C-191/83

In Case 191/83

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

F. A. SALZANO, Munich,

and

BUNDE SANSTA L T FR A R B E I T— KIN DERGELDKASSE [Federal Employment Office, Child Allowance Department] 1 — Language of the Case: German.

JUDGMENT OF 13. 11. 1984 — CASE 191/83

Facts and Issues

The facts of the case, the course of the children resident in Italy. The allowances procedure, and the observations sub- in question were refused for the period mitted under Article 20 of the Protocol from 1 May 1979 to 31 December 1979 on the Statute of the Court of Justice of because, according to the defendant in the EEC may be summarized as follows : the main action, Mrs Salzano had worked during that period and because I — Facts and written procedure of her employment was entitled to family allowances under Italian law. According Mr Salzano is of Italian nationality. He to Article 76 of Regulation No 1408/71 has been employed and resident in entitlement to family allowances must be Germany since May 1979. Mrs Salzano suspended if, by reason of the pursuit of lives with their three children in Italy. a professional or trade activity, family allowances are also payable under the On 11 July 1979 Mr Salzano applied to legislation of the Member State in whose the Bundesanstalt für Arbeit for the territory the members of the family are grant of family allowances for his three residing. '

SALZANO v BUNDESANSTALT FÜR ARBEIT

Each of those whether and to what extent the parent in judgments however concerned facts the country of residence of the children which predated the entry into force of is entitled to family allowances?" the Italian Law No 903 of 9 December 1977 ' on equal treatment for men and The order making the reference was women according to which : received at the Court Registiy on 12 September 1983. "Family benefits, family allowances and pension increases for dependent members In the grounds of the order making the of the family may, in the alternative, reference the national court observes that be paid to the wife who is in paid according to the national law of the employment or in receipt of a pension on Federal Republic of Germany the the same conditions and subject to the plaintiff is not entitled to the family same limits as those which apply to a allowances (Kindergeld) since his male worker who is in paid employment children have neither their residence nor or in receipt of a pension.

the substantive conditions for entitlement residing in the territory of the Federal to family allowances. It does not matter Republic of Germany. whether in Italy the exercise of the right Under Article 76 of the regulation, however, entitlement under Article 73 is I — Gazzella Ufficiale della Repubblica Italiana of 17. 12. 1977, No 343.

requires an application to that effect by entitlement to family allowances only in the mother and a declaration of waiver. the event of actual payment or at least They are simply formal requirements. where all the formal or substantive conditions are satisfied (Case 134/77 The national court is inclined to adopt Ragazzoni [1978] ECR 963). the plaintiff's view according to which there is suspension under Article 76 of Article 76 of Regulation N o 1408/71 is the regulation only if all the conditions not intended to prevent the overlapping for the payment of the family allowances of benefits which are not real but only are in fact satisfied in the country of fictitious. residence of the children, that is to say, where there is also an appropriate Thus the condition which must be application and, if necessary, a dec- fulfilled for a suspension to come into laration of waiver by the other parent. operation is the actual payment of double benefits. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of In the judgment in Case 100/78 Rossi the European Community written obser- [1979] ECR 831 relating to Article 79 (3) vations were lodged by the plaintiff of the regulation which contains a in the main action, Mr Salzano, re- scheme similar to Article 76 for pen- presented by J. Ståhlberg, Rechtsanwalt sioners the Court stated that suspension of Munich, the Government of the is applicable "only to the extent of the Federal Republic of Germany, rep- amount actually paid by virtue of resented by M. Seidel and E. Roder, the pursuit of a professional or trade acting as Agents, the Italian Govern- activity". Suspension of entitlement to ment, repesented by O. Fiumara, benefits Avvocato dello Stato and the Commission of the European Com- "is not applicable if the mother has not munities, represented by M. Beschel, actually become entitled to those same a Member of its Legal Department, allowances under the legislation of assisted by B. Schule of the Max-Planck- another Member State by virtue of her Institut für Ausländisches und Internat- pursuit of a professional or trade activity, ionales Sozialrecht, Munich. either because only the father is acknowledged to have the status of head of household or because the conditions On hearing the report of the Judge- for awarding to the mother the right to Rapporteur and the views of the payment of the allowances have not been Advocate General the Court decided to fulfilled". open the oral procedure without any preparatory inquiry. In that case the Court made no distinction between formal and sub- Pursuant to Article 95 (1) and (2) of the stantive conditions but Mr Advocate Rules of Procedure the Court, by order General Capotorti emphasized that sus- of 11 April 1984, assigned the case to the pension First Chamber. "implies, of course, the need for an application from the wife and a II — W r i t t e n o b s e r v a t i o n s declaration by the husband . . . Until those conditions have actually materi- alized, it cannot be said that a working The plaintiff in the main action considers wife is entitled to payment of the that there can be suspension of allowances in respect of the children".

The municipal law of tlie country of the event of suspension under Article 76 residence and the jurisdiction of the of Regulation No 1408/71. competent authorities of that countiy The Court held in the judgment in Case must be fully accepted by the country of employment. According to Italian law 104/80 Beeck [1981] ECR 503 in relation grant of the allowance presupposes an to Article 10 (1) (a) of Regulation No application by the wife and a waiver by 574/72 that payment of family benefits the husband. or family allowances are suspended "only up to the amount received, in If the competent authority of the country respect of the same period and the same of residence does not consider itself to member of the family, in the State of be in a position to rule upon an residence by the spouse pursuing a pro- application, an authority of the country fessional or trade activity within the of employment cannot substitute itself territory of that State". for the first-mentioned authority and itself rule upon an application made The Beeck case was concerned with against a body responsible for payment Article 10 of Regulation No 574/72 and in another Member State. not with Article 76 of Regulation No

The fact that in 1408/71). practice the highest benefit is perhaps The plaintiff in the main action considers always chosen is in accordance with the that authority for those propositions is to principle of the most favourable treatment laid down in Regulation No be found in the Rossi case, Case 733/79 1408/71. Laterza [1980] ECR 1915 and Case 807/79 Gravina [1980] ECR 2218. As regards the problem of the basis of The fact that the wife works cannot entail a quasi-penalty in the form of entitlement it is not a question of depriving the migrant worker of family whether the benefit arises only under allowances.

That has difference between the amounts of the consequences for the calculation of an allowances of the country of em- orphan's pension, for example, but not, ployment and the countiy of residence in as in the present case, on family

allowances which are independent of concerned not only with avoiding the insurance periods. overlapping of benefits but also determines which right must be satisfied The main idea underlying the plaintiff's where a right exists in two Member legal argument is that the gainful States. In the event of entitlement in both employment of the spouse in the country Member States because of the pursuit of in which the children reside ought not to a professional or trade activity it is the bring about a situation in relation to Member State in which the children family benefits which is less favourable reside which must grant the benefit.

nationality. To give effect to the responsibility for the children. The contention of the defendant in the main provision in question cannot however action would lead to discrimination, in achieve that objective if it may be applied the first place where both parties work only in a case in which, apart from the (and thus, in general, discrimination substantive conditions, the formal against the wife) and in the second place conditions for entitlement are satisfied in on grounds of nationality. the State where the children reside. Such The Government of the Federal Republic an interpretation of the provision of Germany considers that the first part amounts to acknowledging that the of the question referred to the Court for parents have a right of option; they are a preliminary ruling should be answered free to choose which of the two Member in the affirmative.

The Court

did not examine, in the grounds of those the benefits determined according to the judgments, the problem of the sub- principle of the country of employment. mission of an application or that of the declaration of waiver. In view of the legal position at the time it was not According to the established case-law of necessary to consider such matters. the Court inspired by the fundamental principle of free movement of workers and the purpose of Article 51 of the EEC Regulation No 1408/71 excludes in Treaty a rule intended to avoid over- principle the choice between family lapping of family allowances must be allowances in the country of residence restrictively applied: it is applicable only and the country of employment. It is to the extent to which it docs not, obvious that Article 76 provides no without cause, deprive those concerned

According to Article 76 of Regulation No. 1408/71 and Article 10 (1) (a) of In the present case the entitlement of the Regulation No 574/72 entitlement to plaintiff to child allowances is based on family benefits is suspended or is not Article 73 (1) of Regulation No 1408/71. suspended; partial suspension is not That right, which is based on Com- provided for. munity law, ceases to exist by virtue of

(Article 73 (2)). The authors of the regu- lation have thus not inferred from Article Nor do the judgments of the Court 51 of the EEC Treaty that it is the which dealt with similar legal questions highest benefits which must always be relating to Chapter 8 of Regulation No granted. That decision by the authors 1408/71 (Case 100/79 Rossi [1979] ECR of the regulation cannot however be 831; Case 733/79 Laterza [1980] ECR compatible with an interpretation of 1915; Case 807/79 Gravina [1980] ECR Article 76 to the effect that the benefits 2205) yield a different solution.

JUDGMENT OF 13. 11. 1984 — CASE 191/83

SALZANO v BUNDESANSTALT FÜR ARBEIT

wife is entitled to family allowances in professional or trade activity in the State Italy, is governed, as far as concerns of residence but requires in addition that entitlement to family allowances under as a result of the pursuit of that pro- Community law, by two different fessional or trade activity family benefits provisions against overlapping. or allowances are "payable" there (Case 134/76 Ragazzoni [1978] ECR 963).

Article 76 aims at preventing the over- lapping of entitlements to family In the main proceedings in the Ragazzoni allowances acquired in different States. case the plaintiff's wife could not be The rules take into account the fact that regarded as incontestably being a "head family benefits are intended to safeguard of household" under the Italian law in the family's standard of living by force at the time so that she could not compensating to a certain extent for the claim in Italy the family allowances for additional needs which the family have the children and as a result no family to meet as the result of the expenses benefit or allowance was "payable" connected with the maintenance and pursuant to the legislation of the State of education of children. Since the amount residence. of those additional needs does not change according to whether only one or both spouses are working, the family allowances ought to be granted only In his opinion Mr Advocate General once even if both spouses are working. Capotorti considered the legal position On the other hand Article 76 is not to created in Italy by Article 9 of Law No be interpreted as a rule of priority of 903 of 9 December 1977 according to Community law according to which which family allowances might in the entitlement to family allowances event of application also be paid to the acquired in the State of employment working wife. He observed in that must always be suspended once the other respect that in the new legal situation the parent takes up a professional or trade ac- right to payment of family allowances tivity in the State of residence. That arises, in the case of a woman married to follows also from the fact that Article 76 a husband who works abroad and who contemplates not only the pursuit of a in turn is entitled to dependent child

allowances, only where the employed members of his family to the risk, on the wife, or perhaps both parents, submit a one hand, that his entitlement to family claim. No right whatever will arise if the allowances in the State in which he is claim for allowances is submitted by the working may be suspended and, on the father alone, for in that case "for the other hand, that it may not yet be certain purposes of Article 76 of Regulation No that the benefits which may possibly be 1408/71 the family allowances are not payable in the State of residence are in payable to the employed mother within fact paid. Moreover the circumstances the meaning of the said Article 9 of Law justifying the suspension of payment of No 903 of 1977". the family benefits in the State of employment of the migrant worker might arise solely because of the pursuit of a professional or trade activity by the wife of the migrant worker in the State of residence, that is to say without his As a result the Sozialgericht Munich knowledge and concurrence. considered that in the absence of an application by the plaintiff's wife and a declaration by the plaintiff himself family allowances are not "payable" in Italy. That interpretation is justified on practical grounds: the competent institution in the country of employment That result would be contrary to the is in practice unable to determine objective specifically laid down in respect whether all the conditions laid down by of family benefits and allowances by the domestic legislation of the country of Article 73 - (1) of Regulation No residence for the grant of family 1408/71, implementing Article 51 of the allowances are fulfilled. Thus it is still EEC Treaty, according to which the not established in the present case establishment of free movement of whether the plaintiff's wife, on the basis workers in the field of social security of part-time work for 51 days only, should entail equality of the conditions really satisfies the legal conditions in applying to national and migrant Italy for entitlement to family allow- workers of the Member States of the ances. That question can be answered Community and consequently the only after submission of an appropriate assimilation of migrant workers of those application by the wife and a declaration States to national workers. The equating, of waiver by the plaintiff. for that purpose, of the place of residence of the members of the family of the migrant worker in another Member State with the place of residence in the State in which he is working is limited by Article 76 of Regu- lation No 1408/71 and Article 10 (1) of Regulation No 574/72 solely to avoid unjustified enrichment resulting from the An interpretation of Article 76 of Regu- overlapping of rights to family benefits lation No 1408/71 which does not take and allowances in the State of account of the existence of all the employment and State of residence. That conditions, including formal conditions, objective is achieved if entitlement to the to which the benefit of family allowances benefits is suspended in the State of is subject in the State of residence employment provided that all conditions exposes the migrant worker and for the grant are satisfied in the State of

Article 79 (3) provides for the suspension It must nevertheless be recognized that of benefits for dependent children of that interpretation gives the spouses the pensioners and for orphans if the possibility of choosing between the children become entitled to family family benefits and allowances of the benefits or family allowances under the State of employment and of the State of legislation of a Member State by virtue residence. Basically that option is attri- of the pursuit of a professional or trade butable to the fact that it is ultimately activity. pursuant to and in implementation of the Community provisions designed to give effect to the principle of equality of treatment between men and women that the national laws on family benefits and allowances give the two parents the The Court considers that that rule possibility of choosing which of them against overlapping "has a purpose, and should exercise the right. is applicable, only if entitlement to benefits actually arises and is acquired according to the legislation of the State in which the professional or trade activity is pursued" and that the It would be contrary to the principle of suspension of entitlement to family allowances for dependent children of a equality of treatment which is the basis father who is in receipt of a pension of the rules laid down in Article 73 of under the legislation of a Member State Regulation No 1408/71 that the option is not applicable "if the mother has not granted by national law should be actually become entitled to those same restricted by Community law in such a allowances under the legislation of way that where the two spouses pursue a another Member State by virtue of her professional or trade activity the family pursuit of a professional or trade activity, benefits and allowances to be claimed in either because only the father is the State of residence have priority and acknowledged to have the status of head must be applied for by the spouse of household or because the conditions working there, that is to say, in other for awarding to the mother the right to words, that the wife pursuing a pro- payment of the allowances have not been fessional or trade activity in Italy would fulfilled". be required to apply for family al- lowances there and her husband would

Consequently the application of Article Should the Court decide to follow the 76 of Regulation No 1408/71 basically Commission's view, the question of the depends on the way in which the spouses amount up to which the entitlement in fact use their right of option. acquired in the State in which the husband is employed must be suspended does not arise. That reasoning accords with the objective of the provision against over- lapping which is to prevent unjustified Moreover it is necessary to take account enrichment and moreover with the of the interpretation which the Court answer given by the Court in Case gave to Articles 77, 78 and 79 of Regu- 149/82 Robará [1983] ECR 171 on the lation N o 1408/71 in Cases 100/78 Rossi first sentence of Article 10 (1) (a) of [1979] ECR 831 and in Case 733/79 Regulation No 574/72. According to Laterza [1980] ECR 1915. According to that judgment the provision for those judgments when the amount of suspension applies "whenever the family allowances paid in the State of institution of another Member State has residence is lower than that of the in fact granted family benefits to a benefits provided for by the legislation of worker in respect of the same child, in the State of employment the worker is pursuit of Article 73 of Regulation No entitled, as against the competent 1408/71, without its being necessary to institution of the State of employment, to examine whether all the conditions for a supplement equal to the difference the grant of those benefits are satisfied between the two amounts. under the legislation of that other Member State". Even though the applicable provisions of Community law, according to their If for example the plaintiff's wife had literal wording, provide only for made an application for family al- "suspension" of entitlement and not lowances in Italy and the plaintiff had "partial suspension" or a "reduction" lodged a corresponding declaration of that solution is in accordance with the waiver and if, as a result, the plaintiff's meaning and the purpose of the wife had obtained allowances in Italy, it provisions against overlapping which are would not be necessary to consider in designed to prevent the unjustified the present case whether the occasional enrichment of a migrant worker resulting pursuit of a professional or trade activity from the grant of various family benefits by the wife in fact suffices to give rise to and allowances in several Member States an entitlement to family allowances; but are not intended to entail, in entitlement to family allowances would addition, a reduction in benefits. Such a have to be suspended. reduction would moreover be contrary to the objective of Article 51 of the EEC Treaty and Regulations Nos 1408/71 On the other hand, in the present case, and 574/72 which require, according to which is the converse of the case just the case-law of the Court, that the described, since the conditions required Community rules should be applied in before family allowances "are payable" such a way as not to deprive the migrant

3 The Bundesanstalt für Arbeit [Federal Employment Office] refused to grant Mr Salzano the family allowances for his three children for the period from 1 May 1979 to 31 December 1979, on the grounds that Mrs Salzano had been working during that period and that, by virtue of being gainfully employed, she was entitled to the family allowances in accordance with Italian statutory provisions.

JUDGMENT OF 13. 11. 1984 — CASE 191/83

4 Mr Salzano brought an action before the Sozialgericht München against the decision rejecting his application. That court, by order of 22 July 1983, referred the following question to the Court of Justice for a preliminary ruling under Article 177 of the Treaty:

"Is Article 76 of Regulation N o 1408/71 of the Council of 14 June 1971 to be interpreted as meaning that entitlement to family allowances must be suspended (if so, to what extent), in the country in which one of the parents is employed, also in the case where the other parent resides with the children in another Member State (country of residence) and there pursues a pro- fessional or trade activity, but does not receive any family allowances for the children because there is no application by one parent and/or waiver by the other parent as required by the domestic law so that it is not clear whether and to what extent the parent in the country of residence of the children is entitled to family allowances?"

s Article 73 (1) of Regulation N o 1408/71 provides that a wage-earner who is subject to the legislation of a Member State other than France is, as regards the members of his family residing in the territory of another Member State, entitled to receive the family benefits provided for by the legislation of the first Member State, as though they were residing in the territory of the latter.

io Consequently, in this instance, if Mrs Salzano had in fact been entitled to them, the family allowances would have been paid to her, provided always that a prior request had been made. In the absence of such a request Mrs Salzano was not entitled under Italian legislation to payment of the family a owances during the period in question. It follows that the family allowances were not "also payable" for the purposes of Article 76 of the aforesaid regulation.

1 1 The reply to be given to the question referred to the Court by the Sozial- gericht München must therefore be that there is no suspension of entitlement to family allowances payable in pursuance of Article 73 of Regulation N o 1408/71 in the country of employment of one of the parents when the other parent resides with the children in another Member State and pursues there a professional or trade activity but does not receive family allowances for the children, the reason being that not all the conditions laid down by the egisktion of that Member State for the actual receipt of such allowances have been satisfied.

JUDGMENT OF 13. 11. 1984 — CASE 191/83

Costs

1 2 The costs incurred by the Government of the Federal Republic of Germany, the Government of the Italian Republic and 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, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,

H. A. Rühi G. Bosco Principal Administrator President of the First Chamber