Report for the Hearing in Case C-5/91

I — Legislative background, facts and procedure

A. Relevant domestic and Community provisions

1. Article 10(2) of Royal Decree No 50 of 24 October 1967 {Moniteur Belge of 27 October 1967, p. 11258), as amended, provides that

2. Until 31 December 1980, that provision did not envisage any reduction of the pension in the event of the worker being already in receipt of another pension.

3. The Law of 10 February 1981 (Moniteur Belge of 14 February 1981, p. 1697) amended Article 10(2) of Royal Decree No 50 by incorporating an anti-overlapping clause with effect from 1 January 1981.

4. Article 32, inserted in the Royal Decree of 21 December 1976 (Moniteur Belge of 16 January 1968, p. 441) by the Royal Decree of 30 March 1981 (Moniteur Belge of 11 April 1981, p. 4526), provides that:

5. Article 46 of Regulation (EEC) No 1408/71 of the Council of 14 June 1971 on the application of social security schemes to employed and self-employed persons and members of their families moving within the Community, in the version codified by Council Regulation (EEC) No 2001/83 of 2 June 1983 (Official Journal 1983 L 230, p. 6) is worded as follows:

B. Summary of the facts and of the procedure before the national court

1. Antonietta di Prinzio, an Italian national residing in Belgium, is the widow of Guerrino Tormen, also an Italian, who was born on 4 January 1923 and died on 12 January 1981.

2. Mr Tormen's insurance record comprised 26 actual years or years treated as such as an underground miner in Belgium, he having also worked for at least two years as a worker (under the general scheme) in Italy.

3. In 1965, Mr Tormen was pensioned off on grounds of invalidity.

4. On 1 April 1978 Mr Tormen received an invalidity pension in Italy.

5. By three decisions of 2 March 1984, the competent Belgian institution, namely the Office National des Pensions (National Pensions Office, hereinafter referred to as the ONP) determined the retirement pension due to the late Mr Tormen as at 1 April 1978, the retirement pension payable to Mrs Di Prinzio as a separated spouse as at 1 February 1980 and the survivor's pension payable to Mrs Di Prinzio as at 1 February 1981 as 29/30ths of a complete insurance record.

6. Considering that the proper insurance record to be taken into consideration was 30/30ths and could not be reduced, Mrs Di Prinzio appealed against the three decisions of 2 March 1984 before the Tribunal de Travail, Mons, Louvière Division.

7. By judgment of 21 December 1990, that court first upheld part of Mrs Di Prinzio's appeal. In view of the fact that, until 31 December 1980, the Belgian legislation contained no provision for reduction in the event of entitlement to another pension, the national court held that Mr Tormen's retirement pension should be determined on a 30/30ths basis for the period from 1 April 1978 to 31 December 1980.

8. Having established that, for the period commencing on 1 January 1981, the Belgian legislation included an anti-overlapping provision, the Tribunal de Travail then took the view that, in order to determine whether that provision was properly applied by the competent Belgian institution, it was necessary to decide whether the national law, including its rules against overlapping, was less favourable than Community law. Accordingly, it was necessary to calculate the benefits in accordance with Article 46 of Regulation No 1408/71 and then to compare the result with that arrived at under Belgian domestic law. The national court considered that, in doing so, it was necessary to distinguish two periods.

9. Considering that the case thus raised questions of interpretation of Article 46 of the regulation, the Tribunal du Travail, Mons, stayed the proceedings and, by judgment of 21 December 1990, referred the following questions to the Court of Justice for a preliminary ruling:

C. Procedure before the Court

1. The judgment of the Tribunal du Travail, Mons, was received at the Court Registry on 10 January 1991.

2. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted on 9 April 1991 by Antonietta Di Prinzio, represented by D. Rossini, Trade-Union delegate of the C. S. C, Brussels, and by the ONP, represented by the Administrateur Général thereof, R. Masyn, and on 19 April 1991 by the Commission of the European Communities, represented by Maria Patakia, a member of its Legal Service, acting as Agent.

3. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry.

4. Pursuant to Article 95(1) and (2) of the Rules of Procedure, the Court, by decision of 9 July 1991, assigned the case to the Second Chamber.

II — Written observations submitted to the Court

1. Antonietta Di Prinzio, the plaintiff in the main proceedings, observes that the distinction drawn by the national court between the periods before and after 31 January 1981 is otiose. Mr Tormén had already received — since 1 January 1965 — an invalidity pension in Italy and it had not been possible to convert that pension into an old age pension; moreover, in the light of previous case-law (see judgment in Case 128/88 Di Felice [1989] ECR 923) invalidity and old age pensions are to be regarded, in cases such as the present one, as benefits of the same nature, regardless of the age of the recipient.

2. The ONP, the defendant in the main proceedings, first observes, in general terms, that the Court has consistently held (see most recently the judgments in Case C-108/89 Pian [1990] ECR I-1599 and Case 109/89 Bianchiti [1990] ECR I-1619) that the most favourable social security scheme must be applied to a worker, being either the national legislation applied in its entirety, including the rules thereof against overlapping benefits, or the Community system, under which the benefits are awarded and reduced in accordance with Article 46 of the regulation, to the exclusion of the rules against overlapping benefits laid down in the national legislation.

3. (a) The Commission states, with respect to the first question, that Article 45 of the regulation embodies the principle of aggregation with a view to the acquisition, maintenance or recovery of a pension, whereas Article 46 of the regulation lays down a calculation method for determining the amount of the benefit payable to the worker. Since the regulation does not establish a common social security scheme, it follows that the calculations to be made under Article 46 require the conditions for entitlement to the benefits to be fulfilled already, with Article 45 of the regulation being applied if appropriate. In those circumstances, the problem of the legally prescribed age for entitlement to the benefits would be more likely to arise in relation to Article 45. That article provides that the competent institution of a Member State is to take into account, to the extent necessary, insurance or residence periods completed under the legislation of any other Member State as if they were periods completed under the legislation which it administers. Thus, the question of the legally prescribed age should arise only with respect to the legislation of the State which is to take account of the periods completed in any other Member State. It is true that, in frequent cases where the persons concerned do not simultaneously satisfy the conditions laid down by all the legislations under which insurance or residence periods have been completed, Article 49 of the regulation provides that each of the institutions administering a legislation whose conditions are satisfied is to calculate the amount of the benefit due in accordance with Article 46, and those benefits are subsequently recalculated progressively as the conditions laid down by the other legislations to which the person concerned was subject are satisfied. In the Commission's view, this shows that the legally prescribed age, as a condition for entitlement to a pension, has no impact on the application of Article 46 of the regulation, which merely lays down the method for calculating the amount of the pension to be paid to the worker. Accordingly, a Member State should take account of the insurance or residence periods completed in another Member State even if the person concerned has not attained the legally prescribed age for entitlement to the pension under the legislation of that other Member State. (b) The Commission considers that the second and third questions relate essentially to the principles to be observed and the procedure to be followed for the application of Article 46 of the regulation, in particular where it is necessary to take account of notional periods for the purposes of the calculation provided for by that article. In that regard, the Commission describes the reasoning to be followed in relation to Articles 12(2) and 46 of the regulation for determination of an old-age pension, death benefit or invalidity pension due to a migrant worker. According to the Commission, the first operation consists — as the Court confirmed in its judgment in Joined Cases 116/80, 117/80, 119/80, 120/80 and 121/80 Celestre [1981] ECR 1737 —in determining the amount of the benefit by applying national law alone, including the anti-overlapping rules thereof. The second operation consists in fixing the amount of the benefit by applying the scheme provided for in Article 46 of the regulation. That calculation would be in three stages. (i) Thus, it is first necessary to fix, in accordance with Article 46(1) of the regulation, the amount of the benefit corresponding to the total of the insurance or residence periods to be taken into account under the national legislation applied (independent benefit). At this stage, account must be taken of Article 12(2) of the regulation, which provides: - The provisions of the legislation of a Member State for reduction... of benefit in case of overlapping with other social security benefits or other income may be invoked even though the right to such benefits was acquired under the legislation of another Member State ... However, this provision shall not apply when the person concerned receives benefits of the same kind in respect of invalidity, old age, death (pensions) or occupational disease which are awarded by the institutions of two or more Member States in accordance with ... Articles 46, 50 and 51 or Article 60(l)(b). Accordingly, it is unnecessary, for the purposes of the calculation under Article 46(1), to apply anti-overlapping provisions of the national legislation in the case of benefits of the same kind, as defined by Article 12(2) of the regulation. The Commission then states that, in the present case, it is necessary to decide whether the fourth subparagraph of Article 10(2) of the abovementioned Royal Decree No 50 must be interpreted as containing provisions for reduction within the meaning of Article 12(2) of the regulation. The Court has already answered that question in the affirmative in its judgments in Case 58/84 Romano [1985] ECR 1679 and Case 117/84 Ruzzu [1985] ECR 1697, in which it held that a national provision which reduced the additional years of notional employment from which a worker may benefit by the number of years in respect of which he may claim a pension in another Member State constitutes a provision for reduction within the meaning of Article 12(2) of the regulation which, by virtue of the last sentence of Article 12(2), is not to be applied when the amount of the pension is calculated under Article 46(1) of that regulation. (ii) The Commission states that, secondly, it is necessary to calculate, pursuant to Article 46(2) of the regulation, first the theoretical amount of the benefit as if all the insurance periods had been completed under the legislation which the competent institution administers at the time of award of the benefit, and then the actual amount pro rata to the duration of the insurance periods completed or recognized under the legislation administered by the institution in question. Moreover, it is necessary to apply, where appropriate, the correcting factor provided for in Article 46(2)(c) of the regulation, where the legislation in question lays down a maximum limit for insurance or residence periods for entitlement to a complete benefit and, following aggregation, the total length of the periods exceeds that maximum limit. The Commission then states that, where insurance periods completed in several States are taken into account, regard must also be had to Article 15(l)(c) of Regulation No 574/72, which provides: when a period of insurance or residence, other than a period treated as such, completed under the legislation of one Member State coincides with a period treated as such under the legislation of another Member State, only the period other than a period treated as such shall be taken into account. Even if it is for the national court to define a period treated as such within the meaning of that provision and to determine whether the two periods in question coincide in their timing, it nevertheless follows from Article 15(l)(e) of Regulation No 574/72 and the judgments in Romano, Ruzzu and Celestre, cited above, that, in the present case, the notional years added by virtue of Article 10(2) of Royal Decree No 50 and the periods of insurance that Mr Tormén completed in Italy do not overlap. As regards the taking into account of notional periods for calculation of the pro rata benefit, it must be considered in the light of the abovementioned decision No 95 of the Administrative Commission and the judgment in Menzies, supra. However, by contrast with that case, in which the notional period added by the competent institution related to a period after the materialization of the risk, the notional years granted in the present case under Belgian legislation are within a period prior to the materialization of the risk giving rise to the award of the pension. Accordingly, the inclusion, in the calculation of the actual amount of the benefit, of a notional period antedating the materialization of the risk does not run counter either to decision No 95 or to the relevant case-law. On the contrary, the terms periods of insurance completed and periods of insurance... completed before the risk materializes used in Article 46(2)(a) and (b) respectively militate in favour of such inclusion. The Commission also considers that it is not appropriate to deduct from that notional period periods completed in another Member State where that notional period does not overlap with the periods completed in that other Member State. The Commission adds that, after establishing the pro rata amount in accordance with the above principles, the competent institution must compare the national amount, without regard to the national anti-overlapping rules, and the actual amount of the benefit. Pursuant to the second subparagraph of Article 46(1), the higher of those two amounts must be taken into consideration. In the present case, where the retirement pension was acquired at the full rate under national legislation alone, it appears that no more favourable result could be arrived at by applying Article 46(2) of the regulation. (iii) Finally, the Commission states that, if appropriate, it is necessary to apply the reduction provided for in Article 46(3) of the regulation. The sum of all the independent pro rata benefits available to the migrant worker may not exceed the highest theoretical amount which could have been arrived at if all the periods of insurance had been completed under the legislation of each of the Member States involved. To the extent to which that limit was exceeded, the institution in the State where the entidement of the person concerned arose without recourse to aggregation should adjust the independent benefit by means of the calculation provided for in the second subparagraph of Article 46(3) of the regulation.

1 Language of the case: French.