C-85/99

OFFERMANNS

OPINION OF ADVOCATE GENERAL ALBER delivered on 28 September 2000 1

I — Introduction ATS 3 500 for each of them. The children live in Austria, as do their parents.

1. This reference for a preliminary ruling made by the Oberster Gerichtshof of the Republic of Austria raises the question of 3. Both parents are self-employed in Aus- the compatibility with Community law of tria. The mother runs a bookshop selling national legislation under which a child children's books and the father is a self- entitled to maintenance who receives no employed representative selling building payments from a parent liable to provide products. the maintenance can claim an advance on maintenance payments from the State only if the child is either an Austrian national or is stateless. 4. On 1 September 1998, the children applied for the grant of advances on maintenance in the amount of ATS 3 500 per month on the grounds that their father had paid no maintenance since February 1998. In that respect, they claimed that II — Facts and procedure they had sought to obtain enforcement of the claim for maintenance against their father but that execution had been to no avail because their father received no salary. 2. The applicants in the main proceedings, who are minors, and their parents are German nationals. The family has been living in Austria since 1987. The parents' marriage was dissolved on 1 February 1995 and the mother was granted sole 5. The application was dismissed by the custody of the children. On 17 January court of first instance on the ground that 1996, the father agreed in a court settle- the minors were of German nationality. ment to pay a monthly contribution to the This decision was upheld on appeal but maintenance of the children amounting to leave to appeal on a point of law was granted. The competent chamber of the Oberster Gerichtshof (hereinafter 'the 1 — Original language: German. national court') considered that it was

9. However, advances paid to the parent in whose household the child entitled to maintenance is cared for also have as their purpose, as is clear from the abovemen- III — The reference for a preliminary tioned reasoning of the legislature, to meet ruling family expenses, which — if advances were not granted — would be borne solely by the parent caring for the child. It is for that reason, too, that advances on main- tenance are financed out of the resources of 7. The national court refers to the reason- the Familienlastenausgleichsfonds (Family ing which motivated the Austrian legisla- Support Fund). Furthermore, the allevia- ture, according to which the State is tion of subsistence concerns by the endeavouring, in enacting the Unterhalts- advances is also clearly intended to ensure vorschussgesetz, to look after its 'young that the parent caring for the child is able to people'. The draft law is a 'decisive step in devote him or herself more to the raising of ensuring the maintenance of minor chil- his or her minor child by reducing the dren'. The background documents to the pressure to obtain the requisite financial legislation refer to the plight of mothers means to fund maintenance. 'who because they are divorced from their husbands or have been abandoned by them or who are mothers of illegitimate children with whom the fathers wish to have little to do, are left to cope alone with their minor children' and who 'in addition to the heavy burden of raising their children' are also 'burdened with the difficulty of obtaining maintenance for their children from the 10. According to the national court, in father'. That is why the State must inter- view of the requirements for entitlement vene in place of the person in default of to, and the purpose of, advances on main- payment of maintenance in order to pay tenance, the Court of Justice could come to advances on account of maintenance, later the conclusion that such advances are to be seeking reimbursement from that person. classified as social security benefits which

qua family benefits fall within the terms precludes not only discrimination under ratione materiae of R e g u l a t i o n laws imposing a nationality requirement No 1408/71. 2That conclusion could, how- which directly affect the exercise of activity ever, be challenged by citing the case-law of as a self-employed person, but also provi- the Court according to which a social sions which might be likely to deter persons benefit which is intended to provide a from establishing themselves in the Mem- minimum means of subsistence may indeed ber State concerned, such as unequal treat- be a social advantage under Article 7(2) of ment in regard to social benefits. Regulation No 1612/68. 3 Therefore, the correct approach under Community law might be to classify advances on mainte- nance under Austrian law both as family benefits within the meaning of Arti- cle 4(1 )(h) of Regulation No 1408/71 and as social advantages under Article 7(2) of Regulation No 1612/68. 12. Finally, entitlement to advances on maintenance under Austrian legislation, even if it were not subsumed under the scope of application of the freedoms enshrined in the EC Treaty, particularly in this case freedom of establishment, could none the less come within the wide area protected under the first paragraph of Article 6, which also applies to matters which simply 'touch upon areas covered by Community law'. 11. However, the parents of the applicants are not workers but self-employed persons. Accordingly, there can be no question of extending social advantages, which, under Regulation No 1612/68, are awarded only to workers and to members of their families, to the applicants as children of 13. The national court has referred the self-employed persons. By contrast, Arti- following questions to the Court of Justice cle 52 of the EC Treaty (now, following for a preliminary ruling: amendment, Article 43 EC) is a specific expression of Article 6 of the EC Treaty (now, following amendment, Article 12 EC), which, as a lex specialis, takes pre- cedence over the general prohibition on discrimination. Article 52 of the EC Treaty '1. Are advances on maintenance pay- ments for minor children of self- 2 — Regulation (EEC! No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons, granted under the employed persons, to self-employed persons and to mem- Austrian Federal Law on the Grant of bers of their families moving within the Community, as amended (OJ, English Special Edition 1971 (II), p. 416). Advances on Maintenance for Children 3 — Regulation (EEC) No 1612/68 of the Council of 15 October (Unterhaltsvorschussgesetz 1985, here- 1968 on freedom of movement for workers within the Community (OJ, English Special Edition 1968 (II), p. 475). inafter "UVG" — current version in

Are minor children who, like their parents — who are self-employed in the Republic of Austria — are German nationals but ordinarily resident in the 'Article 1(10) (15) Republic of Austria and who are applying for the grant of advances on maintenance payments under the Aus- trian Federal Law on the Grant of Advances on Maintenance for Children Definitions (UnterhaltsVorschussgesetz 1985) dis- criminated against as family members, contrary to Article 52 of the EC Treaty 4 — OJ 1997 L 28, p. 1.

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For the purpose of this Regulation: Article 2

Persons covered

(a) — (e)...

OPINION OF MR ALBER — CASE C-85/99

Article 5(10)

Declarations by the Member States on the scope of this Regulation

Article 4(10)

The Member States shall specify the legis- Matters covered lation and schemes referred to in Arti- cle 4(1) and (2),... the minimum benefits referred to in Article 50 and the benefits referred to in Articles 77 and 78 in declara- tions to be notified and published in accordance with Article 97.' (1) This Regulation shall apply to all legislation concerning the following branches of social security:

B — Provisions of the Member State (a) — (g)...

17. Articles 30 and 31 of the UVG provide that the public authorities are to be sub- rogated to the child's claims for mainte- nance on which advances have been made. 'Article 3. Advances shall be granted Where the person in default of payment of maintenance makes no payments, the debts may be recovered by distraint.

(1) where a writ of execution enforceable in Austria exists in respect of the legal claim to maintenance payments and

V — The first question

nance, whether or not a writ of execution is the basis of a legally defined position and in existence against the parent liable for concern one of the risks expressly listed in maintenance or, for certain specific reasons, Article 4(1) of Regulation No 1408/71. In does not (yet) exist. The purpose of the that respect, the specific branch of social provision is to ensure that a child receives benefit which can be envisaged in the maintenance in full even where the parent present case is that of family benefits since liable for maintenance is in default of it is possible to conclude that the benefit is payment. Although payments are made by by nature a social welfare benefit. the public authorities to that end, they in no way constitute social benefits. Where the Federal Government makes payments, it is subrogated to the claim for mainte- nance under family law. Therefore, the child maintenance is financed in advance but the State merely intervenes in imple- menting the claim. Consequently, advances on maintenance under the Unterhalts- vorschussgesetz are not family benefits within the meaning of Article 4(1)(h) of Regulation No 1408/71 and therefore Arti- 20. However, the UVG is based on a claim cle 3 thereof does not apply. for maintenance at civil law. In that respect, the purpose of the benefit is one which differs from the typical purpose of family benefits, that is to say to meet family expenses. The expenses incurred in main- taining a child are neither alleviated nor offset by advances on maintenance. There- fore, the payment at issue cannot be regarded as a family benefit within the meaning of Regulation No 1408/71 and therefore Article 3 thereof cannot apply.

It is therefore necessary to consider whether payments under the Austrian Unterhalts­ vorschussgesetz are family benefits within the meaning of Article 4(1 )(h) of Regula­ tion No 1408/71. That is because '[t]he fact that a domestic law is not mentioned in the declaration made by a Member State does not mean that that law must be deemed to lie outside the scope of the regulation', as the Court of Justice confirmed in Vigter.6 The commu­ nication of national provisions pursuant to 23. Under Article 5 of the regulation, the Article 5 of Regulation No 1408/71 has Member States must specify inter alia, in binding effect only in a positive sense. 7

Declarations to be notified and published in accordance with Article 97, the legislation and schemes referred to in Article 4( 1 ) and 5 — Case 35/77 Beerens v Rijksdienst voor Arbeidsvoorziening (2), because they relate to one of the types 11977] ECK 2249, paragraph 9. 6 — Case 70/80 Vigier v Bundcsversicberiingsanstalt für Anges­ of benefit referred to therein. It is not tellte |1981| ĽCR 229, paragraph 15). disputed that payments under the UVG 7 — See Beerens (cited in footnote 5, paragraph 9) and Case C-251/89 Atlhinasopoitlos and Others v Bundesanstalt für have not been designated as such a benefit Arbeit |1991] ECU I-2797, paragraph 28.

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25. Consequently, it is necessary to con- 27. This view is reinforced by the fact that sider whether the grant of advances on social assistance, whose grant is conditional maintenance payments under the UVG upon an assessment of need, is excluded fulfils the criteria which would indicate from the scope of Regulation No 1408/71 that such advances are a social security under Article 4(4) thereof. benefit under Regulation No 1408/71. Article l(u)(i) defines 'family benefits' as 'all benefits in kind or in cash intended to meet family expenses'.

8 — See Case 249/83 Hoeckx v Openbaar Centrum voor Maatschappelijk Welzijn, Kalmthout [1985] ECR 973, paragraph 11) and Case 122/84 Scrivner and Cole v Centre public d'aide sociale de Chastre [1985] ECR 1027, para- graph 18; Case C-78/91 Hughes v Chief Adjudication Officer, Belfast [1992] ECR I-4839, paragraph 14; Joined Cases C-245/94 and C-312/94 Hoever and Zachów v Land Nordrhein-Westfalen [1996] ECR I-4895, paragraph 17; 30. On an abstract level, parental care can and Case C-160/96 Molenaar and Fath-Molenaar v Allge- meine Ortskrankenkasse Baden-Württemberg [1998] ECR be described as the personal care of a child 1-843, paragraph 19. in the form of various types of attention 9 — See Hughes (cited in footnote 8, paragraph 15); Hoever and Zachów (cited in footnote 8, paragraph 18); Molenaar (cited in footnote 8, paragraph 20) and Case C-275/96 Kuusijarvi v Riksförsäkringsverket [1998] ECR I-3419, paragraph 57). 10 —See Article 4(1)(h).

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making financial resources available at the of maintenance. Public resources are used time at which they are needed. Moreover, for both aspects and therefore it is entirely the State bears the risk of insolvency. The possible to conclude that society contri- Court is aware that over half the advance butes to the expenses incurred by the payments cannot be recovered from those specific family situation. It should be added in default of payment of maintenance. 12 It that children living in this special family would therefore be a simplification to situation require special assistance from dismiss the legislation on advances on society, which the legislature realised in maintenance as merely procedural assis- deciding to adopt the UVG. tance or to focus mainly on the provisional aspect of the advance financing of out- standing maintenance payments.

37. The Commission objects that the 35. It is clear to the Court of Justice from advance payments serve to provide support the description of the content and purpose for minor children but do not alleviate or of family benefits that they are intended 'to offset expenses incurred in maintaining a provide social assistance for workers with child which remain unchanged at the same dependent families in the form of a con- level. When the obligation to provide tribution by society towards their maintenance is viewed in abstract terms, expenses'. 13 that contention may be correct. When viewed in concrete terms, however, serious doubts arise as to its correctness.

39. Consequently, the spirit and purpose of 42. First, it must be borne in mind that the rules on advances on maintenance advances on maintenance payments are not payments is to meet family expenses as paid to the employed person or gainfully defined above. This view is underpinned by employed parent but to the child entitled to the fact that the advances on maintenance maintenance. However, it should not be payments are financed out of the Famil- forgotten that the advances are paid to the ienlasteimtisgleicbsfonds. Although the par- household in which the child lives and the ties concerned referred to the judgment in sums can indeed be regarded as a benefit Hughes and cited the following passage: paid to the parent having custody. More- '[t]he method by which a benefit is financed over, in Hoever and Zachów, the Court is immaterial for the purposes of its classi- ruled that the distinction between personal fication as a social security benefit', 14the rights and derived rights did not in princi- Court of Justice advanced this argument in ple apply to family benefits. 16 The fact that that case to counter the objection that the the child is the recipient of the payments benefit at issue therein 15 was not a social does not therefore preclude them from security benefit since it was not subject to a being classified as a family benefit. contribution requirement.

unemployment benefits referred to in Arti- the event that the claim to maintenance is cle 4(l)(g) of Regulation No 1408/71. 18 not fulfilled. As a consequence of the grant of the advances on maintenance payments, the child's self-standing right against the defaulting parent is transferred by subroga- tion to the State, which can take action against that parent in respect of that debt. It would appear logical to classify the 44. However, this decision does not pre- State's standing in for a claim under family judge the classification of the payment in law as a family benefit. the present case. Mouthaan concerned claims arising directly from an employment contract whereby the professional or trade institution's subrogation to the employer's obligations had to be regarded as unem- ployment benefit in order to open up the scope of Regulation No 1408/71. However, 46. Reference should also be made to the in that case, the trigger for payments of the judgments of the Court in Hoever and benefits in question was not the applicant's Zachów 19 and Kuusijärvi. 20 In those judg- unemployment but the employer's insol- ments, the Court classified German child- vency. The situation in the present case is raising allowance and Swedish parental fundamentally different. benefits as benefits which had to be treated as family benefits within the meaning of Regulation No 1408/71. The benefit con- cerned was one intended to meet family expenses. 21 Moreover, child-raising allow- ance was intended to enable one of the parents to devote himself or herself to the raising of a young child. The benefit was 45. The child's self-standing claim for aimed at remunerating the service of bring- maintenance against its parents is — even ing up a child, meeting other costs of caring if it has to be ascribed to civil law — a for and bringing up a child and, as the case claim under family law. Mere classification may be, mitigating the financial disadvan- of this claim as a claim under civil law tages entailed in giving up income from would constitute an excessively formal full-time employment. 22 limitation which would not do justice to its significance in terms of family law — and, consequently, to the nature of the maintenance payment as a payment inten- ded to meet family expenses, which, although within the family, still operates in a classic manner. Therefore, even if the claim for maintenance must be assigned to 47. It cannot be ruled out that advances on civil law, the child entitled to maintenance maintenance payments are also intended to has a personal claim against the State by virtue of the rules contained in the UVG in 19 — Cited in footnote 8. 20 — Cited in footnote 9. 21 — Hoever aud Zachów, cited in footnote 8, paragraph 23. 18 — See Mouihaan, cited in footnote 17, paragraph 20. 22 — Hoever aud Zachów, cited in footnote 8, paragraph 25.

23 — Case 40/76 Kermaschek v Bundesanstalt für Arbeit [1976] ECR 1669. 50. Article 1(f)(i) defines 'member of the 24 — Kermaschek, cited in footnote 23, paragraph 7. family' as any person defined or recognised 25 — Cited in footnote 23.

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case-law 26 was, in Cabanis-Issarte, 27 spe- sary to determine that they can derive their cifically limited 28 to the circumstances status from one or other parent. underlying Kermaschek. 29 The distinction between rights in person and derived rights 'may undermine the fundamental Commu- nity law requirement that its rules should be applied uniformly, by making their applicability to individuals depend on whether the national law relating to the benefits in question treats the rights con- 56. In the present case, the mother of the cerned as rights in person or as derived children, with whom they live in the same rights, in the light of specific features of the household, is self-employed. As a self- domestic social security scheme.' 30 employed person subject to a branch of social security within the meaning of Arti- cle 4, she falls within the scope ratione personae of Regulation No 1408/71 and therefore so do her children.

54. Furthermore, as regards the special case of family benefits, the Court ruled in Hoever and Zachow — as mentioned above 31 — that the distinction between 57. Consideration should also be given, personal rights and derived rights does perhaps, to the fact that the father, who is not in principle apply to family benefits. 32 liable for maintenance and gainfully employed, determines the legal position of the children. However, in the present case, it is certainly not necessary to ascertain whether the children's father has social insurance and, if so, against which risk. It would be for the national court to ascertain such facts. 55. For children entitled to maintenance to fall within the scope ratione personae of Regulation No 1408/71, it is merely neces-

VI — The second question tute a social advantage within the meaning of A r t i c l e 7 ( 2 ) of R e g u l a t i o n No 1612/68. 33 By paying the advances the State assumes the risk that the main- tenance payment which is due but has not been paid will remain unrecoverable. The fact that Regulation No 1612/68 is, Submissions of the parties according to the wording thereof, applic- able only to employees whilst the parents of the applicant children in the main proceed- ings are self-employed is immaterial. That is because Article 48 of the EC Treaty 59. The Austrian Government first points (now, following amendment, Article 39 out that the relationship between Article 6 EC) and Article 52 of the EC Treaty and Article 52 of the EC Treaty has been (now, following amendment, Article 43 interpreted by the case-law of the Court as EC) afford, according to case-law, the same meaning that Article 52 of the EC Treaty is legal protection against discrimination in intended to implement the principle of respect of social advantages and therefore equal treatment in respect of self-employed the classification of the relevant economic persons. Therefore, in such cases Article 52 activities is unimportant. takes precedence over Article 6.

63. National legislation which provides for The prohibition concerns not only rules on the grant of advances on maintenance only the pursuit of occupational activities but all to children who are Austrian nationals or obstacles to the pursuit by nationals of who are stateless and excludes the minor other Member States of occupational activ- children of self-employed German parents ities as self-employed persons and means working in Austria from any claim to such that they may not be treated differently payments infringes Articles 6 and 52 of the from nationals of the country concerned. EC Treaty. The provision prohibits unequal treatment of the children of self-employed persons who are liable for their maintenance. This also follows from the judgment in Meeu- sen. 34 Consequently, the nationality requirement infringes the freedom of estab- lishment.

64. At the hearing, the Swedish Govern- ment argued that the Austrian legislation undoubtedly discriminates against a child entitled to maintenance who does not posses Austrian nationality. On the other Appraisal hand, the existence of discrimination against the parent having custody is not so apparent. However, the non-payment of maintenance by the parent liable to provide maintenance affects the parent having cus- 66. By its second question the national tody since he or she has to make up the court is seeking to ascertain whether the shortfall. In practice, the nationality nationality requirement in Article 2(1) of requirement affects parents of foreign the UVG constitutes discrimination prohib- nationality since their children generally ited under Article 52 or Article 6 of the EC possess foreign nationality. In that respect, Treaty. it constitutes a case of indirect discrimina- tion.

70. As has been argued by the parties concerned and established in settled case- law, 36 Article 6 applies independently only 68. The classification of the payment as a to situations governed by Community law family benefit does not preclude it from in regard to which the Treaty lays down no being regarded simultaneously as a social specific non-discrimination rules. Since advantage since it has been acknowledged Article 52 is essentially intended to give in previous case-law 35 that a certain over- effect, in the field of activities as self- lap is indeed possible in respect of social employed persons, to the principle of equal benefits which can be regarded both as treatment enshrined in Article 7, 3 7this social security benefits within the meaning principle takes precedence in the present of Regulation No 1408/71 and as social case. Rules of a Member State which are advantages within the meaning of Arti- incompatible with this provision also cle 7(2) of Regulation No 1612/68, infringe Article 6. 38 depending on the specific circumstances of the relevant case and the grant thereof.

71. As regards the content and purpose of Article 52, the Court has stated as follows:

72. As the Court of Justice has repeatedly held, 'that prohibition covers not only specific rules on the pursuit of occupational 75. No obvious direct connection exists. activities, but also... any measure which, However, the additional financial expenses pursuant to any provision laid down by incurred by the parent having custody law, regulation or administrative action in a where the parent liable for maintenance Member State, or as the result of the fails to make the payments can affect his or application of such a provision, or of her occupational activities as a self- administrative practices, hinders nationals employed person. That is because the of other Member States in their pursuit of missing resources must be raised somehow activities as self-employed persons by treat- from occupational activities. He or she may ing nationals of other Member States be subjected merely to reduced profits, be differently from nationals of the country forced to withdraw business assets, or have concerned.' 40 to work more. Even in the case of a mere reduction in profits, those resources are no longer available for possible reinvestment in the business, either to procure physical resources, to create reserves or to meet personnel costs. Various possible situations are conceivable.

73. As the Swedish Government has clearly explained, the direct discrimination against the children on account of their nationality gives rise to indirect discrimination against the parent having custody. That is because the parents of children with foreign nation- ality are much more frequently nationals of other Member States than parents of Aus- trian children. 76. At any rate, it can be concluded that 39 — Meeusen, cited in footnote 34, paragraph 27. the denial of access to advances onsmain- 40 — Meeusen, cited in footnote 34, paragraph 27; Case tenance is indeed capable of producing C-111/91 Commission v Luxembourg [1993] ECR I-817, paragraph 17. unfavourable effects on the occupational

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VII— Conclusion

80. For the foregoing reasons I therefore propose that the Court should answer the questions referred for a preliminary ruling as follows:

(1) Article 4(1)(h) of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self- employed persons and to members of their families moving within the Community must be interpreted as covering advances on maintenance payments to the minor children of self-employed persons under the Austrian Federal Law on the Grant of Advances on Maintenance for Children so that in such a case Article 3 of Regulation No 1408/71, which contains the principle of equal treatment, is applicable.

In the alternative: