C-293/88

Mr President, old-age pension under the AOW. But the Members of the Court, amount of that pension was calculated on the basis of her number of years of insurance, that is to say the years between 1. The Raad van Beroep (Social Security December 1965, when she took up Court), Amsterdam, has referred to the residence in the Netherlands, and February Court for a preliminary ruling a question on 1987, when she ceased to receive an inva- the interpretation of the provisions of Regu- lidity allowance. Mrs Winter-Lutzins then lation (EEC) No 1408/71 of the Council, 1 brought proceedings in the national courts in the field of social security, in the context to challenge the refusal of the Sociale of proceedings concerning the application Verzekeringsbank (hereinafter referred to as of the Algemene Ouderdomswet, the 'the SVB'), the Netherlands social security Netherlands Law on old-age insurance institution which pays benefits under the (hereinafter referred to as 'the A O W ) , to a AOW, to grant her the 'transitional German national. concessions' provided for in the AOW. Those concessions make it possible to treat periods prior to 1 January 1957, when the AOW entered into force, as periods of 2. The person in question, Mrs Winter- insurance for the purposes of old-age Lutzins, was born on 15 February 1922 and insurance. In the absence of such left the Federal Republic of Germany for concessions it would have been impossible the Netherlands in December 1965, for anyone to claim an AOW pension at the together with her husband, who was born full rate of 100% until the year 2007, on 16 September 1917. She was employed because the pension is equivalent to 2% of a part-time in various posts in the minimum salary per year of insurance. Netherlands from 1973 to 1980, when she was granted an invalidity allowance. Her husband reached retirement age in 1982. In 1983, Mr and Mrs Winter-Lutzins returned to the Federal Republic of Germany. From 4. It is necessary to provide certain details 1983 to 15 February 1987, the date of of the legal structure of the transitional her 65th birthday, Mrs Winter-Lutzins concessions under the AOW. The continued to be insured under the AOW arrangements are a 'benefit' because they even though she was no longer resident in allow periods which elapsed between a the Netherlands, because she was receiving person's 15th birthday and 1 January 1957 an invalidity allowance from a Netherlands to be treated as periods of insurance social security institution. provided that the person concerned meets three requirements.

which is laid down in Article 59(1) of the benefit of the mitigating rule, since from AOW, is, however, mitigated by Article 2 of 1 January 1957 until the end of December a Royal Decree of 3 December 1985 which 1965 she was still resident in the Federal provides that a person who has left the Republic of Germany and was not insured Netherlands but remains insured under the under the AOW. AOW is treated as residing in the Netherlands for the purpose of the six-year requirement. 10. Before the national court, Mrs Winter- Lutzins argued that, in so far as it made entitlement to the 'transitional concessions' dependent on residence in the Netherlands, 6. The second requirement is that the the Netherlands legislation was incompatible claimant must be a Netherlands national or with Article 10(1) of Regulation No a person treated as such. It cannot apply so 1408/71. That paragraph provides: 'Save as to disqualify Community nationals. as otherwise provided in this regulation, . . . old-age . . . cash benefits . . . acquired under the legislation of one or more Member States shall not be subject to any reduction, 7. Under the third condition, which is laid modification, suspension, withdrawal or down in Article 56 of the AOW, the confiscation by reason of the fact that the claimant must reside in the Netherlands. recipient resides in the territory of a That requirement, referred to as the Member State other than that in which the 'continuing-residence' requirement, which is institution responsible for payment is also relaxed by a provision in a Royal situated'. The question referred to the Court Decree, does not apply to persons who were by the national court for a preliminary continuously insured under the AOW from ruling concerns the compatibility of the 1 January 1957 until their 65th birthday. Netherlands legislation with Article 10(1) of the regulation.

12. The very wording of the question Winter-Lutzins to obtain by virtue of referred to the Court draws attention to a Community rules what she had been refused particular point. It asks whether a because she did not meet the requirements requirement such as the continuing- of the AOW. She had indeed resided for six residence requirement in the AOW is years in the territory of one or more incompatible with Article 10(1) of Regu- Member States after her 59th birthday, but lation No 1408/71 'in particular when' there was no period which could be treated another provision in that regulation, Point as an insurance period because she had had 2(a) and (f) of the Netherlands section of no 'link', prior to 1 January 1957, with the Annex VI, provides that a recipient of Netherlands. This leads me to point out benefits under the AOW who does not that, depending on whether or not they are satisfy the conditions permitting him to have met, the requirements in the AOW which periods of his life prior to 1 January 1957 determine a claimant's entitlement to the treated as insurance periods is nevertheless transitional concessions give rise to the entitled to have periods before 1 January application of one or the other of two 1957 during which he resided in the systems of rules which differ markedly in Netherlands after the age of 15 or during terms of the advantages which they entail.

13. It may be observed at this point that the stances as Mrs Winter-Lutzins, and had material provision of Annex VI to Regu- there pursued the same activities at the same lation No 1408/71 could not enable Mrs periods but, unlike Mrs Winter-Lutzins, had remained in the Netherlands until her 65th 2 — Case 284/84 [1986] ECR 685. paragraph 22 of the birthday. Although, like Mrs Winter- judgmem. Lutzins, she would have had no link with

17. The first, explicit, consequence is to weaken the effects of the residence 15. An analysis of Mrs Winter-Lutzins's requirements. It becomes possible for a situation with regard to the provisions of person who does not meet the requirements the AOW relating to the 'transitional entitling him to have periods prior to 1957 concessions' and the abovementioned treated as insured periods as provided for in provisions of Annex VI of Regulation No the AOW not to lose all such entitlement. 1408/71 highlights the decisive conse- This is undoubtedly a weakening, a quences of the operation of the relaxation of the residence requirements in 'continuing-residence' clause. It may even the AOW. Were it not for the 'second be said that the differences in treatment chance' rule in Annex VI, a person who did which the application of such a clause may not meet the requirements of the AOW entail have the appearance of discrimination. would lose all entitlement whatever to such Does that mean that the residence treatment. requirement must be regarded as incom- patible with Article 10(1) of Regulation No 1408/71? I do not think so. In that regard I agree with the SVB, the Netherlands Government and the Commission in 18. The second implication of the relevant considering that an analysis of the provisions of Annex VI is an implicit one, provisions in the light of the Court's inasmuch as the requirements laid down by judgment in the Spruyt case leads to the the AOW, in particular the residence conclusion that a condition such as the requirement, will normally be applicable to continuing-residence requirement is not the full extent to which they have not been incompatible with Regulation No 1408/71. weakened or relaxed by the Community It is clear that the abovementioned regulation. Put simply, that means that provisions of Annex VI, whilst revealing while Annex VI stops the requirements laid certain differences in treatment, do indicate down in the AOW from having the effect of unequivocally the intention of the preventing a person who does not meet Community legislative authority to accept them from having any periods prior to 1957 the operation of the residence requirements during which he had a link with the for the purposes of the transitional Netherlands, through residence or concessions of the A O W to quite a large employment, treated as insured periods, it extent. Let me expand on that point of view. allows the other effects of those requirements

to operate freely. It is in that way that The Court thus pointed out, as it had Annex VI limits the scope of Article 10(1) already stated in its judgment of of Regulation No 1408/71, which prohibits 7 November 1973 in Case 51/73 Sociale residence clauses. Verzekeringsbank v Smieja,5 that the protection afforded by the 'waiving' of residence clauses in Article 10(1) of Regu- 19. That interpretation is the one which the Court enshrined in its judgment in the lation No 1408/71 should in principle apply Spruyt case. In that decision, it first pointed to the 'transitional concessions' in the out that the aim of Articles 48 to 51 of the AOW. But it immediately went on to EEC Treaty provide, in paragraph 21 of the judgment, important details with regard to the way in which that principle is to be applied to such 'would not be attained if, as a consequence transitional arrangements: of the exercise of their right to freedom of movement, workers were to lose the advantages in the field of social security guaranteed to them by the laws of a single Member State'. 3 'Special procedures for giving effect to that principle in the application of the Netherlands legislation on general old-age With that concern in mind, the Court went insurance are laid down in Annex VI, Pan on to state that I, Point 2 of Regulation No 1408/71. The rule contained in Article 10, whereby the 'the purpose of Article 10(1) of Regulation application of residence clauses is set aside, No 1408/71 concerning the waiving of cannot be applied without restriction to a residence clauses is to guarantee the person general old-age insurance scheme in which concerned his right to social security the mere fact of residence in the benefits even after taking up residence in a Netherlands is sufficient qualification for different Member State and to promote the insurance purposes'. 6 free movement of workers, by insulating those concerned from the harmful conse- quences which might result when they transfer their residence from one Member State to another', 4 20. The Court considers, then, that the provisions of Article 10(1) of Regulation No 1408/71 apply to the transitional and added that if that objective was to be concessions in the AOW in accordance with attained, the procedures laid down in Point 2 of the Netherlands section of Annex VI to that regulation, which are stated to restrict the 'the protection given must necessarily rule in Article 10(1) whereby residence extend to cover benefits which, while clauses are waived. That is a clear statement created within the confines of a particular that Article 10(1) cannot be interpreted as scheme, such as that of the AOW, are given regards its effects on the transitional effect by increasing the value of the pension concessions in the AOW, without reference which would otherwise accrue to the to Annex VI which is in fact its necessary recipient'. 5 vehicle. It also implies, in my view, that the 3 — Case 284/84, cited above, paragraph 19 of the judgment. 4 — Case 284/84, cited above, paragraph 20 of the judgment. 6 — The 'Part I' referred to in this passage from the judgment is the Netherlands section of Annex VI; in the version of 5 — [1973] ECR 1213. Regulation No 1408/71 currently in force, it is 'PartJ'.

22. Article 10(1) of Regulation N o 1408/71 21. It is true that Annex VI cannot be held, is thus to be interpreted, as regards the in absolute terms, to define all the effects of present case, subject to the restrictions the principle whereby residence clauses are which, as the Court has pointed out, Annex waived in connection with the transitional VI places upon it. Sufficient light appears to concessions under the AOW. The dispute me to be cast on the justification for those which gave rise to the Court's judgment in restrictions by the Court's judgment in the the Spruyt case illustrates the possibility that Spruyt case. As regards principles, the there may be gaps in the rules with the principle whereby residence clauses are result that certain effects not explicitly waived must by definition be restricted in provided for must be inferred, by analogy if relation to an old-age insurance scheme necessary. But it does not appear to me to be possible to consider that such a gap exists with regard to the circumstances of the 'in which the mere fact of residence . . . is present case. On the contrary, I consider sufficient qualification for insurance that by stating that Point 2(a) of Annex purposes'. 7 VI — which applies, it will be recalled, to persons who do not meet the requirements of the AOW — provides that In such a scheme, where residence is not a condition but the condition, unrestricted application of a principle prohibiting residence clauses would in fact have the effect of destroying the Netherlands old-age 'periods before the entry into force of the insurance scheme. The rule of law must be Netherlands legislation are to be taken into interpreted strictly, but not in a manner so account only if a supplementary condition is unbending as to verge on the absurd. satisfied, namely that during the periods in question the person concerned resided in 2 — Case 284/84 [1986] ECR 685, paragraph 22 of the the Netherlands or pursued an activity as an judgment. employed person in that country', 7 — Case 284/84, cited above, paragraph 21 of the judgment.

23. I would add that Regulation No the Netherlands scheme may not be treated 1408/71 must always be interpreted in the as insurance periods. A certain impression light of the fundamental principle which it is of discrimination may arise because what is intended to implement, that of freedom of available to some, who meet the movement for workers. It may be recalled continuing-residence requirement, is not that the Court stated, in its judgment in the available to others, who do not. As I have Spruyt case, that the principle demonstrated, fictions are unequal before the transitional arrangements of the AOW, depending on how the residence clause

that very effect. It thus gives the principle link. whereby residence clauses are waived, with regard to the transitional concessions under the AOW, a scope which enables the requirements of the fundamental right to 25. But, however favourably or unfavour- freedom of movement to be satisfied. In my ably the difference in treatment revealed in view, those requirements would be disre- this case may be presented, it is in my view garded if a residence clause prevented the sufficient, in the final analysis, to find that it recognition of a reality but are not if it has been taken into consideration and denies the benefit of a fiction. accepted by the Community legislative authority in Annex VI of Regulation No 1408/71, and that it has been accepted also by the Court in its interpretation of Article

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OPINION OF MR DARMON — CASE C-293/88

26. I therefore propose that the Court should rule as follows:

'Article 10(1) of Regulation (EEC) No 1408/71, as it applies to the transitional concessions under the Netherlands legislation on general old-age insurance in accordance with the procedures laid down in Point 2 of the Netherlands section of Annex VI of that regulation, does not preclude a rule which, for the purposes of that legislation, prevents persons not meeting a continuing-residence requirement from having periods prior to the entry into force of the old-age insurance scheme during which they had no link with the Netherlands treated as insurance periods.'

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