C-320/82

LANDESVERSICHERUNGSANSTALT SCHWABEN [Regional Insurance Office, Swabia]

on the interpretation of Regulation (EEC) 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),

T H E C O U R T (First Chamber)

composed of: T. Koopmans, President of Chamber, A. O'Keeffe and G. Bosco, Judges,

Advocate General: S. Rozès Registrar: H. A. Rühi, Principal Administrator

gives the following

The order making the reference, the had completed a longer period of course of the procedure and the obser­ insurance in Italy than in the Federal vations submitted pursuant to Article 20 Republic of Germany. of the Protocol on the Statute of the Court of Justice of the EEC may be Article 78 of the said regulation, as summarized as follows: amended by Regulation (EEC) N o 2864/72 of the Council of 19 December 1972 (Official Journal, English Special Edition 1972 (31 December), p. 15), is I — Facts and written p r o c e d u r e worded as follows: Benito d'Amario, the plaintiff in the "Orphans main action, who has always resided in Italy, is the son of a migrant worker of (1) The term 'benefits', for the Italian nationality. His father, who died . purposes of this article, means family in 1980, worked partly, in the Federal allowances and, where appropriate, sup- Republic of Germany and partly in-Italy:: plementary or special allowances for In the course of such work he completed orphans and orphans' pensions except insurance periods amounting in Germany those granted under insurance schemes to 83 months and in Italy to-111 months. for accidents at work and occupational After his return to Italy he continued to diseases. work until December 1974. From 1 March 1974 the Landesversicherurigs- (2) Orphans' benefits shall be granted ąnstąlt Schwaben.(hereinafter referred to in accordance with the following rules, às "the German institution"), the irrespective of the Member State in defendant in the main action, paid him a whose territory the orphan or the natural pension on the ground of incapacity for or legal person actually maintaining him work on the basis of German legislation, is resident: whilst the Istituto Nazionale delle Pre- (a) . . . videnza Sociale [National Social Welfare (b) for the orphan of a deceased worker Institution] (hereinafter referred to as who was subject to the legislation of "the Italian institution") also granted several Member States : him from 1 March 1974 an Italian invalidity pension, together with family (i) in accordance with the legis- allowances for the plaintiff in accordance lation of the Member State in with Article 77 of Regulation No whose territory the orphan 1408/71. resides provided that . . . a right to one of the benefits referred to After the death of the insured person the in paragraph (1) is acquired German institution paid his widow a under the legislation of that widow's pension but refused to grant the State; . . . plaintiff an orphan's pension, claiming (ii) in other cases in accordance with that according to Article 78 of Regu- the legislation of the Member lation N o 1408/71 that pension should State to which the deceased be paid exclusively by the Italian worker had been subject for the institution because the insured person longest period of time, provided

When the case went before the Bundes- sozialgericht, the defendant contended In the grounds for the order making the that the Sozialgericht Augsburg had reference the Bundessozialgericht finds failed to comply with Article 78 (2) (b) that the insured worker was already in (i) of Regulation N o 1408/71. According receipt of a family allowance for the to that provision benefits must be plaintiff from the Italian institution. provided for an orphan only by the According to the last sentence of Article Member State in whose territory the 78 (2) of Regulation No 1408/71, the orphan resides, provided that a right Italian legislation remains applicable thereto has been acquired under the after the death of the insured worker. national legislation of that State. In The wording and general structure of adopting Article 78, and the subsequent Article 77 et seq. of that regulation articles, of that regulation the likewise support the view that only one Community legislature intended to Member State is responsible for payment simplify the procedure for granting of an orphan's pension in accordance family allowances (including orphans' with its national legislation. Nevertheless, pensions) by confining responsibility for in its judgment of 9 July 1980 (Gravina, payment to one State only. It would be Case 807/79 [1980] ECR 2205) the contrary to that intention, according to Court considered that supplementary the defendant, to require payment of the benefits should be granted in addition to difference between the German orphan's an orphan's pension where national pension and the Italian pension. The legislation alone provided a right to a

(b) Although, according to the judgment II — S u m m a r y of t h e written in Case 807/79, a supplement must observations lodged with be granted solely on the basis of the the C o u r t pension calculated in accordance with national legislation, that cannot be done here on the basis of the A — Observations of the defendant in the national provisions alone because main action German internal law does not allow for such a supplement. The defendant in the main action states that this reference for a preliminary (c) In Case 807/79 the orphans were ruling is necessary in order to establish already in receipt of an orphan's how far the requirements laid down by pension under German legislation, the Court in Case 807/79 ([1980] ECR whereas that is not so in the present 2205) are relevant to the case in hand. case. By way of a preliminary remark, it states that the German institutions concerned (d) The plaintiff in the main action has consider that the judgment in that case never resided in the Federal Republic established the following requirements: of Germany. (a) Transfer of residence from the territory of one Member State to the The order making the reference was territory of another Member State recorded at the Court Registry on requires the institution of the new 16 December 1982. State of residence to pay benefits.

Pursuant to Article 20 of the Protocol (b) The requirement that the institution on the Statute of the Court of Justice of of the new State of residence should the EEC written observations were pay benefits does not, however,

deprive the recipient of the right to the main action has always resided in higher benefits under the legislation Italy he has acquired through the death of the State where he resided pre- of the insured person only a right to a viously. pension payable by the Italian insurance institution. That is made clear by Article 78 (2) of Regulation No 1408/71. To put the matter briefly, rights enforceable equally against the German insurance institution would be present only if the (c) If the amount which the new State of plaintiff had been living in the Federal residence must pay is less than the Republic of Germany when the insured amount of the benefit payable under person died. the legislation of the State of previous residence alone the insti- tution of the latter State must bear the cost of paying a supplement equal to the difference between the two amounts. , Secondly, the defendant claims that Article 78 of Regulation No 1408/71 is a rule concerning choice of law the objective of which is to create a right as against the institution of the State of residence. The award of a supplement In the light of that, the defendant relies . equal to the difference between the essentially on two arguments to support Italian and the German orphan's pension its submission ' that the answer to the is thus clearly at variance with the question submitted by the national court intention of the Community legislature should be in the negative. of invariably fixing family allowances solely o n ' t h e basis of the legislation of the State of residence and of allowing exceptions only in cases where the legislation of the State of residence does First, it observes that the facts in Case not-confer a right to benefits. Fur- 807/79 differ in one essential respect thermore, since the amount of each of from those of the present case. The the national family allowances is applicants in Case 807/79 were entitled inseparably bound up with the relevant to an orphan's pension on the basis of costs in each Member State it would not their residence in the Federal Republic of be logical to compel the Member States Germany and were actually drawing the to award their benefits regardless of the benefit, whereas in this case such a place of residence. Furthermore, such pension has never been paid by a a requirement would encourage the German institution and the plaintiff in opposite of integration between the the main action has never at any time Member States as far as social policy is lived in the Federal Republic of concerned. Since harmonization between Germany. The defendant adds that, if social security systems is desired it is regard is had to the judgments which the appropriate to accord more importance Court has hitherto given in similar cases, to Member States' willingness to it will be observed that the matter has recognize national insurance periods always been decided on the basis of reciprocally than to the objective of actual receipt of a family allowance harmonizing, merely as to their amount, before the transfer of residence. It goes the various benefits in the Member on to maintain that since the plaintiff in States.

According to the Italian Government the judgment of the Court in Case 807/79 The Commission of the European has confirmed yet again that the Communities points out first of all that objective of Article 51 of the EEC the question referred for a preliminary Treaty will not be attained if, as a result ruling does not expressly mention the of exercising their right of free provisions of Community law of which movement, workers must forfeit the an interpretation is requested. In the social security advantages accruing to grounds of its order the court making them solely under the legislation of one the reference referred in a general Member State. Consequently, the fashion to Article 77 et seq. of Regulation Community provisions may not be No 1408/71, whereas the defendant applied in such a way as to deprive a clearly considers that it is the scope of migrant worker or those entitled under Article 78 (2) (b) (i) of the regulation him of benefits accruing independently which requires an interpretation. In the from the legislation of a Member State. opinion of the Commission, however, the The general objectives of Regulation No question can only, concern, the in- 1408/71 are also directed to ensuring terpretation of the last sentence of that the migrant worker obtains the Article 78 (2), read in conjunction with highest benefit to which he is entitled by Article 77 of Regulation No 1408/71. virtue of the periods of insurance Before his death the plaintiff's father completed in the.various Member States. received from the Italian institution the family allowances referred to in Article 77. In those circumstances the last sentence of Article 78 applies to this case. If the interpretation of Article 78 of the above-mentioned regulation abides by those principles the answer to be given to the question submitted by the court making the reference cannot differ from that already provided in Case 807/79. The fact that in the present case it is only The Commission observes next that the the insured worker who moved is death of the insured person, as the court unimportant. In fact the benefit in making the reference has pointed out, question forms part of a number of entitled his son at the same time to an advantages arising from the worker's orphan's pension solely on the basis of insured status which he must be able to German law. Relying on the general retain for himself and for the members of principles laid down by the Court of his family when he moves within the Justice in this sphere, the Commission Community. considers that although the plaintiff cannot claim the benefits to which he is entitled under German law up to the amount of the benefits granted under Italian law, the difference between the In conclusion, the Italian Government two must nevertheless be paid by suggests that the reply to the question the German insurance institution. It submitted should be in the affirmative. therefore proposes that the problem

should be resolved by setting off the Charleroi et de Namur v Laterza [1980] "competing" benefits of the Member ECR 1915) the children for whom the family allowances were granted under States concerned. Belgian legislation had never lived in Belgium. Moreover, it is not unusual for The Commission does not deny that that the children of migrant workers to solution may give rise to administrative remain in their country of origin. difficulties. However, such difficulties cannot be overcome simply by reducing Finally, the Commission maintains that if the existing rights. Such a reduction the plaintiff could rely only on his right would be contrary to the aim of Article under Italian law he would be placed in 51 of the EEC Treaty, which is to ensure a less favourable position than an orphan that in all cases the migrant worker whose father never exercised his right of obtains the most extensive right to which free movement, always remained in he is entitled under the legislation of one Germany and completed in that country of the Member States. Articles 77 and 78 the same periods of insurance as the of Regulation N o 1408/71 likewise, by plaintiff's father. their nature, do not support a reduction in acquired rights. The fact that legal writers classify a provision of Com- For those reasons, the Commission munity law as a rule of choice of laws is suggests that the reply to the question of no importance. Only the legal effect submitted by the Bundessozialgericht of a provision of Community law is should be as follows:

If legislation itself does not attach any the actual amount of the benefits in the relevance to it. It adds that if the first Member State is smaller than the plaintiff's father had remained in amount of the benefits provided for Germany family allowances would have solely by the legislation of the other been granted to him on the basis of Member State an orphan may claim from Article 77 of Regulation N o 1408/71 in the competent insurance institution in the respect of his son who was living in Italy. latter Member State a supplement corre- If he had died in Germany the German sponding to the difference between the insurance institution would then have two amounts." been obliged to grant his son an orphan's pension pursuant to the last sentence of Article 78 (2) of the said regulation regardless of the fact that the son of the insured person had never lived in Ill — Oral procedure

D'AMARIO v LANDESVERSICHERUNGSANSTALT SCHWABEN

by Jürgen Ståhlberg, Rechtsanwalt, respect, it referred to the decision of the Munich, the defendant in the main Administrative Commission on Social action, represented by Mr Wanders, Security for Migrant Workers of Director of the Landesversicherungs- 20 April 1983 (Official Journal, C 295, anstalt Schwaben and the Commission of 2. 11. 1983, p. 4) which sets out the pro- the European Communities, represented cedures to be followed and fixes the by Manfred Beschel, a member of its detailed rules for cooperation between Legal Department, presented oral the competent institutions, as derived argument. from the solutions adopted by the Court in its judgments in Cases 100/78 (Rossi), At the sitting the Commission empha- 733/79 (Laterza) and 807/79 (Gravina). sized that the solution put forward in its written observations would not lead to The Advocate General delivered her insurmountable difficulties from the opinion at the sitting on 27 October administrative point of view. In that 1983.

Decision

1 By order of 6 October 1982, received at the Court on 16 December 1982, the Bundessozialgericht [Federal Social Court] referred to the Court for a preliminary ruling, pursuant to Article 177 of the EEC Treaty, a question on the interpretation of Articles 77 and 78 of Regulation (EEC) 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).

s It follows from the above-mentioned judgment that Article 78 of Regulation N o 1408/71 may not be interpreted in such a way as to deprive the orphans of a deceased worker who has been subject to the legislation of more than one Member State of the benefits acquired under the legislation of a single Member State if they are higher than the benefits granted by the Member State to whose territory the orphans' residence has been transferred.

6 The Bundessozialgericht hesitates to apply that interpretation to the case brought before it. It states that this case does not concern an orphan whose residence has been transferred inasmuch as the plaintiff in the main action has always resided in Italy where his father was subject to the social security scheme before going to work in the Federal Republic of Germany and where the family allowances were granted by the Italian institution in accordance with Article 77 of Regulation No 1408/71. In addition the Bundessozial- gericht points out that the application of the Italian scheme alone to the exclusion of any benefit granted under the German legislation, seems, in its view, to conform to the declared aim of the Community legislature, which is to achieve a quick and simple administrative procedure.

D'AMARIO v LANDESVERSICHERUNGSANSTALT SCHWABEN

7 In she first place it should be noted that the question whether the residence of an orphan has always been established in a Member State or whether it has been transferred there is of no relevance for the application of Articles 77 and 78 of Regulation No 1408/71. Indeed, as the Court has already observed, in relation to family allowances, in its judgment of 12 June 1980 (Case 733/79 Laterza [1980] ECR 1915), the guiding principles of that regu- lation require that, if the amount of the benefits provided by the State of residence is less than that of the benefits awarded by the other State responsible for paying them the worker or his dependant shall continue to be entitled to the greater amount and shall receive from the competent institution of that latter State a supplement to the benefit equal to the difference between the two amounts.

JUDGMENT OF 24. 11. 1983 — CASE 320/82

Costs

n The costs incurred by the Italian Government and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

O n those grounds,

T H E C O U R T (First Chamber)

in answer to the question referred to it by the Bundessozialgericht, by order of 6 October 1982, hererby rules: