C-7/81

JUDGMENT OF THE COURT 2 F E B R U A R Y 1982 1

Antonino Sinatra v Fonds National de Retraite des Ouvriers Mineurs (reference for a preliminary ruling from the Cour du Travail, Mons)

(Social security — Invalidity pension)

Case 7/81

Social security for migrant workers — Old-age and death insurance — Benefits — Alteration — Recalculation (Regulation No 1408/71 of the Council, Art. 51)

A recalculation in accordance with the alteration is due to one of the "reasons provisions of Article 46 of Regulation for adjustment" provided for in Article N o 1408/71 is necessary in respect of 51 of Regulation N o 1408/71, which do any alteration in benefits paid by a not include supervening changes in the Member State, save where any such personal circumstances of the insured.

JUDGMENT OF 2. 2. 1982 — CASE 7/81

on the interpretation of Article 51 of Regulation N o 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),

THE COURT

composed of: J. Mertens de Wilmars, President, A. Touffait and O. Due (Presidents of Chambers), Lord Mackenzie Stuart, A. O'Keeffe, T. Koopmans and U. Everling, Judges,

Advocate General: S. Rozès Registrar: A. Van Houtte

gives the following

limits permitted under the rules. On that scheme which requires, in his case, occasion the Mine-Workers' National application by the Belgian institution Pension Fund decided that the alteration of a different rule of Belgian law of the Belgian pension from the "married relating to the amount of the Belgian rate" to the "single rate" justified a underground mine-workers' inval- recalculation, pursuant to Article 51 (2) idity pension awarded to him with of Regulation N o 1408/71, of the the effect of reducing the pension benefits due to Mr Sinatra. The Mine- (Article 4 (1) (4) of the Royal Workers' National Pension Fund Decree of 19 November 1970), therefore obtained from the competent without any change having occurred Italian institution details of the amount at that time in the Belgian legislative of the Italian pension which was paid to provisions as such relating to the Mr Sinatra on 1 January 1976, account manner of fixing benefits or in those being taken of various changes which concerning the rules for calculating had occurred up to that date, and benefits? deducted that amount from the Belgian pension awarded to Mr Sinatra from 1 January 1976. 3. Must Article 51 (2) of Regulation (EEC) N o 1408/71 be interpreted as meaning that an alteration only in That application of Article 51 of Regu- the amount of the invalidity pension lation No 1408/71 was challenged by awarded by the competent Belgian Mr Sinatra before the appropriate institution to a person insured under Belgian courts. It was within the context the social security scheme which has of that dispute that by judgment of 7 the effect of reducing that amount, January 1981 the Cour du Travail in application of Article 4 (1) (4) of [Labour Court], Mons, requested the the Royal Decree of 19 November Court of Justice to give a preliminary 1970, entails a recalculation of the ruling on the following questions : benefits in accordance with Article 46 of Regulation No 1408/71?"

II — Written observations sub- national law alone or to make savings at mitted under Article 20 of the expense of migrant workers. the Protocol on the Statute of the Court of Justice of According to Mr Sinatra, any calculation the EEC based on Community regulations should improve the lot of the migrant worker and not reduce the rights which the worker already possesses pursuant to A — Observations submitted by the Article 46. plaintiff in the main action The plaintiff in the main action therefore suggests that the Court answer the Mr Sinatra considers that the exact scope questions submitted as follows: of Article 51 (2) of Regulation N o 1408/71 of the Council should be "Article 51 (2) of Regulation N o appraised by reference to the aims of the 1408/71 of the Council must be Treaty. As the Court has frequently interpreted as meaning that a recalcu- stated, Articles 48 to 51 of the Treaty are lation of benefits in accordance with the intended to foster freedom of movement provisions of Article 46 should not be for workers and to prevent the loss of carried out if the recalculation is liable to rights to benefits acquired by virtue of reduce the amount of benefits previously the various laws to which the migrant awarded". worker has been subject. Those objectives are recalled in the preamble of Regulation N o 1408/71. B — Observations of the Commission of the European Communities The plaintiff in the main action accordingly concludes that it would be The Commission states that, according abnormal and contrary to the spirit of to well-established case-law of the the Treaty for the competent institution Court, in seeking the meaning and scope of a Member State to use an alteration of a rule of Community law it is occurring in its own legislation as a important to consider the scheme of the pretext for making a double reduction in body of rules of which that rule forms the amount of the benefits payable by it, part and the end which that rule pursues. namely, one reduction by application of rules of national law and another As far as Article 51 of Regulation N o reduction as a result of pension increases 1408/71 is concerned, the exemption which are awarded by the institution of from the requirement to carry out a another State and under Community recalculation of the benefits which is set law. Such an interpretation of Article 51 out in paragraph (1) of that article (2) of Regulation No 1408/71 would should be considered not as the constitute a "punitive measure", so far as expression of a principle but rather as an the migrant worker is concerned, where exception. In principle any alteration in the recalculation of the pension the amount of a pension payable by one produced a result disadvantageous to Member State should automatically him. It is clear that the Community regu- entail the alteration of pensions payable lations in this field have not been by other Member States. However, adopted in order to allow insurance because of the administrative difficulties offices responsible for paying benefits to which such a situation would create, evade payment of pensions due under Article 51 (1) restricts the number of

cases in which it is necessary to recal- the recipient. Since such alterations do culate benefits. Article 51 (1) refers in not have the same general and repetitive particular to periodical adjustments nature as alterations due to the causes linked to increases in the cost of living or covered by Article 51 (1) it is not to the level of wages or salaries and also possible, in the Commission's view, to set "other reasons for adjustment", but against the requirement to recalculate those reasons may only be those of benefits the need for administrative general application. On the other hand simplicity which underlies Article 51 (1) alterations to benefits which are made of Regulation No 1408/71. for reasons which relate to a particular recipient do not come within the provisions of Article 51 (1) of Regulation The Commission then deals with the

The only point lation of benefits to those cases alone. which may be advanced as an argument That paragraph is couched in more to the contrary is the wording of the general terms and in the Commission's heading to Article 51: "revalorization view it must be accepted that a change in and recalculation of benefits". It is well the amount of pension consequent upon settled that the headings given to the the spouse's taking up gainful various provisions of Regulation N o employment represents an instance in 1408/71 do not in themselves have any which the method of determining the relevant benefit has altered within the legislative content and it is clear that the meaning of Article 51 (2). word "revalorization" refers solely to Article 51 (1) whereas the words "recal- culation of benefits" refer to Article 51

JUDGMENT OF 2. 2. 1982 — CASE 7/81

institution responsible for paying the Such is the case in particular where the reduced national benefits but also by the fact that the insured or his spouse are in institutions of the other Member States gainful employment requires that benefits concerned, that recalculation may lead to paid by one of the Member States a revalorization of the benefits payable pursuant to the law of that State should by other Member States. be calculated on the basis of a different In conclusion the Commission suggests rate." that the Court should give the following answer to the questions submitted to it: III — Oral procedure "Articles 46 and 51 of Regulation No 1408/71 must be interpreted as meaning that an alteration in the method of At the sitting on 14 July 1981 oral determining or the rules for calculating argument was presented by the the benefits paid to an insured person following: D. Rossini for Mr Sinatra; Mr which results from a change in his Stein for the Fonds National de Retraite personal circumstances requires the des Ouvriers Mineurs; and J. Amphoux, competent institutions to carry out a Legal Adviser, acting as Agent, for the recalculation of the benefits in Commission of the European Com- accordance with the provisions of Article munities. 46, irrespective of whether the alteration The Advocate General delivered her produces an increase or a decrease in the opinion at the sitting on 22 October benefit in question. 1981.

Decision

1 By j u d g m e n t of 7 J a n u a r y 1981, which w a s received at the C o u r t of Justice o n 14 J a n u a r y 1 9 8 1 , the C o u r du Travail [ L a b o u r C o u r t ] , M o n s , referred to the C o u r t of Justice for a preliminary ruling u n d e r Article 177 of the E E C T r e a t y t h r e e questions o n the interpretation of Article 51 of R e g u l a t i o n N o 1 4 0 8 / 7 1 of the Council of 14 J u n e 1971 o n the application of social security schemes t o e m p l o y e d persons and their families moving within the C o m m u n i t y (Official J o u r n a l , English Special Edition [1971] II, p . 416).

" 1 . Does the 'revalorization' referred to in the heading to Article 51 of Regulation No 1408/71 of 14 June 1971 constitute the general framework of application of paragraphs (1) and (2) of that article with the result that the cases mentioned in paragraph (2) only cover instances in which there is a revalorization or increase in benefits even though the word 'alter' used in Article 51 (2) usually means both improvement and deterioration?

2. Is the 'method of determining or the rules for calculating benefits' 'altered' within the meaning of Article 51 (2) of Regulation N o 1408/71 where there is an alteration only in the position of the person insured under a social security scheme which requires, in his case, application by the Belgian institution of a different rule of Belgian law relating to the amount of the Belgian underground mineworkers' invalidity pension awarded to him with the effect of reducing the pension (Article 4 (1) (4) of the Royal Decree of 19 November 1970), without any change having occurred at that time in the Belgian legislative provisions as such relating to the manner of fixing benefits or in those concerning the rules for calculating benefits?

JUDGMENT OF 2. 2. 1982 — CASE 7/81

3. Must Article 51 (2) of Regulation (EEC) N o 1408/71 be interpreted as meaning that an alteration only in the amount of the invalidity pension awarded by the competent Belgian institution to a person insured under the social security scheme which has the effect of reducing that amount, in application of Article 4 (1) (4) of the Royal Decree of 19 November 1970, entails a recalculation of the benefits in accordance with Article 46 of Regulation No 1408/71?"

SINATRA v FNROM

9 However, in order to reduce the administrative burden which a fresh exam- ination of the insured's situation following every alteration of benefits received would represent, Article 51 of Regulation No 1408/71 establishes a distinction between alterations in benefits "by a fixed percentage or amount" resulting from "an increase in the cost of living or changes in the level of wages or salaries or other reasons for adjustment" and alterations in the "method of determining" or "the rules for calculating" benefits. Paragraph (1) of that article provides that alterations of the first type must be applied directly to the benefits paid without any need for the recalculation expressly provided for in Article 51 (2) in respect of alterations of the second type.

10 The regulation was thus intended to exclude a fresh calculation where the alterations in the benefits result from events unconnected with the personal circumstances of the insured and are the consequences of the general evolution of the economic and social situation.

1 1 Such exclusion may not, in the absence of appropriate specific provisions, be extended to alterations in benefits due to a change in the personal circum- stances of the insured, such as his transition from the "household" category to the "single" category, particularly as it is not possible to envisage an application, by analogy, of Article 51 (1) in such cases, since changes in the personal circumstances of insured workers, as opposed to the "reasons for adjustment" referred to in that paragraph, are not of a general nature.

in answer to the questions referred to it by the Cour du Travail, Mons, by judgment of 7 January 1981, hereby rules :

A recalculation in accordance with the provisions of Article 46 of Regu- lation N o 1408/71 is necessary in respect of any alteration in benefits paid by a Member State, save where any such alteration is due to one of the "reasons for adjustment" provided for in Article 51 of Regulation N o 1408/71, which do not include supervening changes in the personal circumstances of the insured.

Mertens de Wilmars Touffait Due

Mackenzie Stuart O'Keeffe Koopmans Everling

Delivered in open court in Luxembourg on 2 February 1982.

A. Van Houtte G. Bosco Registrar President of the First Chamber, acting as President