JUDGMENT OF THE COURT (Fifth Chamber)

3 June 1999 (1)

(Social security — Article 16(2), first sentence, of Regulation (EEC) No 1408/71— Right of option — Effects)

In Case C-211/97,

REFERENCE to the Court under Article 234 EC (ex Article 177) by theLandessozialgericht Niedersachsen (Germany) for a preliminary ruling in theproceedings pending before that court between

Paula Gómez Rivero

and

Bundesanstalt für Arbeit,

joined party:

Federal Republic of Germany,

on the interpretation of Article 16(2), first sentence, of Council Regulation (EEC)No 1408/71 of 14 June 1971 on the application of social security schemes toemployed persons, to self-employed persons and to members of their families

moving within the Community, as amended and updated by Council Regulation(EC) No 118/97 of 2 December 1996 (OJ 1997 L 28, p. 1),

THE COURT (Fifth Chamber),

composed of: P. Jann, President of the First Chamber, acting as President of theFifth Chamber, C. Gulmann, D.A.O. Edward (Rapporteur), L. Sevón andM. Wathelet, Judges,

Advocate General: F.G. Jacobs,

Registrar: R. Grass,

after considering the written observations submitted on behalf of:

—    Mrs Gómez Rivero, by A. Nicolás, Head of the Social Affairs Section in theSpanish Consulate-General in Hanover,

—    the Finnish Government, by H. Rotkirch, Ambassador, Head of the LegalService in the Ministry of Foreign Affairs, acting as Agent,

—    the Commission of the European Communities, by P. Hillenkamp, LegalAdviser, acting as Agent,

having regard to the report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 16 July 1998,

gives the following

Judgment

1.

    By order of 22 May 1997, received at the Court on 4 June 1997, theLandessozialgericht Niedersachsen (Higher Social Court, Lower Saxony) referredto the Court for a preliminary ruling under Article 234 EC (ex Article 177) twoquestions on the interpretation of Article 16(2), first sentence, of CouncilRegulation (EEC) No 1408/71 of 14 June 1971 on the application of social securityschemes to employed persons, to self-employed persons and to members of theirfamilies moving within the Community, as amended and updated by CouncilRegulation (EC) No 118/97 of 2 December 1996 (OJ 1997 L 28, p. 1) (hereinafter'Regulation No 1408/71‘).

2.

    Those questions have been raised in a dispute between Mrs Gómez Rivero and theBundesanstalt für Arbeit (Federal Labour Office) ('the Bundesanstalt‘) concerninga decision which, with effect from 1 February 1995, withdrew her entitlement tofamily benefits in respect of her two dependent children.

Community law

3.

    Article 2(1) of Regulation No 1408/71 provides:

'This Regulation shall apply to employed or self-employed persons who are orhave been subject to the legislation of one or more Member States and who arenationals of one of the Member States or who are stateless persons or refugeesresiding within the territory of one of the Member States, as well as to themembers of their families and their survivors.‘

4.

    Article 3(1) of Regulation No 1408/71 provides:

'Subject to the special provisions of this Regulation, persons resident in theterritory of one of the Member States to whom this Regulation applies shall besubject to the same obligations and enjoy the same benefits under the legislationof any Member State as the nationals of that State.‘

5.

    Under Title II, headed 'Determination of the legislation applicable‘, Article 13 ofRegulation No 1408/71 provides:

'1.    Subject to Article 14c, persons to whom this Regulation applies shall besubject to the legislation of a single Member State only. That legislation shall bedetermined in accordance with the provisions of this Title.

2.     Subject to Articles 14 to 17:

(a)    a person employed in the territory of one Member State shall be subject tothe legislation of that State even if he resides in the territory of anotherMember State or if the registered office or place of business of theundertaking or individual employing him is situated in the territory ofanother Member State;

...

(f)    a person to whom the legislation of a Member State ceases to be applicable,without the legislation of another Member State becoming applicable to himin accordance with one of the rules laid down in the aforegoingsubparagraphs or in accordance with one of the exceptions or special

provisions laid down in Articles 14 to 17 shall be subject to the legislationof the Member State in whose territory he resides in accordance with theprovisions of that legislation alone.‘

    

6.

    Article 16 of Regulation No 1408/71, entitled 'Special rules regarding personsemployed by diplomatic missions and consular posts, and auxiliary staff of theEuropean Communities‘, provides:

'1.    The provisions of Article 13(2)(a) shall apply to persons employed bydiplomatic missions and consular posts and to the private domestic staff of agentsof such missions or posts.

2.    However, employed persons covered by paragraph 1 who are nationals ofthe Member State which is the accrediting or sending State may opt to be subjectto the legislation of that State. Such right of option may be renewed at the end ofeach calendar year and shall not have retrospective effect.

...‘

7.

    Article 13(2) and (3) of Council Regulation (EEC) No 574/72 of 21 March 1972laying down the procedure for implementing Regulation No 1408/71, as amendedand updated by Regulation No 118/97 (hereinafter 'Regulation No 574/72‘),provides:

'2.    The person concerned who exercises his right of option shall inform theinstitution designated by the competent authority of the Member State for whoselegislation he has opted, at the same time notifying his employer thereof. The saidinstitution shall, where necessary, forward such information to all other institutionsof the same Member State, in accordance with directives issued by the competentauthority of that Member State.

3.    The institution designated by the competent authority of the Member Statefor whose legislation the person concerned has opted shall issue to him a certificatetestifying that he is subject to the legislation of that Member State while he isemployed by the diplomatic mission or consular post in question or in the personalservice of agents of such mission or post.‘

German law

8.

    Until 31 December 1995, entitlement in Germany to family benefits in respect ofdependent children was governed by the Bundeskindergeldgesetz (Federal Law onChild Allowance) of 31 January 1994 (BGBl. I, 1994, p. 169) ('the BKGG‘). Paragraph 1 of the BKGG was worded as follows:

'1.    Under the provisions of this Law, the following are entitled to receive childallowance ...

    1.    persons domiciled or having their habitual place of residence in theterritory to which this Law applies ...

    ...

3.    Non-nationals shall have rights under this Law only if they hold a residenceauthorisation or residence permit ...‘

9.

    Since 1 January 1996, child allowance has been awarded under theEinkommensteuergesetz (Law on Income Tax) of 11 October 1995 (BGBl. I, 1995,p. 1250). Paragraph 62 of that Law provides as follows:

'1.    In respect of children as defined in Paragraph 63, those entitled to receivechild allowance under this Law shall be:

    1.    persons domiciled or having their habitual place or residence in thecountry ...

    ...

2.    Non-nationals shall be entitled to receive child allowance only if they holda residence authorisation or residence permit ...‘

The dispute in the main proceedings

10.

    Mrs Gómez Rivero and her husband are Spanish nationals residing in Germany. Mr Gómez Rivero is employed in the Spanish Consulate-General in Hanover. MrsGómez Rivero does not work, with the exception of a small job as a home helpwhich is not subject to compulsory social security insurance.

11.

    Following Mr Gómez Rivero's decision to opt, under Article 16(2), first sentence,of Regulation No 1408/71, to be subject to Spanish social security legislation('exercise of the right of option‘), the Bundesanstalt ceased, with effect from1 February 1995, to pay to Mrs Gómez Rivero the family benefits previouslygranted to her in respect of her two children.

12.

    The Bundesanstalt takes the view that the exercise of the right of option byMr Gómez Rivero also has effects with regard to his wife, so that the Germanlegislation ceased to apply to Mrs Gómez Rivero once that right had beenexercised. Consequently, according to the Bundesanstalt, although Mrs GómezRivero satisfies all of the conditions for entitlement to child allowance in Germany,

except that which requires that German legislation be applicable to her case, sheis no longer entitled to receive such family benefits.

13.

    Under the Spanish social security scheme, neither Mrs Gómez Rivero nor herhusband receives family benefits in respect of dependent children since the family'sincome exceeds the ceiling under which those benefits are payable.

14.

    The Landessozialgericht Niedersachsen, on appeal in Mrs Gómez Rivero's caseagainst the decision of the Bundesanstalt, takes the view that the allowances whichshe received in respect of her dependent children fall within the scope ofRegulation No 1408/71, since they must be treated as 'family benefits‘ within themeaning of Article 4(1)(h) of that regulation. The Landessozialgericht also takesthe view that resolution of the case depends on whether German legislation onfamily benefits is applicable to Mrs Gómez Rivero, a question which is itselfsubordinate to the question whether the exercise by Mr Gómez Rivero of his rightof option produces legal effects in regard to his wife, even though she did notconsent to the exercise of that option.

The questions submitted for preliminary ruling

15.

    Since it had doubts as to the correct interpretation of Article 16(2), first sentence,of Regulation No 1408/71, the Landessozialgericht Niedersachsen decided to stayproceedings and to refer the following two questions to the Court for a preliminaryruling:

'(a)    Does the option by a person employed in a consular post under the firstsentence of Article 16(2) of Regulation (EEC) No 1408/71 to be subject tothe legislation of the sending Member State of which he is a national alsohave effect for his spouse, not employed by the consular service, who is alsoa national of the sending Member State,

    or

    is the legislation of the sending Member State applicable to the spouse onlyif the spouse also opts to be subject to it?

(b)    If the option by the national who is in the consular service also has effectfor his spouse, does the effectiveness of the option to be subject to thelegislation of the sending Member State presuppose the consent or othercooperation of the spouse who is also affected thereby?‘

The first question

16.

    Depending on the circumstances, a person may claim a family benefit in hiscapacity as an employed or self-employed person, as a member of the family ofsuch a person, or by reason of his residence in the territory of the Member Stateconcerned, irrespective of whether he is insured under a social security scheme orhis spouse or parent is so insured.

17.

    The case before the national court involves a child allowance granted to any personliable for the maintenance of a child and authorised to reside in Germany,irrespective of whether he is insured under a social security scheme or his spouseor parent is so insured.

18.

    In those circumstances, the crux of the first question is whether the decision by aperson employed in a consular post to opt, in accordance with Article 16(2), firstsentence, of Regulation No 1408/71, to be subject to the social security legislationof the sending Member State of which he is a national has the effect that hisspouse may no longer claim a social security advantage which, irrespective of thesocial cover of her spouse, is guaranteed to her by the legislation of the MemberState in which she resides.

19.

    Mrs Gómez Rivero argues that the exercise of the right of option by her husbandcannot result in the loss of entitlement to family benefits which she was receivingup to 1 February 1995, since Regulation No 1408/71 may extend the group ofpersons entitled to receive family benefits but cannot restrict it.

20.

    The Finnish Government takes the view that the legislation applicable to themembers of the family of an employed person is in general determined byreference to the legislation which applies to the employed person himself. This, itargues, is also the case where the latter has exercised his right of option, since themembers of his family are not independently entitled to choose the legislation towhich they are subject. Consequently, the decision by Mr Gómez Rivero to opt forthe application of Spanish legislation is binding on his wife.

21.

    For its part, the Commission argues that Article 16(2) of Regulation No 1408/71is one of the provisions of that regulation which apply to workers only and not tomembers of their families. It concludes from this that the exercise of the optionby Mr Gómez Rivero does not have any legal effect in regard to his wife and thatthe latter does not have any personal right of option under Article 16(2).

22.

    Article 16 of Regulation No 1408/71 is a special rule which derogates from thegeneral rule in Article 13(2)(a) of that regulation. Under that general rule, aperson employed in the territory of one Member State is subject to the legislationof that State even if he resides in the territory of another Member State. Article16(2) of Regulation No 1408/71, on the other hand, may have the consequence ofrendering applicable the social security legislation of a Member State other thanthat in the territory of which the occupation is pursued.

23.

    According to the wording of Article 16 of Regulation No 1408/71 that the right ofoption for which it provides is a right available to persons employed by diplomaticmissions and consular posts and to the private domestic staff of agents of suchmissions or posts. Like Article 13 of Regulation No 574/72, Article 16 makes noreference whatever to the members of their families.

24.

    None the less, the exercise or non-exercise by a person employed by a diplomaticmission or consular post of the right of option in favour of the legislation of thesending State does have direct consequences for the extent of the rights which themembers of his family can, as such, derive from the social cover of the worker,depending on whether that worker comes under the legislation of the sending Stateor under that of the State to which he has been sent.

25.

    On the other hand, the exercise of the right of option cannot deprive the membersof the worker's family of the social security advantages which, irrespective of thesocial cover of the worker himself, are guaranteed to them by the legislation of theMember State in which they reside.

26.

    As the Court held in Case 7/75 Mr and Mrs F. v Belgian State [1975] ECR 679, atparagraph 16, it follows from Article 2(1) of Regulation No 1408/71, defining thepersons covered by the regulation, read in conjunction with Article 3(1), which setsout the fundamental principle of equal treatment, that the members of a worker'sfamily who have not worked and do not work in an employed capacity, whetherprofessionally or otherwise, as referred to in Title II of that regulation, must beallowed the benefit of the social security legislation of the Member State in whichthey reside under the same conditions as the nationals of that State.

27.

    It should be added that, if a member of a worker's family is himself employed inthe territory of a Member State, he will be subject to the legislation of that Statein accordance with Article 13(2)(a) of Regulation No 1408/71.

28.

    Should it prove to be the case that both the worker who has exercised his right ofoption under Article 16 of Regulation No 1408/71 and his spouse may claim thesame family benefits during the same period and in respect of the same familymember, one in the Member State of which he is a national by reason of thatoption and under the conditions laid down in Article 73 of that regulation, theother by virtue of the legislation of the Member State in which she resides, therules designed to avoid overlapping of benefits in such situations would have to beapplied.

29.

    In this regard, Article 10(1)(a) of Regulation No 574/72 provides, inter alia, thatentitlement to benefits or family allowances due under the legislation of a MemberState, according to which acquisition of the right to those benefits or allowances isnot subject to conditions of insurance, employment or self-employment, is to besuspended when, during the same period and for the same member of the family,

benefits are due in application of Article 73 of Regulation No 1408/71, suchsuspension being up to the sum of those benefits.

30.

    The answer to the first question must therefore be that the decision by a personemployed in a consular post to opt, in accordance with Article 16(2), first sentence,of Regulation No 1408/71, to be subject to the social security legislation of thesending Member State of which he is a national does not have the effect that hisspouse may no longer claim a social security advantage which, irrespective of thesocial cover of her spouse, is guaranteed to her by the legislation of the MemberState in which she resides.

The second question

31.

    In view of the reply to the first question, the second question no longer serves anypurpose.

Costs

32.

    The costs incurred by the Finnish Government and the Commission, which havesubmitted observations to the Court, are not recoverable. Since these proceedingsare, for the parties to the main proceedings, a step in the action pending before thenational court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Fifth Chamber),

in answer to the questions referred to it by the Landessozialgericht Niedersachsenby order of 22 May 1997, hereby rules:

The decision by a person employed in a consular post to opt, in accordance withArticle 16(2), first sentence, of Council Regulation (EEC) No 1408/71 of 14 June1971 on the application of social security schemes to employed persons, toself-employed persons and to members of their families moving within theCommunity, as amended and updated by Council Regulation (EC) No 118/97 of2 December 1996, to be subject to the social security legislation of the sendingMember State of which he is a national does not have the effect that his spousemay no longer claim a social security advantage which, irrespective of the socialcover of her spouse, is guaranteed to her by the legislation of the Member Statein which she resides.

JannGulmann Edward         Sevón                            Wathelet

Delivered in open court in Luxembourg on 3 June 1999.

R. Grass

J.-P. Puissochet

Registrar

President of the Fifth Chamber

1: Language of the case: German.