Case C‑549/22
X
v
Raad van bestuur van de Sociale verzekeringsbank
(Request for a preliminary ruling from the Centrale Raad van Beroep)
Judgment of the Court (Second Chamber) of 29 February 2024
(Reference for a preliminary ruling – EC-Algeria Association Agreement – Social security for Algerian migrant workers and their survivors – Transfer of benefits to Algeria at the rates applied by virtue of the legislation of the debtor Member State – Survivors’ benefit – National legislation applying the country-of-residence principle – Residence clause involving a reduction in the amount of survivors’ benefit for recipients residing in Algeria)
1. International agreements – EC-Algeria Association Agreement – Article 68(4) – Direct effect – Absence of any decision taken by the Association Council – Irrelevance
(EC-Algeria Association Agreement, Art. 68(4))
(see paragraphs 30-36, operative part 1)
2. International agreements – EC-Algeria Association Agreement – Social security for migrant workers – Free transfer of social security pensions and annuities – Scope ratione personae – Survivors’ benefits – Survivors of workers – Included – Obligation to reside in the debtor Member State – No such obligation
(EC-Algeria Association Agreement, Art. 68(4))
(see paragraphs 38, 40-42, operative part 2)
3. International agreements – EC-Algeria Association Agreement – Social security for migrant workers – Free transfer of social security pensions and annuities – Survivors’ benefits – Surviving spouse residing in Algeria – Transfer of benefits at the rates applied by the legislation of the debtor Member State – Reduction in the amount of a survivors’ benefit to take account of the cost of living in the recipient’s country of residence – Whether permissible – Conditions
(EC-Algeria Association Agreement, Art. 68(4))
(see paragraphs 46-49, 51, operative part 3)
Résumé
Ruling on a request for a preliminary ruling from the Centrale Raad van Beroep (Higher Social Security and Civil Service Court, Netherlands; ‘the referring court’), the Court of Justice holds that Article 68(4) (1) of the EC-Algeria Association Agreement, (2) concerning the right to transfer freely social security benefits, has direct effect and does not preclude a reduction in the amount of survivors’ benefits on the ground that their recipients reside in Algeria, where those benefits are intended to guarantee a basic income calculated on the basis of the cost of living in the debtor Member State and where that reduction respects the substance of that right.
X resides in Algeria. As the survivor of her spouse who worked in the Netherlands and was insured under the Algemene nabestaandenwet (General law on survivors’ insurance; ‘the ANW’) at the time of his death, she has been entitled to a survivors’ benefit since 1 January 1999. After reinstating X’s survivors’ benefit retroactively in 2018, which it had terminated in 2012, the Raad van bestuur van de Sociale verzekeringsbank (Board of Management of the Social Insurance Bank, Netherlands) informed X that that benefit would be reduced with effect from 1 January 2013 on the ground that it should have been paid in accordance with the country-of-residence principle, namely, in the present case, on the basis of a percentage reflecting the level of the cost of living in Algeria in relation to the cost of living in the Netherlands. (3)
After several actions against that decision had been dismissed, X brought an appeal before the referring court, which decided to refer a number of questions to the Court of Justice for a preliminary ruling on the interpretation of Article 68(4) of the EC-Algeria Association Agreement in order to ascertain whether that agreement precludes the reduction, based on the country-of-residence principle, in the amount of X’s survivors’ benefit.
Findings of the Court
The Court answers, first of all, the question whether, having regard to the wording, purpose and nature of the EC-Algeria Association Agreement, Article 68(4) of that agreement has direct effect.
It notes, in that regard, that that provision establishes in clear, precise and unconditional terms the right to transfer freely to Algeria the pensions and annuities referred to in that provision, at the rates applied by virtue of the legislation of the debtor Member State. Thus, that provision imposes on the Member States a clear and precise obligation as to the result to be achieved, consisting of enabling the persons concerned to make such a free transfer, an obligation which is not, as such, subject, in its implementation or effects, to the adoption of any subsequent measure.
Although the Court notes that that right to transfer freely is not absolute, since its actual effects in each individual case depend on the ‘rates applied by virtue of the legislation of the debtor Member State or States’, that cannot be interpreted as allowing the Member States to make that right to transfer freely subject to discretionary limitations and to render that right meaningless. It also notes that the implementation or effects of the right provided for in that provision are not subject to the adoption of another measure and, in particular, to the adoption, by the Association Council, of the provisions referred to in Article 70(1) of the EC-Algeria Association Agreement, which may not therefore be regarded as rendering conditional the immediate application of that right. The Court concludes in that regard that Article 68(4) of the EC-Algeria Association Agreement has direct effect, so that the persons to whom that provision applies are entitled to rely on it directly before the Member States’ courts to have rules of national law which are contrary to it disapplied.
The Court then answers the question concerning the personal scope of Article 68(4) of the EC-Algeria Association Agreement.
While observing that Article 68(4) refers expressly only to ‘the workers in question’, which refers back to ‘workers of Algerian nationality’ mentioned in paragraph 1 of that article, the Court finds that the benefits which may be transferred freely to Algeria include pensions and annuities in respect of survivor status, the recipients of which can, by definition, only be the survivors of those workers. Article 68(4) of the EC-Algeria Association Agreement would therefore be deprived of its useful effect if those survivors were excluded from its personal scope. It also observes that it would run counter to the logic underlying the very principle of the free transfer of benefits to Algeria to require that the recipient be obliged to reside in the debtor Member State, in this case the Netherlands. The Court concludes in that regard that Article 68(4) of the EC-Algeria Association Agreement applies to the survivors of a worker who, wishing to transfer their survivors’ benefit to Algeria, are not themselves workers and who reside in Algeria.
Lastly, as regards the compatibility of the reduction in the amount of a survivors’ benefit by reason of the fact that the recipient of that benefit resides in Algeria with Article 68(4) of the EC-Algeria Association Agreement, the Court points out that that provision provides for the right to transfer freely the benefits at issue to Algeria ‘at the rates applied by virtue of the legislation of the debtor Member State or States’. Thus, the debtor Member State has a discretion in establishing rules for calculating the amount of the benefits referred to in that provision, and that Member State may therefore lay down rules designed to adjust the amount of those benefits on the occasion of that transfer, such as the rule based on the country-of-residence principle.
The Court notes, however, that such rules must respect the substance of the right to transfer freely benefits, without depriving that right of its practical effect, and examines, to that end, the factors characterising the survivors’ benefit at issue in the main proceedings. It notes that the amount of that benefit is fixed on the basis of the cost of living in the Netherlands and that, consequently, that benefit is intended to ensure that survivors have a basic income calculated on the basis of the cost of living in that Member State. Therefore, the fact of adjusting the amount of the benefit transferred to take account of the cost of living in Algeria does not appear, in the Court’s view, to be liable to render meaningless the right to transfer freely, provided that the determination of the rate used for the purposes of that adjustment is based on objective factors, which it is for the referring court to ascertain.