Mr and Mrs Lachheb reside with their children in France. Mr Lachheb is employed in Luxembourg, while his wife works in France, and Mr and Mrs Lachheb are entitled, under Luxembourg legislation, to the payment of a ‘differential supplement’ by the CNPF, the amount of which corresponds to the difference between the family benefits to which they are entitled from the State in which Mr Lachheb is employed, namely the Grand Duchy of Luxembourg, and those benefits which they can claim from the State in which they reside, namely the French Republic. Following an objection lodged by Mr and Mrs Lachheb, the Steering Committee of the CNPF upheld a decision of the president of the CNPF, which had taken into account the child bonus, owed to Mr and Mrs Lachheb under Luxembourg legislation, in the calculation of the differential supplement.
As, in the course of the further proceedings, it was uncertain whether a benefit such as the child bonus provided for under the Luxembourg legislation can be classified as a family benefit within the meaning of Articles 1(u)(i) and 4(1)(h) of Regulation 1408/71, the Luxembourg Cour de cassation decided to stay the proceedings and to ask the ECJ whether Articles 1(u)(i) and 4(1)(h) of Regulation 1408/71 must be interpreted as meaning that a benefit such as the child bonus is a family benefit within the meaning of that regulation.
The Court has repeatedly held that the distinction between benefits excluded from the scope of Regulation 1408/71 and those which fall within its scope is based essentially on the constituent elements of each particular benefit, in particular its purposes and the conditions on which it is granted, and not on whether a benefit is classified as a social security benefit by national legislation. Further, the Court has made it clear that characteristics which are purely formal must not be considered relevant criteria for the classification of benefits. Consequently, the fact that a benefit is governed by national tax law is not conclusive for the purpose of evaluating its constituent elements.
According to settled case-law, a benefit may be regarded as a social security benefit in so far as it is granted to the recipients, without any individual and discretionary assessment of personal needs, on the basis of a legally defined position and relates to one of the risks expressly listed in Article 4(1) of Regulation 1408/71. As the CNPF and the Commission contend, the benefit at issue in the main proceedings is, first, automatically granted in the case where there is a dependent child in order to compensate for the maintenance of that child, and, second, it corresponds to a set amount, granted automatically, without any link to the income or the tax owed by the applicant.
Consequently, a benefit such as that at issue in the main proceedings is indeed a social security benefit.
In the second place, it is necessary to determine the precise nature of the measure at issue in the main proceedings. In order to distinguish between different categories of social security benefit, the risk covered by each benefit must be taken into consideration. Specifically, Article 1(u)(i) of Regulation 1408/71 provides that ‘the term family benefits means all benefits in kind or in cash intended to meet family expenses’. In this regard, the Court has held that family benefits are intended to provide social assistance for workers with dependent families in the form of a contribution by society towards their expenses.
It must be observed that the child bonus, which is paid for each dependent child, represents a public contribution to a family’s budget to alleviate the financial burdens involved in the maintenance of children and therefore constitutes a family benefit within the meaning of Article 1(u)(i) of Regulation 1408/71. In that regard, the fact that the public contribution to a family’s budget takes the form of a cash benefit payable under the national tax law regime and that the child bonus has its origin in a tax reduction for children has no bearing on the classification of that benefit as a ‘family benefit’.
It follows from all of the foregoing that a benefit such as the child bonus is a family benefit within the meaning of Article 1(u)(i) of Regulation 1408/71.