C-59/95

BASTOS MORIANA A N D OTHERS v BUNDESANSTALT FÜR ARBEIT

OPINION OF ADVOCATE GENERAL FENNELLY delivered on 24 October 1996 *

2 — OJ, English Special Edition 1971 (II), p. 416. The most recent consolidated version of this much-amended legislation is published in OJ 1992 C 325, p. 1. The Regulation was amended most recently by Council Regulation (EEC) * Original language: English. N o 1945/93, OJ 1993 L 181, p. 1 and by the most recent Act 1 — Case C-251/89 [1991] ECR I-2797. of Accession, OJ 1994 C 241, p. 1.

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antee to workers who move within the 4. Chapter 8 of Title III of the Regulation Community their accrued rights and advan- concerns 'benefits for dependent children of tages whilst not giving rise to unjustified pensioners and for orphans'. Article 77 overlapping of benefits'. However, the eighth states: recital stated that 'it is necessary to limit the [enjoyment of accrued] benefits to the great- est amount which would have been due to a worker from one of these States if he had spent all his working life there'.

'1. The term "benefits", for the purposes of this Article, shall mean family allowances for persons receiving pensions for old age, inval- idity or an accident at work or occupational disease, and increases or supplements to such pensions in respect of the children of such pensioners, with the exception of supple- ments granted under insurance schemes for 3. Article 45(1) of the Regulation states: accidents at work and occupational diseases.

or

(a) for the orphan of a deceased employed (ii) in other cases in accordance with the or self-employed person who was sub- legislation of the Member State to ject to the legislation of one Member which he has been subject for the State only in accordance with the legisla- longest period of time, provided tion of that State; that, taking into account, where appropriate, the provisions of Article 79(1 )(a), a right to one of the benefits referred to in paragraph 1 is acquired under such legislation; if no (b) for the orphan of a deceased employed right to benefit is acquired under or self-employed person who was sub- that legislation, the conditions for ject to the legislation of several Member the acquisition of such right under States: the legislations of the other Member States concerned shall be examined in decreasing order of the length of periods of insurance or residence completed under the legislation of (i) in accordance with the legislation of those Member States.' the Member State in whose territory the orphan resides provided that, tak- ing into account, where appropriate, the provisions of Article 79(1 )(a), a right to one of the benefits referred 5. Article 78 of the Regulation states: to in paragraph 1 is acquired under the legislation of that State;

' 1 . The term "benefits", for the purposes of this Article, means family allowances and, or

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6. Article 79 of the Regulation states, in rel- evant part:

3. The right to benefits due only under the ' 1 . Benefits, within the meaning of national legislation ... and under Articles 77 Articles 77 and 78, shall be provided in and 78 shall be suspended if the children accordance with the legislation determined become entitled to family benefits or family by applying the provisions of those Articles allowances under the legislation of a Member by the institution responsible for administer- State by virtue of the pursuit of a profes- ing such legislation and at its expense as if sional or trade activity. In such a case, the the pensioner or the deceased had been sub- persons concerned shall be considered as ject only to the legislation of the competent members of the family of an employed or State. self-employed person.'

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9. Similar questions regarding limits on the overlapping of equivalent social security benefits arose in the field of family allow- 8. The Court has established the principle that Community acts adopted on the basis of Article 51 of the Treaty providing for the 3 — For a possible explanation of why the retention principle has been applied to pensions and the supplement principle to acquisition of social security benefits by the family benefits, see F. Pennings, Introduction to European Social Security Law (Deventer, 1994), p. 233. aggregation of periods taken into account 4 — Case 24/75 [1975] ECR 1149. under the laws of several Member States can- 5 — Operative part of the judgment of the Court. The earlier not prejudice the acquisition or retention of case-law of the Court on pensions, under the preceding Council Regulation (EEC) N o 3 concerning social security social security rights under the law of one for migrant workers, JO 1958 30, p. 561, as well as under the Regulation, appears to have oscillated between the two pos- Member State alone (referred to, at times, in sible solutions just mentioned. See, on the one hand, Case this Opinion as 'purely national' rights). At 100/63 Kabbeek v Sociale Verzekeringsbank [1964] ECR 565 and Case 4/66 Labots v Raad van Arbeid Arnhem [1966] different periods and in different fields, this ECR 425, and, on the other, Case 1/67 Ciechebki v Sécurité Sociale Orléans [1967] ECR 181, Case 2/67 De Moor v principle has been given effect by the Court Caisse de Pension [1967] ECR 197 and Case 9/67 Colditz v either by requiring that Community- Assurance Vieillesse Paris [1967] ECR 229. See generally D. Wyatt, 'Pensions and acquired rights under national law' coordinated social security benefits be (1975-76) 1 European Law Review 314. The Court accepted that the provisions of Article 46(3) on the total permissible supplemented, to make up the difference amount of aggregated pensions could not apply either in between those benefits and purely national respect of a national pension entitlement supplemented by Community rules suppressing residence requirements. See benefits, by the Member State responsible Article 10 of the Regulation, and Case 32/77 Giuliani v Landesversicherungsanstalt Schwaben [1977] ECR 1857. A for the latter ('the supplement principle'), or general discussion can be found in S. Van Raepenbusch, La by requiring that purely national entitle- Sécurité Sociale des Personnes qui Circulent à l'Intérieur de la Communauté Économique Européenne (Brussels, 1991), ments be maintained in full alongside those pp. 366-369.

Article 79(3) of the Regulation provides for the suspension of benefits payable pursuant to either national law or Articles 77 and 78 where equivalent entitlements arise in another Member State pursuant to the exer- cise of a professional or trade activity. It 10. In a number of subsequent cases, the appears from the Opinion of Advocate Gen- Court considered the anti-cumulation provi- eral Capotorti in Rossi that the case con- sions of Articles 76 and 79(3) of the Regu- cerned the overlap between the purely Bel- lation, and their equivalent regarding self- gian national right of a pensioner, who had employed persons, Article 10(1) of Council moved to Italy, to receive a dependent child Regulation (EEC) N o 574/72 of 21 March pension supplement and his wife's possible 1972 laying down the procedure for imple- entitlement to a lower Italian allowance on menting Regulation (EEC) N o 1408/71 on the basis of her employment there. H e spoke the application of social security schemes to of the necessity of protecting 'accrued rights' employed persons, to self-employed persons by the application of the supplement prin- and to their families moving within the ciple. 7 The Court stated that Community Community. 10 In doing so, the Court has legislation 'did not set up a common scheme applied the supplement principle in cases of of social security, but allowed different the overlap of purely national family allow- schemes to exist, creating different claims on ance entitlements with entitlements arising different institutions against which the claim- only through the operation of Community ant possesses direct rights by virtue either of law (for example, by the suppression of resi- national law alone or of national law supple- dence requirements pursuant to Article 73 of mented, where necessary, by Community the Regulation), 11 and the retention prin- law'. 8 The Court continued, that a Commu- ciple in cases of the overlap of purely nity rule, and Article 79(3) of the Regulation national entitlements in different Member in particular, 'designed to prevent the over- States. 12 lapping of family allowances, is applicable only to the extent to which it does not, with- out cause, deprive the persons concerned of 9 — Operative part of the judgment of the Court. the benefit of a part of the legislation of a 10 — OJ, English Special Edition 1972 (I), p. 159. Member State'. Thus, Article 79(3) was 11 — See Case 104/80 Beeck v Bundesanstalt für Arbeit [1981] ECR 503; Case 104/84 Kromhout v Raad van Arbeid [1985] applicable 'only to the extent of the amount ECR 2205; Case 153/84 Ferraioli v Deutsche Bundespost actually paid by virtue of the pursuit of a [1986] ECR 1401; Case 24/88 Georges v ONAFTS [1989] ECR 1905. The supplement principle has been applied con- sistently irrespective of whether it is the purely national right or the right acquired by virtue of coordination under Community law which is partially suspended. Cf. Van Raepenbusch's analysis, op. cit., pp. 380-390, which focuses on suspension of coordinated rights only and is, thus, 6 — Case 100/78 [1979] ECR 831. unable to accommodate Kromhout. 7 — Page 851 of his Opinion. 12 — Case 377/85 Burchell v Adjudication Officer [1987] 8 — Paragraph 13 of the judgment. ECR 3329.

11. The Court has adopted a similar accrued to them in the various Member approach to the application of Articles 77 States whilst limiting them "to the greatest and 78 of the Regulation. These Articles pro- amount" of such benefits'. 15 vide that only one Member State should be responsible for the payment of benefits for the dependent children of pensioners or for orphans in any given case: the Member State which is solely responsible for payment of a pension or to whose legislation a deceased worker was exclusively subject, or, where more than one Member State is responsible for payment of pensions or the deceased 12. In Gravina v Landesversicherungsanstalt worker was subject to the legislation of more Schwaben, 16 a case concerning German than one Member State, the Member State of orphans' pensions to which the Italian- resident orphans in question had a purely residence or, in the absence of entitlement in national right, the Court stated that, as a that State, the Member State in which the result of exercising their right to free move- longest period of insurance or residence has ment, workers should not lose 'social secu- been spent and in which such benefits are rity advantages guaranteed to them, in any available. An exception to this principle of event, by the legislation of a single Member exclusive attribution of responsibility was State'. 17 The Court invoked the judgment in established in CCAF v Laterza, 13 in which Rossi and ruled that 'Article 78(2)(b)(i) [of the Court ruled that a pensioner's entitle- the Regulation] must be interpreted as mean- ment to family benefits in respect of depen- ing that the entitlement to benefits payable dent children pursuant to Article 77(2)(b)(i) in the State in whose territory the orphan to of the Regulation from the State in whose whom they have been awarded resides does territory the pensioner resides does not take not remove the entitlement to benefits away the right to higher benefits awarded greater in amount previously acquired under previously by another Member State: the the legislation of another Member State benefits paid by the Member State of resi- alone' (emphasis added). It applied the dence were to be supplemented by the other supplement principle to such cases. Member State in order to make up the differ- ence between the two amounts. The Court cited the earlier judgment in Rossi and attrib- uted to it the principle that Community rules could not be applied in such a way as to lead to a reduction in the benefits payable to a migrant worker or his dependants by virtue of national law supplemented by Com- 13. In subsequent cases, the Court cited Lat- munity law. 14 Community law 'must guar- erza when ruling that there was entitlement antee to workers who move within the to a supplement 'where ... the amount of the Community all the benefits which have benefits paid by the State of residence

[pursuant to Article 77(2)(b)(i) of the Regu- were resident in Member States other than lation] is lower than that of the benefits Germany and who (in so far as is relevant to granted by another State which is respon- the present case) were either recipients of sible for payment [of a pension]'; 18 and pensions under the legislation of both Ger- repeated that 'the rules contained in [the many and another Member State, or were the Regulation] must guarantee to workers who successors in title of persons who had been move within the Community all the benefits engaged as workers or self-employed per- which have accrued to them in the various sons in both Germany and another Member Member States whilst limiting them "to the State. They were applicants either for Ger- greatest amount" of such benefits'. 19 The man dependent children's or orphans' ben- Court also invoked its judgment in Gravina efits, or for supplements from the German to rule that 'Articles 77 and 78 [of the Regu- authorities to the equivalent benefits received lation] must be interpreted as meaning that, in their Member States of residence. In some where a deceased father has been subject to cases, the benefits or the benefit supplements the legislation of more than one Member were claimed in respect of children who State, entitlement to an orphan's pension were born after the applicants left Germany, acquired under the legislation of the Member so that the applicants in those cases had not State which is competent according to those previously been in receipt of German ben- provisions does not extinguish entitlement to efits in respect of those children. It is higher orphans' benefits under the legislation nowhere stated in the judgment of the Court of another Member State alone'. 20 Notwith- or the Opinion of the Advocate General that standing the use of this last phrase, the the applicants were in receipt of pensions supplement principle was applied in all these acquired on the basis of German law alone, cases, irrespective of whether the rights in or were the successors in title to workers or question were purely national or arose only self-employed persons who had made suffi- by virtue of the coordinating provisions of cient contributions in Germany to be the Regulation. entitled to a pension on the basis of German law alone. 22

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BASTOS MORIANA AND OTHERS v BUNDESANSTALT FÜR ARBEIT

17. In Durighello, 24 the Court was con- cerned with a family allowance for depen-

23 — Paragraph 21 of the judgment. 25 — Paragraph 11 of his Opinion. 24 — Case C-186/90 [1991] ECR 1-5773. 26 — Paragraphs 16 and 17 of the judgment.

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Regulation 1408/71'. This reproduces almost Administrative measures verbatim the ruling recommended by Advo- cate General Van Gerven in his Opinion.

19. The Administrative Commission adopted Decision N o 150 29 in the light of the judgment of the Court in Athanasopou- los. Paragraph 1 of Decision N o 150 states:

29 — Decision No 150 of 26 June 1992 concerning the applica- tion of Articles 77, 78 and 79(3) of Regulation (EEC) 27 — Paragraph 13 of his Opinion, emphasis added. No 1408/71 and of Article 10(l)(b)(ii) of Regulation (EEC) 28 — Paragraph 12 of his Opinion. No 574/72, OJ 1993 C 229, p. 5.

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BASTOS MORIANA A N D OTHERS v BUNDESANSTALT FÜR ARBEIT

20. Paragraph 2 of Decision N o 150 states: This supplement shall be determined taking account of all the children or orphans born before or after the transfer of residence ....

22. As regards orphans, German law distin- guishes between an orphan's pension and an orphan's allowance. Orphans are entitled to 21. Paragraph 4 of Decision N o 150 states, an orphan's pension where the deceased par- in relevant part: ent made at least 60 months' social insurance contributions. 30 The grant of allowances for dependent children and orphans is subject to common rules in Germany, which are the same, for present purposes, as those appli- cable at the time of the decision in Athana- 'In the cases referred to in paragraphs 1 [and] sopoulos. Except for the case of parents in 2 ... the competent institution of the first receipt of pensions awarded before 1 January Member State shall award a supplement to 1984, who continue to be entitled to a pen- the benefits granted under the legislation of sion supplement in respect of dependent the second Member State, equal to the differ- ence between the amount of the benefits actually received under the legislation of the 30 — Paragraph 48 of the Sozialgesetzbuch VI ('SGB VI') read in second Member State and the amount of the combination with paragraph 50 SGB VI. The SGB VI was introduced by the Rentenreformgesetz 1992 of 18 Decem- benefits due under the legislation of the first ber 1989 (BGBl. I, p. 2261) and entered into force on Member State, irrespective of the place of 1 January 1992, replacing paragraphs 1226 to 1261 of the Reichsversicherungsordnung ('RVO': the National Social residence on the territory of the Community. Insurance Code).

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31 — Paragraphs 583 and 1262, RVO. 32 — From 1996 onwards, this allowance will normally be received by German residents by way of a reduction in taxes due, under the Einkommensteuergesetz ('EStG': Law on Income Tax), as amended by the Jahressteuergesetz 1996 of 11 October, 1995 (BGBl. I, p. 1250). Paragraphs 1(1)(1) and 2(5) of the Bundeskindergeldgesetz ('BKGG': Federal Law on Child Allowance) are the residual basis of entitle- ment of persons who do not come within the terms of the 35 — See paragraph 1247(2a), read in conjunction with EStG. However, the term Kindergeld will be used in this paragraph 1246(2a), RVO: there is no entitlement to a pen- text to describe such German allowances irrespective of sion under German law alone where the event insured their legislative source. against occurred after 30 June 1984 and at least 36 compul- sory contributions were not made to the German pension 33 — Paragraph 1(2), BKGG. insurance scheme in the 60 months preceding the event 34 — Paragraph 32, EStG and paragraph 2(2) and (3), BKGG. insured against.

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BASTOS MORIANA AND OTHERS v BUNDESANSTALT FÜR ARBEIT

I-1085 .

OPINION OF MR FENNELLY — CASE C-59/95

benefits were provided for, however small, 2) Must Article 78(2)(b) in conjunction by the State of residence, whereas the full with Article 79(1) of Regulation (EEC) German allowances were paid if benefits N o 1408/71 be interpreted as meaning were not available in the State of residence. that family allowances for orphans of a However, the applicants' approach would deceased worker or self-employed per- enable those who made compulsory insur- son who was subject to the legislation ance contributions in Germany for as little as of several Member States, if entitlement a year to acquire a right to allowances, or to an orphan's pension in a Member allowance supplements, which, in view of State whose law applied does not exist their potential duration and amount, might solely on the basis of the legislation of far exceed all the contributions and tax pay- that Member State or on the basis of the ments by the migrant worker in Germany. coordinating provisions of European social law, are to be paid by the Member State in which the orphans do not reside as a benefit supplement equal to the dif- ference between the amount of the ben- efits provided for in that Member State and the benefits paid or provided for by the State of residence?

Analysis purely national benefits should supplement Community-coordinated benefits under Articles 77 and 78 of the Regulation by the amount necessary to make up the disparity. Furthermore, there is no reason why the application of the rule against loss of more The first and second questions beneficial, purely national entitlements should be restricted to cases where the national benefit was awarded and enjoyed before the grant of the lower, Community- coordinated benefit, as was the case in Gravina. Thus, although the Court referred in the operative part of its judgment in that case to benefits 'previously acquired under 30. Two distinct principles can be identified the legislation of another Member State' from the case-law on the interpretation of (emphasis added), the condition of prior Articles 77 to 79 of the Regulation which is acquisition was dropped in D'Amario, where outlined at length above, although both ulti- the applicant, who had always resided in mately flow from the need to remove Italy, sought to avail of a German orphan's obstacles to the free movement of workers. pension for the first time. The first is the principle of respect for rights based on the provisions of national law alone. The Court has rightly emphasized that the provisions of Community social law, adopted on the basis of Article 51 of the Treaty, which are designed to assist migrant workers, should not have the effect of depriving them of national social security benefits to which they are entitled, in any event, on the basis of the law of one Member State alone. Otherwise, Community law would actually cause migrant workers to suf- fer for having exercised their right to free 31. The second principle is that of the pres- movement under the Treaty by depriving ervation of accrued rights, irrespective of them of part of the benefits to which they whether they were acquired on the basis of had become entitled under the law of that national law alone or pursuant to the coordi- State. In the field of family allowances, the nating provisions of Community law. The Court has ruled, in cases where one of two Court has sought to eliminate the disincen- family allowances is granted on the basis of tive which affects workers in the form of the national law alone, that Community anti- loss of social security benefits which they cumulation provisions should not be inter- receive in one State when they travel to preted so as to deprive a person of the high- another. Such a disincentive arises inevitably est benefit available, whether it be that based if the level of benefits depends on the place on national law or on the coordinating pro- of residence. This is, to some extent, inescap- visions of Community law. More pertinently able, as Community law has not sought to to the present case, it has ruled, in Gravina, harmonize national social security systems D'Amario and Ventura, that the Member or benefit levels. However, provisions of State responsible for payment of higher Community law should not be interpreted

32. It should be noted that the scope of application of Articles 77(2) and 78(2) of the Regulation is not restricted to family benefits award of which is made contingent, by national law, on receipt of a pension or on periods of contribution equivalent to those 33. As a result, the application of neither necessary for the award of a pension principle is subject, a priori, to entitlement to (although Article 79(1) makes special provi- a purely national pension or to a deceased sion for such situations). Rather, receipt of a parent having made the requisite number of pension or pensions, or the deceased parent's contributions (save to the extent, for the pur- working periods in one or several Member poses of the first rule, that grant of purely States, act merely as conditions precedent for national rights is subject to these conditions). the application of the regime established by Because both principles apply in circum- Chapter 8 of Title III of the Regulation, irre- stances governed by Articles 77(2)(b) and spective of national rules on the award of 78(2)(b) of the Regulation, they necessarily family benefits. This is also true of the two extend to situations where a pension has

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35. The second question referred in Athana- sopoulos asked, in relevant part, whether there was a right to a supplement represent- ing the difference between German family benefits and those provided in the Member State of residence 'when the pension entitle- ment does not arise until after the transfer of residence to the home country [and asked 34. Turning now to the decision of the whether in] those circumstances, ... a child Court in Athanasopoulos, three preliminary allowance [is] payable to a pensioner only in points are worth reiterating regarding the respect of those members of his family who Court's response to the second question qualified for it prior to his transfer of resi- referred in that case. First, the German fam- dence, or in respect of all those who are ily allowances in question were not, in prin- members of his family at the time when he ciple, as a matter of national law, subject to receives the pension — including those who receipt of a pension. 36 This remains the pos- were not born until after he had transferred ition in the present case. Secondly, the his residence'. national rules made entitlement to the allow- ance dependent on the residence of both par- ent and child, or of the child alone in the case of full orphans, so that the case could not have related to the preservation of the effects of a purely national right. This is also true of the present case. Thirdly, nothing in Athanasopoulos indicates expressly that all 36. The Court first pointed out that the order for reference had mentioned the Lat- erza principle of the preservation of the 36 — Even those in receipt of pre-1984 pensions who enjoyed effect of 'higher benefits awarded previously pension supplements in respect of children born before that date were stated in Athanasopoulos to be able to have by another Member State', and had sug- recourse, where benefits were greater, to the general system gested that it sought to guarantee solely the of children's allowances; see the Report for the Hearing, p. I-2802. maintenance of rights acquired prior to the

change of residence. 37 This indicates that the previously accrued benefits (that is, benefits case was understood to relate to the scope of enjoyed in Germany before transfer of resi- the second principle set out above. The dence) but also to those which would have Court then stated that Article 77 of the been acquired had the pensioner stayed in Regulation linked entitlement to the benefits Germany: 41 if a supplement were not referred to therein to entitlement to a pen- granted in such cases as well, 'workers would sion, the benefits being granted by the Mem- be prompted to maintain their residence in ber State or one of the Member States the territory of the Member State granting responsible for payment of a pension. 38 The the more favourable benefits until the date basis of the entitlement to a pension on which they were entitled to the grant of a (whether national law alone or otherwise) is pension under the legislation of that Member not mentioned. State, in order to receive those benefits', con- trary to the objectives of the Regulation. 42 'Those considerations also require the ben- efit supplement to be granted in respect not only of the pensioner's dependent children born before the transfer of his residence to the Member State granting the less favour- 37. The principle of preserving the effects of able benefits, but also children born after the accrued family benefits recognizes the diffi- transfer of residence'. 43 culty pensioners might experience in choos- ing between transferring residence and main- taining family benefits to which they are accustomed. However, the Court recast the principle in broader terms in Athanasopou- los. The Court characterized the recognition of entitlement to a benefit supplement as a rule which 'seeks to promote freedom of movement for workers by ensuring that those concerned obtain the amount of ben- efits which would have been granted to them if they had continued to reside in the Mem- 38. The Court was engaged, in responding ber State granting the most favourable ben- to the second question in Athanasopoulos, in efits'. 39 'If entitlement to that supplement interpreting Article 77(2)(b) of the Regu- were not conferred on workers acquiring a lation. The application of that provision is right to the grant of a pension under the leg- triggered by receipt of pensions under the islation of the Member State granting the law of more than one Member State. The most favourable benefits, following the legal framework in which the Court oper- transfer of their residence to the territory of ated and the reasoning on the basis of which the other Member State responsible for pay- it answered the question relate as much to ing a pension to them, an obstacle would multiple pensions acquired on the basis of arise to the free movement for workers.' 40 These general remarks relate not only to

aggregation as to those acquired on the awarded on the basis of national law alone, basis of national law alone. It was to pro- there is no basis to limit the effects of the spective Community-coordinated entitle- decision to the latter type of pension. ments, related to Community-coordinated pensions as much as to purely national ones, that the Court referred. What is important is the fact that, irrespective of whether a person receives a German pension on the basis of wholly German contributions or on the basis of aggregation, he would, if also in receipt of a pension under the law of another Member State, be entitled to a Kindergeld children's allowance if he resided in Germany, on the basis of Article 77(2)(b)(i) of the Regulation. He would, therefore, in the Court's view, be deterred from transferring residence, even before the realization of the condition prece- dent under that Article (grant of a pension), by the prospect of losing such future benefits guaranteed by Community law. The same was true of the other, factual condition pre- cedent, the birth of children. Similarly, when Advocate General Van Gerven referred to situations where the requirements for a pen- 39. In the light of this analysis, it is clear sion entitlement have been fulfilled as ones that the four applicant pensioners in the where 'the right to a pension and with it the present case fall within the scope of the rul- right to child allowances is acquired condi- ing and the reasoning of the Court in Atha- tionally', 44 the contingency of the child nasopoulos. The interpretation contended for allowance on the ultimate grant of the by Germany, which seeks to restrict the pension arises as a matter of Community application of the ruling in that case to per- law, irrespective of how national rules link sons in receipt of a pension pursuant to Ger- the two benefits and any periods of contri- man law alone, effectively treats the decision bution or other requirements. Thus, his, as having been based on the first principle and the Court's, prescription that a merely identified from the case-law, that of preserv- prospective entitlement to such children's ing the effect of purely national entitlements. allowances should be preserved, by way of However, there was no purely German supplement to allowances awarded after entitlement to child benefit in Athanasopou- moving to another Member State, relates to los, because of the residence requirement in an entitlement directly countenanced by German law. Furthermore, the approach Article 77(2)(b)(i) of the Regulation. As that adopted by the German authorities in provision clearly relates to multiple pensions respect of the applicants in the present case acquired by aggregation as well as to those makes entitlement to a benefit supplement, pursuant to the Court's interpretation of Article 77(2)(b) of the Regulation in the light of Article 51 of the Treaty, subject to a con- dition — receipt of a purely German pension — which is not imposed either by the terms 44 — Paragraph 15 of his Opinion, emphasis added. of that provision, which clearly relates to

40. It is worth noting that Decision N o 150 of the Administrative Commission, adopted in the light of Athanasopoulos, appears to be 42. The decision of the Court in Durighello based on a similar interpretation of the judg- does not add anything to the present analy- ment to that just outlined. It makes no dis- sis. Durighello could, perhaps, be relied upon tinction between pensions granted on the to argue that the principle of preserving the basis of aggregation and those based on the effects of purely national rights, and, by cor- law of one Member State alone. Nor does it ollary, of national rights contingent on other seek to restrict the application of the judg- purely national entitlements, should be ment to cases where family benefits are con- extended to permit the export, by way of tingent, as a matter of national law, on supplement, of national rights which are receipt of a national pension. contingent on the grant of another national benefit, such as a pension, irrespective of whether the latter is acquired on the basis of national law alone or only by virtue of aggregation. That is a significant question, but is quite distinct from that posed in either Athanasopoulos or the present case, as Ger- man Kindergeld allowances are not depen- dent on receipt of a pension of any descrip- tion. Thus, there is no need for me to address that question here, or to express a

41. Even if it were the case that German 45 — The grant of an orphan's pension is subject, in German law, family allowances were dependent, as a mat- to the deceased parent having made at least 60 months' con- ter of German law, on the grant of a pension tributions. As has been pointed out above, the present case, in so far as it relates to orphans, is concerned only with or on the making of a specified number of orphans' allowances under the Kindergeld regime.

43. I now turn to the position of orphans, addressed by the second question referred by 44. It is inherent in the reasoning which the national court. This was not raised underlies the supplement principle, as directly by the second question in Athanaso- applied in Athanasopoulos and as it applies in poulos, but the reasoning of the Court in that the instant case, that the full amount of the case applies to orphans' benefits as well, and highest dependent child or orphan's benefit was understood to do so by the Administra- payable under Articles 77(2) or 78(2) of the tive Commission. This is clearly the case Regulation should be guaranteed to a pen- regarding an orphan whose deceased parent sioner or an orphan, as the case may be. If had already been granted pensions under the the amount of the supplement were reduced, laws of the Member States where he had in accordance, for example, with the ratio worked before his death. The last sentence of between the periods of insurance in the vari- Article 78(2) of the Regulation provides that ous Member States involved, as was sug- the legislation regarding dependent child gested by the national court, the disincentive benefits which applied before the pensioner's to the exercise of the right of free movement death shall continue to apply. In the case of would be, to that extent, unacceptably main- orphans of deceased workers who were sub- tained. Provided the principle of maintaining ject to the legislation of more than one the highest accrued or conditionally acquired Member State, there would exist the same entitlement is observed, it may be open to disincentive to reside in a Member State the Community legislator to allocate differ- other than that where the highest benefit is ently the costs of implementing this prin- payable as was identified in the case of ciple, but the Regulation itself does not pro- workers themselves in Athanasopoulos if the vide any guidance on this matter. As the level of orphans' allowances were deter- Commission observed, the calculation of mined solely by reference to the law of their benefit levels on a pro rata basis under place of residence. This would present an Article 79(1) of the Regulation arises only impediment to the exercise of rights of free where either entitlement itself or the amount movement by a surviving parent or guardian, payable in the responsible Member State is as the Commission pointed out in its obser- contingent on the length of periods of insur- vations. Thus, a supplement should be paid ance, work or residence, which is not the equal to the difference between the amount case in Germany. Even if it were the case, of benefit payable in the Member State of Article 79(1) would require the German residence of the orphan of a deceased worker authorities to calculate whether and in what and the higher amount to which he would be amount an allowance would be payable by entitled if he resided in another Member them to a pensioner or orphan resident in State. Germany by aggregating periods spent in all

the Member States. That amount would then remoteness. There must be a considerable be the basis for calculating any necessary difference in degree between the disincentive supplement to the benefits paid to the pen- felt, in reality, by a pensioner who fears los- sioner or orphan in question under the law ing part of a dependent child allowance of a different Member State of residence. which he currently enjoys and which is part of his household budget and that felt, if at all, by a worker in his twenties who has yet to have children and for whom retirement is a distant prospect. However, the calculations of a worker who is approaching retirement would probably be closer to those of the pensioner than to those of the young worker in the examples just given, while early inval- idity or death can be ruled out by no one. It is impossible to provide separately, by legis- lation or judicial interpretation, for all the combinations of circumstances in which a particular disincentive will be felt in differing degrees. However, while the objective approach to the identification of disincen- tives does not, in general, provide for the balancing of the real value of remedying a remote impediment to free movement against the charge imposed by the remedy on Member State social security systems which 45. I appreciate the concern of the German may have only a slight connection with the social security authorities about the effect of benefiting worker, the operation of the the decision in Athanasopoulos on the supplement principle may have this effect, at entitlements of workers who have spent only least in part. The charge on the German very short periods in Germany. The Com- social security system of providing Kin- munity legislator and the Court have striven, dergeld allowances for the dependent chil- through the enactment and interpretation of dren of pensioners resident in Germany is the Regulation, to ensure that workers do alleviated, up to the amount of benefit pay- not face disincentives to the exercise of the able in the Member State of destination, right of freedom of movement arising from where the pensioner changes residence. The the operation of national social security sys- possibility of maintaining existing levels of tems. It is necessary, for such purposes, to social security entidement may play a part in adopt objective criteria regarding the exist- the pensioner's decision in this regard. Fur- thermore, this alleviation takes place even ence of such disincentives, irrespective of where the pensioner has spent the greater whether individual workers are sufficiendy part of his working life in Germany and only well-informed about disparities of entitle- a short period in the other Member State, ment for this to affect their own decisions. where he may be entitled to a pension only As a result, the identification of disincentives on the basis of aggregation. Similarly, the has a tendency to be formalistic. This has the future cost of such allowances is reduced effect that little account is taken of the slight where the worker changes residence before weight a particular perceived disincentive is the grant of a pension or the birth of his likely to have in the calculations of a worker, children. in the light, for example, of its temporal

(3) The amount of the benefit supplement may not be reduced according to the ratio between the periods of insurance in the Member State responsible for paying the supplement and the periods of insurance of the same kind in the Member State of residence or another Member State.

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