C-12/93

DRAKE

JUDGMENT OF THE COURT 20 September 1994 *

In Case C-12/93,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Centrale Raad van Beroep for a preliminary ruling in the proceedings pending before that court between

Bestuur van de Nieuwe Algemene Bedrijfsvereniging

and

composed of: O . Due, President, J. C. Moitinho de Almeida, M. Diez de Velasco and D . A. O . Edward (Presidents of Chambers), C. N . Kakouris, G. C. Rodríguez Iglesias, F. Grévisse, M. Zuleeg (Rapporteur) and P. J. G. Kapteyn, Judges,

Advocate General: G. Tesauro, Registrar: H . von Holstein, Deputy Registrar,

after considering the written observations submitted on behalf of:

— the Bestuur van de Nieuwe Algemene Bedrijfsvereniging, by C. R. J. A. M. Brent, acting head of the Legal Service (social security) of the association known as the Gemeenschappelijk Administratiekantoor,

— the Netherlands Government, by A. Bos, Legal Adviser at the Ministry of For­ eign Affairs, acting as Agent,

— the Greek Government, by F. P. Georgakopoulos, Assistant Legal Adviser to State Counsel, acting as Agent,

after hearing the Opinion of the Advocate General at the sitting on 26 April 1994,

gives the following

Judgment

By order of 5 January 1993, received at the Court on 14 January 1993, the Centrale Raad van Beroep (Higher Social Security Court) referred to the Court for a pre­ liminary ruling under Article 177 of the EEC Treaty a question concerning the validity of point 4 of Annex VI, section I (now J), of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, in the version codified by Council Regulation (EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6, referred to hereinafter as 'Regulation No 1408/71 as amended').

The question was raised in proceedings between the Bestuur van de Nieuwe Algemene Bedrijfsvereniging and Mr Drake concerning the award of invalidity benefits under the Netherlands legislation.

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6 At the time of the facts on which the main action is based, when simultaneous claims were made for the two kinds of benefit, those payable under the WAO were paid only if and in so far as they exceeded that of the benefits due under the AAW. However, WAO beneficiaries who for some reason were ineligible for AAW ben­ efits were entitled to WAO benefits in full.

7 Mr Drake, a Czech citizen who was naturalized in the Netherlands by a Law of 20 May 1975, completed insurance periods under the WAO during the period of three years and twelve days between 24 October 1968 and 5 November 1971. He was subsequently affiliated to the German invalidity insurance scheme from 30 November 1971 to 23 October 1980 because of his work in that country. Accord­ ing to the order making the reference, Mr Drake ceased to work and received no benefits in lieu of income in either of the two countries from 24 October 1980 to 1 July 1984.

8 By a decision of 24 March 1986 Mr Drake was recognized as suffering from inval­ idity under the German legislation and obtained, with effect from 1 July 1984, an invalidity pension (Erwerbsunfähigkeitsrente) on the basis of the insurance periods completed in Germany.

9 He also applied for invalidity benefits in the Netherlands on the basis of the employment he had had there previously. The competent Dutch institution, the Nieuwe Algemene Bedrijfsvereniging ('the NAB'), recognized Mr Drake's total incapacity for work within the meaning of the WAO and the AAW as from 1 July 1984 but rejected his application on the ground that as he was not employed when he became incapacitated for work he was not entitled to WAO benefits, and

'The Council shall, acting unanimously on a proposal from the Commission, adopt such measures in the field of social security as are necessary to provide freedom of

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movement for workers; to this end, it shall make arrangements to secure for migrant workers and their dependants:

(a) aggregation, for the purpose of acquiring and retaining the right to benefit and of calculating the amount of benefit, of all periods taken into account under the laws of the several countries;

(b) payment of benefits to persons resident in the territories of Member States.'

14 The provision was intended primarily to facilitate the co-existence of both schemes based on the acquisition of the right to benefits as a result of the materialization of the risk insured against and schemes based, on the contrary, on the cumulative acquisition of entitlement to benefits, that is to say, schemes based solely on the length of periods of insurance completed, and in principle enabled employed per­ sons who were entitled to invalidity benefits under the legislation of another Mem­ ber State to claim in addition benefits payable in the Netherlands under the WAO.

15 Subsequently, Council Regulation (EEC) No 1390/81 of 12 May 1981 extending to self-employed persons and members of their families Regulation (EEC) No 1408/71 (OJ 1981 L 143, p. 1) introduced Annex VI, section I (now J), point 4. As regards the application of the Netherlands legislation on insurance against inca­ pacity for work that provision states that the competent institution is to fix the amount of cash benefits

— in accordance with the provisions of the WAO 'if, when incapacity for work or the resultant invalidity occurred, the person concerned was an employed per­ son within the meaning of Article 1(a) of the regulation' (paragraph (a)), and

— in accordance with the provisions of the AAW 'if, when incapacity for work and the resultant invalidity occurred, the person concerned was not an employed person within the meaning of Article 1(a) of the regulation' (para­ graph (b)).

By the same regulation Article 45(3) became Article 45(4).

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JUDGMENT OF 20. 9. 1994 — CASE C-12/93

The first part of the question

20 As regards the first part of the question, it should be emphasized that there is no hierarchy between the provisions of Regulation No 1408/71 (as amended) on the one hand, and those of Annex VI on the other. All those provisions were adopted pursuant to Article 51 of the Treaty and must therefore be interpreted together in the light of the purpose of that article, which is to facilitate the establishment of the greatest possible freedom of movement for migrant workers, a principle which is one of the foundations of the Community (see Case 293/88 Winter-Lutzins [1990] ECR I-1623, paragraph 13, and C-282/91 De Wit [1993] ECR I-1221, para­ graph 16).

21 The question is therefore restricted to the issue of whether the rules governing the application of the Netherlands legislation on incapacity for work laid down in sec­ tion I (now J), point 4, of Annex VI to Regulation No 1408/71, as amended, are compatible with that purpose.

22 It has been established that Articles 48 to 51 of the Treaty are intended to ensure that workers do not lose, as a result of their exercising the right to freedom of movement, social security advantages granted to them by the legislation of a Mem­ ber State, a result which might dissuade Community workers from exercising their right to freedom of movement and would therefore constitute an obstacle to that freedom (see Cases C-45/92 and C-46/92 Lepore and Scamuffa [1993] ECR I-6497, paragraph 21).

!2 As regards the second part of the question raised by the national court, which con­ cerns the lawfulness of the introduction of a supplementary condition, such as income from work of a certain amount during the year prior to the commence­ ment of the incapacity for work, it is sufficient to note that the Court has consis­ tently held that Article 51 of the Treaty and Regulation No 1408/71 provide only for the aggregation of insurance periods completed in different Member States and do not regulate the conditions under which those insurance periods are consti­ tuted. The conditions governing the right or obligation to become a member of a social security scheme are therefore a matter to be determined by the legislation of each Member State, provided that there is no discrimination in that regard between

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the nationals of the host Member State and those of other Member States (see Case C-349/87 Paraschi [1991] 1-4501, paragraph 15).

27 It follows that Community law does not preclude the national legislature from altering the conditions for granting benefits for incapacity for work, even if it makes them more strict, provided that the new requirements do not give rise to overt or disguised discrimination between Community workers.

28 The income requirement laid down by the Netherlands legislature as a condition for entitlement to AAW benefits constitutes an objective requirement which applies to its own nationals and to those of other Member States alike. Conse­ quently, its introduction as a requirement for the grant of Netherlands benefits for incapacity for work is compatible with Community law.

On those grounds,

THE COURT,

in answer to the question referred to it by the Centrale Raad van Beroep by order of 5 January 1993, hereby rules:

Consideration of the question raised has not revealed any factors capable of affecting the validity of point 4 of Annex VI, section I (now J) of Council Reg- ulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community, in the version codified by Coun- cil Regulation (EEC) No 2001/83 of 2 June 1983.

Due Moitinho de Almeida Diez de Velasco

Edward Kakouris Rodríguez Iglesias