C-215/99

1 — Original language: German. 2 — As amended and updated by Council Regulation (EEC) 4. By decision of 7 September 1998, the No 1247/92 of 30 April 1992 amending Regulation (EEC) defendant in the main proceedings rejected 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 ((OJ 1992 L 136, p. 1); for the consolidated version of the Regulation, see OJ 1992 C 325, p. 1. 3 — Case C-160/96 Molenaar [1998] ECR 1-843.

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Mr Jauch's claim for care allowance under thereby releasing resources for care allow- the BPGG. Since the competent authorities ance in the pension insurance funds. in Austria and Germany had both refused him a care allowance, Mr Jauch brought proceedings against those refusals in both Member States.

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III — The relevant legislation (e) benefits in respect of accidents at work and occupational diseases;

(a) Provisions of Community law (f) death grants;

10. Article 4 of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the appli- cation of social security schemes to employed persons, to self-employed per- (g) unemployment benefits; sons and to members of their families moving within the Community, as amended by Council Regulation (EEC) No 1247/92 of 30 April 1992 (OJ 1992 L 136, p. 1) reads as follows: (h) family benefits.

'1. This Regulation shall apply to all legis- 2. This Regulation shall apply to all general lation concerning the following branches of and special social security schemes, whe- social security: ther contributory or non-contributory, and to schemes concerning the liability of an employer or shipowner in respect of the benefits referred to in paragraph 1.

(b) solely as specific protection for the disabled.

12. Article 10a(l) of the regulation pro- vides: 2b. This Regulation shall not apply to the provisions in the legislation of a Member State concerning special non-contributory benefits, referred to in Annex II, Section III, the validity of which is confined to part of its territory. 'Notwithstanding the provisions of Arti- cle 10 and Title III, persons to whom this Regulation applies shall be granted the special non-contributory cash benefits 3.... referred to in Article 4(2a) exclusively in the territory of the Member State in which they reside, in accordance with the legisla- tion of that State, provided that such benefits are listed in Annex IIa. Such ben- 4....' efits shall be granted by and at the expense of the institution of the place of residence.'

11. According to Article 10(1) of the reg- ulation: 13. Annex Ha ('Special non-contributory benefits' (Article 10a of the Regulation)) states: 'Save as otherwise provided in this Regula- tion, invalidity, old-age or survivors' cash benefits, pension 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 'K. AUSTRIA 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. (a) ...

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(b) Care allowance (Pflegegeld) under the sions of this Federal Law, provided they are Austrian Federal Care Allowance Act habitually resident in the national territory: (Bundespflegegeldgesetz) with the exception of care allowance granted by accident insurance institutions where the handicap is caused by an accident at work or occupational dis- ease.' 1. Persons in receipt of a full pension who are in need of care as a result of an accident at work or occupational dis- ease, or who are in receipt of a pension (other than a miner's pension) in accor- dance with the

(a) The Austrian Government

17. The Austrian Government contends 20. The Austrian Government contends that the residence requirement linked to that the term non-contributory means that the grant of the care allowance listed in the benefit is financed without any contri- Annex IIa to the regulation is not incom- bution from the insured person (or his patible with the regulation. employer). In other words, it is necessary to establish conclusively that the funding derives solely from the general tax revenue. That is clearly the case where care allow- ance is paid as a supplement to an Austrian pension on the basis of the abovementioned Paragraph 23 of the BPGG. 18. It is clear from the Court's case-law that the Court itself has not called into question the entries in Annex IIa. In para- graph 30 of its judgment of 4 November 1997 in Case C-20/96, 4the Court held as follows: 'The fact that the Community legislature refers to legislation, such as that relating to DLA, in Annex IIa to Regula- tion No 1408/71 must be accepted as 21. It is true that when the BPGG was establishing that benefits granted pursuant introduced the rates of contribution and to the legislation are special non-contribu- financing flows between the insurance tory benefits falling within the scope of institutions were altered. However, this Article 10a of Regulation No 1408/71'. was done specifically to ease the financial The Court fully endorsed that interpreta- burden on the federal budget, in order to tion of the law in its judgments of 11 June release the resources needed to finance care allowance from general tax revenue. More- 1998 in Case C-297/96 5and of 25 Febru- over, the accompanying financial policy ary 1999 in Case C-90/97. 6 measures, and particularly the increase in sickness insurance contributions, point rather to care allowance being a non- 4 — Case C-20/96 Snares [1997] ECR I-6057. 5 — Case C-297/96 Partridge [1998] ECR I-3467. contributory benefit, since the payment of 6 — Case C-90/97 Swaddling [1999] ECR I-1075. an increased contribution in no way entitles

(b) The German Government 23. As regards the question whether this is a special benefit, the Austrian Government considers this to be established simply on the basis that care allowance essentially 25. The German Government also con- shares the same social-policy objectives as tends that the question referred must be the benefits the Court examined in Snares answered in the negative. and Partridge. In any event, the fact that, in Austria, care-related benefits, to which all inhabitants of Austria are entitled, have a social objective makes them closely related to social assistance, particularly since the risk of being in need of care is akin to other risks, like poverty, in regard to which the 26. In its submission, the Austrian care State intervenes in its role as social welfare allowance constitutes a special non-con- provider. tributory benefit within the meaning of Article 10a of the regulation, since, unlike care allowance under the German care insurance scheme, it is financed exclusively from tax revenue. The fact that these resources were previously released as a 24. The Austrian Government argues, result of restructuring within the Austrian finally, that the decision in Molenaar is federal budget (by increasing sickness insur- not relevant for the resolution of the main ance contributions), is not significant in this proceedings. In particular, it cannot be connection and does not alter the non- inferred from that judgment that all care- contributory nature of the Austrian care related benefits under the legislation of the allowance.

28. In accordance with Article 19(1)(a) of the regulation, these benefits are provided by the German care insurance institution in the form of benefits in kind on behalf of the competent (in this case, Austrian) institu- tion.

30. The question now arises as to whether the listing of a benefit in Annex IIa to the regulation means that the special rules automatically take effect. According to (c) The French Government the French Government, Article 10a is a derogation and has therefore to be nar- rowly construed. For it to apply, two conditions must be met, and both have to be fulfilled. The benefit at issue must both 29. The French Government contends that fall within the scope of Article 4(2a) and be this case involves determining the substan- listed in Annex IIa to the regulation.

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31. A court wishing to apply the deroga- hearing, namely: the significance of the tion must establish unequivocally that it is inclusion of a benefit in Annex IIa to the dealing with a special benefit which is not regulation; the significance of the method tied to contributions. It has therefore to be of financing a benefit for classification a benefit linked to the social sphere and purposes; and the concept of 'special ben- financed from the general tax revenue. The efit'. mere fact that the benefit is listed in Annex IIa to the regulation is not sufficient to bring the special rules into play, since the characteristics and purpose of the provision have also to be evaluated.

34. The Netherlands Government contends that the mere fact that a benefit has been included in Annex IIa to the regulation is sufficient to characterise it as a benefit 32. The French Government therefore pro- within the meaning of Article 10a of the poses that the question referred be regulation. The Annex was drawn up by answered as follows: the Community legislature in such a way that there is no scope for further assess- ment. That approach is confirmed by the judgment in Snares.

37. The Netherlands Government rejects the Commission's submission in the alter- native, namely that the residence require- ment could constitute discrimination under Community law. Were that line of argu- ment adopted, both Article 10a and Annex Ha would be without practical sig- 39. The United Kingdom Government sub- nificance. Moreover, those issues have mits that only one condition has to be already been resolved by the judgment in fulfilled for Article 10a of the regulation to Snares. In conclusion, the Netherlands apply and that is the inclusion of the benefit Government contends that the inclusion in question in Annex Ha to the regulation. of the care allowance at issue in Annex Ha The reference to the benefit in Annex Ha to the regulation implies that it is a special simply means that the derogation whereby non-contributory benefit covered by Arti- the residence clause is waived should apply. cle 10a of Regulation (EEC) No 1408/71. The individual features of the benefit were assessed before it was included in Annex - Ha.

(e) The United Kingdom Government 40. As regards the possibility that a resi- dence requirement might give rise to dis- crimination within the meaning of Arti- cles 48 and 6 of the EC Treaty (now, after amendment, Article 12 EC), the United 38. The United Kingdom Government essentially raised two issues at the hearing. First, it takes the view that in the Snares, 7 — See footnotes 4 to 6 above.

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(f) The Commission

44. It is true that Paragraph 23 of the 42. The Commission begins by stating that BPGG, according to which the Austrian the question referred is seeking to ascertain Federation has to reimburse the competent whether the benefit at issue has actually to institutions the care allowance they accord, be considered to be a special non-contrib- suggests that this is a non-contributory utory benefit within the meaning of Arti- benefit. However, as the national court has cles 4(2a) and 10a of the regulation. That is demonstrated, there are significant grounds a question which requires an interpretation for taking the opposite view. These include, of national law and can therefore be in particular, the increase in sickness insur- answered only by the national court itself. ance contributions and the simultaneous In accordance with settled case-law, the reduction in the level of contributions to be paid by the pension funds to the sickness insurance funds — in the amount of the 8 — Case C-20796 (cited in footnote 4 above). anticipated increase in expenditure on care 9 — Case C-297/96 (cited in footnote 5 above). allowance — at the time the BPGG was 10 — Case C-90/97 (cited in footnote 6 above). introduced.

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46. The Commission concludes from this 49. Should the Court decide that care that the Austrian care allowance probably allowance is a special non-contributory fails to meet the conditions for a non- benefit, the Commission argues that the contributory benefit and ought not there- abovementioned provisions of the regula- fore to have been included in Annex IIa. In tion cannot apply to a benefit of that that connection, the judgment in Snares is nature. A national rule which makes enti- not to be construed as meaning that the tlement to care allowance subject to a mere fact that a benefit is included in person being habitually resident in the Annex IIa creates a right, regardless of the Member State concerned is incompatible circumstances of the individual case. with the prohibition on discrimination on grounds of nationality (Article 6 of the EC Treaty — now, after amendment, Arti- cle 12 EC — and Article 48 of the EC Treaty — now, after amendment, Arti- cle 39 EC).

47. If care allowance is not a special non- contributory benefit, the Commission con- 50. It is settled case-law that these provi- siders that reference should be made to the sions prohibit not only direct discrimina- judgment in Molenaar in order to answer tion on grounds of nationality but also all the question referred, since Molenaar con- forms of discrimination which have the cerned a national rule largely comparable same effect as a result of the application of to the national provision at issue in this other distinguishing criteria. While Aus-

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52. In Molenaar, which concerned care insurance and care allowance under Ger- man law, the preliminary issue of the (a) Preliminary observation applicability of Regulation No 1408/71 was therefore raised. In that case, the Court was able to conclude on the basis of the submissions of the various participants in the proceedings before it 12 that: 51. The 'care allowance' issue was consid- ered by the Court of Justice for the first time in Molenaar. It has now again been brought to the Court's attention in the form of an Austrian State social benefit. As Advocate General Cosmas graphically demonstrated in his Opinion in Mole- naar, 11 [the risk of] 'reliance on care' is a phenomenon that still exists. However, it has only recently become a risk of social 'All the interveners in the proceedings agree insurance. That is probably why the risk of that a scheme such as that at issue in the reliance on care does not appear in the list main proceedings falls within the scope of contained in Article 4(1) of Regulation Regulation No 1408/71.' 13 No 1408/71 concerning the kinds of bene- 12 — The claimant and defendant in the main proceedings, the Austrian, German and Swedish Governments and the 11 — Opinion of Advocate General Cosmas of 9 December Commission were the participants in the proceedings 1997 in Case C-160/96 ([19981 ECR I-843, I-846, before the Court i nMolenaar. point 3). 13 — Molenaar, cited in footnote 3 above, paragraph 16.

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54. The Court drew attention to the criter- ion already established in earlier case-law, namely that the distinction between bene- 56. For its part, the Court analysed the fits excluded from the scope of Regulation essential features of the benefit, and, as part No 1408/71 and those which fall within it of that analysis, also considered the pur- is based essentially on the constituent pose of care insurance benefits, which is to elements of each particular benefit, in develop the independence of persons reliant particular its purpose and the conditions on care, particularly from the financial on which it is granted, and not on whether point of view. 'The system introduced is a benefit is classified as a social security aimed at encouraging prevention and reha- benefit by national legislation. 17 'The bilitation in preference to care and at Court has consistently stated that a benefit promoting home care in preference to care may be regarded as a social security benefit provided in hospital.' 20 As regards the in so far as it is granted, without any purpose of care allowance, the Court held individual and discretionary assessment of that the payment allows the insured to personal needs, to recipients on the basis of choose the method of assistance they prefer

14 — Molenaar, cited in footnote 3 above, paragraph 17. 18 — Molenaar, cited in footnote 3 above, paragraph 20. 15 — Molenaar, cited in footnote 3 above, paragraph 17. 19 — See the proposal by Advocate General Cosmas at Section 16 — Molenaar, cited in footnote 3 above, paragraph 18. IX of his Opinion. 17 — Molenaar, cited in footnote 3 above, paragraph 19. 20 — Molenaar, cited in footnote 3 above, paragraph 22.

58. As regards the purpose of Austrian care allowance, it may be affirmed that it is in all essential respects comparable to the German care allowance. The Austrian legislature defined the purpose of care allowance in Paragraph 1 of the BPGG. (b) The legal effects of inclusion in Annex - According to that definition, the benefit is IIa to the regulation designed 'to compensate, in the form of a lump-sum contribution, for the extra expenditure needed to provide persons reliant on care so far as possible with the care and assistance they need, and improve 61. The various annexes to Regulation their opportunity of living an independent No 1408/71 — eight in all — differ in life in accordance with their needs'. content and significance. Annex I, for example, refers to the persons covered by the regulation, that is to say, it lists groups of persons, in the categories defined in the 21 — Molenaar, cited in footnote 3 above, paragraph 23. 22 — Molenaar, cited in footnote 3 above, ParaGraphs 24 and laws of the Member States, which have to 25. be included under the concepts of

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63. In so far as it is sought to draw any conclusion for the purposes of this case, I consider it permissible to be guided only by 'Notwithstanding the provisions of Arti- the content and purposes of the individual cle 10 and Title III, persons to whom this annex and above all its function in regard Regulation applies shall be granted the to the substantive provisions of the regula- special non-contributory cash benefits tion which the annex in question is inten- referred to in Article 4(2a) exclusively in ded to clarify. the territory of the Member State in which they reside, in accordance with the legisla- tion of that State, provided that such 23 — See Cases 17/76 Brack [1976] ECR 1429 and 143/79 benefits are listed in Annex Ha'.27 Walsh [1980] ECR 1639. 24 — See Case 150/79 Commission v Belgium [1980] ECR 2621. 25 — Regulation (EEC) No 574/72 of the Council of 21 March 1972 fixing the procedure for implementing Regulation (EEC) No 1408/71 on the application of social security 26 — See the sixth recital in the preamble to Regulation schemes to employed persons, to self-employed persons No 1247/92, which refers to: 'a system of coordination and to members of their families moving within the which differs from that currently provided for in Regula- Community (OJ, English Special Edition 1972 (I), p. 159) tion (EEC) No 1408/71.' (for the consolidated version see OJ 1992 C 325, p. 96). 27 — My emphasis.

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66. That form of wording suggests that for Furthermore, the wording of Article 10a the derogation to take effect the benefit has implies that the benefits to which it refers to be listed in Annex IIa. It does not, also come within Article 4(2a) of Regula- however, give any indication as to whether tion No 1408/71, as amended by Regula- this has to be a special non-contributory tion No 1247/92. benefit within the meaning of Article 4(2a). However, it must be a special non-contrib- utory benefit if Article 10a is to apply.

68. The participants in these proceedings do not agree on the interpretation of this 'The fact that the Community legislature passage: that is to say on whether the very refers to legislation, such as that relating to fact that it is listed means that the benefit the DLA, in Annex IIa to Regulation has to be classified as a non-contributory No 1408/71 must be accepted as establish- benefit within the meaning of Article 4(2a) ing that benefits granted pursuant to that or whether this has first to be assessed. The legislation are special non-contributory latter view is advanced in particular with benefits falling within the scope of Arti- reference to the fact that in Snares the cle 10a of Regulation No 1408/71 (see, in question whether the benefit was a special particular, to that effect, Case 24/64 Dinge- non-contributory benefit did not arise; at mans v Bestuur der Sociale Verzekerings- issue was simply the legal consequence, bank [1964] ECR 647, at p. 654). that is to say the applicability of Arti- cle 10a.

28 — Case C-20/96, cited in footnote 4 above. 29 — Case C-297/96, cited in footnote 5 above. 31 —See the judgment i n Snares, cited in footnote 4 above, 30 — Case C-90/97, cited in footnote 6 above. paragraphs 30 to 32.

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71. Turning now to the Dingemans 34 judg- 'Eine Leistung, die wie die Einkommens- ment to which the Court made specific beihilfe in Anhang IIa aufgeführt ist, fällt

33 — See paragraph 24 of the judgment in Swaddling (cited in 32 — See paragraph 33 of the judgment in Partridge (cited in footnote 6 above). footnote 5 above). 34 — Case 24/64 [1964] ECR 647.

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reference in Snares, 35 and which concerned be considered to be contrary to Article 48 the classification of an invalidity benefit as of the EC Treaty (now, after amendment, a 'benefit of type B', 36 it is striking that, on Article 39 EC). the basis of an amendment to Annex F to Regulation No 3, which categorised the (contested) Netherlands legislation as such as type B, the Court recognised the benefit to be a type B benefit. However, the Court expressly noted: 73. Moreover, in both Snares and Par­ tridge, the Court held, in almost identical terms, as follows:

'The legality of the amendment has never been contested.

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75. Moreover, the eighth recital in the 78. At the hearing, it was submitted that preamble to Regulation No 1247/92, the annexes — like the regulation as a which first specifically placed special non- whole — could be amended only unani- contributory benefits within the scope of mously. Without unanimity, a potentially Regulation No 1408/71, states: incorrect listing could therefore continue to be included in Annex IIa. In that respect, the United Kingdom Government's refer- ence to the possibility of bringing Treaty- infringement proceedings is misconceived in that such proceedings are not capable of determining the attitude of a Member State within the Community's legislative process. '... it is necessary nevertheless to ensure that Finally, there is also no apparent reason the existing system of coordination in why inclusion in an annex should not in Regulation (EEC) No 1408/71 continues principle be open to judicial review. to apply to benefits which either do not fall within the special category of benefits referred to or are not expressly included in the Annex to that Regulation...'.42

79. As an interim conclusion, I therefore consider that it must be possible to under- take a substantive assessment of the benefit at issue in the light of Article 4(2a) of the 76. That wording also makes it clear that regulation. It is therefore necessary to inclusion in the list in Annex IIa is merely consider the question referred by the one prerequisite for the application of national court as to whether the benefit at Article 10a. issue is a special non-contributory benefit within the meaning of Article 4(2a).

benefit within the meaning of Article 4(2a). 81. The regulation was therefore intended In order to determine the characteristics of to make clear that — subject to certain a benefit of that nature, it is first necessary conditions and in accordance with the to refer back to Regulation No 1247/92, Court's case-law — certain social benefits which inserted both Article 4(2a), Arti- of a dual nature fall within the scope of cle 10(a) and Annex IIa in the regulation. Regulation No 1408/71. To the extent that The third and fourth recitals indicate the these are not traditional social security background to and the reasons for its benefits, the special system of coordination adoption. They state: is also justified, given that the inclusion of the benefits within the scope of the regula- tion marked an improvement on the pre- vious situation, which was based on a twofold system of 'social security' on the one hand and 'social assistance' 43— spe- cifically excluded from the regulation — on the other. Only the Court's case-law made it possible to categorise individual 'Whereas it is also necessary to take benefits of a combined nature. account of the case-law of the Court of Justice stating that certain benefits provi- ded under national laws may fall simulta- neously within the categories of both social security and social assistance because of the class of persons to whom such laws apply, their objectives and their manner of appli- cation; 82. However, Regulation No 1247/92 was also designed to ensure that: 'the existing system of coordination in Regulation (EEC) No 1408/71 continues to apply to benefits which... do not fall within the special category of benefits referred to . . . ' . 44 It is therefore necessary to identify the features of this 'special category of benefits' in order to use it for the purposes of classifying a benefit. Whereas the Court of Justice has stated that, in some of its features, legislation under which such benefits are granted is akin to social assistance in that need is an essential criterion in its implementation and the conditions of entitlement are not based upon the aggregation of periods of employment or contributions, whilst in 83. On the one hand, the benefit must be other features it is close to social security 'non-contributory'. But that criterion alone to the extent that there is an absence of cannot be decisive, since Article 4(2) of the discretion in the manner in which such benefits as are provided thereunder are awarded and in that it confers a legally 43 — Sec Article 4(4) of Regulation No 1408/71. defined position upon beneficiaries.' 44 — See the eighth recital in the preamble to the regulation.

regulation applies to 'all general and special way in which old-age and sickness insur- social security schemes, whether contribu- ance were financed was restructured as tory or non-contributory'. 45It is therefore follows: sickness insurance contributions further necessary unequivocally to establish were increased by 0.8%. That permitted a that the benefit to be classified is in the reduction in the financial contribution from nature of a 'special benefit' before it can be the pensions institutions to the providers of included in the scope of Article 4(2a). sickness insurance, while at the same time maintaining the level of benefit. As a result, resources were freed up within the pension insurance funds. As regards the financial resources which the State allocates to the providers of pensions insurance, a special budget heading for care allowance was introduced. Consequently, Austria is cor- rect in claiming that care allowance is 1. What is meant by 'non-contributory' financed from tax revenue, but the Com- mission is also right to say that the introduction of care allowance was neutral in terms of its impact on the Austrian State budget. 84. The national court has, above all, expressed reservations concerning the non-contributory nature of the benefit in question and made particular mention of the budgetary changes that were made when the benefit was introduced; the claimant in the main proceedings was also affected by this as a result of the increase in sickness insurance contributions. 86. Characteristic of the three-pronged system described above is that, to a large extent, the potential beneficiaries of the care allowance which has been introduced contribute indirectly, as persons insured under the social security scheme, to the financing of care allowance as a result of 85. At an organisational level, the care the increase in sickness insurance contribu- allowance was linked to pensions insur- tions. The critical factor here is the exis- ance, both administratively and as regards tence of a social insurance relationship. the conditions of entitlement. Traditionally, Austrian pensions insurance has been financed from three sources: employee and employer contributions and supple- ments from the State. For its part, the pensions insurance institution pays contri- butions to the sickness insurance fund. When care allowance was introduced the 87. Considered from the purely formal point of view, the existence of a separate 45 — My emphasis. budget heading for care allowance — as

88. It has, however, to be borne in mind that even before care allowance was intro- duced, the State contributed to the finan- cing of the pensions insurance funds. Given that the pensions insurance institutions have been able to make savings by way of 2. The nature of a special benefit sickness insurance contributions, while State supplements have been channelled towards care allowance, it is reasonable to assume there has been a proportionate 91. The Community legislature has not increase in the element of pension benefits provided a specific definition of a special which is financed from contributions. Since benefit within the meaning of Arti- the benefit at issue is both closely con- cle 4(2(a). In the recitals in the preamble nected to a social security system reliant on to the regulation, 46 reference is, however, contributions, and indirectly financed from made to the case-law of the Court of sickness insurance contributions, it cannot Justice. be considered to be non-contributory with- out further analysis.

92. In a series of cases, 47 the Court has had to rule on whether the grant of certain social benefits, accorded by way of supple- ment to social security benefits, was com- 89. One factor which can be considered an patible with the rules of Regulation indication that the benefit is not non- contributory is that self-employed persons are potentially able to be included in the 46 — See the fourth recital in the preamble to Regulation scope of the BPGG, in accordance with No 1247/92. 47 —See Case 24/74 Biason [1974 ECR 999; Joined Cases Paragraph 3 thereof, at the request of their 379/85 to 381/85 and 93/86 Giletti [1987] ECR 955; Case C-236/88 Commission v France [1990] ECR I-3163 and professional representatives; but it is speci- Case C-356/89 Newton [1991] ECR I-3017.

93. In one of the earlier cases of this nature, 48 the subject of which was still Regulation No 3, at issue was a supplement to an invalidity pension, which was taken away from the claimant in the main 94. A later judgment, in Giletti, 50 con- proceedings because he had moved his cerned an allowance in supplementation of place of residence to another Member old-age, survivors and invalidity pensions State. The Court held: which was defined as: 'a solidarity allow- ance, which is financed out of taxation, intended to guarantee a minimum means of subsistence, paid as a supplement to another benefit, contributory or not, and granted on the basis of the applicant's 'Whilst it may seem desirable from the resources but without regard to his occupa- point of view of applying this regulation to tion and which may under certain circum- establish a clear distinction between legis- stances be recovered from the recipient's lative schemes that fall respectively within estate.' 51 social security and assistance, one cannot exclude the possibility that by reason of the persons covered, its objectives and its method of application, a legislation can come close to both these categories, thus preventing any comprehensive classifica- tion. In the event of such legislation having ceased to concern itself with the assessment In classifying the benefit, the Court pointed of need in the individual case — a char- out that the way in which the benefit was acteristic feature with assistance — con- financed was not an issue, since, in accor- ferring on the persons entitled a legally dance with Article 4(2), non-contributory defined status, then it falls within the benefits were not excluded from the scope system of social security, within the mean- of the regulation. The Court then stated: ing of the Community regulations. This is 'Legislation of the type with which the the case where the legislation provides request for a preliminary ruling is con- supplementary benefits linked to a certain cerned in fact fulfils a dual function, in so degree of invalidity and having the purpose far as, in the first place, it guarantees a of increasing the amount of an invalidity minimum means of subsistence to persons pension. The fact that the same law also in need and, in the second place, it provides provides beneficiaries with advantages that come close to the concept of assistance 49 — Biason, cited in footnote 47 above, paragraphs 9 to 12. 50 — Joined Cases 379/85 to 381/85 and 93/86, cited in footnote 47 above. 48 — Biason, cited in footnote 47 above. 51 — See paragraph 4 of the judgment.

'Having regard to the broad definition of the persons entitled to the benefit in issue, such legislation in fact has a twofold function. On the one hand it seeks to 95. In subsequent proceedings against the ensure a minimum level of income for French Republic 54 for breach of its Treaty handicapped persons who are entirely out- obligations by reason of failure to waive side the social security system. On the other the residence clause in connection with the hand it provides supplementary income for grant of a supplementary allowance recipients of social security benefits who designed to guarantee the minimum for subsistence in France, the Court based itself 55 — Cited in footnote 47 above. 56 — Cited in footnote 47 above. 57 — Case C-356/89, cited in footnote 47 above. 52 — See paragraph 10 of the judgment. My emphasis. 58 — See paragraph 2 of the judgment. 53 — See paragraph 11 of the judgment. 59 — See paragraph 5 of the judgment. 54 — Case C-236/88, cited in footnote 47 above. 60 — See paragraph 5 of the judgment.

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suffer from physical disablement affecting meet family expenses, as is clear in parti- their mobility. cular from the fact that it is paid only where the claimant's family includes one or more children and from the fact that the amount of the benefit varies according to the age of the children.' 64

Consequently, in the case of an employed or self-employed person who by reason of his previous occupational activity is already covered by the social security system of the State whose legislation is invoked, that legislation must be deemed to fall within In conclusion, the Court held that family the field of social security within the credit was a family benefit within the meaning of Article 51 of the Treaty and meaning of Regulation No 1408/71. the legislation adopted in implementation of the provision, although in the case of other categories of beneficiaries it may be deemed not to.' 61

102. The purpose of the Austrian care allowance is therefore to tackle the 'risk 100. In its written observations, the Aus- of reliance on care' as a separate phenom- trian Government also refers, significantly, enon. The order for reference points out — in this connection to the 'principal benefit'. and this was confirmed by the Austrian Since Austrian care allowance is indissolu- Government in its written observations — bly linked to a social security benefit, the that the purpose of the restructuring of the grant of care allowance is, in the final care system was 'to create a comprehensive analysis, dependent on factors related to care provision system, for the first time social security law. In that respect, it bears expressly recognising need for care as a the classical hallmarks of a social security social risk in its own right and acknowl- benefit. edging the responsibility of society for that risk.'

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survivor 71 may be in need of care. Within tively to establish that the benefit is special the framework of the Austrian rules gov- in nature, and that, precisely, is not possible erning care allowance, persons in receipt of here. However, the phenomenon of need of survivor's benefits may also be entitled to care cannot be equated with disability at a care allowance. conceptual level either. A disabled person may, of course, be in need of care. But there are a range of other reasons why a person may be in need of care — illness, accident or age, for example — that cannot be linked to disability.

107. Since the benefit at issue does not 105. In those terms, care allowance is not a display the characteristics of a special non- benefit 'other than those referred to in contributory benefit and a residence clause paragraph 1' within the meaning of Arti- cannot therefore be applied under Com- cle 4(2a) of the regulation. Nor, conse- munity law, it is not necessary to adopt a quently, is it a 'special benefit' within the position on the Commission's submission in meaning of Article 4(2a)(b) intended 'solely the alternative, designed to enable the as specific protection for the disabled.' On individual to enforce his rights on the basis the one hand, it would be necessary posi- of Article 48 of the EC Treaty (now, after amendment, Article 39 EC) in a case such as the present case, where a frontier 71 —See Article 4(1)(d). worker, who has for 40 years paid into 72 — See Molenaar, cited in footnote 3 above, paragraph 24. the social security system of a State, loses

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his claim to entitlement because of a clude this, since we are dealing merely with residence clause. a transfer of resources and not a rigid separation of the systems. That would only be the case were the link between the grant of care allowance and social insurance to be broken.

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VI — Conclusion

113.1 therefore propose that the Court give the following answer to the question submitted by the Landesgericht Feldkirch:

It is contrary to Article 10 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, in the version resulting from Regulation (EEC) No 1247/92, to make entitlement to care allowance under the Bundespflegegeldgesetz (BPGG) (Austrian Federal Law on care allowance, BGBl. 110/1993), in the version at present in force, dependent on the person reliant on care being habitually resident in Austria, in so far as the benefit is not a special non-contributory benefit.

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