Caisse régionale d'assurance maladie de Lille (CRAM) v Diamante Palermo, née Toia (237/78)

I —Facts and procedure

Article L 640 of the French Social Security Code provides for an ‘allocation aux mères de famille’ [allowance for women with children]. Entitlement to that allowance depends on the following conditions:(1) Under Article L 640 of the Social Security Code the person concerned must:— Be aged at least 65;— Have French nationality;— Be the wife of an employed person;— Be of insufficient means;— Have brought up at least five dependent children for at least nine years before their sixteenth birthday.(2) Under Article 1 of Decree No 50-76 of 16 January 1950, as amended on 16 August 1956:— Those children must be of French nationality on the date on which entitlement arises.Diamante Palermo (née Toia), of Italian nationality, having been born on 8 July 1913 at Gizzeria (Italy), resident in France, the wife of an empolyed person and the mother of seven children, applied for that allowance to the Fund which by a decision of 7 September 1977 of its Commission de Recours Gracieux [Appeals Board] refused her the allowance on the ground that five of the children had possessed Italian nationality from birth.When that decision was disputed the Commission de Première Instance du Contentieux de la Sécurité Sociale [Tribunal of First Instance for Social Security Appeals], Lille, by a decision of 21 March 1978, found in favour of the plaintiff on the ground that as a non-contributory old-age benefit was involved, by virtue of the provisions of Articles 2, 3 and 4 of Regulation No 1408/71, it must be available not only to French nationals but also to the nationals of other countries of the Community.On 18 April 1978 the Fund appealed against that decision to the Cour d'Appel, Douai.The Fund stated that it had been authorized by way of administrative instructions not to rely on the fact that the mother did not have French nationality.The Cour d'Appel, considering that the solution to the legal problem before it depended on the interpretation of Community provisions, decided to stay proceedings and to submit the following question to the Court of Justice pursuant to Article 177 of the Treaty:‘What interpretation must be given to the provisions of Articles 2 (1), 3 (1) and (3) and 4 (1) (c) and (2) of Regulation (EEC) No 1408/71 of 14 June 1971 with regard to the grant of an old-age benefit which, being of a non-contributory nature, is in principle reserved to French nationals?’The judgment making the reference, dated 10 October 1978, was received at the Court Registry on 30 October 1978.In accordance with Article 20 of the Statute on the Protocol of the Court of Justice of the EEC, written observations were submitted by the Fund, by Mrs Palermo, by the Government of the Italian Republic, represented by its Ambassador, Adolfo Maresca, acting as Agent, assisted by the Avvocato dello Stato, Franco Favara, and by the Commission of the European Comunities, represented by Marie-Jose Jonczy, a member of its Legal Department, acting as Agent, assisted by Henri Scheyvaerts and Francis Herbert, of the Brussels Bar.Having heard the report of the Judge-Rapporteur and the views of the Advocate General, the Court asked the Fund to produce certain documents.

II —Summary of the written observations submitted to the Court

The Fund points out that the Treaty leaves governments free to pursue the demographic policy which they consider best. The allowance for women with children is essentially an instrument of demographic policy.The imposition of a condition concerning the nationality of the children cannot be regarded as anything other than an incentive to bear and raise children who will increase the French national community. The period of employment which the husband is required to have completed is very short (three months). Moreover, the women who apply for the allowance in question do not belong to the category of ‘workers’ whose free movement the Treaty sought to ensure.Similarly, Regulation No 1408/71 does not apply to the allowance for women with children. The preamble to the said regulation suggests that it does not take account of benefits which are inspired by predominantly demographic considerations.As to Chapter 3, ‘Old age and death (pensions)’, of Title II, ‘Special provisions relating to the various categories of benefits’, Regulation No 1408/71 makes provision for benefits to be granted by virtue of periods of insurance or of residence, but it does not make reference to bearing or raising children.Consequently, it cannot be said that the draftsmen of Regulation No 1408/71 regarded the allowance for women with children as capable of constituting an old-age benefit within the meaning of Article 4 of that regulation.Admittedly, the French Government considered (see the letters from the Minister for Employment of 6 May 1949 and 8 September 1950) that the allowance for women with children was on the same footing as the allowance for retired workers as regards diplomatic agreements, but that unilateral appraisal cannot alter the nature of the allowance.The Fund emhasizes that the allowance for mothers cannot be claimed in respect of children who are not French, even though women possessing the nationality of Member States of the Community may be entitled to the allowance.Article 3 of Regulation No 1408/71 provides for equality of treatment as regards benefits and obligations. In Article L 640 of the French Social Security Code no benefits are conferred on children, nor are any obligations imposed on them; they are merely one of the factors in the situation of the claimant, such as age or insufficient means.Besides, under the system set up by Regulation No 1408/71, the same factor cannot create entitlement to more than one benefit of the same nature. Finally, if the regulation is considered applicable, the children must, if they are to be taken into account for its purposes, reside within the territory of one of the Member States. That is not so in this case.Mrs Palermo claims that the condition concerning the children's nationality is not in accordance with the spirit or the letter of Regulations No 1612/68 (Articles 7 and 10) or No 1408/71 (Articles 2, 3 and 4).The allowance for women with children is a non-contributory old-age benefit. Therefore it should be payable not only to the French but also to the nationals of another Member State and to their families.Mrs Palermo submits that the combined effect of Articles 2 and 3 of Regulation No 1408/71 is that the members of the family of a migrant worker must be allowed to enjoy the benefit of the legislation of the State in which they reside under the same conditions as the nationals of that State. In accordance with the provisions of Article 4 (1) (c) and (2), that regulation applies to all legislation concerning the branches of social security and the benefits which are referred to there.According to the Government of the Italian Republic, the allowance in question comes within the matters covered by Regulation No 1408/71, as defined in Article 4 thereof. It is a welfare benefit typical of a social security scheme (although non-contributory); its justification is old-age preceded by an intensive period of child-rearing and it is subject to the condition that the husband must have worked as an employed person.The Italian Government goes on to examine the case-law of the Court. It submits that according to that case-law, amongst the recipients of the allowance in question must be Included all elderly mothers who are nationals of a Member State and resident in France, especially if they also have husbands who work or have worked as employed persons in France. The fact that not all the children raised have chosen French nationality cannot suffice to justify any discrimination, the more so because in this case the treatment in the field of social security of the elderly and needy mother would be determined by the behaviour and by the choices of other persons, namely her children.The Commission considers that according to the case-law of the Court (Case 1/72 Frilli v Belgium [1972] ECR 457; Case 187/73 Callemeyn v Belgium [1974] ECR 553), the allowance for women with children, which confers on the recipient a legally defined position entitling her to a benefit similar to an old-age benefit and subject to the requirement that the husband be an employed person, comes within the category of non-contributory ‘old-age benefits’ to which Article 4 (1) (c) and (2) of Regulation No 1408/71 applies.The question in the form in which it is submitted seeks to ascertain what interpretation must be given to the principle of equality of treatment formulated in Article 3 (1) of the said regulation, and in particular to the expression ‘the same obligations and … the same benefits … as the nationals of that State’, having regard to paragraph (3) of that article.To the extent to which the question submitted refers only to the nationality of the recipient of the benefit, namely the wife of the migrant worker, an answer to it can already be found in the case-law of the Court (Case 7/75 [1975] ECR 679). She cannot be denied the benefit on the basis of her nationality.It is apparent from the grounds of the judgment of the Court making the reference and from the file which it has forwarded that the Fund's refusal to grant the allowance for mothers of large families was not based on the nationality of the mother, but on that of some of her children.In order to provide the national court with some clarification regarding the actual problem raised before it, it would be useful if the Court of Justice were to extract from all the factors provided by the national court and in particular from the grounds of the judgment making the reference, the elements of Community law which require an interpretation, having regard to the subject-matter of the dispute.The question is whether the refusal to grant an old-age benefit on the ground of the nationality of the applicant's children is contrary to the principle of equality of treatment as formulated in Article 3 (1) of Regulation No 1408/71.According to the Commission there are arguments in favour both of a negative answer and of an affirmative answer.The arguments in favour of a negative answer are in the first place that, in form, the condition concerning the nationality of the applicant's children applies equally to French nationals and to foreigners. Secondly, it is one of the objective conditions giving entitlement to the benefit. Thirdly, to the extent to which the condition is objectively justified having regard to the nature and purpose of the benefit, there cannot be any discrimination, since that concept presupposes an arbitrary difference in treatment. The objective justification is the fact that the objective condition is due to a consideration of demographic policy.The argument in favour of an affirmative answer is that the prohibition on discrimination, contained in Article 3 (1) of Regulation No 1408/71 does not apply-solely to discrimination in form but also to discrimination in substance or indirect discrimination, that is to say that provisions which lay down requirements applicable both to a State's own nationals and to foreigners, but which in reality are more difficult for foreigners to satisfy (Case 55/77 Maris v Rijksdienst voor Werknemerspensioenen [1977] ECR 2327; Case 16/78 Choquet [1978] ECR 2293). The effect of the condition concerning the nationality of the children varies according as a French national or a national of another Community State is involved. That condition is more easily satisfied by a French mother.Moreover, the difference in treatment is not justified. Considerations of a demographic nature have been accepted as justification for excluding certain benefits from the scope of Regulation No 1408/71, as is shown by Article 1 (u) of the regulation.That exception to the general application of the provisions of Regulation No 1408/71 to all the branches of social security listed in Article 4 (1) of the regulation must be interpreted restrictively. Thus it cannot be extended, by analogy, to allowances for women with children, which belong to the category of old-age benefits.In conclusion, the Commission considers that the condition concerning the nationality of the children is not objectively justified and that therefore it cannot be relied on, by virtue of Article 3 (1) of Regulation No 1408/71, as against the wife of a migrant worker so as to deny her the benefit of the allowance for women with children provided for in Article L 640 of the Social Security Code.

III —Oral procedure

At the hearing on 13 June 1979 oral argument was presented by the Commission of the European Communities, represented by Marie-José Jonczy and Francis Herbert.The Advocate General delivered his opinion at the hearing on 3 July 1979.

Costs