within the meaning of Article 78 (1) of Regulation No 1408/71 are Ill — Oral procedure provided, pursuant to paragraph (2) (b) (i) of that article, in accordance with the legislation of the State in At the sitting on 21 May 1980 the the territory of which the orphans Commission of the European reside, provided that entitlement to Communities, represented by Dr N. those benefits exists there by virtue Koch, acting as Agent, the plaintiffs in of the legislation of that State, the main action, represented by L. Fazzi regard being had, where appropriate, and L. Nicolussi of the Patronato ACLI, to the provisions of Article 79 (1) (a) and the defendant in the main action, of the regulation. Where the orphans represented by the Director of the Lan- transfer their residence to another desversicherungsanstalt Schwaben, Dr Member State following the award Wanders, presented oral argument and of benefits an alteration in the answered questions from the Court. legislation applicable by virtue of Articles 78 (2) (b) may result The Advocate General delivered his therefrom. opinion at the sitting on 10 June 1980.

"(i) in accordance with the legislation of the Member State in whose territory the orphan resides provided that, taking into account, where appropriate, the provisions of Article 79 (1) (a) a right to one of the benefits referred to in paragraph (1) is acquired under the legislation of that State . . . " .

4 In view of this provision and the facts of the case — involving a refusal to continue payment to orphans who have transferred their residence to a Member State where they are in a position to enjoy other benefits of the same kind — the Sozialgericht Augsburg referred to the Court the following questions:

" 1 . In the event of the residence of orphans being transferred to another Member State does Article 78 (2) of Regulation (EEC) No 1408/71 of the Council of 14 June 1971 have the effect of enabling the competent institution of a Member State to withdraw benefits, within the meaning of Article 78 (1) of the regulation, which have already been duly

JUDGMENT OF 9. 7. 1980 — CASE 807/79

awarded in that Member State if, when the benefits were awarded for the first time pursuant to Article 78 (2) of the regulation, the institution of that other Member State was the competent, institution?

2. If such is the case, is withdrawal justified even where entitlement to benefits within the meaning of Article 78 (1) of Regulation No 1408/71 is conferred by national law alone?"

7 The regulations on social security for migrant workers did not set up a common scheme of social security, but allowed different schemes to exist, creating different claims on different institutions against which the claimant possesses direct rights by virtue either of national law alone or of national law supplemented, where necessary, by Community law relating, in particular, to the lifting of conditions of residence. In its judgment of 6 March 1979 in Case 100/78 Rossi v Caisse de Compensation pour Allocations Familiales [1979] ECR 831 the Court stated, moreover, that "the Community rules could not, in the absence of an express exception consistent with the aims of the Treaty, be applied in such a way as to deprive a migrant worker or his dependants of the benefit of a part of the legislation of a Member State". Nor may those rules bring about a reduction in the benefits awarded by virtue of that legislation. Regulation No 1408/71, in laying down rules

GRAVINA v LANDESVERSICHERUNGSANSTALT SCHWABEN

for the co-ordination of the various national laws, is inspired in fact by the fundamental principle that the said rules must guarantee workers moving within the Community the entirety of benefits acquired in the different Member States up to the limit of the greatest amount of those benefits.

JUDGMENT OF 9. 7. 1980 — CASE 807/79

On those grounds,

T H E COURT

in answer to the questions referred to it by the Sozialgericht Augsburg by order of 25 October 1979, hereby rules:

Article 78 (2) (b) (i) of Regulation No 1408/71 of the Council of 14 June 1971 must be interpreted as meaning that the entitlement to benefits payable by the State in whose territory the orphan to whom they have been awarded resides does not remove the entitlement to benefits greater in amount previously acquired under the legislation of another Member State alone. Where the amount of the benefits actually received in the Member State of residence is less than that of the benefits provided for by the legislation of the other Member State alone the orphan is entitled to supplementary benefits, payable by the competent institution of the latter State, equal to the difference between the two amounts.

Kutscher O'Keeffe Touffait