C-132/96

STINCO A N D PANFILO v INPS

OPINION OF ADVOCATE GENERAL JACOBS delivered on 25 September 1997

1. This reference from the Pretura (Magis- on the approach taken by the legislation of trate's Court), Rome, concerns the interpreta- the Member State awarding the benefit. tion of Article 46(2)(a) of Regulation N o 1408/71 ('the Regulation'). 1

3. If under that legislation a person's entitle- The Community legislation ment arises without its being necessary to have recourse to periods completed in other Member States (for example, because the periods of insurance or residence completed in the awarding Member State confer entitle- ment per se), the method of calculation set out in Article 46(1) applies. 3

2. Article 46 2 of Regulation N o 1408/71 lays down the conditions for the award of old-age and death benefits where a worker has been subject to the legislation of two or more Member States. The system provided for by 4. If on the other hand under a Member Article 46 is intended to remedy situations in State's legislation a person's entitlement does which the laws of one Member State deny not arise unless account is taken of periods of benefits in whole or in part to such a worker insurance completed in another Member State, because insufficient periods of insurance or Article 46(2) applies. That article provides as residence have been completed. The way in follows: which the system applies — and hence the calculation of the benefit payable — depends

claim provided all periods of insurance described (i. e. the calculation of the theo- and/or of residence, which have been retical amount under Article 46(2)(a)) is completed under the legislations of the known as aggregation and the second step Member States to which the employed (i. e. the calculation of the pro rata benefit person or self-employed person was sub- under Article 46(2)(b)) as apportionment. ject, have been completed in the State in question under the legislation which it administers on the date of the award of the benefit. If, under this legislation, the amount of the benefit is independent of the duration of the periods completed, the amount shall be regarded as being the theoretical amount referred to in this para- 6. Article 50 of Regulation N o 1408/71, graph; although not mentioned in the question referred, is invoked by the defendant Istituto Nazionale della Previdenza Sociale (the Italian national social security institute, 'INPS'), the Swedish Government and the Commission. That provision is intended to cover cases (b) the competent institution shall subse- where the periods of employment of the quently determine the actual amount of worker under the legislation of the States to the benefit on the basis of the theoretical which he was subject were relatively short amount referred to in the preceding para- with the result that the total amount of the graph in accordance with the ratio of the benefits payable by those States does not pro- duration of the periods of insurance or of vide a reasonable standard of living. 4 It pro- residence completed before the materiali- vides as follows: sation of the risk under the legislation which it administers to the total duration of the periods of insurance and of resi- dence completed before the materialisa- tion of the risk under the legislations of all the Member States concerned.'

10. The applicants also refer to Article 8 of Law N o 153 of 30 April 1969, Article 6 of Law N o 638 of 11 November 1983 and Arti- cle 7 of Law N o 407 of 29 December 1990. 7. Italian law provides for a minimum level According to the applicants, the 1983 law is of pension. Where the total pension payable concerned solely to avoid any Overlap' (including any pension payable by another between the pension supplement and other Member State) falls below that level, a supple- income of the recipient. In its original form, ment is payable to bridge the difference. Article 6 of that law excluded from the income so taken into account revenue obtained abroad. However, again according to the applicants, the Law was amended by Law N o 407 of 29 December 1990 so as to include for that purpose income accruing abroad to pensioners there resident. As for Article 8 of the 1969 8. The order for reference provides virtually law, the applicants state that it expressly pro- no information about the minimum pension vides for supplementing, to the level of the scheme. It asserts that it is provided for pen- minimum pension, pensions 'entitlement to sioners credited with more than 780 weekly which is acquired by virtue of aggregating contributions. It refers, without detail, to periods of insurance and contributions in Article 8 of Law N o 153 of 30 April 1969 and accordance with international agreements or Article 7 of Law N o 407 of 29 December 1990. conventions in the field of social security'. Article 8 is quoted as amended by Article 7(1) of Law N o 407 of 29 December 1990, although the applicants do not there refer to the latter law.

14. The order for reference states that the 12. It appears, from the somewhat skeletal pension actually received by the applicants order for reference that Mr Stinco and Mr Pan- was not supplemented to meet the statutory filo each applied to the INPS for an old-age minimum because the total pension received pension. Each applicant was also entitled as in each case, i. e. after taking into consider- from the same date to an old-age pension ation the pension received from France or the from another Member State (France and the United Kingdom, was above the level trig- United Kingdom respectively). It was stated gering payment of the supplement under at the hearing that Mr Stinco had worked for Italian law. However, even if the total pension 392 weeks in Italy and 1 105 weeks in France. were below that level it must be doubted The Court has been given no details of Mr Pan- whether the applicants would be entitled to filo's 'working history. require Italy to supplement their total pen- sions to that level since it was stated at the hearing that they were resident in France or the United Kingdom and, as will be seen below, it appears that the Italian pension supplement is a non-exportable benefit.

13. The INPS awarded pro rata pensions in accordance with Article 46(2) calculated by reference to the notional pensions which the applicants would have received if they had worked in Italy throughout their working life. It appears that the amount of the notional pension taken for the calculation was such 15. The applicants each claimed that the that, had the applicants in fact been entitled notional pension used as a starting point for to domestic pensions of that amount, the the calculation of their pro rata pensions pension would have been topped up by the should have included the supplement and

17. Written observations were submitted by the applicants, the INPS, the Swedish Gov- ernment and the Commission. The applicants, the INPS, the Spanish and Austrian Govern- ments and the Commission were represented at the hearing. 19. Even if the supplement were conceptu- ally separable from the basic pension payable, that in itself would not in my view be suf- ficient to take it outside the scope of Arti- cle 46. Supplementary allowances are specifi- Is the supplement within Article 46? cally mentioned by the Regulation as being within the meaning of 'benefits and pen- sions'. 6 The Court has on several occasions held that supplementary allowances similar in structure to the Italian pension supplement fall within the scope of Regulation N o 1408/71, notwithstanding that such allow- 18. The question whether the supplement is ances frequendy have characteristics of both within the scheme of Article 46 is not raised social security (obviously and expressly within as such in any of the observations. However, the scope of Regulation N o 1408/71 by Arti- the INPS contends that the supplement is not part of the pension, presumably with a view to concluding that it is therefore not within 5 — Sez. Lavoro, judgment of 9 January 1996, No 95 INPS v Article 46. The Pretura and the applicants Alberici [1996] Il Foro Italiano I-874. assert that it is not an independent benefit but 6 — See Artide 1(t).

I - 5231

OPINION OF MR JACOBS — CASE C-132/96

I - 5232

STINCO A N D PANFILO v INPS

15 — Second and third recitals in the preamble. See for examples the cases cited in notes 7 to 10. For further cases see the 17 — OJ 1985 C 240, p. 6; COM(85) 396 final. Opinion of Advocate General Da Cruz Vilaça in Giletti, 18 — Case C-236/88 Commission v France [1990] ECK. I-3163. cited in note 10, paragraphs 21 to 31, and the summary of For the history of Regulation N o 1247/92, see the Repon the written observations of the United Kingdom in the for the Hearing in Commission v France, p. 3166; the sum- Report for the Hearing in Piscitello, cited in note 9, pp. 1432 mary of the written observations of the Commission in Pis- to 1434. citello, cited in note 9, p. 1434; and the explanatory memo- 16 — Cited in note 8. randum to the Commission's proposal, cited in note 17.

I - 5233

O P I N I O N OF MR JACOBS — CASE C-132/96

25. First, it extends the definition of 'member (b) solely as specific protection for the dis- of the family' in Article 1(f) to bring Regu- abled.' lation N o 1408/71 into line with the Court's case-law on the entitlement of children to certain hybrid benefits. 19

Article 4(1)(c) refers to old-age benefits.

26. Secondly, it inserts Article 4(2a) 20 in Regulation N o 1408/71, to make it clear that certain hybrid benefits are within the scope of the Regulation: 27. Thirdly, it inserts Article 10a 21 and Annex IIa 22 in Regulation N o 1408/71, to make it clear that Member States may specify that certain of the benefits described in Article 4(2a) are payable exclusively to resi- dents. Article 10a(1) provides:

Annex IIa includes under the heading 'H. ITALY':

'This Regulation shall not apply to the provi- sions in the legislation of a Member State concerning special non-contributory benefits, referred to in Annex II, Section III, the validity '(e) Benefits supplementing the minimum pen- of which is confined to part of its territory.' sion (Laws N o 218 of 4 April 1952, N o 638 of 11 November 1983 and N o 407 of 29 December 1990)'.

Other benefits listed in Annex IIa are the Belgian guaranteed income benefit at issue in 29. It is thus clear that Regulation N o 1247/92 Frilli and Levatino, the French supplemen- was designed, first, expressly to include spe- tary allowance from the National Solidarity cial non-contributory benefits amongst the Fund at issue in Biason and Giletti and the benefits covered by Regulation N o 1408/71 Italian social pension at issue in Piscitello. and hence ensure that migrant workers n o longer have to bring proceedings each time the status of a hybrid benefit is disputed and, secondly, to restrict the grant of those ben- efits acquired under the legislation of one Member State exclusively to persons residing within the territory of that State. 27 28. Finally, Regulation N o 1247/92 inserts Article 4(2b), 24 to make it clear that certain other non-contributory benefits are outside 25 — Artide 5 of Regulation N o 1408/71 as replaced by Regu- lation N o 1247/92: see Article 1(3) of the latter. 26 — Inserted by Article 1(5) of Regulation N o 1247/92. 27 — See the Court's description of the Commission's Proposal in Commission v France, cited in note 18, paragraph 6 of the 24 — Inserted by Article 1(2) of Regulation N o 1247/92. judgment, in very similar terms.

30. The applicants argue, in my view cor- hence that, since they are not resident in Italy, rectly, that Regulation N o 1247/92 did not the applicants would not be entitled to claim modify the calculations imposed by Article 46. the supplement to raise their total pensions to the minimum amount specified by the Italian legislation. That issue does not, however, arise in this case: it is plain that the applicants are not seeking payment of the benefit as a supple- ment to top up their pensions but are simply claiming that it should be taken into account 31. The INPS invokes Regulation in determining the theoretical amount of N o 1247/92, although its arguments are some- the Italian pension for the purposes of what unclear. It appears to conclude that, Article 46(2)(a). since the supplement is, by virtue of Regu- lation N o 1247/92, not exportable, it cannot be considered in the determination of the theoretical amount of the benefit for the pur- poses of Article 46(2)(a). That the INPS con- siders that Regulation N o 1247/92 has that effect is also borne out by the statement made on behalf of the applicants at the hearing that before the entry into force of that regulation the INPS had included the supplement in the theoretical amount and had changed its prac- tice only after Regulation 1247/92 came into force. (It may also be inferred from the obser- vations of the Italian Government in Valen- 33. The distinction between the grant of ben- tim 28 that that Government was previously efits listed in Annex IIa, restricted to resi- of the view that a supplement such as the dents, and the receipt by a non-resident of a pension supplement at issue in this case fell pro rata benefit calculated by reference to a within the scope of Article 46.) theoretical amount which includes the ben- efit, may seem slight, even specious. The dis- tinction is however in my view correctly drawn. An example may make its operation clearer. Suppose that a worker with short periods of contributions in Italy and France retired. His pension entitlement was calcu- 32. The argument advanced by the INPS lated pursuant to Article 46, the Italian pen- however confuses payment of the supplement sion supplement being taken into account for with the distinct — and germane — question the purposes of the theoretical amount. H e whether it should be taken into account in would receive pro rata benefits reflecting the the determination of the theoretical amount. periods worked in the two Member States It is true that Regulation N o 1247/92 makes concerned. If the total of those benefits actu- it clear that the supplement is to be granted ally received was less than the minimum pen- as such exclusively to residents in Italy, and sion laid down by Italian legislation, the worker could, provided that he was resident in Italy, in addition claim the Italian supple- ment to increase the total to the minimum. If 28 — Case 171/82 Valentini v ASSEDIC [1983] ECR 2157, at p. however he chose to move to another Member 2165.

35. It is to my mind clear on a number of grounds that the effect of Article 10a is not to 39. It may also be noted that Advocate Gen- exclude from the scope of Regulation eral Tesauro in Krid 29 gave short shrift to the N o 1408/71 as a whole the benefits listed in argument apparently advanced by the United Annex IIa. As a general point, it must be Kingdom to the effect that the amendments borne in mind that Article 10a, as a deroga- made by Regulation N o 1247/92 'made it tion from legislation intended to improve the even clearer that special non-contributory situation of migrant workers, calls for a strict benefits fall outside the scope of social secu- interpretation. rity'. 30 He stated his view that it was not 'possible to entertain any doubts with regard to the fact that a national benefit such as that at issue in the main proceedings [the French Fonds National de Solidarité supplement] ... falls within the field of social security' as defined by the Regulation. 31 The Court

36. First, it is clear from Article 4(2a), referred to in Article 10a, that the Regulation applies 29 — Case C-103/94 Krid v CNAVTS [1995] E C » I-719. in principle to benefits such as the Italian 30 — See paragraphs 9 to 11 of trie Opinion. pension supplement. 31 — Paragraph 11.

I - 5237

OPINION OF MR JACOBS — CASE C-132/96

43. Thirdly, the history of Article 10a, recounted above, shows that the intention was to resolve the difficulties perceived to flow from cases such as Biason 33 and Piscitello, 34 42. Secondly, there is nothing in the wording where the Court ruled that non-contributory of Article 10a to suggest that it has the effect cash benefits continued to be payable even contended for by the INPS and the Austrian though the recipient transferred his residence Government: the provision simply provides from the Member State of payment to another for the benefits to which it applies to be paid Member State, rather than issues such as that exclusively in the State of residence. The Aus- raised in Levatine, which concerned the deter- trian Government submitted at the hearing mination and adjustment of old-age benefits that the reference to Title III in the opening

33 — Cited in note 8. 32 — Paragraph 36 of the judgment. 34 — Cited in note 9.

I - 5238

STINCO AND PANFILO v INPS

47. The INPS submits that, where the amount of the minimum benefit is, as here, indepen- dent of periods of insurance, that benefit must not be taken into account in calculating the theoretical pension but is relevant only for the purposes of Article 50. That argument is in my view untenable in the light of the wording of Article 46(2)(a), the final sentence of which specifically provides that 'if the amount of the benefit is independent of the duration of the periods completed, the amount shall be regarded as being the theoretical amount'. That provision clearly envisages that the amount of a benefit which is independent 45. To conclude this section, therefore, I con- of the duration of the periods completed is sider that it was established in Levatine that not thereby excluded from the theoretical a benefit such as the Italian pension supple- amount, but on the contrary is the theoretical ment is subject to Article 46 and that that proposition has not been altered by the amend- ments to Regulation N o 1408/71 made by Regulation N o 1247/92. 35 — Sec paragraph 47 below.

I - 5239

O P I N I O N OF MR JACOBS — CASE C-132/96

51. Should it not be thought clear from the wording of Article 46(2)(a) that the theo- 36 — Cited in note 111 see paragraph 26 of the judgment. 37 — Cited in note 2. retical amount of the pension should include 38 — The previous version read: 'If, under that legislation, the the supplement, there is a further argument amount of the benefit does not depend on the length of the to that effect drawn from decisions of the periods completed then that amount shall be taken as the theoretical amount referred to in this subparagraph': see the Court. There is some case-law on what is consolidated version of Regulation N o 1408/71 contained in Annex I to Council Regulation (EEC) N o 2001/83 of 2 June meant by 'the theoretical amount of the ben- 1983, OJ 1983 L 230, p. 6. efit', although no direct authority on the spe- 39 — Paragraphs 23 to 27 of the judgment; see also paragraphs 13 and 14 of my Opinion. cific question raised in this case.

I - 5240

STINCO A N D PANFILO v INPS

'with regard to the question of the taking into 53. In rejecting that argument, the Court account of notional periods in calculating the made the following points about the calcula- theoretical amount of the benefit, it is apparent tion of the theoretical amount: from the wording of Article 46(2)(a) that the competent institution is to apply its own leg- islation in its entirety and therefore, if the latter provides that the benefits must be cal- culated not only by reference to actual periods or periods treated as such, but also to a 'As regards the theoretical amount, the express number of additional notional years, that addi- effect of Article 46(2)(a) is that it must be tional period must also be taken into consid-

40 — Case 793/79 Menzies v Buntdesversicberungsanstalt für Ang- 41 — Paragraph 10 of the judgment. estellte [1980] ECR 2085. 42 — Case C-5/91 [1992] ECR I-897.

I - 5241

OPINION OF MR JACOBS — CASE C-132/96

eration in calculating the theoretical amount invalidity benefit under Article 46(2) on the of the benefit'. 43 basis of the wage thus reduced. That reduc- tion was challenged.

56. In Besem, 44 the Court laid down a more general rule. That case concerned the calcula- tion of Netherlands invalidity benefit. Under It is not compatible with those rules for a the relevant national legislation, the amount Member State to adopt for the purpose of of the benefit was not dependent on the length determining the amount of benefit in such of the completed periods of insurance but circumstances provisions designed to alter the was based on the degree of incapacity for way in which the theoretical amount is cal- work and on the amount which the applicant culated so as to make that amount less than could have earned if he had not been unfit for that which would result from the general work. Where, however, entidement to the provisions in force under the national legisla- benefit arose solely as a result of the Com- tion.' 45 munity regulation, that hypothetical wage was to be reduced in proportion to uninsured periods. Mr Besem had been uninsured for five years in an otherwise insured period of 44 years before being declared unfit for work. The Netherlands authority calculated his 58. It may be concluded from the principles laid down by the Court in those cases that

43 — Paragraph 45 of the judgment. 44 — Case 274/81 Besem v Nieuwe Algemene Bedrijfsvereniging [1982] ECR 2995. 45 — Paragraphs 12 and 13 of the judgment

I - 5242

STINCO A N D PANFILO v INPS

the calculation referred to in Article 46(2)(a) ensure the uniform judicial interpretation of is to be based on the total notional pension the rules of Community law. 49 Accordingly, which would be due to the applicant if he had the notes referred to by the INPS cannot be worked throughout his working life in the regarded as binding. Member State in question. It would be incon- sistent with those principles that a pension supplement should not be included in that calculation.

46 — Regulation N o 3 of the Council of 25 September 1958 con- 49 — Case 19/67 Socialt Verzekeringsbank v Van der Vecht [1967] cerning social security for migrant workers, JO 1958, p. 561. ECR 345, at p. 355. 47 — Article 81(a). 50 — Cited in note 4. 48 — Article 43. 51 — Case 22/81 [1981] ECR 3357.

I - 5243

OPINION OF MR JACOBS — CASE C-132/96

it is seekingto derive from those decisions. In tion to Article 40, which became Article 50 of Torri, the C o u r t ruled that Article 50 could Regulation N o 1408/71: not apply where a Member State had not spe- cifically legislated for a minimum pension. In Browning, that proposition was further refined: the Court ruled that what was meant in Article 50 was a minimum resulting from a specific guarantee laid down under national legislation and not the minimum benefits which may result from the normal operation of pension rules based on insurance periods and contributions. It may be that the INPS is seeking to rely on Torri as authority for its 'Lorsque la carrière du travailleur a été assez contention that the theoretical amount of the courte et que le droit aux prestations benefit is not the same as the minimum pen- d'invalidité, de vieillesse ou de survie, n'a pu sion: in that case, the applicant had unsuc- s'ouvrir, au titre des législations des États cessfully argued that, in default of a statutory auxquelles il a été soumis, qu'en tenant compte minimum pension in a given Member State, de toutes ses périodes d'assurance, il arrive Article 50 required that a minimum be pay- fréquemment que le montant total des presta- able equal to the theoretical amount calcu- tions dues par ces États n'atteigne pas le lated in accordance with Article 46(2)(a). niveau du minimum prévu par la législation However, it is clearly fallacious to conclude d'un ou de plusieurs d'entre eux, bien que le from the premiss that the theoretical amount montant théorique dont il s'agit à l'article 35 cannot, in the absence of any statutory min- [which became Article 46] ait déjà été porté imum, be a minimum pension for the pur- au niveau de ce minimum.' 54 poses of Article 50 that therefore the theo- retical amount must, for the purposes of Article 46(2)(a), exclude a statutory supple- ment designed to bring a pension up to such a minimum.

64. I accordingly consider that the question referred by the Pretura, Rome, should be answered as follows:

Where (i) the legislation of a Member State confers entitlement to a supplement to increase to a specified minimum the amount of an old-age pension within the meaning of Chapter 3 of Title III of Council Regulation (EEC) N o 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 Com- munity and (ii) the amount of the pension to which a person could have laid claim if he had completed in that Member State all periods of insurance and/or residence under the legislation of the Member States to which he was subject would be less than the specified minimum so that the person would be entitled to that supple- ment, the theoretical amount referred to in Article 46(2)(a) of the Regulation is the amount of the pension as supplemented to that specified minimum notwithstanding the fact that the supplement is listed in Annex IIa to the Regulation.

55 — At p. 2309.

I - 5245