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IMPORTANT LEGAL NOTICE - The source of this judgment is the web site of the Court of Justice of the European Communities. The information in this database has been provided free of charge and is subject to a Court of Justice of the European Communities disclaimer and a copyright notice. This electronic version is not authentic and is subject to amendment.
JUDGMENT OF THE COURT
5 March 1998 (1)
(Freedom of movement for workers - Benefits designed to cover the risk of
reliance on care)
In Case C-160/96,
REFERENCE to the Court under Article 177 of the EC Treaty by the
Sozialgericht Karlsruhe (Germany) for a preliminary ruling in the proceedings
pending before that court between
Manfred Molenaar,
Barbara Fath-Molenaar
and
Allgemeine Ortskrankenkasse Baden-Württemberg,
on the interpretation of Articles 6 and 48(2) of the EC Treaty,
THE COURT,
composed of: G.C. Rodríguez Iglesias, President, C. Gulmann, H. Ragnemalm,
M. Wathelet and R. Schintgen (Presidents of Chambers), G.F. Mancini,
J.C. Moitinho de Almeida, P.J.G. Kapteyn, J.L. Murray, D.A.O. Edward,
J.-P. Puissochet (Rapporteur), G. Hirsch, P. Jann, L. Sevón and K.M. Ioannou,
Judges,
Advocate General: G. Cosmas,
Registrar: H. von Holstein, Deputy Registrar,
after considering the written observations submitted on behalf of:
- Mr and Mrs Molenaar, by S. de Witt, Rechtsanwalt, Freiburg,
- the Allgemeine Ortskrankenkasse Baden-Württemberg, by K. Hirzel,
Rechtsassessor, Justiziar,
- the German Government, by E. Röder, Ministerialrat at the Federal
Ministry of the Economy, acting as Agent,
- the Austrian Government, by M. Potacs, Univ. Doz. DDr.,
Bundeskanzleramt, acting as Agent,
- the Swedish Government, by L. Nordling, Director General of Legal Affairs
in the Legal Secretariat (EU) of the Ministry of Foreign Affairs, acting as
Agent, and
- the Commission of the European Communities, by P. Hillenkamp, Legal
Adviser, and M. Patakia, of its Legal Service, acting as Agents,
having regard to the Report for the Hearing,
after hearing the oral observations of Mr and Mrs Molenaar, represented by
W. Schirp, Rechtsanwalt, Freiburg, the Allgemeine Ortskrankenkasse Baden-Württemberg, represented by K. Hirzel, the German Government, represented by
E. Röder, the Austrian Government, represented by G. Hesse, Magister at the
Bundeskanzleramt, and the Commission, represented by P. Hillenkamp, at the
hearing on 8 October 1997,
after hearing the Opinion of the Advocate General at the sitting on 9 December
1997,
gives the following
Judgment
- By order of 28 March 1996, which was received at the Court on 13 May 1996, the
Sozialgericht (Social Court) Karlsruhe referred to the Court for a preliminary ruling
pursuant to Article 177 of the EC Treaty a question concerning the interpretation
of Articles 6 and 48(2) of that Treaty.
- The question was raised in proceedings between Mr and Mrs Molenaar, who are
of Dutch and German nationality respectively, and the Allgemeine
Ortskrankenkasse (General Local Health Insurance Fund) Baden-Württemberg
('the AOK'), concerning the couple's right to German social care insurance ('care
insurance') benefits.
- That insurance scheme was introduced, from 1 January 1995, by the
Pflegeversicherungsgesetz (Care Insurance Law, hereinafter 'the Law'), contained
in Volume XI of the Sozialgesetzbuch (German Code of Social Law, hereinafter
'the SGB'). It is designed to cover the costs entailed if insured persons should
become reliant on care, that is to say, if a permanent need were to arise for those
insured to resort, in large measure, to assistance from other persons in the
performance of their daily routine (bodily hygiene, nutrition, moving around,
housework, and so on).
- Under the Law, any person insured, either voluntarily or compulsorily, against
sickness must contribute to the care insurance scheme.
- Care insurance gives entitlement, first, to benefits designed to cover the costs
incurred for care provided in the home by a third person. Those benefits,
designated as 'home care', the amount of which depends on the degree of reliance
on care on the part of the person concerned, may be provided, at the choice of the
recipient, either in the form of care dispensed by authorised bodies or in the form
of a monthly allowance, known as 'the care allowance', enabling recipients to
choose the form of aid they consider most appropriate to their condition.
- Secondly, care insurance gives entitlement to direct payment of the cost of nursing
home or hospital care provided to the insured person, to allowances designed to
cover the absence on holiday of the third party who usually looks after the person
insured and to allowances and payments for various costs entailed by the insured
person's reliance on care, such as the purchase and installation of special
equipment and work required to adapt the home.
- Lastly, care insurance will, in certain circumstances, pay old age and invalidity
insurance contributions, as well as accident insurance, for the third party assisting
the insured person.
- Pursuant to Paragraph 34(1)(1) of Volume XI of the SGB, insurance care benefits
may be paid only to insured persons residing on German territory.
- Mr and Mrs Molenaar are employed in Germany but resident in France. Both are
voluntarily insured against sickness in Germany, and were required to take out care
insurance from 1 January 1995.
- However, in December 1994 and January 1995 the competent social security fund,
the AOK, informed them that they were not entitled to care insurance benefits
while they resided in France.
- Mr and Mrs Molenaar thereupon brought proceedings before the Sozialgericht
Karlsruhe for a declaration that they were not bound to pay contributions to the
care insurance scheme so long as they were not entitled to benefits thereunder.
They claimed that the residence condition, on which entitlement to those benefits
depends by virtue of Paragraph 34(1)(1) of Volume XI of the SGB, was contrary
to Articles 6 and 48 of the Treaty.
- Taking the view that an interpretation of those provisions was necessary before it
could reach a decision, the Sozialgericht Karlsruhe referred the following question
to the Court of Justice for a preliminary ruling:
'Are Articles 6 and 48(2) of the EC Treaty to be interpreted as restricting the right
of a Member State to set up a social security system covering the risk of reliance
on care as part of statutory compulsory insurance arrangements under which
persons residing in another Member State are liable to pay compulsory
contributions, even though their entitlement to benefits is simultaneously excluded
or suspended because of their place of residence?'
- By its question, the national court is asking essentially whether Articles 6 and 48(2)
of the Treaty preclude a Member State from requiring persons working in its
territory but residing in another Member State to contribute to a social security
scheme of the care insurance type while excluding payment of benefits thereunder
in the Member State in which those persons are resident.
- With a view to answering that question, it must be recalled that, according to the
Court's case-law (see, inter alia, Case 368/87 Hartmann Troiani v
Landesversicherungsanstalt Rheinprovinz [1989] ECR 1333, paragraph 20, and Case
C-443/93 Vougioukas v IKA [1995] ECR I-4033, paragraph 30), in order to
safeguard the effective exercise of the right to freedom of movement enshrined in
Article 48 of the EC Treaty, the Council was required, under Article 51 thereof, to
set up a system to enable workers to overcome obstacles with which they might be
confronted in national social security rules. In principle, the Council carried out that
duty by introducing Council Regulation (EEC) No 1408/71 of 14 June 1971 on the
application of social security schemes to employed persons and their families
moving within the Community (OJ, English Special Edition 1971 (II), p. 416).
- In the circumstances, it is necessary to examine the question raised in the light of
the provisions of that regulation, as amended and updated by Council Regulation
(EEC) No 2001/83 of 2 June 1983 (OJ 1983 L 230, p. 6, hereinafter 'Regulation
No 1408/71'), and therefore to determine whether it covers a scheme such as care
insurance.
- All the interveners in the proceedings agree that a scheme such as that at issue in
the main proceedings falls within the scope of Regulation No 1408/71.
- The applicants in the main proceedings and the Austrian, German and Swedish
Governments take the view, more specifically, that benefits provided under the
scheme may be treated as 'sickness benefits' referred to in Article 4(1)(a) of that
regulation. The applicants in the main proceedings claim that those benefits could
also be treated as 'old-age benefits' referred to in Article 4(1)(c).
- On the other hand, the Commission considers that, although benefits under the
scheme are indeed covered by Regulation No 1408/71, they cannot be linked
exclusively to any one branch of social security referred to in Article 4(1) of that
regulation. In its view, those benefits display characteristics in common with the
sickness, invalidity and old-age branches referred to in Article 4(1)(a), (b) and (c),
but cannot be strictly identified with any one of them.
- On this point, it must be recalled that the distinction between benefits excluded
from the scope of Regulation No 1408/71 and those which fall within it is based
essentially on the constituent elements of each particular benefit, in particular its
purpose and the conditions on which it is granted, and not on whether a benefit is
classified as a social security benefit by national legislation (Case C-78/91 Hughes
[1992] ECR I-4839, paragraph 14).
- The Court has consistently stated that 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 provided that it concerns one of the risks expressly listed in Article 4(1) of
Regulation No 1408/71 (see, in particular, Case 249/83 Hoeckx [1985] ECR 973,
paragraphs 12 to 14; Case 122/84 Scrivner [1985] ECR 1027, paragraphs 19 to 21;
Case C-356/89 Newton [1991] ECR I-3017; and Case C-78/91 Hughes, cited above,
paragraph 15). That list is exhaustive, so that a branch of social security not
mentioned therein does not fall within that category even if it confers upon
recipients a legally defined position entitling them to benefits (see, in particular,
Case C-25/95 Otte [1996] ECR I-3745, paragraph 22).
- As regards the first of those two conditions, it is common ground that the
provisions concerning the grant of care insurance benefits confer on recipients a
legally defined right.
- With regard to the second condition, it appears from the file that care insurance
benefits are designed to develop the independence of persons reliant on care, in
particular from the financial point of view. The system introduced is aimed at
encouraging prevention and rehabilitation in preference to care and at promoting
home care in preference to care provided in hospital.
- Care insurance gives entitlement to full or partial direct payment of certain
expenditure entailed by the insured person's reliance on care such as care provided
in the home, in specialised centres or hospitals, the purchase of equipment required
by insured persons, the carrying out of work in the home and the payment of
monthly financial aid allowing the insured to choose the method of assistance they
prefer and, for example, to remunerate in one form or another the third party
assisting them. The care insurance scheme provides cover, furthermore, against the
risks of accident, old age and invalidity for some of those third parties.
- Accordingly, benefits of that type are essentially intended to supplement sickness
insurance benefits to which they are, moreover, linked at the organisational level,
in order to improve the state of health and the quality of life of persons reliant on
care.
- In those circumstances, even if they have their own characteristics, such benefits
must be regarded as 'sickness benefits' within the meaning of Article 4(1)(a) of
Regulation No 1408/71.
- The question referred to the Court must therefore be examined in the light of the
provisions of Regulation No 1408/71 concerning the grant of sickness benefits
where the person concerned has his residence in a Member State other than the
competent State. Under Article 19(1)(a) and (b) of Regulation No 1408/71,
'An employed or self-employed person residing in the territory of a Member State
other than the competent State, who satisfies the conditions of the legislation of the
competent State for entitlement to benefits ... shall receive in the State in which he
is resident:
(a) benefits in kind provided on behalf of the competent institution by the
institution of the place of residence in accordance with the provisions of the
legislation administered by that institution as though he were insured with
it;
(b) cash benefits provided by the competent institution in accordance with the
legislation which it administers...'
- The twofold mechanism resulting from those provisions applies equally to
unemployed persons, pursuant to Article 25(1)(a) and (b), and to pensioners
entitled to a pension under the legislation of a Member State other than the
country of residence, pursuant to Article 28(1)(a) and (b) of Regulation No
1408/71.
- The parties to the main proceedings and the Governments which have submitted
observations to the Court differ as to whether the benefits at issue in the main
proceedings, and in particular the care allowance, should be described as sickness
insurance 'benefits in kind' or 'cash benefits'.
- On the one hand, the German and Swedish Governments maintain that care
insurance benefits that are aimed at allowing recipients to cover the payment of
certain expenses entailed by their condition, inter alia medical expenses, are
sickness insurance 'benefits in kind', even though they are paid in the form of a
monthly allowance such as the care allowance. The German Government points out
in that connection that when the law was enacted the German legislature specified
that the care allowance was a 'benefit in kind' under the sickness branch.
- On the other hand, the applicants in the main proceedings, the Austrian
Government and the Commission consider that benefits such as the care allowance,
which are not intended to cover any particular expenses, are sickness insurance
'cash benefits'.
- In its judgment in Case 61/65 Vaassen v Beambtenfonds Mijnbedrijf [1966] ECR 261,
in particular at p. 278, the Court has already stated, in connection with Regulation
No 3 of the Council of 25 September 1958 concerning social security for migrant
workers (Official Journal of 16 December 1958, p. 561 et seq.), which preceded
Regulation No 1408/71 and used the same terminology, that the term 'benefits in
kind' does not exclude the possibility that such benefits may comprise payments
made by the debtor institution, in particular in the form of direct payments or the
reimbursement of expenses, and that 'cash benefits' are essentially those designed
to compensate for a worker's loss of earnings through illness.
- As stated above, in particular at paragraphs 5, 6, 7 and 23 of this judgment, care
insurance benefits consist, first, in the direct payment or reimbursement of expenses
incurred as a result of the insured person's reliance on care, in particular medical
expenses entailed by that condition. Such benefits, which are designed to cover care
received by the person concerned, both in the home and in specialised centres,
purchases of equipment and work carried out, indisputably fall within the definition
of 'cash benefits' referred to in Articles 19(1)(a), 25(1)(a) and 28(1)(a) of
Regulation No 1408/71.
- However, although the care allowance is also designed to cover certain costs
entailed by reliance on care, in particular those relating to aid provided by a third
person, rather than to compensate for loss of earnings on the part of the recipient,
it nevertheless displays features distinguishing it from sickness insurance benefits
in kind.
- First, payment of the allowance is periodical and is not subject either to certain
expenditure, such as care expenditure, having already been incurred, or a fortiori
to the production of receipts for the expenditure incurred. Secondly, the amount
of the allowance is fixed and independent of the costs actually incurred by the
recipient in meeting his daily requirements. Thirdly, recipients are to a large extent
unfettered in their use of the sums thus allocated to them. In particular, as the
German Government itself pointed out, the care allowance may be used by
recipients to remunerate a member of their family or entourage who is assisting
them on a voluntary basis.
- The care allowance thus takes the form of financial aid which enables the standard
of living of persons requiring care to be improved as a whole, so as to compensate
for the additional expense brought about by their condition.
- A benefit such as the care allowance must therefore be regarded as a sickness
insurance 'cash benefit', as referred to in Articles 19(1)(b), 25(1)(b) and 28(1)(b)
of Regulation No 1408/71.
- In those circumstances it follows, first, from the wording of Article 19(1)(a) of
Regulation No 1408/71 that an employed person residing in a Member State other
than that in which he is employed is to receive, in the Member State in which he
resides, benefits such as care insurance benefits in kind in so far as the legislation
of that State, whatever the more specific name given to the social protection
scheme of which it forms part, provides for the payment of benefits in kind
designed to cover the same risks as those covered by care insurance in the Member
State of employment. Those benefits are to be paid by the institution of the place
of residence in accordance with the provisions laid down by the legislation of the
Member State of residence. The same is true with regard to unemployed persons
and pensioners covered by the legislation of a Member State other than that in
which they reside, pursuant to Articles 25(1)(a) and 28(1)(a) of Regulation No
1408/71.
- Secondly, it follows from Article 19(1)(b) of Regulation No 1408/71 that a worker
is to receive cash benefits such as the care allowance in the Member State in which
he resides even if the legislation of that State does not provide for benefits of that
type. The benefits in question are paid by the competent institution of the Member
State of employment under the conditions provided for by the legislation of that
State. The same is true with regard to unemployed persons and pensioners covered
by the legislation of a Member State other than that in which they reside, pursuant
to Articles 25(1)(b) and 28(1)(b) of Regulation No 1408/71.
- A provision such as Paragraph 34(1)(1) of Volume XI of the SGB, which prohibits
'cash' payment of care insurance benefits in the Member State in which the
migrant worker resides, accordingly conflicts with Article 19(1)(b) of Regulation No
1408/71. Similarly, in the case of unemployed persons and pensioners covered by
the legislation of a Member State other than that in which they reside, it conflicts
with Articles 25(1)(b) and 28(1)(b) of Regulation No 1408/71.
- However, neither that conflict nor the fact that care insurance benefits in kind are
provided by the institution of the place of residence confer on migrant workers the
right to be exempted in whole or in part from the payment of contributions for the
financing of care insurance.
- There is no rule of Community law which requires the competent institution to
ascertain whether an employed person is likely to be able to take advantage of all
the benefits of a sickness insurance scheme before registering that person and
collecting the appropriate contributions. The right to benefits must be assessed, on
the basis of the conditions laid down by the legislation of the competent Member
State, on the date when entitlement arises, so that the situation on the date when
the contribution is payable is not relevant in that connection. That is true in
particular of the employed person's residence, which is not definitively settled when
he joins the scheme or pays contributions.
- Recognition of a right to exemption would amount, moreover, to accepting, as
regards the scope of the risks covered by sickness insurance, a difference in the
treatment of insured persons according to whether or not they resided on the
territory of the State in which they were insured. To offer a migrant worker the
possibility of choosing exemption would be equivalent, for the competent State, to
asking him to waive in advance the benefit of the mechanism introduced by Articles
19(1), 25(1) and 28(1) of Regulation No 1408/71. No such consequence can arise
either from the Treaty, in particular Articles 6 and 48(2) thereof, or from that
regulation.
- In any event, payment of contributions to a sickness insurance scheme in principle
confers entitlement on insured workers to receive the corresponding benefits when
they satisfy the conditions laid down by the legislation of the competent State, with
the exception of those conditions which are not in accordance with the applicable
social security provisions of Community law. Mr and Mrs Molenaar may therefore
rely on Regulation No 1408/71 for the purpose of obtaining the benefit of the care
allowance, notwithstanding the conflicting provisions of national law.
- The answer to the question submitted must therefore be that Articles 6 and 48(2)
of the EC Treaty do not preclude a Member State from requiring persons working
in its territory but residing in another Member State to contribute to a social
security scheme covering the risk of reliance on care, although Articles 19(1), 25(1)
and 28(1) of Council Regulation (EEC) No 1408/71 do prevent entitlement to an
allowance such as the care allowance, which constitutes a sickness benefit in cash,
from being subject to the condition that the insured person resides in the territory
of the Member State where he is insured.
Costs
45. The costs incurred by the Austrian, German, Spanish and Swedish Governments
and by the Commission of the European Communities, which have submitted
observations to the Court, are not recoverable. Since these proceedings are, for the
parties to the main proceedings, a step in the proceedings pending before the
national court, the decision on costs is a matter for that court.
On those grounds,
THE COURT,
in answer to the question referred to it by the Sozialgericht Karlsruhe by order of
28 March 1996, hereby rules:
Articles 6 and 48(2) of the EC Treaty do not preclude a Member State from
requiring persons working in its territory but residing in another Member State
to contribute to a social security scheme covering the risk of reliance on care,
although Articles 19(1), 25(1) and 28(1) 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 amended and updated by Council Regulation (EEC) No 2001/83
of 2 June 1983, do prevent entitlement to an allowance such as the care allowance,
which constitutes a sickness benefit in cash, from being subject to the condition
that the insured person resides in the territory of the Member State where he is
insured.
Rodríguez IglesiasGulmann
Ragnemalm
Wathelet Schintgen
Mancini
Moitinho de Almeida Kapteyn
Murray
Edward Puissochet
Hirsch
Jann Sevón
Ioannou
|
Delivered in open court in Luxembourg on 5 March 1998.
R. Grass
G.C. Rodríguez Iglesias
Registrar
President
1: Language of the case: German.
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