The Court considers that coherence between the REA scheme and that of old-age pensions justifies derogation from the Community principle of equal treatment for men and women
The Community rules on equal treatment for men and women in matters of social security prohibit all discrimination on grounds of sex, in particular for the calculation of benefits.
However, such discrimination may be justified: the Member States are entitled to derogate from that rule in determining the pensionable age for the purpose of granting old-age pensions and the repercussions thereof for other benefits.
In the United Kingdom, the reduced earnings allowance ("REA") is a weekly benefit payable to employees or former employees who have suffered an occupational accident or disease. Its purpose is thus to compensate for a decrease in earning capacity.
REA is calculated on the basis of a comparison between earnings in the occupation which the claimant has been prevented from continuing as a result of suffering an occupational accident or disease and those in any alternative occupation still considered suitable despite the disablement.
As from 1986, in order to limit the number of persons receiving REA, a "retirement allowance" ("RA") replaced that benefit for persons who had reached pensionable age and had ceased regular employment. Its purpose was to limit the payment of REA to persons still of normal working age.
REA is intended to compensate for the reduction in pension entitlement resulting from a decrease in income following an occupational accident or disease. RA corresponds to 25% of the last weekly amount of REA to which the relevant recipient was entitled.
In the United Kingdom the pensionable age is 65 years for men and 60 for women.
Ms Hepple and four others commenced proceedings in the United Kingdom courts following the refusal of the Adjudication Officer to grant them REA. They consider that the amount of the allowance received by them since attaining the statutory retirement age is lower than that received by a person of the opposite sex in comparable circumstances.
The Social Security Commissioner sought a ruling from the Court of Justice as to whether the derogation from the principle of equal treatment for men and women applies to the Reduced Earnings Allowance.
The Court observed, first, that where a Member State prescribes different pensionable ages for men and women for the purposes of granting old-age pensions, the scope of the permitted derogation may be extended to other benefit schemes provided that the discrimination is necessarily and objectively linked to that difference in age.
That will be the position, for example, where such forms of discrimination are objectively necessary in order to avoid disturbing the financial equilibrium of the social-security system or to ensure coherence between the retirement-pension scheme and other benefit schemes.
The Court considered that removal of the discrimination regarding the conditions for entitlement to the benefit at issue did not have any effect on the financial equilibrium of the social-security system of the United Kingdom as a whole.
The Court then examined whether there was coherence between the REA scheme and the old-age pension scheme. It considered that such coherence exists in so far as the REA is an allowance intended to compensate for a decrease in earnings.
In those circumstances, the discrimination found to exist is considered to be necessarily linked to the difference between the retirement age for men and that for women. It is therefore covered by the derogation provided for by Community law.
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