News from the ECJ > (Case C-589/10) Wencel v ZUS w Bialymstoku

This request for a preliminary ruling concerns the interpretation of Articles 20(2) TFEU and 21 TFEU and certain provisions of Regulation 1408/71. It has been made in proceedings between Mrs Wencel and the Zakład Ubezpieczeń Społecznych w Białymstoku (the Białystok section of the national social security institution) (‘the ZUS’) concerning her entitlement to a retirement pension.

Mrs Wencel, a Polish national, has been registered as resident in the city of Białystok (Poland). Her husband, also of Polish nationality, settled, after their marriage, in Frankfurt am Main (Germany), where he was registered as resident and had an established employment relationship entailing the payment of social security contributions. As from a certain date, he received an incapacity pension in Germany. Mrs Wencel frequently went to Germany to see her husband, who spent all his holidays, including public holidays, in Poland. According to a residence registration certificate issued by the municipality of Frankfurt am Main, Mrs Wencel was also permanently resident in Germany as from a certain date. She obtained a residence permit in Germany but never worked there. On the other hand, she was employed as a childminder in Poland. By decision of the ZUS, she acquired the right to a Polish retirement pension, by virtue of the insurance periods completed in Poland. Following the death of her husband in 2008, the German insurance institution granted Mrs Wencel a survivor’s pension on the basis, inter alia, of her residence in Germany.

In 2009, the ZUS was informed that Mrs Wencel was registered as resident in both Poland and Germany. This lead the ZUS to two decisions. In its first decision, the ZUS reversed the decision to grant a retirement pension and suspended payment of that pension. According to the ZUS, under Article 4 of the Convention PL-DE of 9 October 1975, an application for a retirement pension may be considered solely by the insurance institution of the State in which the applicant is resident. By its second decision, the ZUS required Mrs Wencel to repay the sums received over the previous three years, to which it claimed she was not entitled. Mrs Wencel went to Court and the case was referred to the ECJ for a preliminary ruling.

By its questions, the referring court asks, in essence, whether EU law must be interpreted as meaning that a social security institution is entitled to withdraw, retroactively, the pension right of an insured person who, for many years, has had two habitual residences simultaneously in two different Member States, and to demand repayment of any pension to which, it is alleged, the person concerned is not entitled, on the ground that the insured person receives a survivor’s pension in another Member State in the territory of which he has also been resident.

The ECJ first made some preliminary observations as to the applicability of Regulation 1408/71.

As regards, first, the applicability ratione temporis of Regulation 1408/71, it should be noted that that regulation entered into force in Poland upon its accession to the European Union, namely on 1 May 2004. It is the abovemented two negative decisions, issued after the accession of the Republic of Poland to the European Union, which are the subject of the dispute in the main proceedings. Accordingly, the legality of the decisions must be assessed in the light of Regulation 1408/71, in so far as the provisions of the conventions on social security are not applicable.

With regard, second, to the applicability ratione materiae of Regulation 1408/71, it should be recalled that, under Article 7(2)(c) of that regulation, the provisions of social security conventions set out in Annex III to the regulation continue to apply, notwithstanding the provisions of Article 6 of the regulation, which provides that the regulation is to replace the provisions of any social security convention binding two or more Member States as regards persons and matters which it covers. Regulation 1408/71 continues to apply only to the extent that the bilateral conventions concluded before its entry into force do not impede its application.

However, an EU law provision which, like Article 7(2) of that regulation, gives precedence to the application of a bilateral convention, cannot have a purport that conflicts with the principles underlying the legislation of which it is part. It follows that EU law may be applied not only to all situations which, in accordance with the requirements set out in Article 7(2) of Regulation 1408/71, do not fall within the scope of the Convention of 9 October 1975 but also where the provisions of that convention are inconsistent with the principles on which the regulation is based. It must therefore be concluded that Mrs Wencel’s situation must be assessed on the basis of Regulation No 1408/71.

After these observations, the Court investigated the questions referred.

First, it is necessary to determine whether a person may legitimately, for the purposes of the application of Regulation 1408/71, in particular Article 10 thereof, claim to have simultaneously two habitual residences in two different Member States. Since it is not possible, however, to ascertain on the basis of the wording of Article 10 of Regulation 1408/71 whether it is permissible under the regulation to have two habitual residences in two different Member States, it must be borne in mind that the regulation establishes a system for the coordination of national social security schemes and lays down, in Title II, rules governing the determination of the legislation to be applied.

The principle that the person concerned is to be subject to the social security scheme of only one Member State finds expression in particular in Article 13(1) and Article 13(2)(f) of Regulation 1408/71. Since the system introduced by Regulation 1408/71 uses the residence of the person concerned as the connecting factor for the determination of the legislation applicable, it cannot be accepted, without depriving the provisions referred to in the preceding paragraph of all practical effectiveness, that a person may have, for the purposes of Regulation 1408/71, a number of habitual residences in different Member States. Consequently, it must be concluded that Article 10 of Regulation 1408/71 must be interpreted as meaning that, for the purposes of the application of that regulation, a person cannot have simultaneously two habitual residences in two different Member States.

Second, in order to establish the competent institution for the purpose of calculating the pension rights of a person in a situation such as that of Mrs Wencel, it is for the national court to determine, in the light of all the relevant evidence before it, the Member State in which the habitual residence of the person concerned is situated, within the meaning of the case law cited above.

On the assumption that the competent institution is located in that Member State on account of the fact that the person concerned is resident there, it is necessary, thirdly, to ascertain whether that institution may legitimately withdraw, retroactively, her pension entitlement and require her to repay any pension to which it is alleged she was not entitled, on the ground that she receives a survivor’s pension in another Member State in whose territory she had also been resident.

It is apparent from Article 12(2) of Regulation 1408/71 that provisions on reduction laid down in the legislation of a Member State may, unless that regulation provides otherwise, be invoked against persons who receive a benefit from that Member State if they can claim other social security benefits, even when those benefits are acquired under the legislation of another Member State, provided the limits imposed by Regulation No 1408/71 are observed. Those limits are imposed, inter alia, by Article 46a(3)(d) of Regulation No 1408/71, which provides that the benefit payable under the legislation of the first Member State may be reduced only within the limit of the amount of the benefits payable under the legislation of the other Member State.

It follows from the foregoing that Mrs Wencel’s Polish old age pension cannot be withdrawn retroactively on the ground that she receives a German survivor’s benefit. However, that pension may be reduced, up to the limit of the amount of the German benefits, on the basis of any Polish rule precluding the cumulation of benefits. It is for the referring court to ascertain whether such a rule exists in the present case.

However, the finding that a national measure may be consistent with a provision of a secondary law measure, in this case Regulation No 1408/71, does not necessarily have the effect of removing that measure from the scope of the Treaty’s provisions. European Union law militates against any national measure which, even though applicable without discrimination on grounds of nationality, is capable of hindering or rendering less attractive the exercise by Member State nationals of the fundamental freedoms guaranteed by the Treaty. National measures of that kind may be allowed only if they pursue a legitimate objective in the public interest, are appropriate for the purpose of ensuring the attainment of that objective, and do not go beyond what is necessary to attain the objective pursued. it is for the national court to assess the compatibility of the rules of national legislation at issue with the requirements of European Union law by determining whether the rule requiring the withdrawal of a pension entitlement and the repayment of sums to which, it is claimed, the person concerned was not entitled, which applies without distinction to Polish nationals and to nationals of other Member States, does not in fact lead, in respect of the person concerned, to an unfavourable situation in comparison with that of a person whose situation has no cross-border element, and, if such a disadvantage is established in the present case, whether the national rule at issue is justified by objective considerations and is proportionate to the legitimate objective pursued by national law.


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