C-160/96

IV — Facts I-851

V — Question referred for a preliminary ruling I - 852

VI — Subject-matter of the order for reference I - 852

VII — Community legal framework I - 853

VIII — Substance I-855

A — Characterisation of the insurance in question I - 855

(b) Receipt of benefits as the counterpart to affiliation to an insurance

scheme I - 873

D — Regulation N o 1612/68 I-876

IX — Conclusion I-879

I — Introduction ( G e r m a n y ) the C o u r t is asked t o i n t e r p r e t Articles 6 a n d 48(2) of t h e E C Treaty.

1. By a reference for a p r e l i m i n a r y ruling s u b m i t t e d b y t h e Sozialgericht K a r l s r u h e

4. Reliance on care can be defined, generally, 2 — With regard to the Member States of the European Union, as a person's inability to be independent and the situation could, in 1995, be summarised as follows: his consequent need for assistance from a (a) a first group of countries gives priority to autonomous benefits to persons reliant on care (Austria, Germany, Den- mark, United Kingdom, Ireland, Luxembourg, Portugal, Sweden, Finland); (b) in other countries care benefits are linked to other ben- efits, such as old-age or invalidity pensions (Belgium, Spain); 1 — The information in question is drawn from the written (c) in a third group of countries, benefits for persons reliant observations of the parties in the present case and the pend- on care are granted principally through social welfare ing Case C-40/97 Jordy, from the Minutes of the Sixth Con- schemes, or at local or regional level (France, Greece, Italy); ference of the European Social Security Ministers of the (d) elsewhere, finally, there are certain benefits which are not Council of Europe, which took place in Lisbon from 29 to restricted particularly to persons reliant on care, but partly 31 May 1995 (Strasbourg 1995) —hereinafter 'the Minutes' cover their needs (Netherlands) — sec the Minutes, p. 61. It and from the article by G. Igl, 'Coordination et nouvelles should be noted, however, that since then a number of formes de protection sociale' in the volume commemorating changes have occurred, such as the vote for new legislation in the 25th anniversary of the adoption of Regulation No France laying down a special care benefit for the aged (Law 1408/71 which has not yet been published. The latter two N o 97-60 of 24.1.1997 (JORF of 25 February 1997, p. 1280)), sources were relied upon and adduced by the German Gov- a sign of the rapid development in the area of insurance ernment and the Commission. against reliance on care.

7. In Germany, the provision of home care to persons requiring it was first introduced in 1988 as part of sickness insurance and was included in Book V of the Sozialgesetzbuch (German Social Security Code, hereinafter 'the SGB'). The aim of those benefits was, first, as far as possible, to enable the persons concerned to remain in their own home and As regards award of benefits, there are two to prevent their being placed in institutions. priorities: (a) to ensure people are cared for at home and in familiar surroundings, rather than in an institution, which remains the exception, out of respect for the dignity and independence of the individual and (b) reha- bilitation rather than the mere payment of benefits. Persons reliant on care were, however, able to choose to receive a monthly allowance, 3 — This is the most common case. They are the unsung heroes instead of assistance in the home, of in the case of persons reliant on care, in particular where the D M 400, if they were in a position to obtain latter remain at home. There is increasing awareness, how- ever, that measures should also be taken to protect those per- sons because of the range of risks they run (psychological damage, social isolaûon, and so forth) as a result of being continually occupied in looking after someone reliant on care. 4 — Minutes, p. 52.

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the appropriate care themselves from a third ity for administering care insurance has been party. given to the sickness insurance institutions.

8. Those benefits were replaced and improved, from 1 January 1995, by the Pfle- 11. The insurance is funded by contribu- geversicherungsgesetz (Care Insurance Law), tions from workers and employers. The level which makes up Book XI of the SGB and of contribution amounts, for each of them, governs the situation in this case. to 0.85% of gross pay.

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Instead of benefits in kind, the person reliant or wholly in an establishment (Paragraph on care is entitled to opt for a monthly 41). The competent institution covers the allowance ('the care allowance'), which will cost of nursing care effected partly in an enable him to obtain the appropriate form of establishment up to a certain ceiling (Para- care from a care assistant (Paragraph 37). 7 In graph 41). 8 that case, the competent institution examines persons reliant on care to verify their con- dition every six months (Categories I and II) or every three months (Category III).

The person concerned may, however, opt for a combination of the two types of benefits 14. Lastly, provision is also made for ben- (Paragraph 38). efits for the care assistants such as payment of their insurance contributions in respect of sickness and accidents at work (Paragraph 44) as well as for special courses for the fam- ily of the person reliant on care and for those who provide assistance on a voluntary basis (Paragraph 45). In addition provision is made for the insured to receive the material and technical assis- tance required to improve their condition such as, for example, rental or purchase and installation of special equipment, the perfor- mance of work to adapt the home or the cost of replacing, while they are on holiday, the care assistants who usually look after the insured (Paragraph 40).

18. Mr and Mrs Molenaar initiated proceed- 20. O n the other hand, it held that the other ings in the Socialgericht Karlsruhe, seeking: two claims, in particular the third, raise the question whether Articles 6 and 48(2) of the Treaty permit national legislation to require the payment of insurance contributions in the context of a compulsory insurance scheme against a risk such as that in the main (a) principally, a declaration that, subject to the generally applicable conditions for entitlement being fulfilled, they were entitled to care insurance benefits even if 10 — This clearly means that, since the insurance risk has not materialised, there is no question of the grant of a specific they were resident abroad; benefit or refund of specific costs.

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proceedings, when the benefits in question Treaty lays down no specific prohibition of are not payable because the person entitled is discrimination. resident in another Member State. Accord- ingly, the national court submitted the fol- lowing question to the Court for a prelimi- nary ruling. In the matter of freedom of movement for workers the principle of discrimination has been given effect and specific expression by Articles 48 to 51 of the Treaty and by acts of V — Question referred for a preliminary the Community institutions adopted on the ruling basis of those articles, and in particular by Regulation N o 1408/71 and Regulation N o 1612/68.

'Are Articles 6 and 48(2) of the E C Treaty to be interpreted as restricting the right of a Consequendy, if a case such as that in point Member State to set up a social security sys- in the main proceedings falls within the tem covering the risk of need of care as part scope of those articles of the Treaty and of of statutory compulsory insurance arrange- the Community regulations adopted on the ments under which persons residing in basis of them, it is unnecessary to give a rul- another Member State are liable to pay com- ing on the interpretation of Article 6 of the pulsory contributions, even though their Treaty. 11 entitlement to benefits is simultaneously excluded or suspended because of their place of residence?'

VII — Community legal framework

23. In my view those questions are closely connected and should be examined specifi- 25. In view of the foregoing, the Commu- cally. The main question is that of the legal nity provisions which are relevant to the classification of the benefits in question from present situation are as follows: the point of view of Community law. Given that those benefits are obviously social in nature, there are two possible interpreta- tions: either they constitute social security benefits within the meaning of Article 51 of the Treaty and Regulation N o 1408/71, in which case the further question arises as to which particular category of Article 4(1) of (i) The E C Treaty that regulation they fall within; alternatively they constitute a social advantage, within the meaning of Article 7 of Regulation N o 1612/68, and are part of the social assistance system. The reply to that question will deter- mine the reply to the questions whether the benefits in question can be exported, Article 6, first paragraph: 'Within the scope whether the insurance cover and the pay- of application of this Treaty, and without ment of insurance contributions are compul- prejudice to any special provisions contained sory, and whether the contributions paid can therein, any discrimination on grounds of be reimbursed. Accordingly, the questions nationality shall be prohibited.' which arise must be studied first in the light of Articles 48 and 51 of the Treaty and, more specifically, of Regulations Nos 1408/71 and 12 — See inter alia Case C-237/94 O'Flynn [1996] ECR I-2617, 1612/68. paragraphs 24 and 25, and Case C-131/95 Huijbrechts [1997] ECR I-1409, paragraph 11.

(b) invalidity benefits, including those intended for the maintenance or Article 10: ' 1 . Save as otherwise provided in improvement of earning capacity; this Regulation, invalidity, old-age or survi- vors' cash benefits, pensions for accidents at work or occupational diseases and death grants acquired under the legislation of one or more Member States shall not be subject (c) old-age benefits; to any reduction, modification, suspension, withdrawal or confiscation by reason of the fact that the recipient resides in the territory of a Member State other than that in which the institution responsible for payment is situated. ...'

13 — Regulation (EEC) N o 1408/71 of the Council on the appli- cation of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (OJ, English Special Edi- Article 10a: 'Notwithstanding the provisions tion 1971 (II), p. 416), as amended and updated by Council of Article 10 and Title III, persons to whom Regulation (EC) N o 118/97 of 2 December 1996 (OJ 1997 L 28, p. 1). this Regulation applies shall be granted

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the special non-contributory cash benefits (iii) Regulation N o 1612/68 14 referred to in Article 4(2a) exclusively in the territory of the Member State in which they reside, in accordance with the legislation of that State, provided that such benefits are listed in Annex IIa. Such benefits shall be granted by and at the expense of the institu- Article 7: ' 1 . A worker who is a national of a tion of the place of residence.' Member State may not, in the territory of another Member State, be treated differendy from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and should he become unemployed, reinstatement or re-employment;

O P I N I O N OF MR COSMAS — CASE C-160/96

plaintiffs have not in fact reached a state lation, examination of the other is unneces- where they are reliant on care in the sense of sary, 16 whereas others take the opposite the German legislation and, accordingly, they approach. 17 have never been awarded the specific benefit in respect of reliance on care or had it with- drawn from them, a situation regarding which the court of reference might entertain doubts. 15 That would certainly have simpli- fied matters because the insurance in ques- tion covers a number of benefits which have their own peculiarities and it is rather odd to lump them all together. Nevertheless, given The substantive problem consists in whether that the observations of the parties concen- one regulation alone may be applied to one trate mainly on benefits in kind and on the and the same benefit (hence precluding care allowance, I shall deal with them below, application of the other regulation) or without however overlooking the overall whether it is possible to apply both regula- framework. tions. The question is clearly of significance, since the provisions of the two texts are not identical. In any event, the case-law of the Court has not been consistent on that ques- tion. 18

27. In connection with that characterisation, a methodological problem now arises •which conceals a substantive problem.

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MOLENAAR v AOK BADEN-WÜRTTEMBERG

(a) Social security benefit regarded as a social security benefit if it is granted to recipients, on the basis of a legally defined position, without any individual and discretionary assessment of personal needs (which is a characteristic of social assistance) and if it concerns one of the risks expressly 29. The case-law usually concludes that a listed in Article 4(1) of Regulation benefit should be classified as a 'social secu- N o 1408/71. 20 rity benefit' in the context of Regulation N o 1408/71 by attributing special weight inter alia to whether or not it falls within the branches of social security listed in Article 4(1) thereof. The fact that a benefit is a social security benefit emerges clearly on compar- ing them with social assistance benefits, which are expressly excluded from the regu- 32. However, the concept of social security lation, under Article 4(4) thereof, particu- should not be confused with the specific larly in relation to certain mixed or hybrid branches of social security listed exhaus- benefits, which have something of both cat- tively 21 in Article 4(1)(a) to (h) of the regu- egories at the same time. lation. In reality the concept of social secu- rity has a wider, autonomous and Community content 22 which flows from Article 51 of the Treaty, in other words from a rule which has greater authority than Regulation N o 1408/71. It is to that concept, as a generic term, that the Community legis- 30. Thus it has been consistently held that lature must be regarded as referring in the the distinction between the benefits excluded first sentence of Article 4(1) before going on from the scope of Regulation N o 1408/71 to list as types of social security certain and those which fall within its scope is based social security risks in respect of which it essentially on the constituent elements of was chosen to lay down coordinating rules. each particular benefit, in particular its pur- poses and the conditions on which it is granted, and not on whether a benefit is clas- sified as a social security benefit by national legislation. 19

difficult, provided it has been concluded that 'rigidifying' vague legal concepts that are the benefit at issue more closely resembles a fluid and constantly evolving. Those con- social security benefit than a social assistance cepts acquire specific content at the time benefit states that the benefit 'falls, as regards when they are applied by the legislature, and, the persons covered by Regulation N o 3, in the final analysis, by the Court of Justice, within the area of social security within the in the light of the purpose of Article 51, meaning of Article 51 of the Treaty and of which is to ensure freedom of movement for the Community Regulations thereunder' 23 workers, and in view of the legal and social or that it 'falls, in so far as this person is con- conditions prevailing at the time of applica- cerned, within the field of social security tion. That is also the case as far as the defini- within the meaning of Article 51 of the tion of social security is concerned. Accord- Treaty and of the Regulations for carrying ingly, Regulation N o 3 (Journal Officiel this provision into effect' 24 or 'in principle 1958, p. 561) and its successor, Regulation falls within the field of social security N o 1408/71, which, originally at least, were referred to in Article 51 of the E E C Treaty limited to mere coordination of national and is not excluded from the scope of Regu- social security systems, 27leaving aside the lation N o 1408/71 by the provisions of definition of the concept, listed the most Article 4(4) thereof'. 2 5A benefit falls within usual and, perhaps, most important branches this definition if it is of an 'intrinsic social of social security at the time, and left security character', 26 that is to say in view of unregulated special or as yet simply its specific characteristics, which make it a unknown cases of social security risks. 28 social security benefit rather than a benefit of any other sort.

23 — Case 39/74 Costa [1974] ECR 1251, paragraph 11. 27 — It is evident, in my view, that the regulation has changed 24 — Case 24/74 Biosan [1974] ECR 999, paragraph 15, and Case over the years into an instrument for at least partial har- 63/76 Inzirillo [1976] ECR 2057, paragraph 9. It is interest- monisation of the Member States' social security legislation. ing that the judgment in the latter case next considers whether the person concerned falls within the scope rottone 28 — As Advocate General Mancini, as he then was, emphasised, personae of the regulation (paragraph 10). Article 4 of the Regulation lists the nine traditional sectors established by the International Labour Organisation (ILO) 25 — Case 139/82 Piscitello [1983] ECR 1427, paragraph 13. Convention on minimum standards of social security ( N o 26 — Biason judgment, cited in footnote 24, paragraph 12, and 102, 28 June 1952). However, with the exception of a few Joined Cases 379/85, 380/85, 381/85 and 93/86 Gaeta and cases (family benefits, death grants and the like) it does not Others [1987] ECR 955, paragraph 11. See also Case define the various benefits (see the Opinion of 5 July 1983 C-236/88 Commission v France [1990] ECR I-3163, para- in Case 171/82 Valentini v Assedic [1983] ECR 2157, at graph 10, my emphasis. p. 2177).

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thus quite clear that the benefit is a social ity. 31 Recourse to such general rules is, to security benefit within the meaning of some extent, a last resort, which is justified Article 51 of the Treaty and the regulation, where the case in point is not covered by but is not yet 29 included amongst the ben- more specific legal provisions. 32 This is efits (provided for by legislation), referred to however not so in the present case. in Article 4(1) of the regulation, with the result that there is a lacuna in the law.

36. The question which arises in connection with those cases which fall within this lacuna left by Article 51 of the Treaty and the list in Regulation N o 1408/71 is whether, in the absence of any coordination, they can be decided on the basis of the provisions of the Treaty and the general principles of Commu- nity law. I am inclined to believe that they 37. I propose, first, to consider the benefits can. The same principle applies as in the case in issue from the point of view of the plain- of the adoption of rules on compulsory tiffs in the main proceedings and in the light insurance cover and the rules on the rights of Regulation N o 1408/71. and duties of the insured, which, as a rule, are a matter for the Member States. The Court has held that 'it is for the legislature of each Member State to lay down the condi- tions creating the right or the obligation to become affiliated to a social security scheme or to a particular branch under such a scheme provided always that in this connec- 38. The first point to be made is that the tion there is no discrimination between plaintiffs fall within the scope ratione perso- nationals of the host State and nationals of nae of Regulation N o 1408/71 as they are the other Member States'. 30 Similarly, in the insured against sickness under the social field of social security, which is a matter for security system in Germany. 33 Community law where it concerns migrant workers, the Member States are bound to respect the general principles of Community law — such as the principles of equal treat- 31 — In accordance with that principle the Court has consistently held, in cases which raise questions outside a purely ment, non-discrimination and proportional- national framework, that the Member States must respect the fundamental principles of the Treaty even when they are enacting measures in areas which fall within their terms of reference, such as the law of property (Case 182/83 Fearon [1984] ECR 3677, paragraph 7), or intellectual property (Joined Cases C-92/92 and C-326/92 Phil Collins and Oth- 29 — See Case C-25/95 Otte [1996] ECR I-3745, in which the ers [1993] ECR I-5145, paragraph 22), or direct taxation Court found that the German adaptation allowance was (Case C-279/93 Schumacher [1995] ECR I-225, paragraph similar in some respects to pre-retirement benefits, 'which 21), etc. are not yet covered by the Regulation' (paragraph 33). 32 — Romero cited in footnote 11. 30 — Case 110/79 Coonan [1980] ECR 1445, paragraph 12. 33 — Case C-20/96 Snares [1997] ECR I-6057, paragraph 28.

40. Obviously this does not mean that the benefits in issue automatically fall within the scope of Regulation N o 1408/71. As has been held, the list of risks contained in 43. As the Court has held, 'the essential Article 4(1) of the Regulation is exhaustive characteristic of the old-age benefits referred and only national social security legislation to in Article 4(1)(c) ... of Regulation N o covering those risks falls within the material 1408/71 lies in the fact that they are intended scope of the regulation. 35 to safeguard the means of subsistence of per- sons who, when they reach a certain age, leave their employment and are no longer required to hold themselves available for work at the Employment .Office'. 38 In view of the fact that the benefits in issue do not 41. Examination of the question whether the have that purpose, I do not believe that they German legislation in issue falls within one

36 — See Otte, cited in footnote 29, paragraph 23. 34 — See above, point 7. 37 — See Hughes, cited in footnote 16, paragraph 22, and Case 35 — See Hoeckx, cited in footnote 19, paragraph 12, and Case C-356/89 Newton [1991] ECR I-3017, paragraph 22. 122/84 Scrivner[1985] ECR 1027, paragraph 16 et seq. 38 — Valentini, cited in footnote 28, paragraph 14.

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46. The first point to make is that the con- cept of 'sickness benefits' is defined at Com- 40 — Case 22/86 Rmdont [1987] ECR 1339. munity level and must be interpreted uni- 4 1— Cited in footnote 22. It is of particular note that the Ger- man legislation in issue in that case covered various benefits formly. 39 The definition of this concept, similar to the benefits in issue in the present proceedings, such as medical treatment at home or hospital treatment, cash benefits, such as the payment of a subsistence allow- ance, grants on commencing or resuming work, as well as specific benefits such as a grant for the purpose of employ- ing a care assistant in the home or a replacement (see tne 39 — Case 69/79 Jordens- Voam [1980] ECR 75, paragraph 7. opinion of Advocate General Mayras [1972] ECR 1116).

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47. This being the case, and in view of the characteristics of the legislation in issue which I have outlined, 42 and particularly of the fact that care insurance is compulsory and is automatically included in sickness insurance cover, I am inclined to take the view that the legislation in issue treats reli- ance on care as a weakness or reduction of physical capacity, which it regards as equiva- lent to sickness in the wider sense. 43 Its pur- pose is to supplement and extend sickness insurance, either by using existing sickness 48. I would add that, from a practical point of view, reliance on care, in the sense described above, can easily be brought under 42 — See point 7 et seq. and point 39 above. the same umbrella as the other insurable 43 — I cannot resist pointing out that, in Greek, the language risks in Regulation N o 1408/71, of which it which, together with Latin, is the derivation of most of the is a consequence in practice. This facilitates international medical vocabulary, the term 'asthenia' is made up of the negatory prefix 'a', and 'sthenos' meaning the operation of benefits in respect of reli- (strength, power or vigour), and can mean either 'sickness or 'lack of strength, power or vigour'. It is this lack of ance on care as sickness benefits, given that strength which is the defining characteristic of reliance on care. Note that in international medical terminology, the the latter, which comprise various benefits in term 'asthenia' (French: asthénie; English: asthenia; Italian kind and in cash, are more easily combined and Spanish: astenia; German: Asthenic) refers to the pathological diminution of physical faculties. with benefits relating to other insurable risks

49. I must make one final observation to 50. Taking as our premiss that the benefits in conclude my observations on the legal classi- issue are sickness benefits, we need to con- fication of benefits. I said a little earlier that I sider whether they are benefits in kind or felt there was not a very close connection cash benefits. This question only arises in between benefits in respect of reliance on connection with the care allowance since care and old-age and sickness benefits. The there is no doubt as to the answer with absence of a close link means, I think, that regard to the other benefits. The question is the relationship between the risks of old-age important in particular because of its impli- or invalidity and that of reliance on care and cations for the exportability of the care thus between the respective benefits cannot allowance, which will be considered below. be considered to be that of 'principal' and 'subordinate'. It is true that in the judgments in Biason, Giletti and Others, and Commis- sion v France 45 the Court held that the supplementary allowance designed to increase the amount of old-age, survivors' and invalidity pensions came within the social security system of Regulation N o 1408/71, since it was an automatic appendage of benefits already covered by the regulation. However, I do not think that this case-law 51. The German Government, referring to can be applied in this case, at least as regards the judgment in Vaassen-Gòbbels, 46states the benefits in respect of reliance on care in that the care allowance is a substitute for the strict sense, which are benefits in kind, benefits in kind. This is because it is in fact essentially for two reasons. First, in those paid instead of other benefits in respect of cases, the benefits were of the same type reliance on care provided for by the SGB. (pension and supplement to pension, that is The German Government points out further to say, cash benefits), which is not necessar- that, although the insured is not required to ily so in the present case. Second, the supple- furnish documentary evidence of expendi- ment was an 'automatic' appendage of the ture arising from his reliance on care, he is basic pension, whereas, in this case, the pay- none the less subject to periodic checks to ment of benefits in respect of reliance on verify the extent to which the allowance is care is simply a possible consequence of the used to meet needs deriving from his reliance materialisation of other insured risks. on care; if it is not, the allowance may be stopped.

54. In this case we must not overlook the 56. Furthermore, in this case, the possibility fact that the care allowance in issue is paid so open to the insured under the German legis- that the insured himself can arrange for the lation to choose for himself the form of care type of care which suits him, whilst being which suits him, usually by relying on a rela- subject to periodic checks by the competent tive or acquaintance, is of particular signifi- institution. From that point of view, the care cance. That option is also available for seri- allowance is comparable to a benefit in kind, ous cases in category III, but there do not as the German Government argues. appear to be any strict rules or limitations on the insured's right to apply to receive cash benefits rather than benefits in kind. This 47 — Vaassen-Göbbeb, cited above in footnote 46. 48 — Cose C-206/94 Paktu [1996] ECR I-2357, paragraph 20; Case C-325/93 Del Grosso [1995] ECR I-939, paragraph 25; and Vaassen-Göbbels, cited above in footnote 46. 49 — See footnote 7.

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freedom of choice is not in any way an argu- pose, that is to say, they are intended to con- ment for the classification of the allowance firm the incapacity for work (or persistence in issue as a sickness benefit in kind or a sub- thereof) so that the 'worker can receive (or stitute for such a benefit. Indeed, in the case continue to receive) the sickness benefits in of sickness benefits in kind and particularly kind in his place of residence. in serious cases, the insured is, as a general rule, required to follow the treatment pre- scribed by the doctor and cannot choose it freely, still less treat himself in exchange for a flat-rate payment.

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(Article 19(1)(a) of Regulation N o 1408/71). recourse being necessary to Article 48(2) of O n the other hand, the other parties who the Treaty and Article 3(1) of Regulation N o submitted observations are of the view that 1408/71, which lay down the prohibition on the care allowance in issue could be exported discrimination on grounds of nationality. 52 as a cash benefit, either on the basis of Article 19(1) of Regulation N o 1408/71 (plaintiffs and Austrian Government) or Article 7 and Article 48(2) of the Treaty (Swedish Government and Commission).

62. Let us none the less consider whether the same conclusion is called for in the case of sickness benefits in kind.

60. Before I consider the provisions of the Treaty, I propose to look at the question of exportability in the light of the regulation.

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of sickness insurance which is equivalent to insured person who resides in another Mem- that of the State of employment, but that ber State, to which the insured person is not they are also granted if it is objectively pos- entitled but which the competent institution sible for the institution concerned to pay the of the Member State of employment may required benefit, regardless of the specific allow him or her (paragraphs 13 and 14). designation of the social security system of which the benefit forms part.

67. Furthermore, the Court held in Pierik 54 I 5 5:'Within the context of the general objec- 65. In Jordens-Vosters, it was held that the tives of the Treaty Article 22 of the regu- term 'sickness benefits' includes all benefits lation constitutes one of the measures provided in the case of sickness, including intended to permit a worker who is a health care, whatever the type of social legis- national of one of the Member States of the lation or whatever benefits are provided, as Community, without regard to the national long as the legislation in question relates to a institution to which he is affiliated or the branch of social security which concerns place of his residence, to receive benefits in them (paragraph 8). kind provided in any other Member State' (paragraph 14).

68. In addition, in Pierik II, 56 the Court ter 1 of Title III of the regulation. 58 In his confirmed and expounded further the judg- State of residence, a worker must accord- ment in Pierik I and again held, in connec- ingly receive all sickness benefits in kind tion with Article 22(1) of Regulation N o which can be granted under the legislation of 1408/71, that the institution of the Member that State irrespective of the more specific State to which the person concerned goes to designation of the system of social protec- receive the treatment is required to provide it tion of which they are part. In other words, even if, under the legislation which it admin- the competent institution of the State of resi- isters, 'it does not have a duty but only has a dence can only refuse to grant benefits in power to grant it' (paragraphs 13 to 15). kind if the treatment required by the state of health of the insured is entirely unknown and it is wholly impossible for the compe- tent institution to provide it, not only because its legislation does not provide for any separate benefits in the case of reliance on care or does provide for such benefits but under a different branch of social security.

69. Of course, in Pierik I and I I , the Court interpreted Article 22 of Regulation N o 1408/71, which concerns sickness benefits in the event of a stay, that is to say, the tempo- rary residence abroad of a worker (Article 1(i)), whereas 'Article 19 applies to workers 71. It would be illogical and contrary to the who reside in a Member State other than the objectives of the regulation to take the view competent State, that is to say workers who that the regulation requires health protection have their "habitual residence" in that State of a higher standard using all available means (Article 1(h) of the regulation)'. 57 for a 'worker who is temporarily resident in another Member State whereas it settles for health protection of a lower standard using only the means immediately available where that same worker has his habitual residence in that same Member State.

assumes that it is a substitute for sickness they could not be exported when the recipi- benefits in kind, as the German Government ent moved abroad. As the question was argues. None of the practical reasons which raised whether Article 77 was valid inasmuch might make the export of sickness benefits in as it did not include those two allowances, kind more difficult (inability of the compe- the Court held, if I have interpreted its tent institution of the place of residence to decision correctly, that the article is valid as provide equivalent benefits etc.) obtain in it includes all family benefits which are this case. As I have already explained, this is granted on the basis of objective criteria such because, where the insured elects to have the as the number of children and their age. care allowance paid, he makes his own 'Benefits of another kind ... [obviously the arrangements for the necessary care by a salaire unique allowance] as in the case, for relative or trusted acquaintance. As long as example, of ... [the rentrée scolaire allowance] there are such people in his place of resi- intended to cover certain costs incurred at dence, I cannot see how one can deny him the beginning of the school year, are in most the right to assistance from such people in cases closely linked with the social environ- his place of residence. ment and therefore with the place where the persons concerned reside' (paragraph 16).

(a) Affiliation to an insurance scheme

76. I have already answered, at point 57, the argument of the German Government that it is difficult to monitor the benefit abroad. I will therefore confine myself to pointing out that, according to consistent case-law, practi- 77. By the third and fourth claim which the cal difficulties which arise in the application plaintiffs made in the national court, they of the regulations in force must not prejudice seek, in the alternative, (that is to say, in the the rights which individuals derive from the event that the court should rule that they principles of the social legislation of the have no right to benefits because they do not Community and that such practical prob- reside in Germany), exemption from the lems may always be referred to the Admin- obligation to be affiliated to an insurance istrative Commission set up by Article 81(d) scheme and the reimbursement of the contri- of the regulation. 62 butions paid.

that interpretation, from which it follows, in Treaty which do not allow social security essence, that the plaintiffs' main claims must measures to be adopted which directly or be allowed, there is no need to consider the indirecdy discriminate against migrant work- questions arising out of the plaintiffs' alter- ers. Thus, it is for the Member States to lay native claims. I will therefore confine myself down the conditions creating the right or the to a discussion of these questions in sum- obligation to become affiliated to a social mary form. security scheme or to a particular branch under such a scheme provided always that in this connection there is no discrimination between nationals of the host State and nationals of the other Member States. 66The objective of Article 51 of the Treaty would not be attained if the Member States could lay down conditions for the acquisition or 80. The Court has consistently held that, as retention of the right to benefits in such a Community law now stands, Member States way that they can be fulfilled only by retain their powers to organise their social nationals of the Member State concerned, or security systems. 63 The requirements and conditions under which that right is lost or conditions of membership of a statutory suspended and which are more apt to occur social security scheme such as that in issue in the case of nationals of other Member include both compulsory membership of a States than in the case of nationals of the specific branch of social security and com- competent Member State. 67 pulsory payment of contributions to finance that branch. Such systems have a social objective and are based on the principle of solidarity, which requires compulsory insur- ance under such systems and compulsory payment of contributions in order to ensure financial equilibrium and the continuing existence of such systems. 64

sickness insurance cover, that is to say, that the options open to him under national leg- cover is based on objective criteria and is not islation. 70 dependent on their place of residence. In the present case, German law 68 thus rightly requires the plaintiffs to have care insurance cover and to pay the insurance contributions even though they live in another Member 84. Some provisions of Regulation N o State and the German Government rightly 1408/71 deal with questions arising in con- invokes the principle of solidarity on that nection with the reimbursement of contribu- point. tions. For example, Article 1(t) provides that 'benefits' includes reimbursement of contri- butions; Article 10(2) provides that, where, under the legislation of a Member State, reimbursement of contributions is condi- tional upon the person concerned having ceased to be subject to compulsory insur- ance, this condition is not to be considered satisfied as long as the person concerned is subject to compulsory insurance as a worker under the legislation of another Member State. However, these provisions are essen- tially directed to the right to reimbursement 83. Furthermore, it has been held, in this of contributions as provided for in the legis- connection, that Regulation N o 3 (like Regu- lation applicable in each case, but do not lation N o 1408/71) envisages national legisla- provide a basis for a right to reimbursement tion as a whole and that the question of the of contributions at Community level. reimbursement of contributions thus falls within its field of application if that question is covered by national legislation and only the general principles laid down in the regu- lation need be applied, such as the principle Finally, Article 17(a) of the regulation, to of equal treatment and the principle of the which the Austrian Government referred waiver of residence clauses. 69 In view of this, and which concerns the right of the recipient Regulation N o 3 did not preclude the reim- of a pension to be exempted from the appli- bursement of social security contributions cation of the legislation of his State of resi- under national legislation under certain cir- dence, is quite specific: it cannot be applied cumstances even if the insured later came by analogy, nor can any general principle be under the compulsory insurance scheme of derived from it. another Member State, as this would limit the freedom of the insured to decide on his own best interests, within the framework of

89. Furthermore, the Court held, in inter- preting Article 33 of Regulation N o 1408/71, 72 that 'it appears from that provi- sion that such deductions from pensions may be made by the institution of a Member State 86. If compulsory insurance and the obliga- only in respect of those insured persons who tion to pay contributions are not contrary to in return receive sickness and maternity ben- Community law, the question arises whether efits from the institution of that Member the insured have acquired a Community State responsible for such benefits. But such right to the associated benefits, as the Aus- deductions may not be made where the ben- trian Government, in particular, argues. efits in question are not borne by an institu- tion of that Member State. That is the case in relation to insured persons who reside in the territory of another Member State and who are in receipt, by virtue of that residence, of benefits from the competent institution of that Member State under Articles 27 to 32 of 87. It is clear from the case-law of the Court Regulation N o 1408/71.' 73 of Justice, that Community law envisages the relationship between contributions and ben- efits as one which gives rise to rights and obligations on both sides. In this relationship benefits are seen as compensation for the payment of contributions such that the obli- gation to be insured gives rise to a right to 90. The second paragraph inserted into the payment of the relevant benefits. Article 33 by Regulation N o 2332/89 pro- vided, on the other hand, that a State of resi- dence in which a general system of social

91. The importance which Community law The Court interpreted that new article in attaches to the relationship between contri- Noij 74 and held: 'Those provisions pursue butions and benefits emerges, it seems to me, the objective of Regulation N o 1408/71, a contrario, from the fact that Regulation N o which is to contribute to the establishment 1247/92 75 (Article 4(2a)) expressly provides of the fullest possible freedom of movement that Regulation N o 1408/71 also applies to for migrant workers. With that end in view, a special non-contributory benefits. Moreover number of other provisions are designed to such benefits are to be granted exclusively by remove barriers to that fundamental freedom and at the expense of the institution of the similar to those resulting from the contribu- place of residence (Article 10a), whereas tions at issue, in particular barriers arising before the amendment, according to the from the transfer of residence from one case-law of the Court, the principle that resi- Member State to another and the simulta- dence clauses should be waived applied. Pre- neous application of several national legisla- cisely because these benefits are not financed tive systems. It would be contrary to that by contributions from the insured and con- objective if, in the absence of grounds of gen- sequently are exclusively linked with the eral interest, a worker could be deprived of possibilities and conditions obtaining in the part of a pension received under the legisla- State which grants them, the Council was tion of one Member State simply because he able to exclude them from the application of has gone to reside in another Member State' the principle that residence clauses should be (paragraph 13). waived and the Court was able to rule that such a limitation is not contrary to Article 51 of the Treaty. 76

94. This principle of interpretation could be applied in the present case and has already 93. This principle would be something more been applied in this Opinion to the questions than the protection of acquired rights or the of the legal characterisation of the benefit in principle of the exportability of benefits, issue and its classification in one of the tra- essentially in three respects. First, it would ditional categories of Regulation N o 1408/71 emphasise the legal nature of the personal and to the question of the interpretation of right of the migrant worker, to receive any- Article 19(1)(a) of the regulation as regards where in the Community the benefits which the payment of benefits in kind in the case of he has helped to finance himself using sickness abroad. income from his employment or possibly also his savings. Thus the contribution of the European worker, that is to say, of the Euro- pean citizen, to the construction of the economy and the social security system of the Member States through his work would be acknowledged. Second, it would highlight the fact that the principle of solidarity, which, as I have already said, applies to statutory social security systems, works both 95. In that context, the argument of the Ger- ways. Thus it not only requires that a man Government, that the plaintiffs must worker make sacrifices for the benefit of the pay contributions throughout their life to a system but also requires the system to show system, which, if they live in another Mem- solidarity when necessary, that is to say, ber State, will offer them nothing in the when the insured risk materialises. Third, it event of need, allegedly for reasons of soli- would cover all benefits whether in cash or darity, is not only weak but is contrary to in kind, as the latter, which are just as vital as Community law. the former, are not essentially different from them as both are intended to meet the vital needs of the insured. Thus attention would be drawn to the true significance of Article 77 — Sec, in t h a tconnection, Case 242/83 Patteri [1984] ECR 3171, paragraph 8.

(ii) Then came the judgment in Commis- sion v Belgium, 81 in which the (a) According to the first, if a benefit falls Court ruled that by maintaining the within one regulation, it cannot come requirement of a period of residence under the other. In some cases the Court on Belgian territory which workers expressly held that it is necessary first to from other Member States subject to examine whether the rule or benefit in Belgian legislation must fulfil in issue falls within the definition of social order to qualify for the grant of the security within the meaning of Article 51 allowances for handicapped persons, of the Treaty and Regulation N o 3 or the guaranteed income for old Regulation N o 1408/71, since only if it people and the minimum means of does not can the question whether it is a subsistence (minimex), the Kingdom social advantage within the meaning of of Belgium had failed to fulfil its Article 7 of Regulation N o 1612/68 be obligations under the E E C Treaty put. 79 and, in particular, Article 7(2) of Regulation N o 1612/68 and Article 3 of Regulation N o 1408/71.

(b) According to the second, which appears to have won the day, it cannot be ruled (iii) That case-law was confirmed by the judgment in Commission v Luxem- 78 — See above, paragraph 27. 79 — Case 1/72 Frilli [1972] ECR 457, at paragraph 4 and Scriv- ner, cited in footnote 35, at paragraph 16. See also Heinze, cited in footnote 22, at paragraph 4, which indirectly 80 — Cited in footnote 24. expresses the same view. 81 — Case C-326/90 Commission v Belgium [1992] ECR I-5517.

bourg. 82 In that judgment the of Regulation N o 1612/68 (para- Court held, in connection with a graph 18) which a migrant worker maternity allowance, as follows: could claim for the benefit of his 'since Regulation N o 1612/68 is of daughter (paragraph 26). 85 general application regarding the free movement of workers, Article 7(2) thereof may apply to social advantages which, at the same time, fall specifically within the scope of Regulation N o 1408/71' (paragraph

However the Court held that this allowance was (also) a social advantage within the meaning 99. However, in my view, the connection between the two categories and their com- mon purpose is not sufficient to justify the 82 — Cited above in footnote 17. application of both regulations in all cases. 83 — In other cases, the case-law suggests indirectly that it is pos- Article 51 of the Treaty is a lex specialis in sible to apply both regulations concurrently. For example, relation to Article 48, and it must be in answer to the question whether it is possible to transfer rights in the field of social security from one Member State assumed that the regulations adopted on the to another on the basis of Regulation N o 1612/68 or on the basis of Regulation N o 1408/71, the Court first found that basis of the two provisions bear the same the purpose of Regulation N o 1612/68 was the systematic relation to one another.

See also granted to nationals of other Member States under the same Hughes, cited in footnote 19). conditions on the basis (also) of Regulation N o 1612/68. 86 — Case 41/84 Pinna [1986] ECR 1, paragraph 21, and Case 84 — Case C-310/91 Schmid [1993] ECR I-3011. 359/87 Pinna [1989] ECR 585.

Regulation N o 1612/68 was adopted, Regu- view that there is no need to consider that lation N o 3 was already in force and covered regulation. the same matters as Regulation N o 1408/71 which later replaced it; in the absence of any evidence to the contrary, it must therefore be assumed that Regulation N o 1612/68 gov- erns the matters which were not already cov- ered by Regulation N o 3 (and therefore which now come under Regulation N o 1408/71), and that these regulations conse- 101. If, none the less, one were disposed to quently have a different substantive scope. It accept that the benefits in issue were a social may be added that the scope of Regulation advantage, it should be noted that Article 48 N o 1408/71 has been somewhat different of the Treaty and Article 7 of the regulation since the self-employed were brought under not only prohibit overt discrimination on the regulation. 87 grounds of nationality but also indirect dis- crimination on those grounds. As was the case in O'Flynn, 88 this involved conditions which affect essentially or predominantly migrant workers and also conditions appli- cable without distortion which can more eas- ily be satisfied by national workers than by migrant workers or which entail the risk that they may operate to the particular detriment of migrant workers (paragraph 18). Such dis- criminatory provisions are only permissible, by way of exception, if they are justified by 100. The judgments cited above under (i) to objective considerations and are proportion- (iv) do not, in my view, provide any support ate to the aim pursued by the national law for the opposite view. In reality they concern (paragraph 19). special benefits which fall within the defini- tion of both social security and social assis- tance and which the case-law of the Court of Justice has usually classified in the first cat- egory. The possibilities available for applying both regulations concurrently are, in so far as they still exist at all, now extremely lim- ited following the settlement of the matter 102. A residence clause such as that in issue by Regulation N o 1247/92. As regards ben- in the present case must be viewed as such a efits which fall unequivocally within the condition because it can more easily be satis- definition of social security, such as, in my fied by national workers than by workers view, the benefits in issue, to which the from the other Member States. 89 The detailed provisions of Regulation N o purpose of the benefit, which is to enable 1408/71 apply, I cannot, in any case, see persons reliant on care to live in dignity, is what the general provisions of Regulation not linked to the place where such people N o 1612/68 could add. I therefore take the

F o r that reason, c o m p u l s o r y affiliation t o a scheme of care insurance a n d the obliga- t i o n t o p a y insurance c o n t r i b u t i o n s are n o t c o n t r a r y t o the provisions of the Treaty o r of Regulation N o 1408/71.

90 — Sec above, point 76. 91 — See O'Flynn, cited in footnote 12, paragraphs 28 and 29.

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