law://eu/cjeu/1976/c-19-76/hd_1_1_2@2026-11-14Mr Triches denies the validity of Article 42 (2) of Regulation No 3 in that its provisions are incompatible with:(a) Articles 3 (c) and 48 (3) (b) of the EEC Treaty:He claims that the practical application of Article 42 (2) has the effect of depriving certain migrant workers of a part of their rights. It constitutes an obstacle to the free movement of persons within the Community, by encouraging beneficiaries of a pension to remain in the territory of the State which gives them the most favourable benefits;(b) Article 51 (b) of the EEC Treaty, which according to him ensures that the payment of benefits to which entitlement has arisen in one Member State shall be payable in the territories of the other Member States;(c) Article 117 of the EEC Treaty:He further claims that it is apparent from the first recital to Regulation No 1/64 of the Council that the decision to make only one country bear the cost of paying family allowances to which beneficiaries of pensions are entitled was taken for the purposes of simplification. However, such a purpose ought not to have the effect of creating inequalities of treatment incompatible with the objectives of ‘harmonization while … improvement is being maintained’ mentioned in Article 117 of the Treaty. It is argued that this Article envisages ‘harmonization from above’, whereas Article 42 (2) has the opposite effect. Take, for example, two Italian workers of whom one has worked exclusively in Belgium for ten years, and the other for ten years in Belgium and five years in Italy; the first simply receives the Belgian invalidity pension and continues to receive, if he changes his residence to Italy, the family allowances under the Belgian system; the second receives an invalidity pension apportioned between Belgium and Italy and, if he changes his residence to Italy, loses the benefit of the Belgian family allowances which are more advantageous than those under the Italian scheme.Mr Triches points out that Article 77 (2) of Regulation No 1408/71, in force since 1 October 1972, creates the same inequalities, and that it would be useful ifthe Court were to extend its interpretation to this provision. The Belgian Government argues first that Article 42 does not base the determination of the legislation applicable on nationality. The criterion of country of residence is the most convenient solution because expenditure on education for the children can best be evaluated in the country where the members of the family reside and in which the family allowances must be used.Since Article 42 does not infringe Article 48 of the Treaty, there is no obstacle to freedom of movement within the meaning of Articles 3 and 51 of the Treaty.Article 117 of the Treaty is directed at the harmonization of the internal legislation of the Member States; Article 42 is a Community provision laying down rules to determine what national legislation is applicable.The same conslusions can be drawn from the judgment of the Court of 17 June 1970 in Case 3/70 [1970] ECR 415.The Italian Government is of the opinion that the aim of co-ordination set out in Article 42 is justified under Article 51 of the Treaty. Without Article 42, there would often be accumulation of two or more family benefits. However, in assimilating family benefits to increases in pensions, Article 42 deprives the worker in some cases of family benefits to which he has become entitled on the basis of the legislation of a given Member State, when that right is not replaced by another right having the same effect. It is therefore incompatible with Article 51 of the Treaty that, by the mere fact of having transferred his permanent residence, the same worker — by virtue of the rule against accumulation in Article 42 (2) — receives the lowest of the benefits to which he is entitled on the basis of the national laws.It is a fundamental rule of Community law on social security that pension benefits may not be reduced, suspended, or altered by reason of the fact that the beneficiary resides permanently in a country other than the one where the institution liable for payment is situated.Finally, it is argued, the fact of having worked in several Member States cannot, without infringing Article 48 of the Treaty, entail a loss vis-à-vis those who have worked in only one Member State.The Commission points out first of all that there can be no question of the validity of Article 42 (2) of Regulation No 3 as regards Articles 3 and 117 EEC. This is because the Court has repeatedly asserted that the regulations on social security are founded on, governed by and limited by Articles 48 to 51 of the EEC Treaty and also because Article 3 of the Treaty, which defines the activities of the Community, refers to the said articles, and because Article 117 of the Treaty is outside the context of freedom of movement.In its original form Article 42 (2) provided that the beneficiary of a pension under the legislation of a Member State had the right to the family allowances provided for by its legislation if he was permanently resident in the territory of the competent State or of another Member State, but in the latter case up to the amount of family allowances or pension supplements in respect of children payable under the legislation of the country of permanent residence, or up to the total amount of those benefits if the said legislation provided for the simultaneous payment of both kinds of benefits. The determination of the amount of the family allowances to be transferred by the competent State was extremely complicated, and caused considerable delays in the payment of benefits because they had to be recalculated frequently and the final result was that Member States often had to pay very trivial benefits out of all proportion to the administrative costs involved.Under the system introduced by Regulation No 1/64, the right to family allowances, to which supplements or increases in pension for dependent children are assimilated, is determined by reference to the legislation of only one country, and according to criteria analogous to those used for the granting of benefits in the nature of sickness insurance for beneficiaries of pensions: if the worker is the beneficiary of a pension in pursuance of the legislation of one Member State only, it is the legislation of that Member State which is applicable; if the worker is the beneficiary of a pension in pursuance of the legislation of several Member States, it is the legislation of the country of permanent residence which is applicable when the worker is the beneficiary of a pension payable by that country, and it is the legislation of the Member State in the territory of which the worker has completed the longest old-age insurance period which is applicable when the worker is permanently resident in the territory of a Member State other than those States which are liable to pay a pension.For as long as Mr Triches resided in Belgium he received, in addition to two invalidity pensions, the Italian pension supplement for dependent children, which was sent to him on the same footing as the Italian invalidity pension itself, and the Belgian family allowances. When he returned to Italy, his right to the transfer of the Belgian family allowances became subject to the application of Article 42 (2) of Regulation No 3. This meant that the said allowances could not exceed the amount representing the Italian pension supplement for accounting purposes and had to be calculated within the limits fixed by Article 70 (6) of Regulation No 4, that is to say, this amount could not be higher than the Belgian family allowances less the Italian pension supplement actually paid, or than the Italian pension supplement for accounting purposes less the Italian pension supplement actually paid. Therefore the Belgian Fund could only be exonerated from all payments of family allowances to Mr Triches if the amount resulting from one of the two calculations described above was equal to zero.As from 1 February 1964, the rights of Mr Triches were determined exclusively by Italian law, as if he had spent his whole working life in Italy, and the Italian institution was alone liable for payment, that is to say, he was ensured of benefits equal to the amount of the Italian pension supplement for accounting purposes.The purpose of Regulation No 1/64 was to introduce a simpler and more flexible system than the previous one, which had rendered the legislation of several countries applicable and had thus given rise to considerable delays. Apart from the fact that the choice of the legislation of the country of permanent residence as the legislation applicable for the granting of benefits for family commitments is the easiest solution when the country of permanent residence is also a competent country, because it is the institution of that country which is responsible for making enquiries and determining the rights of the persons concerned, it should be borne in mind that the migrant workers to whom Article 42 (2) applies receive all the benefits payable under the legislation applicable as if they had spent their whole working life under that one legislation, and this is the position even if aggregation was necessary in order to establish the right to a pension. Thus the migrant worker is not placed at a disadvantage by reason of his migration. Therefore the system introduced by Article 42 (2) does not discriminate on grounds of nationality and is not an obstacle to freedom of movement, offending against Article 48 of the EEC Treaty.Nevertheless in certain cases Article 42 (2) might result in a worker entitled to claim benefits under the legislation of several countries receiving the benefits payable under the least favourable legislation, and might be contrary to Article 51 of the EEC Treaty. But such an assertion might be subject to reservations. The simultaneous application of the legislation of two or more countries would lead to a more accurate calculation of the amount of the benefits to which the person concerned is entitled, taking into account the insurance periods completed in each country, but all the problems which gave rise to the revision of Article 42 (2) would reappear and they would be even more complicated at the present time because of currency instability. And it would be that system which, whilst perhaps more accurate as to the calculation of the amount of benefits, but of such a nature as to bring about considerable delays in payment, which would be an obstacle to freedom of movement for workers within the Community, and would be contrary to Article 51 of the EEC Treaty.Therefore the Commission is of the opinion that the system introduced by Article 42 (2) of Regulation No 3 as amended by Regulation No 1/64, which ensures in all circumstances that family allowances are paid by reference to insurance periods completed by beneficiaries of pensions in one or several Member States, wherever their permanent residence may be, is not incompatible with Articles 48 and 51 of the EEC Treaty.At the hearing on 15 June 1976, the appellant in the main action, represented by Mr Rossini, and the Commission, represented by its Agent, Miss Jonczy, elaborated on the arguments set out in the written procedure.The Advocate-General delivered his opinion on 6 July 1976.
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