DELIVERED ON 11 OCTOBER 1984 (1)

Mr President,

Members of the Court,

1. Felice Salzano, a wage-earning Italian worker employed in Germany since 1979, married with three children, applied to the Kindergeldkasse [Child Allowance Department, hereinafter referred to as “the Kindergeldkasse”] of the Bundesanstalt für Arbeit [Federal Employment Office, hereinafter referred to as “the Bundesanstalt”] for the grant of family allowances for his three children residing in Italy with their mother. That option is available to him under Article 73 (1) of Regulation No 1408/71 of 14 June 1971, (2) under which the entitlement to family benefits is determined by the legislation of the country of employment, irrespective of the family's place of residence.

He was, however, denied the benefit of that provision by the German institution in question, on the ground that his wife had, from 1 May to 31 December 1979, been working in Italy, where she could have asserted her right to family allowances. It was, the Bundesanstalt contended, irrelevant in that connection that she had neither requested nor consequently received family allowances in Italy, since they remained payable to her in pursuance of Italian legislation.

In that regard, the Bundesanstalt bases itself on Article 76 of Regulation No 1408/71, mentioned above, which provides as follows:

“Entitlement for family benefits or family allowances under Articles 73 and 74 shall be suspended if, by reason of the pursuit of a professional or trade activity, family benefits or family allowances are also payable under the legislation of the Member State in whose territory the members of the family are residing.”

Following the rejection of his claim by the Kindergeldkasse, Felice Salzano brought proceedings before the Sozialgericht München [Social Court, Munich] seeking payment, in respect of the period under consideration, of the difference between the level of family allowances in the Federal Republic of Germany and that of the same benefits in Italy.

In order to resolve the dispute which was thus brought before it, the German court submitted the following question:

“Is Article 76 of Regulation (EEC) No 1408/71 of the Council of 14 June 1971 to be interpreted as meaning that entitlement to family allowances must be suspended (if so, to what extent), in the country in which one of the parents is employed, also in the case where the other parent resides with the children in another Member State (country of residence) and is employed there, but does not receive any family allowances for the children because there is no application by one parent and/or waiver by the other parent as required by domestic law so that it is not clear whether and to what extent the parent in the country of residence of the children is entitled to family allowances?”

The grounds of the order making the reference, together with the observations which were submitted, disclose the two aspects of the problem of interpretation which has been raised:

First, it is a matter of determining the conditions in which family allowances may be regarded as “payable” in the State of residence, within the meaning of the aforesaid Article 76;

Secondly, on the assumption that allowances are “payable” within the meaning of that provision, the Court is asked to specify the level up to which the payment of family allowances in the State of employment must be “suspended”.

2. Before considering those two points in turn, it is necessary for the purposes of my argument to outline the state of the relevant national legislation.

The German law on family allowances (3) reserves the benefits in question to parents whose child has his habitual abode or residence in the Federal Republic of Germany; the court making the reference and the Commission note that, pursuant to the aforementioned Article 73 (1) of Regulation No 1408/71, Felice Salzano may, in respect of his children residing with their mother in Italy, avail himself of a right to German family allowances without prejudice to the application of Article 76 of that regulation.

Italian legislation has undergone a development, inasmuch as Article 9 of the Italian Law No 903 of 9 December 1977 on Equal Treatment for Men and Women in the matter of Employment (4) provides that, in future, family allowances may be claimed either by the father or by the mother, whereas they had previously been made available to the father alone, in his capacity as head of the family, (5) Should both spouses claim them, the allowances are paid to the parent with whom the child is living. (That option has been created in the Federal Republic of Germany as well, under Paragraph 3 (3) of the Bundeskindergeldgesetz).

By virtue of Italian Law No 903, the wife of Felice Salzano was therefore entitled to claim family allowances subject to the conditions laid down by Italian legislation. However, it is apparent from the order making the reference and from the observations submitted to this Court that she made no such claim and that Felice Salzano did not issue any waiver of his rights vis-à-vis the competent Italian institution.

3. Now that those preliminary remarks have been made, it is possible to set forth in brief the parties' interpretations regarding the first point referred to above.

Turning, therefore, to the question whether Italian family allowances are “payable” to Mrs Salzano, within the meaning of Article 76 of the regulation, the Commission takes the view that the determining factor is the actual payment of the benefits, not the finding that one or other condition — whether of form or of substance — is satisfied.

The plaintiff in the main proceedings and the Italian Government share the viewpoint of the Commission.

In opposition to that interpretation, the German Government argues as follows: in order to determine whether benefits are “payable” in the State of residence, it is sufficient to establish whether the worker satisfies the substantive conditions laid down by domestic law. No account should therefore be taken of the conditions which it imposes as to form, especially as that would give parents a choice of legislation and thus enable them to select the Member State which would disburse the family allowances. Article 76, however, is a conflict-of-laws rule which confers “priority” on the legislation of the State of residence.

Lastly, the Ragazzoni and Rossi judgments (6) cannot, the German Government contends, be transposed to this case because, since those cases, mothers have no longer been precluded from the right to claim family allowances which had previously been reserved under Italian legislation to the head of the family alone, that is to say, the father. Moreover, the requirements as to form are not dealt with in either of those cases.

As the Commission has clearly demonstrated, those arguments cannot be accepted.

The case-law of this Court supplies all the material needed for establishing an unequivocal interpretation of the expression “are ... payable” which appears in Article 76 of Regulation No 1408/71.

4. In the first place, the Court took the view that

“Since the grant of family benefits under Article 73 of Regulation No 1408/71 is subject to the interpretation and the application of national legislation, the competent institution of another Member State is not in a position to determine whether the conditions for granting such benefits are all satisfied”. (7)

That statement derives from the principle that Community legislation in the field of social security has no other purposes than to coordinate existing national systems. Any other solution, such as, for example, making the application of the anti-duplication provision contained in Article 76 conditional upon the mere finding by the institution of the country of employment that the worker may legitimately demand — irrespective of the formalities to be observed — the benefits of the State of residence, would constitute a breach of that principle and invite the risk of divergent assessments.

It was to avert such an eventuality that the Court decided that the application of Article 173 called for a uniform interpretation in all the Member States “regardless of the arrangements made by national laws on the acquisition of entitlement to family benefits”. (8)

5. In the second place, the Court took the view in the Ragazzoni judgment that family allowances are not “payable” in the Member State of residence unless the law of that State recognized “the right to the payment of allowances in favour of the person in [the] family who works in such State.”

The Court explained this by adding:

“The person concerned must thus fulfil all the conditions required by the domestic legislation of that State in order to exercise that right”. (9)

It is true that, in that case, it was a substantive condition — the status as head of the family — which was not satisfied, with the result that the benefit was not “payable” in Italy. May it be inferred from that, however, that the Court gave precedence to that type of condition, setting aside the formal requirements governing the grant of family allowances in the State of residence?

Such an interpretation would be tantamount to doing justice to a particular case at the expense of the broader principle underlying it. Indeed, the Court stressed that it was a matter of having regard to “all the conditions” required by the legislation in question, irrespective of their nature. (10) That was why the Court concluded that the suspension of entitlement to family benefits under Article 76 “is not applicable” on the grounds that in the State of residence the mother has not “acquired ... a right to family allowances either because only the father is acknowledged to have the status of head of household or because the conditions for awarding to the mother the right to payment of the allowances have not been fulfilled”. (11)

Thus the Court referred to the conditions for the grant of family allowances laid down by the law of the Member State of residence without drawing any distinction between them.

6. Finally, the decisions of the Court on the application of the anti-duplication provisions in relation to family benefits show that the determining factor for suspension is the actual payment of benefits in the other Member State. Thus the Court has ruled that the anti-duplication rule in Article 79 (3), which is analogous to the one in Article 76 but which relates to benefits for dependent children of pensioners and for orphans “has a purpose, and is applicable, only if entitlement to benefits actually arises and is acquired according to the legislation of the State in which the professional or trade activity is pursued”. (12)

Similarly, the Court interpreted the anti-duplication provision contained in Article 10 (1) (a) of Regulation No 574/72 as meaning “that it applies whenever the institution of another Member State has in fact granted family benefits to a worker in respect of the same child, in pursuance of Article 73 of Regulation No 1408/71, without its being necessary to examine whether all the conditions for the grant of those benefits are satisfied under the legislation of that other Member State”. (13)

7. In the result, it is apparent from the above passages from the decisions of the Court that the purpose of Article 76 is to avoid any overlapping of benefits which have actually been acquired, in order to prevent any unjust enrichment of which a worker or of those entitled under him might take advantage as a result of the interplay between the legislation of the State of employment and that of the State of residence. However, such is not the case here, inasmuch as the wife of Felice Salzano has not taken any of the formal steps which are required if such benefits are to be paid. Without an application from her and a formal waiver from her husband, the family allowances may not be regarded as “due” within the meaning of the aforementioned provision, as Mr Advocate General Capotorti has already pointed out. (14) That interpretation has, admittedly, the effect of giving the migrant worker in the Member State of employment, and his wife working in the State of residence, the right to choose whichever national legislation is more favourable; that option is a consequence both of Italian and of German legislation. In that connection I can do no more than remind the Court that the Community rules on the subject are designed merely to coordinate, not to harmonize, the social legislation of Member States. (15)

More generally, I must point to the paradox which would result from a solution based solely on the finding of an entitlement to receive benefit; in the absence of any actual payment, suspension might then be total, whereas according to the case-law of the Court — as will be seen later — it cannot be other than partial when benefits are actually paid.

Those observations, taken as a whole, therefore lead me to propose that the reply to be given to the national court should be that family benefits or allowances must not be regarded as “payable” to the worker or to those entitled under him who pursue a professional or trade activity in the Member State of residence unless and until they are actually paid there.

8. The above reply should enable the German court to resolve the dispute before it. It is thus only in the alternative that I shall consider the second aspect of the question submitted to the Court, the substance of which I shall now repeat; on the assumption that family allowances are actually paid in the Member State of residence, should the suspension of the allowances previously disbursed in the Member State of employment be total or only partial, and in the latter case, up to what amount?

The Court was recently confronted with a comparable problem in the Patteri case. (16)

The case-law of the Court on this subject is well-known; rights acquired by the worker in the State of employment are not wholly extinguished where payments are in fact made in respect of equivalent rights in the Member State of residence. They continue to exist in respect of the excess of the amount over the level of the benefits paid in the Member State of residence. (17)

In its observations the German Government maintains that the above principle does not apply when the right to family benefits arises, not under national legislation making it available to residents alone, but under Article 73 itself. That line of argument must be rejected. This Court has clearly established that the application of the Community rules on social security cannot “lead to a reduction in the benefits payable by virtue of that legislation supplemented by Community law”, (18) unless an exception is expressly laid down by those rules, an exception which the Court has interpreted as establishing a partial suspension. Any other interpretation would have the result of making it possible to use the residence clause contained in the legislation of the State of employment as a means of opposing the right vested in the worker by Article 73 itself, and would, more generally, serve to defeat the principle of freedom of movement for persons, which it seeks to safeguard. (19)

9. In conclusion, I propose that the Court should rule:

that Article 76 must be interpreted as meaning that family benefits “are ... payable” in the Member State of residence only in so far as a right to be paid such benefits actually exists and is acquired under the law of the State in which the professional or trade activity is pursued; and,

as a subsidiary point, that Article 76 suspends the right to family benefits paid by the State of employment only up to the level of the amount of the equivalent benefits received in the State of residence by the spouse who pursues a professional or trade activity therein.

(1) Translated from the French.

(2) Official Journal English Special Edition 1971 (II), p. 416.

(3) Bundeskindergeldgesetz [Federal Law on Child Allowances], Paragraph 2 (5), Bundesgesetzblatt I of 6, 2, 1975.

(4) Gazzetta Ufficiale of 17.12.1977, No 343, p. 9041.

(5) See in particular Case 134/77, Ragazzoni v Assųbel, [1978] ECR 963, at paragraph 10.

(6) Case 134/77, Ragazzoni, mentioned above; Case 100/78, Rossi v Caisse de Compensation pour Allocations Familiales, [1979] ECR 831.

(7) Case 149/82, Robards v Insurance Officer, (1983), ECR 171, at paragraph II.

(8) Case 104/80, Beck v Bundesanstalt für Arbeit, [1981] ECR 503, at paragraph 7.

(9) Case 134/77, Ragazzoni, cited above, at paragraphs 8 and 9.

(10) Ragazzoni, paragraph 9.

(11) Ragazzoni, paragraph 12.

(12) Case 100/78, Rossi, cited above, paragraph 9.

(13) Case 149/82, Robards, cited above, paragraph 12.

(14) Case 134/77, Ragazzoni, cited above, at p. 975, and Case 100/78, Rossi, at p. 848.

(15) See for example Case 100/78, Rossi, cited above, paragraph 13.

(16) Case 242/83, Caiac de Compensation v Patteri; judgment of 12.7.1984, [1984] ECR 3171.

(17) See in particular Case 100/78, Rossi, cited above, paragraph 17; Case 733/79, CCA v Laterza, [1980] ECR 1915, paragraphs 8 and 9; Case 104/80, Beck, cited above, paragraph 12; and lastly, Case 242/83, Patteri, cited above, paragraph 10.

Case 733/79, Laterza, cited above, paragraph 8; also, Case 101/83, Brusie v Raad van Arbeid, judgment of 17.5.1984, [1984] ECR 2223, at paragraph 30.

(19) Case 320/82, D'Amario, cited above, paragraphs 4 to 7.