Benito D'Amario v Landesversicherungsanstalt Schwaben (320/82)

I —Facts and written procedure

Benito d'Amario, the plaintiff in the main action, who has always resided in Italy, is the son of a migrant worker of Italian nationality. His father, who died in 1980, worked partly, in the Federal Republic of Germany and partly in-Italy:: In the course of such work he completed insurance periods amounting in Germany to 83 months and in Italy to-111 months. After his return to Italy he continued to work until December 1974. From 1 March 1974 the Landesversicherurigs-ąnstąlt Schwaben.(hereinafter referred to às “the German institution”), the defendant in the main action, paid him a pension on the ground of incapacity for work on the basis of German legislation, whilst the Istituto Nazionale delle Previdenza Sociale [National Social Welfare Institution] (hereinafter referred to as “the Italian institution”) also granted him from 1 March 1974 an Italian invalidity pension, together with family allowances for the plaintiff in accordance with Article 77 of Regulation No 1408/71.After the death of the insured person the German institution paid his widow a widow's pension but refused to grant the plaintiff an orphan's pension, claiming that according to Article 78 of Regulation No 1408/71 that pension should be paid exclusively by the Italian institution because the insured person had completed a longer period of insurance in Italy than in the Federal Republic of Germany.Article 78 of the said regulation, as amended by Regulation (EEC) No 2864/72 of the Council of 19 December 1972 (Official Journal, English Special Edition 1972 (31 December), p. 15), is worded as follows:“Orphans(1) The term ‘benefits’, for the. purposes of this article, means family allowances and, where appropriate, supplementary or special allowances for orphans and orphans' pensions except those granted under insurance schemes for accidents at work and occupational diseases.(2)Orphans' benefits shall be granted in accordance with the following rules, irrespective of the Member State in whose territory the orphan or the natural or legal person actually maintaining him is resident:(a) ...(b) for the orphan of a deceased worker who was subject to the legislation of several Member States :(i) in accordance with the legislation of the Member State in whose territory the orphan resides provided that ... a right to one of the benefits referred to in paragraph (1) is acquired under the legislation of that State;...(ii) in other cases in accordance with the legislation of the Member State to which the deceased worker had been subject for the longest period of time, provided that ... the right to one of the benefits referred to in paragraph (1) is acquired under the legislation of that State ...However, the legislation of the Member State applicable in respect of provision of the benefits referred to in Article 77 for a pensioner's children shall remain applicable after the death of the said pensioner in respect of the provision of the benefits to his orphans.”The Italian institution paid the orphan's pension but the plaintiff wished to obtain a German pension, and when he brought an action before the Sozialgericht [Social Court] Augsburg to obtain one, it ruled in his favour. By judgment of 9 December 1981 the German institution was ordered to pay the plaintiff an orphan's pension for the period 1 February 1980 to 31 October 1981; the plaintiff was obliged to concede that the pension should be reduced by the amount he received from the Italian institution under Italian legislation.When the case went before the Bundessozialgericht, the defendant contended that the Sozialgericht Augsburg had failed to comply with Article 78 (2) (b) (i) of Regulation No 1408/71. According to that provision benefits must be provided for an orphan only by the Member State in whose territory the orphan resides, provided that a right thereto has been acquired under the national legislation of that State. In adopting Article 78, and the subsequent articles, of that regulation the Community legislature intended to simplify the procedure for granting family allowances (including orphans' pensions) by confining responsibility for payment to one State only. It would be contrary to that intention, according to the defendant, to require payment of the difference between the German orphan's pension and the Italian pension. The plaintiff, however, argued that the application of Article 78 and the subsequent articles must not entail a loss of or a reduction in rights acquired on the basis of national insurance periods alone.The Bundessozialgericht considered that the dispute raised problems concerning the interpretation of Community law and, by order of 6 October 1982, decided pursuant to Article 177 of the EEC Treaty to stay the proceedings until the Court of Justice had given a preliminary ruling on the following question:“Must the German pension institution pay to an orphan who is an Italian national and has always lived in Italy a supplement to the orphan's pension granted to him by the Italian pension institution if, although his late father paid contributions to both the German and the Italian pension institutions, entitlement to the grant of an orphan's pension was acquired under German legislation by virtue of the German contributions alone?”In the grounds for the order making the reference the Bundessozialgericht finds that the insured worker was already in receipt of a family allowance for the plaintiff from the Italian institution. According to the last sentence of Article 78 (2) of Regulation No 1408/71, the Italian legislation remains applicable after the death of the insured worker. The wording and general structure of Article 77 et seq. of that regulation likewise support the view that only one Member State is responsible for payment of an orphan's pension in accordance with its national legislation. Nevertheless, in its judgment of 9 July 1980 (Gravina, Case 807/79 [1980] ECR 2205) the Court considered that supplementary benefits should be granted in addition to an orphan's pension where national legislation alone provided a right to a greater amount than that available under the legislation of the Member State responsible for payment of the benefit under Article 77 et seq. of Regulation No 1408/71.The court making the reference states that it is in doubt as to whether the principles laid down in the abovementioned judgment are applicable to this case, where the circumstances may require a different approach, namely the application of Italian legislation alone to the exclusion of any right arising under German legislation. Those circumstances may be summarized as follows :(a) The Community legislature's declared aim of achieving a simple and quick administrative procedure would be imperilled by effecting a division of rights which entails administrative complications.(b) Although, according to the judgment in Case 807/79, a supplement must be granted solely on the basis of the pension calculated in accordance with national legislation, that cannot be done here on the basis of the national provisions alone because German internal law does not allow for such a supplement.(c) In Case 807/79 the orphans were already in receipt of an orphan's pension under German legislation, whereas that is not so in the present case.(d) The plaintiff in the main action has never resided in the Federal Republic of Germany.The order making the reference was recorded at the Court Registry on 16 December 1982.Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC written observations were lodged by the Landesversicherungsanstalt Schwaben, the defendant in the main action, represented in this matter by its director, Mr Wanders; by the Government of the Italian Republic, represented by the Avvocato dello Stato [State Advocate General] Pier Giorgio Ferri; and by the Commission of the European Communities, represented by Manfred Beschel, a member of its Legal Department.On hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preliminary inquiry.By order of 4 May 1983 the Court decided pursuant to Article 95 (1) of the Rules of Procedure to assign the case to the First Chamber.