C-20/96

The Adjudication Officer

on the interpretation and validity of Articles 4(2a) and 10a 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 Community, as amended and updated by Council Regulation (EEC) N o 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6), as subsequently amended by Council Regulation (EEC) N o 1247/92 of 30 April 1992 (OJ 1992 L 136, p. 1),

* Language of the case: English.

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T H E COURT,

— the Spanish Government, by A. J. Navarro Gonzalez, Director General of Community Legal and Institutional Coordination, and G. Calvo Díaz, Abogado del Estado, of the State Legal Service, acting as Agents,

— the French Government, by C. de Salins, Assistant Director in the Legal Affairs Directorate of the Ministry of Foreign Affairs, and A. de Bourgoing, Charge de Mission in that directorate, acting as Agents,

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— the Austrian Government, by W. Okresek, Ministerialrat in the Constitutional Affairs Department of the Bundeskanzleramt, acting as Agent,

— the Council of the European Union, by M. Bishop and A. Lo Monaco, Legal Advisers, acting as Agents,

1 By order of 17 January 1996, received at the Court on 22 January 1996, the Social Security Commissioner referred for a preliminary ruling under Article 177 of the E C Treaty two questions on the interpretation and validity of Articles 4(2a) and

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10a 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 t o members of their families moving 'within the Community, as amended and updated by Council Regulation (EEC) N o 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6, hereinafter 'Regulation N o 1408/71'), as subsequently amended by Council Regu- lation (EEC) N o 1247/92 of 30 April 1992 (OJ 1992 L 136, p. 1).

2 Those questions were raised in a dispute between Mr Snares, a United Kingdom national, and the Adjudication Officer concerning the award of the disability living allowance (hereinafter 'DLA') provided for under United Kingdom legislation.

The national legislation

6 Thus, with effect from 1 April 1992, A A, in the case of recipients under the age of 65, and MA already awarded were converted into awards of the care and mobility components of DLA. As from that date, no new awards of AA or MA were to be made, with the exception of A A in the case of recipients over the age of 65.

7 At the material time, D L A was payable under sections 71 to 76 of the Social Secu- rity Contributions and Benefits Act 1992 and the Social Security (Disability Living Allowance) Regulations 1991 (hereinafter 'the D L A Regulations').

s Section 71(6) of the Social Security Contributions and Benefits Act provides that:

'A person shall not be entitled to a disability living allowance unless he satisfies prescribed conditions as to residence and presence in Great Britain.'

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(2) For the purposes of paragraph (l)(a)(ii) and (iii), notwithstanding that on any day a person is absent from Great Britain, he shall be treated as though he were present in Great Britain if his absence is by reason only of the fact that on that day —

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(d) his absence from Great Britain is, and when it began •was, for a temporary purpose and has not lasted for a continuous period exceeding 26 weeks; or

(e) his absence from Great Britain is temporary and for the specific purpose of his being treated for incapacity, or a disabling condition, which com- menced before he left Great Britain, and the Secretary of State has certified that it is consistent with the proper administration of the Act that, subject to the satisfaction of the foregoing condition in this subparagraph, he should be treated as though he were present in Great Britain.'

The C o m m u n i t y legislation

4. This regulation shall not apply to social and medical assistance ...'.

n Article 5 of Regulation N o 1408/71 added the following provision:

'The Member States shall specify the legislation and schemes referred to in Article 4(1) and (2) ... in declarations to be notified and published in accordance with Article 97.'

12 Finally, Article 10 of Regulation N o 1408/71 provided:

' 1 . Save as otherwise provided in this regulation, invalidity, old-age or survivors' 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 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.'

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1 4 At the same time Article 5 of Regulation N o 1408/71 was amended in order to ensure that the declaration made by Member States under this provision should also cover 'the special non-contributory benefits referred to in Article 4(2a)'. The United Kingdom has not made any declaration in regard to those benefits.

is Regulation N o 1247/92 also added Article 10a, which provides as follows:

' 1 . Notwithstanding the provisions of Article 10 and Title III, persons to whom this regulation applies shall be granted the special non-contributory cash benefits 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

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such benefits are listed in Annex IIa. Such benefits shall be granted by and at the expense of the institution of the place of residence.

The main proceedings

i7 Mr Snares worked in the United Kingdom as an employee for 25 years and, as such, paid contributions to the United Kingdom social security scheme. In April 1993, when he was 39, he suffered a serious accident which left him with severely impaired mobility. H e applied for DLA, and his claim was treated as having been made on 1 September 1993.

ie O n the basis of the assessment of his care and mobility needs, the Adjudication Officer awarded Mr Snares the middle rate of the care component and the higher rate of the mobility component of DLA with effect from 1 September 1993.

i9 M r Snares also received invalidity benefit in the United Kingdom (which was sub- sequently converted into incapacity benefit). It is common ground that this is a contributory benefit and, as such, falls within the scope of Article 10 of Regulation N o 1408/71.

20 In November 1993, Mr Snares decided to settle in Tenerife, where his immediate family, and in particular his mother, live, so that she could look after him. H e informed the United Kingdom authorities that his absence would not be tempo- rary and that he would be selling the home that he owned in the United Kingdom.

2i O n 6 January 1994, the Adjudication Officer decided that his entitlement to D L A ceased with effect from his departure on 13 November 1993. That decision was confirmed on review on 16 February 1994.

25 As to whether Mr Snares ought none the less to be entitled to DLA under Regu- lation N o 1408/71, the Social Security Commissioner found that the parties' views differed and decided to stay proceedings in order to refer the following questions to the Court for a preliminary ruling:

' 1 . Is the effect of the terms of Articles 4(2a) and 10a of Council Regulation (EEC) N o 1408/71, as inserted by Council Regulation (EEC) N o 1247/92 with effect

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from 1 June 1992, to remove from the scope of Article 4(1) of Regulation N o 1408/71 a benefit which prior to 1 June 1992 would have been accepted, in the case of a person who by reason of previous occupational activity was or had been cov- ered by the social security legislation of the relevant Member State, as falling within the scope of Article 4(1), with the consequence that a person who after 1 June 1992 becomes entitled to such a benefit under the legislation of one Member State may not rely on the provisions of Article 10(1) of Regulation N o 1408/71 in order to challenge a withdrawal of entitlement on the sole ground that the person resides in the territory of another Member State?

2. If the answer to Question 1 is yes, is Council Regulation (EEC) N o 1247/92 made within the powers granted by the Treaty of Rome, and in particular by Articles 51 and 235 of that Treaty?'

29 In terms of Article 10a of Regulation N o 1408/71, as amended by Regulation N o 1247/92, persons to whom that regulation applies are entitled to the special non- contributory cash benefits referred to in Article 4(2a), in accordance with the coor- dination rules which it sets out, provided that such benefits are listed in Annex Ha. That is the case with regard to DLA, which is mentioned under Point (f) of Sec- tion L (United Kingdom) of that annex.

30 The fact that the Community legislature refers to legislation, such as that relating to DLA, in Annex IIa to Regulation N o 1408/71 must be accepted as establishing that benefits granted pursuant to that legislation are special non-contributory ben- efits falling within the scope of Article 10a of Regulation N o 1408/71 (see, in par- ticular, to that effect, Case 24/64 Dingemans v Bestuur der Sociale Verzekerings- bank [1964] ECR 647, at p. 654).

3i Furthermore, the wording of Article 10a implies that the benefits to which it refers also come within Article 4(2a) of Regulation N o 1408/71, as amended by Regu- lation N o 1247/92.

32 In those circumstances, a benefit such as D L A must, by reason of the fact that it is listed in Annex IIa, be regarded as being exclusively governed by the coordination rules of Article 10a and, consequently, as being a special non-contributory benefit within the meaning of Article 4(2a).

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36 Finally, it is common ground that a person such as Mr Snares, whose disability, which constitutes the basis for payment of DLA, occurred after the entry into force of Regulation N o 1247/92 inserting Articles 4(2a) and 10a in Regulation N o 1408/71, comes exclusively within the scope of the latter provisions and cannot rely on the transitional provisions set out in Article 2 of Regulation N o 1247/92,

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according to which that regulation does not affect the maintenance of rights of individuals who, prior to its entry into force, were already in receipt of the benefit (Article 2(1)) or fulfilled the conditions for receiving it (Article 2(2)).

37 The answer to the question submitted must therefore be that, on a proper con- struction of Article 10a of Regulation N o 1408/71, as amended by Regulation N o 1247/92, read in conjunction with Annex Ha, D L A falls within the scope of that provision and is therefore a special non-contributory benefit within the meaning of Article 4(2a) of that regulation, with the result that the position of a person such as the claimant in the main proceedings, who, after 1 June 1992 when Regulation N o 1247/92 entered into force, satisfied the conditions for the award of that benefit, is governed exclusively by the system of coordination established by the said Article 10a.

The second question

42 Second, the Court has in the past accepted that the grant of benefits closely linked with the social environment may be made subject to a condition of residence in the State of the competent institution (Case 313/86 Lenoir v Caisse d'Allocations Familiales des Alpes-Maritimes [1988] ECR 5391, paragraph 16).

43 As the Advocate General has explained in points 85 to 88 of his Opinion, benefits such as D L A fall within the category of benefits which, as regards the detailed rules for granting them, are closely linked to a particular economic and social con- text.

44 If a person in Mr Snares' position does not, in a particular case, satisfy the condi- tions applied by his new State of residence to the award of invalidity benefit, or if he receives a lower benefit there than that which he hitherto received in another

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Member State, that cannot invalidate the system established by Article 10a of Regulation N o 1408/71.

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49 In the light of those considerations, it must be concluded that the system of coor- dination established by Regulation N o 1247/92, in so far as it applies to DLA, is not at variance either with Article 51 of the Treaty or, indeed, with Article 235 thereof. The latter provision merely made it possible, in adopting that regulation, to extend the coordination of social security schemes for which it provides to self- employed workers and members of their families, since the Treaty had not pro- vided specific powers to that end.

so Admittedly, a person in Mr Snares' position could be refused a right of residence in another Member State, in this case Spain, if, contrary to the requirements of Article 1 of Council Directive 90/365/EEC of 28 June 1990 on the right of resi- dence for employees and self-employed persons who have ceased their occupa- tional activity (OJ 1990 L 180, p. 28), he was not in receipt of an invalidity or early retirement pension, or old-age benefits, or of a pension in respect of an industrial accident or disease of an amount sufficient to avoid becoming a burden on the social security system of that State during his period of residence there.

si If, however, as the Court has found in the present judgment, the Community leg- islature was entitled, without infringing Article 51 of the Treaty, to decide that spe- cial non-contributory benefits such as DLA were to be awarded in accordance with the legislation of the State of residence and at its expense, that conclusion cannot be called in question on the ground that application of that rule could have the effect of diminishing the means of the person concerned. Such a situation would, as noted in paragraph 45 of this judgment, arise from differences existing between the national social security schemes in the absence of harmonization.

THE COURT

in answer to the questions referred to it by the Social Security Commissioner b y order of 17 January 1996, hereby rules:

1. O n a proper construction of Article 10a of Council Regulation (EEC) N o 1408/71 of 14 June 1971 on the application of social security schemes t o employed persons, to self-employed persons and to members of their families moving within the Community, as amended and updated by Council Regu- lation (EEC) N o 2001/83 of 2 June 1983, as subsequently amended by C o u n - cil Regulation (EEC) N o 1247/92 of 30 April 1992, read in conjunction with Annex Ha, disability living allowance falls within the scope of that provision and is therefore a special non-contributory benefit within the meaning of Article 4(2a) of that regulation, with the result that the position of a person such as the claimant in the main proceedings, who, after 1 June 1992 when Regulation N o 1247/92 entered into force, satisfied the conditions for the award of that benefit, is governed exclusively by the system of coordination established by the said Article 10a.

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2. Examination of Regulation N o 1247/92, in so far as it sets aside, in the case of disability living allowance, the principle of waiver of residence clauses laid down in Article 10 of Regulation N o 1408/71, has not disclosed any factor of such a kind as to affect its validity.

Registrar President

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