C-115/83

A P P L I C A T I O N for t h e a n n u l m e n t of the decision adopted b y the Commission by which t h e office responsible for settling claims at Ispra m a d e a special reimbursement of t h e medical expenses incurred by the applicant on the basis of Article 72 (3) of the Staff Regulations a n d Article 8 (2) of the Rules o n Sickness Insurance w i t h o u t applying the weighting referred t o in Article 64 of t h e Staff Regulations,

T H E C O U R T (Third C h a m b e r )

composed of: Y. G a l m o t , President of Chamber, U . Everling and C. Kakouris, Judges,

Advocate general: G. F. Mancini Registrar: H . A. Rühi, Principal Administrator

gives the following

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"Where the total expenditure not The non-reimbursed portion of the reimbursed for any period of 12 months actual expenses which is in excess of half exceeds half the official's basic monthly the average basic monthly salary, pension salary or pension special reimbursement or allowance shall be reimbursed at the shall be allowed by the appointing following rates : authority, account being taken of the familiy circumstances of the person 90% in the case of a member by. whose concerned, in the manner provided for in insurance no other person is covered; the rules referred to in paragraph (1)." 100% in other cases. Article 8 of the Rules on Sickness Insurance supplements the foregoing The office responsible for settling claims provisions as follows: shall deliver an opinion on the ap-

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plication for special reimbursement on reimbursement to which he might be the basis of general criteria for entitled be calculated on the basis that determining whether the expenses the "basic monthly salary" referred to in incurred are excessive adopted by the Article 72 (3), which is used to determine Management Committee after consulting the amount of that reimbursement, be the Medical Council. The appointing understood as having to be adjusted by authority shall take its decision in the the weighting in force at the time, as light of the opinion of the office provided for in Article 64 of the Staff responsible for settling claims." Regulations.

On 27 May 1982, he sought special Upon hearing the report of the Judge- reimbursement, pursuant to Article 72 Rapporteur and the views of the (3) of the Staff Regulations and Article 8 Advocate General, the Court (Third (2) of the Rules on Sickness Insurance, Chamber) decided to open the oral for the period from March 1980 to procedure without any preparatory February 1981 and asked that any special inquiry.

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II — C o n c l u s i o n s of t h e p a r t i e s 1. Dismiss the application as unfounded;

In the applicants view, whilst Article 71 2. Declare that the applicant is entitled (3) of the Staff Regulations makes no to a special reimbursement under express reference to weighting, it must Article 8 of the Rules on Sickness be emphasized that the concept of "basic Insurance for Officials of the monthly salary" mentioned in that European Communities and that for provision is a purely theoretical one, the calculation thereof the weighting modified in practice for all officials by referred to in Article 64 of the Staff the weighting. In that connection, the Regulations must be applied to his applicant contends that in its judgment basic salary; of 13 July 1978 (Case 114/77 Jacquemart v Commission [1978] ECR 1697), the Court declared, on the one hand, that 3. Declare that the defendant must the Commission's practice of applying adjust the applicant's account pur- a weighting rather than periodically suant to the decision to be adopted adjusting the table of basic salaries must under 2. above; not adversely affect the pecuniary rights of officials and, on the other hand, that the weightings do not constitute an 4. Order the defendant to pay the additional element of remuneration but arrears owing on the basis of the fresh rather a method of calculating salary and calculation; of giving geographical weighting to it depending on living conditions in the place of employment. 5. Order the defendant to pay the costs. In the applicant's view, the provisions of the Staff Regulations and of the Rules The defendant contends that the Court on Sickness Insurance should be in- should: terpreted in the light of their purpose.

The applicant thus observes that in so far The applicant states in this connection as reimbursements are, by virtue of those that the expatriation allowance and the provisions, subject to an upper limit education allowance are compensation according to the type of care received for expenses incurred and not remune- and consequently, in so far as officials ration. The same is true of family bear that portion of the expenses not allowances, whose amount is determined covered by the insurance scheme, the in accordance with the social group to purpose of the provisions at issue is to which the official belongs whereas the define the upper limit of the sacrifices remuneration is proper to each likely to be imposed on each official. individual. The applicant considers that the sickness insurance scheme is insurance against a loss of purchasing power due to medical expenses and that its purpose is to ensure Thus, the Commission's argument that that such losses remain limited. Thus, the sickness insurance scheme, which reimbursement of special expenses should provides for the payment of contri- be based upon the real income of each butions without reference to the official, that is, the basic salary modified weightings, requires that only the basic by the weighting referred to in Article 64 salary within the meaning of Article 71 of the Staff Regulations. The real salary (3) be taken into account, is irrelevant. so obtained corresponds to the actual That argument can only lead to a cost of living in the place of employment. doubling, by virtue of the special reimbursement scheme, of the discrimi- nation between officials created by the system of contributions. In reply to the Commission's contention that the expenses which officials must bear depend not on their own circum- The Commission, in contrast to the stances but on the amount of medical teleological interpretation proposed by expenses incurred, the applicant observes the applicant, suggests that the provisions that the upper limit of the amount to be concerning the sickness insurance scheme borne varies for each individual not and special reimbursement be literally merely in accordance with the amount of and systematically interpreted according the expenses incurred but also with the to the so-called method of effectiveness, official's step, since the contributions without any reference to the scale of paid vary in reality in accordance with remuneration of officials. salary.

Regulations since the latter is applied to incurred beyond the limits resulting from the official's remuneration which, the maximum rates and upper limits according to Article 62 of the Staff provided for in the rules on sickness Regulations, consists not only of the insurance. basic monthly salary but also of the family allowances and other allowances, including the expatriation allowance. The Commission considers that the Jacquemart judgment (Case 114/77, The Commission states that the sickness cited above), relied on by the applicant, insurance scheme is based on the Belgian bears no relation to this case.

This case on the Staff Regulations and collected without other hand involves the possible any account being taken of the application of the geographical weight- weighting. That is quite clear from the ings referred to in Article 64 of the Staff first paragraph of Article 64 of the Staff Regulations. Regulations which provides that the weighting is to be applied only after deduction from the remuneration In the Commission's view, if the purpose expressed in Belgian francs of inter alia of the rules was, as the applicant the contribution to the sickness insurance contends, to establish an upper limit, the

However, the reimbursement of medical expenses is application of weighting to the upper exclusively but simultaneously dependent limits in respect of reimbursement of on the amount of the expenses incurred medical expenses would be unfavourable and the amount paid in contributions. to officials at Ispra, where the weighting applied is low, whilst medical expenses are high. Thus the provisions at issue are not intended to define an upper limit for officials but rather to supplement struc- turally the amount to be reimbursed in The Commission adds that where an respect of medical expenses actually official working in a country with a low

weighting receives treatment in a country The applicant emphasizes in this regard where the level of medical expenses is that, in the light of the weighting higher than in the place of employment applicable in Italy, officials working in (the level to which the upper limit of that country always suffer loss in payment will, under the system proposed comparison to officials based in Brussels. by the applicant, be adapted), he will have to bear a larger portion of the expenses than if he had received The applicant emphasizes that it · is treatment in the place of employment. precisely the fact that the special Thus the applicant's argument would reimbursement is the same whilst salaries lead to a restriction in the free choice of differ according to the place of a doctor. employment which breaches the principle of equal treatment. The Commission considers that the application of weighting in the context of Article 72 (3) of the Staff Regulations The Commission considers that the rules would presuppose a reform of the regarding reimbursement of medical sickness insurance scheme and cannot expenses take account of the principle of result from an interpretation of the equality of treatment in the sense that all provisions at issue in the light of the officials of the same grade and step are principle of equality. entitled, in all the places of work of the Community, to a special reimbursement of the same amount in respect of the same amount of medical expenses. If, as Second submission alleging breach of the a consequence, the portion of those principle of equality amongst officials expenses borne by the official reduces the remuneration of an official assigned The applicant, relying on the judgment to a country with a low weighting to a of 31 May 1979 (Case 156/78 Newth v greater extent than in the case of an Commission [1979] ECR 1941) in which official working in Brussels, that is no the Court, in interpreting the provisions more than the consequence of general of the Staff Regulations, took account of and objective rules intended to avoid a the principle of equality amongst situation in which officials are officials, considers that the exclusive reimbursed, in respect of a given amount reference to the basic salary in the in medical expenses, amounts which vary context of Article 72 (3) amounts to from one place of employment to recreating, in terms of net purchasing another. power, the inequality between officials, according to their place of employment, which it is the very purpose of Article 64 In the Commission's view, the appli- of the Staff Regulations to avoid. cation of geographical weighting to the special reimbursement referred to in The discrimination results from the fact Article 72 (3) of the Staff Regulations that the Commission does not treat all would give rise to a double discrim- officials in the same way as regards net ination amongst officials. purchasing power in the sense that the upper limit on reimbursement applies to all Community officials whilst the In the first place, discrimination would amounts which the officials themselves result from the fact that reimbursement must pay vary according to their place of of medical expenses would depend on employment and the real cost of living. purchasing power only in the case of the

Decision

1 By application lodged at the C o u r t Registry o n 14 J u n e 1983, M r O o m s , an official of the J o i n t Research C e n t r e at Ispra, in G r a d e B 2, b r o u g h t an action seeking:

A n n u l m e n t of the decisions of 25 J u n e a n d 21 July 1982, confirmed by the Commission on 9 M a r c h 1983, by which the office responsible for settling claims at Ispra m a d e a special reimbursement o n the basis of Article 72 (3) of the Staff Regulations and Article 8 (2) of the Rules o n Sickness Insurance of medical expenses incurred by the applicant but did n o t take account of the geographical weighting referred to in Article 64 of the Staff Regulations;

An o r d e r to the Commission to pay the arrears o w i n g to the applicant o n the basis of the revised calculation of the special reimbursement.

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2 It appears from the documents before the Court that the office responsible for settling claims at Ispra decided, on 25 June 1982, to calculate the special reimbursement of medical expenses sought by the applicant without applying to the "basic monthly salary", which serves as a basis for that calculation pursuant to Article 71 (3) of the Staff Regulations, the weighting referred to in Article 64 thereof.

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monthly salary, pension or allowance shall be reimbursed at the following rates: 90% in the case of a member by whose insurance no other person is covered; 100% in other cases."

7 Pursuant to the third paragraph of Article 62 of the Staff Regulations, on the other hand, remuneration comprises basic salary, family allowances and other allowances. According to Article 64 of the Staff Regulations :

"An official's remuneration expressed in Belgian francs shall, after the compulsory deductions set out in these Staff Regulations or in any implementing regulations have been made, be weighted at a rate above below or equal to 100%, depending on living conditions in the various places or employment."

s In support of his conclusions, the applicant contends that the fact that only the basic salary is taken into account, without any reference to the weighting . provided for in Article 64 of the Staff Regulations, leads to a : failure to observe the provisions at issue, whose purpose is to define the upper limit of the burden which each official may have to bear and, consequently, to take account of his real purchasing power. That practice also breaches the principle of equality of treatment which it is the very purpose of Articles 64 and 65 of the Staff Regulations to uphold.

9 In the Commission's view, the fact that neither Article 72 (3) of the Staff Regulations nor Article 8 (2) of.the Rules.on Sickness Insurance provides for weighting may be explained by the fact that, unlike the system of weightings the sickness insurance scheme is intended to guarantee, not the equality of purchasing power of officials, regard being had to living conditions in the various places of employment, but rather the reimbursement of expenditure actually incurred. The principle of equality of treatment is upheld inasmuch as a Community officials in the same category, grade and step are entitled, in all the places of work of the Community, to a special reimbursement of the same amount in respect of the same amount of medical expenditure incurred.

H It is clear from the aforementioned provisions that the ordinary reimbursements provided for in Article 71 (1) are based on objective circum- stances and in particular on the application of upper limits and rates o reimbursement fixed by the Staff Regulations and identical for all Community officials, whilst special reimbursement is based on circumstances which are peculiar to the official's own situation and which are related to the fact, according to the circumstances provided for in Article 8 of the Rules on Sickness Insurance, that the portion of expenses not reimbursed places a "heavy financial burden" on him.

,5 It follows from the foregoing that to assess correctly the extent of the financial burden placed on an official who is seeking a special reimbursement, the living conditions of the place of his employment must be taken into account and consequently the special reimbursement provided tor in Article 71 (3) of the Staff Regulations must be calculated, not solely in accordance with the salary referred to in Article 66, but on the basis of the real salary adjusted by the weighting provided for in Article 64 whose purpose is precisely to take account of the living conditions in the place ot employment.

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i6 The Commission contends, however, that if the Community legislature had wished to take account of the living conditions in the various places of employment, it would have made arrangements accordingly in respect of the entire system of maximum rates and upper limits of reimbursement applicable to reimbursement under Article 72 (1).

hereby:

1. Annuls the contested decision;

2. Orders the Commission to pay the difference between the amount already remitted and that of the special reimbursement calculated on the basis of the basic monthly salary weighted in accordance with Article 64 of the Staff Regulations;

OPINION OF MR ADVOCATE GENERAL MANCINI — CASE 115/83

3. Orders the Commission to pay the costs.

Galmot Everling Kakouris

1 — Translated from the Italian.