C-28/00

KAUER

OPINION OF ADVOCATE GENERAL JACOBS delivered on 25 September 2001 1

1. In the present case, the Oberster Gericht- Article 94(1) to (3) of Regulation shof (Austrian Supreme Court) asks No 1408/71 2 and the Treaty provisions whether Community law precludes a provi- concerning the freedom of movement for sion of national social security law under persons. which periods of child-rearing undertaken in a Member State of the EEA or the EC are recognised as substitute qualifying periods for the purpose of old age pension only where (i) those periods occurred after the entry into force of the Agreement on the European Economic Area on 1 January 1994 and (ii) the mother was entitled under The relevant legislative provisions national law to a cash benefit stemming from maternity insurance or a maternity benefit.

Community provisions

3. Article 1 of Regulation No 1408/71, in so far as is relevant to the present case, provides:

4. Article 2 is headed 'Persons covered'. Article 2(1) provides: (r) periods of insurance means periods of contribution or period[s] of employ- ment or self-employment as defined or recognised as periods of insurance by the legislation under which they were completed or considered as completed, and all periods treated as such, where they are regarded by the said legislation as equivalent to periods of insurance;

'This Regulation shall apply to employed or self-employed persons who are or have been subject to the legislation of one or more Member States and who are nationals of one of the Member States or who are (s) periods of employment and periods of stateless persons or refugees residing within self-employment means periods so the territory of one of the Member States, defined or recognised by the legislation as well as to the members of their families under which they were completed, and and their survivors.'

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5. Article 4 is headed 'Matters covered'. only. That legislation shall be determined Article 4(1) provides, in so far as is rel- in accordance with the provisions of this evant: Title.'

'1. This Regulation shall apply to all legis- lation covering the following branches of 8. Article 14c contains special rules appli- social security: cable to persons who are simultaneously employed in the territory of one Member State and self-employed in the territory of another Member State, which are not relevant to the present case. (a) sickness and maternity benefits;

'a person to whom the legislation of a Member State ceases to be applicable, 3. Subject to the provisions of paragraph 1, without the legislation of another Member a right shall be acquired under this Regu- State becoming applicable to him in lation even though it relates to a contin- accordance with one of the rules laid down gency which materialised prior... to the in the aforegoing subparagraphs or in date of its application in the territory of the accordance with one of the exceptions or Member State concerned ...'. special provisions laid down in Articles 14 to 17 shall be subject to the legislation of the Member State in whose territory he resides in accordance with the provisions of that legislation alone'.

The national legislation 48 calendar months from the birth of the child, shall constitute a substitute qual- ifying period after 31 December 1955 in the class of pension insurance within which the last preceding contribution period falls or, where no such period exists, within 14. Under the provisions of the (Austrian) which the next following contribution Allgemeines Sozialversicherungsgesetz period falls. (General Law on Social Security, hereinafter: 'ASVG'), pension insurance institutions are obliged, at the request of an insured person, to establish the periods of insurance which will be taken into account under Austrian law for the purpose of calculating that person's old-age pension. 6 In that context, the insurance institutions must take into account periods during which a person has paid insurance con- tributions ('contribution periods', Beitrags- zeiten) and other periods recognised by law as insurance periods for the purpose of old-age pension ('substitute qualifying periods', Ersatzzeiten). (3) Where the birth ... of an additional child occurs before the expiry of the 48-calendar-month period, it shall extend only until that additional birth ... Where the rearing of the additional child (para- graph 1) ends before that 48-calendar- month period, the following calendar 15. Paragraph 227a of the ASVG lays months shall be counted again until it down rules concerning substitute qualifying expires. Child-rearing in a State party to periods in respect of child-rearing after the Agreement on the European Economic 31 December 1955. That provision reads, Area (EEA) shall be treated as child-rearing in so far as is relevant, as follows: 7 in Austria where an entitlement to a cash benefit stemming from maternity insurance under this or another federal law or to a maternity benefit under the Betriebshilfege- setz exists, or existed, in respect of that child and the period of child-rearing occurs after that Agreement entered into force.' '(1) In addition, where an ... insured person has actually been the person mainly respon- sible for rearing ... her child ..., such child- rearing in the country, up to a maximum of

18. Liselotte Kauer, the applicant in the main proceedings, is an Austrian national born in 1942. She has three children born in 1966, 1967 and 1969. After completing her studies in June 1960, she worked in 20. The applicant challenged that decision Austria from July 1960 to August 1964. In in the Austrian courts. In her view, the April 1970, together with her family, she defendant should have recognised 82 transferred her residence from Austria to months of child-rearing, since the period Belgium. Whilst living in Belgium, she did during which she reared her child in not work. Thus she did not make con- Belgium should be considered to be a tributions to the Belgian pension insurance substitute qualifying period. The defen- scheme nor, it appears, did she contribute dant's refusal to recognise a period of to any other branch of the Belgian social child-rearing abroad (in her case 36 security system. After returning to Austria, months) violated Austrian constitutional she again worked and completed compul- law and Community law.

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23. In its order for reference, the Oberster 1 January 1994? Second, is Paragraph Gerichtshof states that it desires to know, 2 2 7 a ( 3 ) c o n t r a r y to R e g u l a t i o n in particular, whether child-rearing is to be No 1408/71 or provisions of the EC Treaty regarded as a 'contingency' within the in so far as it limits substantively the meaning of Article 94(3) of Regulation recognition of child-rearing by requiring No 1408/71. that the applicant was entitled to a cash benefit under the ASVG or a maternity benefit under the Betriebshilfegesetzi

24. The Austrian and Spanish Govern- ments and the Commission have submitted written observations as well as written 26. It is appropriate to begin by examining replies to a question put by the Court of the first of those issues, since that is the Justice. At the hearing the applicant, the only one explicitly raised in the order for Austrian Government and the Commission reference. Moreover, if there is no incom- presented oral argument. patibility between Community law and the temporal limitation inherent in Paragraph 227a of the ASVG, then the applicant's claim in the main proceedings may be dismissed without its being necessary, in the context of the present case, for the Court of Justice to rule on the compatibility with Community law of a substantive limitation such as that laid down in Para- graph 227a of the ASVG. Delimitation of the issues

25. Those submitting observations all con- sider that the Oberster Gerichtshof seeks, in substance, a ruling on the compatibility of The temporal limitation: summary of the Paragraph 227a of the ASVG with Com- arguments munity law. The Court of Justice should accordingly, it is argued, consider two issues. First, is Paragraph 227a(3) of the ASVG contrary either to Article 94 or other provisions of Regulation No 1408/71 or to provisions of the EC Treaty in so far as it 27. The observations submitted in this case limits temporally the recognition of child- concerning the temporal limitation inherent rearing periods completed in a Member in Paragraph 227a(3) ASVG address, first, State of the EU or the EEA to periods after the compatibility of that limitation with

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of child-rearing in Belgium is, in any event, that provision. However, the possibility of excluded since she was, whilst living in acquiring rights in respect of a contingency Belgium, subject to Belgian rather than which materialised before the Regulation Austrian social security law under took effect under Article 94(3) is '[s]ubject Article 13(2)(f) of the Regulation. to the provisions of paragraph 1' of Article 94. It follows, according to the Commission, that Article 94(3) applies only where a 'pre-regulation contingency' gave rise to an entitlement to social benefits of itself. That condition is not fulfilled in the present case, since it follows clearly from Paragraph 227a of the ASVG that the 32. The Commission stresses, first of all, period of child-rearing spent by the appli- that Article 94(1) limits the temporal scope cant in Belgium does not give rise to any of Regulation No 1408/71 by providing entitlement to social benefits. that '[n]o right shall be acquired under this Regulation in respect of a period prior to ... the date of its application in the territory of the Member State concerned'. Thus while Article 94(1) aims to protect rights already acquired under national law, a right which was not so acquired before the entry into force of Regulation No 1408/71 in Austria on 1 January 1994 cannot be acquired, with retroactive effect, on the basis of that regulation. However, in order to determine in what circumstances, and at which point in time, a right has been 'acquired' it is necessary to look to the transitional provi- sions laid down in Article 94(2) and 94(3).

correctly, the Spanish Government con- the fact she did not exercise any economic siders furthermore that child-rearing activity in Belgium. However, in reply to a periods should be considered to be a question put by the Court of Justice on the contingency within the meaning of Regu- significance for the present case of the lation No 1408/71 and that such periods ruling in Elsen, 8the Commission expressed must therefore be taken into account for the view that the applicant can rely on the the purpose of calculating pensions even right to freedom of movement for citizens though they occurred before the Regulation of the Union laid down in Article 18 EC, entered into force in Austria on 1 January and that the Austrian legislature's refusal to 1994. recognise as substitute qualifying periods periods of child-rearing completed before 1 January 1994 in a Member State of the EEA or the EU is contrary to that provi- sion.

Observations on Articles 18 and 39 EC

necessity based on previous facts. The The temporal limitation: analysis application of Article 18 to that act thus does not involve the recognition of Com- munity law rights with retroactive effect even though some of the facts to be taken into account — such as periods of child- rearing — occurred before the entry into force of the Treaty. The application of Article 18 in that context merely ensures that there is no current discriminatory treatment of migrant persons. 39. It emerges from the factual context and the observations submitted to the Court that in order to provide the Oberster Gerichtshof with an answer which will enable it to decide the case before it in the main proceedings, it is necessary to deter- mine whether a provision of national law which limits temporally the recognition for pension purposes of periods of child-rear- ing spent in a Member State of the EEA or the EU to such periods completed after the date on which Regulation No 1408/71 entered into force in the Member State where recognition is sought are contrary to Community law. In other words, does a rule such as Paragraph 227a(3) of the ASVG infringe Community law in that periods of child -rearing completed in 38. The Austrian authorities are therefore Austria before 1 January 1994 are treated obliged, under Article 18 EC, when decid- differently from periods completed in other ing whether to recognise periods of child- Member States? rearing, not to discriminate against persons who have exercised their right to free movement. The rule laid down in Para- graph 227a(3) of the ASVG discriminates against those persons in so far as it excludes child-rearing periods which would have been taken into account had they been completed in Austria. That discrimination is not, according to the Commission, justi- fied. Paragraph 227a(3) is therefore contrary to Community law, and it is thus incumbent on the Austrian authorities to take into account the periods of child- 40. In order to answer that question, I rearing completed by the applicant in propose to examine, first, the relevant Belgium as if they had been completed in provisions of Regulation No 1408/71 and, Austria. secondly, Articles 18 and 39 EC.

44. The fact that the applicant did not, according to the facts established by the referring court, exercise any economic activity in Belgium does not exclude her 43. Under Article 2(1) of the Regulation, from the scope of the Regulation. It is true its provisions are to apply to Community that the Court of Justice has repeatedly nationals who are employed or self-em- held that the Treaty provisions governing ployed persons and are, or have been, freedom of movement for persons and subject to the social security legislation of measures adopted to implement them, one or more Member States, as well as to including Regulation No 1408/71, do not their families. According to Article 1(a) of apply to activities which are confined in all the Regulation, and the Court's case-law, respects within a single Member State. 12 I the concept of 'employed or self-employed consider however that that case-law is not persons' covers any person who has the applicable to the situation of persons who status of a person insured under the social have moved from one Member State to security legislation of one or more Member another Member State together with their States, even if only in respect of a single spouses, who have worked in the second risk, on a compulsory or optional basis, by State, and have devoted time to bringing up a general or special social security scheme, children in that State. In any event, it is whether or not he pursues a professional or clear from the text of Article 2(1) of the trade activity. 11 The applicant has accord- Regulation that its provisions apply to the ing to the order for reference for many

members of the families of migrant its scope is based essentially on the con- workers. 13 According to information pro- stituent elements of the particular benefit, vided to this court by the Austrian Govern- in particular its purposes and the con- ment, the applicant's spouse worked in ditions on which it is granted, and not on Belgium and paid social contributions whether a benefit is classified as a social there. The applicant thus falls within the security benefit by national legislation. personal scope of the Regulation. More- Moreover, the Court has consistently held over, in her capacity as a family member that a benefit may be regarded as a social within the meaning of Article 2(1), the security benefit in so far as it is granted, applicant can rely on all the provisions of without any individual and discretionary the Regulation with the exception only of assessment of personal needs, to recipients provisions concerned with benefits which on the basis of a legally defined position are exclusively applicable to employed and provided that it concerns one of the persons, such as unemployment benefit. 14 risks expressly listed in Article 4(1) of the Regulation. 15 It is in my view clear that the award of supplementary pension periods in respect of child-rearing under the ASVG meets those criteria, a view which has not been contested by the Austrian Govern- ment.

45. Second, it is necessary to examine whether the social benefits sought by the applicant in the main proceedings are within the material scope of the Regu- lation, in so far as they fall under the branches of social security which are, 47. Third, it is necessary to ascertain according to Article 4(1), covered by the whether, under Regulation No 1408/71, Regulation. Austrian legislation is applicable to the situation of a worker who ceased her occupational activity in Austria, then had a child and subsequently transferred her residence to another State for a period of about five years before returning to Austria where she recommenced occupational activities. 46. According to the Court's settled case- law, the distinction between benefits excluded from the scope of Regulation No 1408/71 and those which fall within

points out that the applicant ceased all lation No 1408/71 many years after the occupational activities in August 1964, facts in issue in the present case by more than 21 months before the birth of Regulation No 2195/91. 17 The question her first child on 25 June 1966, and did not which legislation was applicable to the carry out any other economic activities applicant must therefore be decided in between that date and her move to Belgium accordance with Article 13(2) of the Regu- in April 1970. The applicant was therefore lation as it stood prior to amendment by not, it is argued, subject to Austrian social Regulation No 2195/91. According to the security law under Article 13(2)(a) of the judgments of the Court of19 Justice in Ten Regulation; she was subject to that law Holder 18and Twomey, subparagraph only under Article 13(2)(f) owing to her (a) of that provision was, prior to amend- continued residence in Austria. However, ment, to be interpreted as meaning that a according to the Court's judgment in worker who ceased to carry on an activity Kuusijärvi,16 by virtue of Article 13(2)(f) in the territory of a Member State con- the law of that State ceases to apply the tinued to be subject to the legislation of moment a person transfers his or her that Member State so long as he did not residence to another State. It follows that take up employment in another Member the question of recognition of child-rearing State. periods spent by the applicant in Belgium must be determined on the basis of Belgian law. The fact that Belgian law apparently does not provide for such recognition, and that the applicant may therefore suffer a disadvantage as a result of having moved to Belgium, is a consequence of the existing 50. In accordance with those preliminary differences between the national social observations, I consider that a person in the security systems left in place by Regulation applicant's situation, and the Austrian rules No 1408/71. Thus it cannot affect the in issue in the main proceedings, fall within compatibility of Austrian law with Com- the personal and material scope of the munity law. Regulation. Moreover, under the rules of the Regulation, Austrian rather than Bel- gian law was applicable at the material time.

52. The transitional provisions laid down in Article 94(1) to (3) have a long history. 54. In order to answer the question Article 53 of Regulation No 3 of 1958, 20 referred, it is therefore necessary to inter- the predecessor of Regulation No 1408/71, pret the wording of Article 94 in the light contained similar rules, and equivalent of the purpose of the Regulation, taking provisions are to be found in a number of into account the Court's case-law concern- international conventions concerned with ing the principles of temporal application the strengthening and coordination of of Community legislation. social security for employed and self-em- ployed persons. 21 The proposal for a new regulation on the coordination of social security, which was put forward by the Commission in 1998, 22 also replicates Article 94(1) to (3) of Regulation 55. Article 94(1) provides that no right No 1408/71. 23 shall be acquired under the Regulation in respect of a period prior to the date of its application in the territory of the Member State concerned. That provision reflects the principle that Community legislation does not ordinarily have retroactive effect.26 As such, it sets out the general rule for the temporal application of the Regulation. 53. However, while the Court has occa- The provisions in Articles 94(2) and (3) sionally considered the meaning of are not, in my view, intended to derogate from that rule. Those provisions reflect 20 — Regulation No 3 of the Council of 25 September 1958 concerning social security for migrant workers, OJ English Special Edition 1958, p. 561. 24 — See Case 44/65 Singer [1965] ECR 965, at p. 972; Case 21 — See, for example, Article 53 of the European convention 68/69 Brock [1970] 171, paragraphs 7 to 9 of the on social security for migrant workers, signed 9 December judgment. 1957 by the six original members of the European Coal 25 — See Case 10/78 Belbouab [1978] ECR 1915, paragraph 8 and Steel Community, Tractatenblad (1958) No 54; of the judgment; Case C-105/89 Buhari Haji [1990] ECR Article 74 of the Council of Europe European Convention I-4211, paragraph 21; Case C-227/89 Rõnfeldt [1991] on Social Security, done in Paris on 14 December 1972, ECR I-323, paragraph 15; Kuusijärvi, cited in note 11, European Treaty Series No 78. paragraphs 24 and 25. 22 — Proposal for a Council regulation (EC) on coordination of 26 — For an application of that principle in the context of social social security systems, C0M(1998) 779 Final. security, see Case 104/76 Jansen [1977] 829, paragraph 7 23 — See Article 70 of the proposal. of the judgment.

57. It will be recalled that Article 94(2) 60. In my view, it follows from that lays down the rule that '[a]ll periods of definition that only periods which satisfy insurance and, where appropriate, all the substantive conditions for recognition periods of employment or residence com- laid down by national law must be taken into account under Article 94(2) of the Regulation. That rule is however subject to 27 — See, in the context of social security, Singer, at p. 972 and compliance with the Treaty provisions on Brock, paragraph 7, both cited in note 24. 28 — See, in particular, Case 1/73 Weslzncker [1973] ECR 723, paragraphs 6 to 10 of the judgment; Case 96/77 Banche [1978] ECR 383, paragraph 54 to 58; Case 278/84 29 — See, to the same effect in the context of Article 28 of Germany v Commission [1987] ECR 1, paragraphs 34 to Regulation No 3 of 1958, Case 14/67 Welcbner [1967] ECR 331, at p. 337.

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30 —See, to that effect, Case C-302/90 Faux [1991] ECR 33 — Weichtier, cited in note 29; Case 2/72 Murru [1972] ECR I-4875, patagraphs 25 to 28 of the judgment. 333. 31 — See, in particular, Case 1/78 Kenny [1978] ECR 1489, 34 — Case C-324/88 Velia [1990] ECR I-257; Case C-322/95 paragraph 16 of the judgment and, most recently, Case Iurlaro [1997] ECR I-4881. C-33/99 Fahmi, judgment of 20 March 2001, paragraph 25. 35 — Paragraph 27 and 28 of the judgment. 32 — Case C-349/87 Paraschi [1991] I-4501, paragraph 15 of 36 — See also the judgment of 10 May 2001 in Case C-389/99 the judgment. Rundgren, paragraph 29.

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66. That provision is, as I understand it, concerned with situations where a contin- gency, such as a work-related accident causing the death of a person falling within the scope of the Regulation or the dismissal of a person causing that person to become unemployed, 40 arose prior to the entry into force of the Regulation in the Member State concerned, and that contingency has legal effects — either in the form of an entitlement to social benefits or in the form of an entitlement to recognition of certain 64. In the present case, it follows that there periods as equivalent to contribution is no obligation, under Article 94(2) of the periods — which continue after its entry Regulation, to take into account the period into force. In such situations, the rights during which the applicant reared her child which flow from the Regulation must be in Belgium for the purposes of constituting granted to the affected person with her Austrian pension since she did not immediate effect from the point in time during that period fulfil the residence when the Regulation enters into force. 41 condition laid down in the ASVG for The aim of Article 94(3) is thus, essentially, recognition of child-rearing as substitute to prevent the Member State in question qualifying periods. It will be examined from denying those rights solely on the below whether that result is compatible grounds that the contingency which trig- with the Treaty rules on freedom of move- ment for persons. 39 40 — See to that effect Singer, cited in note 24, at p. 972; Kimsijärvi, cited in note 11, paragraphs 23 and 24 of the ludgment. 37 — Case C-277/89, cited in note 25. 41 — Sec for a similar interpretation of Article 53(3), Regulation 38 — Paragraphs 15 and 16 of the judgment. No 3 of 1958, Brock, cited in note 24, paragraphs 6 to 9 of 39 — See paragraphs 70 to 74. the judgment.

70. It is common ground between the Austrian Government and the Commission that Article 39 EC is inapplicable in the present case. 68. In the present case, it is clear that the child-rearing periods undertaken by the applicant in Belgium do not give rise to an entitlement to recognition of those periods as substitute qualifying periods for the purpose of old-age pension under Paragraph 227a(3) of the ASVG. It follows 71. That view may be accepted. The appli- that, even if the event of taking responsi- cant ceased to work more than 21 months bility for the rearing of a child might — as before moving to Belgium, where she did the Commission maintains — fall within not carry out any occupational activity. She the notion of 'contingency', Article 94(3) therefore cannot therefore be considered a

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migrant worker within the meaning of 74. I accordingly conclude — without it Article 39 EC. being necessary for the Court to make a specific ruling on these points — that a provision such as Paragraph 227a of the ASVG does not infringe Articles 18 and 39 EC in so far as it limits the recognition of periods of child-rearing spent in a Member State of the EEA or the EU to such periods 72. According to the Commission the completed after 1 January 1994. applicant in the main proceedings may however rely on Article 18 EC. In its view, the failure to recognise as substitute qual- ifying periods periods of child-rearing com- pleted before 1 January 1994 in a Member State of the EEA or the EU is contrary to that provision. 42

Conclusion

76. In the light of all the foregoing observations, I am of the opinion that the question referred by the Oberster Gerichtshof should be answered as follows:

Article 94(1) to (3) 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 does not preclude a provision of a Member State under which, for the purpose of pension insurance, periods of child-rearing completed in another Member State of the European Union or the European Economic Area are regarded as substitute qualifying periods only where they occur after the Regulation entered into force in the first State, whereas such periods completed in the first State are regarded as substitute qualifying periods without temporal limitation.

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