Report for the Hearing in Case C-65/92

I — Relevant legislation

1. National Law

The Belgian Law of 1 April 1969 introducing a guaranteed income for elderly persons (Moniteur Belge of 29 April 1969, p. 3954), as amended by the Law of 4 May 1981, which was applicable at the material time, provides as follows:

Under Article 4 of the Law:

Article 8 of the Law provides that:

The amount of resources exceeding an amount to be fixed by royal decree adopted by the Council of Ministers shall be deducted from the amount of guaranteed income determined in accordance with Articles 2 and 3 ....

Finally, under Article 10 of the Law:

2. Community Law

Article 46 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 (as codified by Council Regulation (EEC) No 2001/83 of 2 June 1983, OJ 1983 L 230, p. 6) provides as follows:

Article 51 of that regulation provides as follows:

II — Facts and procedure

1. Facts of the main proceedings

Mrs Caterina Milazzo, an Italian national residing in Belgium, whose son Raffaele Levatino has succeeded to her rights in the main proceedings, received an employed person's retirement pension in Belgium from 1 October 1967 and an Italian retirement pension from 1 November 1967.

On 27 December 1972, Mrs Milazzo applied for the guaranteed income for elderly persons provided for by the Belgian Law of 1 April 1969.

Following the annulment of the decision of the Minister for Social Security of 20 February 1975 refusing to grant Mrs Milazzo that benefit by judgment of the Tribunal du Travail (Employment Tribunal), Liège, of 23 September 1975, the Office National des Pensions pour Travailleurs Salariés, succeeded first by the Caisse Nationale des Pensions de Retraite et de Survie and subsequently by the Office National des Pensions (hereafter the ONP), paid her a guaranteed income of BFR 20679 from 1 January 1973 and BFR 34160 from 1 July 1973. That income was paid until March 1984.

The amount of that benefit was determined by taking into account Mrs Milazzo's pensions, which amounted to an aggregate BFR 20102 per annum as at 1 January 1973 and to BFR 20268 per annum as at 1 July 1973.

By decision notified on 6 March 1984, the Caisse National des Pensions de Retraite et de Survie informed Mrs Milazzo that it [had just] recalculated the amount of the Belgian pension to which [she was] entitled, taking account of the last known amount of [her] foreign pension and the exchange rate officially applicable ... and that, from April 1984, the sum of BFR 11530 would be paid to her monthly.

2. Procedure before the national courts

— Mrs Milazzo brought an action against that decision before the Tribunal du Travail, Liège, on 4 April 1984.

Following her death on 26 August 1984, Raffaele Levatino, her son, took over the proceedings.

Mr Levatino argued before that court that the recalculation effected by the Caisse de Pensions was contrary to Article 51 of Regulation No 1408/71.

In its judgment of 16 September 1987, the Tribunal du Travail, Liège, held that, in accordance with the case-law of the Court of Justice, the guaranteed income had to be treated as an old-age benefit (Case 1/72 Frilli [1972] ECR 457) and that the competent authority was not entitled to recalculate that benefit where the alteration in the benefit paid by the competent authority of another Member State was due to the change in the cost of living (Case 7/81 Sinatra [1982] ECR 137).

It went on to order the defendant to pay the plaintiff the arrears of the guaranteed income for the period 1 April 1984 to 24 August 1984, the date of death, without effecting any deduction whatsoever on the ground that the original plaintiff had been in receipt of a foreign pension.

On 11 January 1988 the ONP appealed to the Cour du Travail (Employment Court), Liège, against that decision.

The ONP submitted that, since the guaranteed income depended solely on the applicant's resources, it did not fall within the scope of Article 46 of Regulation No 1408/71, which related only to benefits determined on the basis of a period of insurance or residence, and that hence Article 51 of the regulation was not applicable to it.

By judgment of 3 February 1989, the Cour du Travail, Liège, held that it followed from the case-law of the Court of Justice (the judgments in Frilli and Sinatra) that the ONP had to pay and index link the Belgian guaranteed income under Article 46 of Regulation No 1408/71 without taking account of adjustments in the Italian pension resulting from the change in the cost of living, but observed that the Tribunal du Travail had erred when it referred in the operative part of its judgment to any deduction whatsoever when the principle that the foreign pension had to be deducted was not contested.

The Cour du Travail upheld the judgment of the lower court but amended the operative pan as follows: without effecting any deduction whatsoever on ground that the original plaintiff was in receipt of a foreign pension shall be replaced by the words without taking account of changes in the Italian pension resulting from inflation and consequently from the increase in the index.

On 25 March 1991 the ONP brought an appeal on a point of law against that decision.

Before the Belgian Cour de Cassation, the ONP took up essentially the same arguments that it had put to the Cour du Travail, Liège.

Considering that the dispute raised questions relating to the interpretation of Community law, the Belgian Cour de Cassation (Third Chamber) referred the following question to the Court of Justice for a preliminary ruling by judgment of 10 February 1992:

3. Procedure before the Court

The judgment of the Cour de Cassation was received at the Court Registry on 4 March 1992.

Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by the Office National des Pensions, the appellant in the main proceedings, represented by its general administrator, R. Masyn; by Mr Levatino, the respondent in the main proceedings, represented by Jules Raskin, of the Liège Bar, and by the Commission of the European Communities, represented by Dimitrios Gouloussis, Legal Adviser, and Marie Wolfcarius, of its Legal Service, acting as Agents.

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.

By order of 21 October 1992 the Court assigned the case to the Fifth Chamber.

III — Summary of the parties written observations

1. After setting out the method for calculating the guaranteed income as prescribed by the Belgian Law of 1 April 1969, notably the provisions of Article 10 of that law, the ONP argues in the first place that the Court held in the judgment in Frilli that the minimum income guaranteed to elderly persons by the legislation of a Member State had to be regarded, in certain cases, as an old-age benefit within the meaning of the Community rules as far as the conditions for granting the benefit were concerned, but did not intend to hold that the rules laid down in Chapter III of Regulation No 1408/71 should be applied to the calculation of the benefit.

2. In contrast, Mr Levatino and the Commission argue that the provisions of Article 46 and 51 of Regulation No 1408/71 are applicable to the calculation of the guaranteed income and that their application is not contrary to Article 3 of the regulation.

1. The Commission argues in the first place that the income guaranteed to elderly persons by the Belgian Law falls within the scope ratione materiae of Regulation 1408/71 and constitutes an old-age benefit within the meaning of Article 4(c) of that regulation. It argues that, as the Court has consistently held, the scope rattorte materiae of the regulation also covers certain noncontributory benefits of a hybrid nature, falling within the ambit of both social assistance and social security, since, among other things, the relevant legislation confers on the beneficiary a legally defined position and relates to one of the risks expressly listed in Article 4 of Regulation No 1408/71.

2. Secondly, the Commission suggests that it be held that the provisions of Article 46 of Regulation No 1408/71 are applicable to benefits paid independently of periods of insurance or residence.

3. Thirdly, the Commission argues that Article 51 of Regulation No 1408/71 is therefore automatically applicable, since the guaranteed income is calculated in accordance with the rules set out in Article 46, and that, according to that which the Court has consistently held (see in particular the judgments in Sinatra and Ravida, cited above, and in Case C-93/90 Cassamali [1991] ECR I-1401), that article must be interpreted as precluding the recalculation of an old-age benefit when a retirement benefit paid by another Member State is revalorized in order to take account of the general evolution of the economic and social situation in that State.

4. Fourthly, the Commission argues that the fact that the application of Articles 46 and 51 of Regulation No 1408/71 would put migrant workers at an advantage over national workers is not contrary to Article 3 of the regulation.

IV — Replies to questions put by the Court

The Court asked the ONP to answer the following questions:

The decision addressed to Mrs Milazzo on 6 March 1984, which gave rise to the main proceedings, informed her that:

The ONP is requested to:

In response to those questions, the ONP produced to the Court:

It appears from those documents that the amount of the guaranteed income benefit paid to Mrs Milazzo, which amounted to BFR 20679 per annum as at 1 January 1973, was regularly altered in order to take account of the changes in the amount of the guaranteed income, the Belgian pension and the Italian pension paid to Mrs Milazzo. The amount of guaranteed income benefit came to BFR 170822 per annum on 1 January 1984 and was reduced to BFR 57793 per annum on 1 April 1984. It amounted to BFR 75401 per annum on 1 August 1984.

The various calculations of the benefit were effected pursuant to Article 10 of the Belgian Law of 1 April 1969 introducing a guaranteed income for elderly persons.

The details of the calculation of the guaranteed income benefit paid to Mrs Milazzo for the four dates stated above is shown in the table below (the amounts are expressed in Belgian francs).

1 Language of the case: French.

2 Unchanged since 1 January 1975.