C-160/02

SKALKA

OPINION OF ADVOCATE GENERAL KOKOTT delivered on 25 November 2003 1

I — Introduction gewerblichen Wirtschaft (Social Insurance Institution for Trade and Commerce; here- inafter: 'Sozialversicherungsanstalt') — the defendant in the main proceedings — could make receipt thereof conditional upon the 1. By this reference for a preliminary ruling pensioner's residence in Austria. On the the Oberster Gerichtshof (Supreme Court), other hand, if the supplement is to be Austria, is seeking to determine how a considered a general old-age benefit, the compensatory supplement provided for Sozialversicherungsanstalt would have to under the Austrian Bundesgesetz vom 11. remit it to the recipient even if he or she Oktober 1978 über die Sozialversicherung were resident in another Member State. der in der gewerblichen Wirtschaft selb- ständig Erwerbstätigen (Federal Law of 11 October 1978 on Social Insurance for Persons engaged in Trade and Commerce; hereinafter: 'GSVG') 2should be classified in the terms of Regulation (EEC) No 1408/71. 3 Previously self-employed pen- sion recipients are awarded such a compen- satory supplement ancillary to their pension if the pension falls short of the subsistence I I— Relevant legislation minimum.

2. If the benefit in question is to be regarded as a special non-contributory A — Community law benefit, the Sozialversicherungsanstalt der

1 — Original language: German. 2 —BGBl.1978, No 560. 3 — Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to 3. Regulation No 1408/71 applies, in employed persons and their families moving within the accordance with Article 4(1)(c) thereof, to Community (OJ, English Special Edition 1971 (II), p. 416), as amended by Council Regulation (EC) No 118/97 of 2 December 1996 (OJ 1997 L 28, p. 1), hereinafter: the branch of social security relating to old- 'Regulation No 1408/71'. age benefits.

Whereas the Court of Justice has stated 'Notwithstanding the provisions of Article that, in some of its features, legislation 10 and Title III, persons to whom this Regulation applies shall be granted the special non-contributory cash benefits referred to in Article 4(2a) exclusively in 4 — Council Regulation (EEC) No 1247/92 of 30 April 1992 amending Regulation (EEC) No 1408/71 on the application the territory of the Member State in which of social security schemes to employed persons, to self- employed persons and to members of their families moving they reside, in accordance with the legisla- within the Community, OJ 1992 L 136, p. 1.

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'If a pension plus any other net income accruing to a pensioner, together with amounts to be taken into account pursuant to Paragraph 151, 5 fall short of the appropriate standard rate (Paragraph 150), the pensioner shall be entitled to a I I I— Facts and question referred for a compensatory supplement to that pension preliminary ruling

5 — The amounts referred to in Paragraph 151 of the GSVG relate to certain maintenance claims and to the spouse's 11. Friedrich Skalka, the claimant in the Income, where he or she lives in the same household as the pensioner. main proceedings (hereinafter: 'claimant'),

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is an Austrian national. From 1 May 1990 reason to refer the matter to the Court of he had been receiving a pension in respect Justice. of his incapacity for work from the Sozialversicherungsanstalt. Since reaching the age of 60, he has been receiving that benefit in the form of an early retirement pension calculated on the basis of a lengthy period of insurance.

15. The claimant appealed on a point of law against the judgment of the appellate 12. Since late 1999 the claimant has been court. The Oberster Gerichtshof, before habitually resident on Tenerife (Spain). which the appeal on a point of law is pending, has referred the following ques- tion to the Court for a preliminary ruling:

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1992, fulfils the conditions for the granting A — Comments regarding the national of that benefit?' legislation

18. The Austrian Government begins by IV — Observations of the parties commenting on the principles underlying the adoption of the GSVG. In Austria, the amount of pension received depends, in principle, on the length of the periods of insurance accumulated and on the amount 16. The Sozialversicherungsanstalt, the of contributions paid on average over a Austrian, German, United Kingdom, Fin- given observation period. In some cases, it nish and Netherlands Governments and the explains, the pension due to be paid out on Commission have each submitted observa- that basis may fall short of the subsistence tions in the proceedings before the Court. minimum. In order to spare those pen- sioners entitled to such small amounts the humiliation of attending the social services office the compensatory supplement, calcu- lated automatically on submission of a pension application, was introduced. 17. All the parties essentially consider that a benefit such as the compensatory supple- ment provided for under the GSVG con- stitutes a special non-contributory benefit within the meaning of Articles 4(2a) and 10a of Regulation No 1408/71. However, the Commission points out that the provi- sions of Article 10a of Regulation No 1408/71 depart from the general rule laid down in Article 10 that social security benefits in principle must be granted, B — Significance of Annex IIa to Regula- whether or not the recipient resides in the tion No 1408/71 Member State of the paying institution. The Finnish and United Kingdom Governments note that the Court has already found the residence requirement inserted into the regulation by Article 10a to be compatible with Articles 39 and 42 EC. 7

21. All the parties agree that, unlike care allowance, which came under Court scru- tiny in the Jauch case, 12 the benefit at issue in this case is a special benefit. They argue, on the one hand, that the compensatory supplement is related to social security C — Special benefit benefit in that it is paid as a supplement to the old-age pension. They also argue, on the other hand, that it is granted subject to the recipient's need, thus making it akin to a social assistance benefit. In this connection the United Kingdom Government submits that need in this context may arise not only out of a person's financial situation but also out of other circumstances, such as the 20. In interpreting the concept of special degree of his disablement. 13 benefit mentioned in Articles 4(2a) and 10a of Regulation No 1408/71, the Netherlands and United Kingdom Governments and — in a slightly different context — the Austrian Government have analysed the Court's less recent case-law on 'mixed benefits'. 10 In the Court's view, those benefits display features peculiar not only to social security but also to state welfare assistance and social assistance. The legis- 22. The Finnish, Austrian, Netherlands lature followed up that case-law by insert- and United Kingdom Governments and the Commission further point out that the rules governing the compensatory supple- ment are focused on the specific circum- 8 — Jauch (cited in footnote 6), paragraphs 20 to 22. 9 — In that connection the United Kingdom Government cites Case C-43/99 Leclere and Deaconescu [2001] ECR I-4265, paragraph 38. 10 — Case 1/72 Frilli [1972] ECR 457, Case 24/74 Biosan 11 — In that connection the governments refer to the recitals in [1974] ECR 999, Case 139/82 Piscitelo [1983] ECR 1427, the preamble to Regulation (EEC) No 1247/92 which are Joined Cases 379/85 to 381/85 and 93/86 Giletli [1987] quoted at point 7 above. ECR 95J, Case 147/87 Zaoui [1987] ECR 5511, Case 12 — Cited in footnote 6. C-307/89 Commission v France [1991] ECR I-2903 and 13 — In support of that point, the United Kingdom Government Case C-65/92 Levatino [1993] ECR I-2005. cites Case C-356/89 Newton [1991] ECR I-3017.

27. The German Government further sub- mits that the exportability of contributory benefits is essential because claimants become eligible for such benefits as a result 25. The German and Finnish Governments of the contributions they have paid. That stress that it is irrelevant that the responsi- argument does not apply to special supple- mentary benefits as they are not granted on the basis of contributions paid. 14 — As regards that criterion, the governments cite Case 313/86 Lenoir [1988] ECR 5391, paragraph 16, and Leclere and Deaconescu (cited in footnote 9), paragraph 32. 15 —OJ2001 C 44, p. 13. 16 — See, to that effect, point 20 above.

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17 — Snares (cited in footnote 7), paragraph 49. 18 —Jauch (cited in footnote 6), paragraph 21. 30. That derogation from the principle of 19 —Jauch (cited in footnote 6), paragraph 21. See also the detailed line of argument presented by Advocate General exportability, which is laid down in Article Alber in his Opinion in the Jauch case, points (A to 79.

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security schemes, whether contributory or the payment of contributions because it can non-contributory. 20 be granted only in tandem with a pension financed through contributions.

34. The referring court entertains doubts 36. Moreover, the concept of special non- about that interpretation of the concept of contributory benefits as defined in Article 4 non-contributory nature. It maintains that, (2a)(a) of Regulation No 1408/71 applies in the light of the Opinion of Advocate precisely to those benefits which provide General Alber in the Jauch case, 23 the cover ancillary or supplementary to a social compensatory benefit in any event must be security benefit. To regard a supplement considered to be indirectly dependent on consistently as contributory on the ground that it is granted as a supplement to a principal benefit which is in itself contrib- utory would, in those circumstances, effec- 20 — Cf. Opinion in Jauch (cited in footnote 19), point 83. tively render the special provisions applying 21 — Jauch (cited in footnote 6), paragraph 29 et seq. 22 — Cited in footnote 15. to special non-contributory benefits nuga- 23 — Cited in footnote 19, at point 110. tory. Even though Article 10a(1) of Regula-

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tion No 1408/71 must be interpreted award and the amount awarded — is strictly, any interpretation of the concept conditional on the recipient's need rather of non-contributory nature which — as than on specific periods of employment or regards supplementary benefits at least — contribution may be regarded as a feature reduces the scope of such a concept almost of social assistance. to nothing cannot be accepted.

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the first place, it guarantees a minimum by the State social security system. How- means of subsistence to persons in need ever, it did not rule out the option of and, in the second place, it provides classifying that benefit differently in the additional income for the recipients of case of other categories of beneficiaries. 28 social security benefits which are inade- quate.' 27

43. The Court held that those mixed benefits, by and large, fell under the legislation applying to social security ben- efits with the result that they could be exported. 41. It held further: 'In so far as such legislation confers a right to supplementary benefits designed to increase the amount of pensions paid by way of social security, without any assessment of individual needs or circumstances, which is a characteristic of assistance, it comes within the social 44. However, in its judgment in Lenoir 29 security scheme within the meaning of it interpreted the concept of family benefits Regulation No 1408/71. The fact that a restrictively. Thus, even the earlier legal single law may also provide for advantages arrangements precluded the export of which can be classified as assistance cannot benefits intended to cover costs which are alter, for the purposes of Community law, closely linked with the social environment the intrinsic social security character of a and, therefore, with the place where the benefit linked to an invalidity, old-age or persons concerned reside. The Court survivor's pension to which it is an auto- adopted the same reasoning, this time in matic supplement.' relation to special non-contributory bene- fits, in its judgment in Leclere, which was delivered after Articles 4(2a) and 10a had been inserted into the regulation. 30

tributory benefits. At the same time, how- 48. However, that link to the old-age ever, it adopted provisions which differ in pension does not mean that the supplement terms of their legal consequences. Although itself constitutes a social security benefit. Of it precluded the export of special benefits course, reaching pensionable age is an on account of their link with social indirect condition for drawing the compen- assistance, it none the less ensured, by satory supplement because the supplement adopting Article 10a(2) and (3) of Regula- can be claimed only in tandem with the tion No 1408/71, that persons covered by a principal benefit, namely the old-age pen- social security scheme in any other Member sion. In the same way as its link with the State are accorded the same treatment as pension does not make the supplement regards any special benefits that may be contributory, 31that link likewise does not awarded in the host State. divest the supplement of the nature of a special benefit. After all, if a contested benefit were consistently considered to be devoid of special nature whenever it was granted as a supplement to a social security benefit, there would be virtually no circum- stances in which the supplementary and ancillary benefits expressly mentioned in Article 4(2a)(a) of Regulation No 1408/71 46. Ultimately, therefore, in order to deter- would come into play. mine whether this matter concerns a special benefit, it is essential primarily to ascertain whether the granting of the benefit is linked with a social security benefit and is thus distinct from a social assistance benefit. Secondly, the benefit in question must not itself constitute a social security benefit, which is ruled out if the benefit has features characteristic of social assistance. 49. The parties have further pointed out that the compensatory supplement displays social assistance features in that its award depends on the need of recipients.

'[A] benefit may be regarded as a social security benefit in so far as it is granted, without any individual and discretionary assessment of personal needs, to recipients on the basis of a legally defined position and relates to one of the risks expressly listed in Article 4(1) of Regulation No 1408/71.' 32 52. If the same approach were adopted in assessing the compensatory supplement, it would, in fact, also have to be regarded as a social security benefit. After all, it too is granted on the basis of legally defined, 51. In the Hughes judgment the Court objective criteria. The recipient of the addressed the objection that the supplement pension is entitled to the supplement if his for families ('family credit') at issue in that income falls short of a specific standard case was granted on the basis of an value which is also determined, in each assessment of need and, consequently, that case, on the basis of objective criteria. For the benefit constituted social assistance. The instance, the standard value may depend on Court held in that regard: whether the pensioner lives with his or her spouse and on the number of children he or she has. There is nothing to suggest that the Sozialversicherungsanstalt has any discre- tion to assess personal need on the basis of criteria other than those defined by law.

'Whilst it is true that a benefit such as family credit is granted or refused solely on the basis of the claimant's assets, income, and the number and age of his dependent children, it does not follow that the grant of the benefit is dependent on an individual

construed in that judgment, might, con- that the benefit concerned is akin to social versely, support the argument that a assistance is that the grant of the compen- benefit constitutes social assistance only satory supplement does not depend on the if it is granted on the basis of an assessment aggregation of given periods of employment of the needs of the person concerned, or contribution. Classification as a special which falls within the discretion of the non-contributory benefit means that the competent authority, rather than on the benefit is paid only if the pension recipient basis of objective, legally defined criteria. is resident in the country providing the benefit. As the German Government cor- rectly points out, that derogation from the principle of exportability is lawful only so long as the person concerned has not acquired any pension entitlements as a result of periods of employment or con- tribution. 54. However, in many national legal orders, social assistance is granted on the basis of objective, legally defined criteria for assessing personal need simply so as to observe the principle of equal treatment. Furthermore, guaranteeing the minimum level of subsistence is no longer considered 57. Moreover, the restriction on export- to be a charitable measure on the part of the ability is justified if the objective of the State. On the contrary, in many modern special benefit is to provide the recipient welfare States, individuals have such a right with the means required to maintain his as an expression of their human dignity. standard of living in the Member State providing the benefit. 33

A benefit constitutes a special non-contributory benefit within the meaning of Article 4(2a)(a) of Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, as amended by Council Regulation (EC) No 118/97 of 2 December 1996, the grant of which may be subject to a residence requirement for the purposes of Article 10a(1) of that regulation, provided that

— it is listed in Annex IIa to Regulation No 1408/71,

— it is not funded through contributions paid into a social security scheme, and

— it is granted as a benefit ancillary or supplementary to an old-age benefit within the meaning of Article 4(1)(c) of Regulation No 1408/71 and, at the same time, has features characteristic of social assistance, such as I - 5629

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— the fact that the grant of the benefit — in terms of the reason for its award and the amount awarded — is conditional on the need of the pension recipient rather than on specific periods of employment or contribution, in which case personal need likewise may be determined on the basis of objective, legally defined criteria, and