JUDGMENT OF THE COURT (Sixth Chamber)

16 December 1999 (1)

(Directive 79/7/EEC — Equal treatment for men and women in matters of socialsecurity — Grant of a winter fuel payment — Link with pensionable age)

In Case C-382/98,

REFERENCE to the Court under Article 177 of the EC Treaty (now Article 234EC) by the High Court of Justice of England and Wales, Queen's Bench Division(Divisional Court), United Kingdom, for a preliminary ruling in the proceedingspending before that court between

The Queen

and

Secretary of State for Social Security,

ex parte: John Henry Taylor,

on the interpretation of Articles 3 and 7(1)(a) of Council Directive 79/7/EEC of 19December 1978 on the progressive implementation of the principle of equaltreatment for men and women in matters of social security (OJ 1979 L 6, p. 24),

THE COURT (Sixth Chamber),

composed of: R. Schintgen, President of the Second Chamber, acting as Presidentof the Sixth Chamber, P.J.G. Kapteyn, G. Hirsch, H. Ragnemalm (Rapporteur) andV. Skouris, Judges,

Advocate General: J. Mischo,

Registrar: D. Louterman-Hubeau, Principal Administrator,

after considering the written observations submitted on behalf of:

—    Mr Taylor, by D. Rose, Barrister, and P. Leach, Legal Director, Liberty,

—    the United Kingdom Government, by J.E. Collins, Assistant TreasurySolicitor, acting as Agent, assisted by D. Pannick QC and T. de la Mare,Barrister,

—    the Austrian Government, by C. Pesendorfer, Oberrätin in the Ministry ofJustice, acting as Agent,

—    the Commission of the European Communities, by A. Aresu, of its LegalService, and N. Yerrell, national civil servant on secondment to that service,acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Mr Taylor, of the United KingdomGovernment and of the Commission at the hearing on 8 July 1999,

after hearing the Opinion of the Advocate General at the sitting on 23 September1999,

gives the following

Judgment

1.

    By order of 9 October 1998, received at the Court on 26 October 1998, the HighCourt of Justice of England and Wales, Queen's Bench Division (Divisional Court),referred to the Court for a preliminary ruling under Article 177 of the EC Treaty(now Article 234 EC) two questions on the interpretation of Articles 3 and 7(1)(a)of Council Directive 79/7/EEC of 19 December 1978 on the progressiveimplementation of the principle of equal treatment for men and women in mattersof social security (OJ 1979 L 6, p. 24; hereinafter 'the Directive‘).

2.

    Those questions were raised in judicial-review proceedings brought before the HighCourt of Justice by Mr Taylor who claims to be the victim of discrimination on

grounds of sex contrary to the Directive, on the basis that he was refused the winterfuel payment provided for under the Social Fund Winter Fuel Payment Regulations1998 ('the Regulations‘).

The Community legislation

3.

    The Directive applies, under Article 3(1)(a) thereof, to statutory schemes whichprovide protection against the following risks:

— sickness,

— invalidity,

— old age,

— accidents at work and occupational diseases,

— unemployment.

4.

    Article 7(1)(a) of the Directive provides, however, that:

'[t]his Directive shall be without prejudice to the right of Member States to excludefrom its scope:

(a)    the determination of pensionable age for the purposes of granting old-ageand retirement pensions and the possible consequences thereof for otherbenefits‘.

5.

    However, under Article 7(2) of the Directive, Member States are periodically toexamine matters excluded under paragraph 1 in order to ascertain, in the light ofsocial developments in the matter concerned, whether there is justification formaintaining the exclusions concerned.

The national legislation

6.

    The Regulations were made on 8 January 1998 pursuant to the Social SecurityContributions and Benefits Act 1992 ('the Act of 1992‘).

7.

    Regulation 2 provides that the following two categories of persons are entitled tothe winter fuel payment, which is made from the Social Fund:

—    under Regulation 2(2), persons in receipt of income support or income-based jobseeker's allowance (both means-tested benefits) who receive oneof a number of premiums which are payable only to those who have, or wholive with a person who has, reached a particular minimum age (in all cases,60 or over);

—    under Regulation 2(5), persons within the categories set out in Regulation2(6), namely men aged 65 or over and women aged 60 or over who are

entitled to one of the benefits listed in Regulation 2(6). Some of thosebenefits are means-tested, others not, including the State retirementpension.

8.

    Under Regulation 3(1), persons within the first category are entitled to a fuelpayment of £50 per year. Those within the second category are entitled to apayment of £20, or £10 if they live with another person who is also entitled to apayment.

9.

    It should be made clear that, under Regulation 1, read together with section 44 ofthe Act of 1992 and Schedule 4 to the Pensions Act 1995, a 'retirement pension‘for the purposes of Regulation 2(6) means a State retirement pension, whichbecomes payable upon a claimant satisfying the relevant contribution conditionsand attaining the age of 65 in the case of a man and 60 in the case of a woman.

The facts in the main proceedings

10.

    Mr Taylor, who was born on 3 June 1935 and employed by the Post Office until heretired, paid social security contributions throughout his working life. In 1998, aged62, he was in receipt of a Post Office pension. If he had been a woman, he wouldhave been in receipt of a State retirement pension. He claims to be the victim ofunlawful discrimination on the ground of sex in that he was denied a winter fuelpayment of £20, to be made by the State, which had been introduced under theRegulations. It is common ground that, in the same circumstances, a woman of thesame age would have been in receipt of that payment.

11.

    On 6 April 1998, Mr Taylor brought proceedings before the High Court of Justicechallenging the refusal to grant him the winter fuel payment.

The questions referred

12.

    It is in those circumstances that the High Court of Justice of England and Wales,Queen's Bench Division (Divisional Court), decided to stay proceedings and torefer to the Court for a preliminary ruling the following two questions:

'1.    Is a winter fuel payment made under Regulations 2(5), 2(6) and 3(1)(b) ofthe Social Fund Winter Fuel Payment Regulations 1998 within the scope ofArticle 3 of Directive 79/7/EEC?

2.    If the answer to Question 1 is yes:

    (a)    Does Article 7(1)(a) of Directive 79/7/EEC apply in the circumstancesof this case?

    (b)    In particular, is the respondent prevented from relying upon Article7(1)(a) of Directive 79/7/EEC where both the Social Fund Winter

Fuel Payment Regulations 1998 and the Social Security Contributionsand Benefits Act 1992 under which those Regulations were madecame into force after 23 December 1984, the latest date for the saidDirective to be given full effect in domestic law?‘

The first question

13.

    By its first question, the High Court of Justice asks whether Article 3(1) of theDirective must be interpreted as meaning that a winter fuel payment, such as thatmade under Regulations 2(5), 2(6) and 3(1), is covered by that directive.

14.

    As the Court has already held, in order to fall within the scope of the Directive, abenefit must constitute the whole or part of a statutory scheme providing protectionagainst one of the risks listed in Article 3(1) of the Directive, or a form of socialassistance having the same objective, and be directly and effectively linked toprotection against one of those risks (see the judgments in Case C-243/90 Smithson[1992] ECR I-467, paragraphs 12 and 14; Joined Cases C-63/91 and C-64/91Jackson and Cresswell [1992] ECR I-4737, paragraphs 15 and 16; and Case C-137/94R v Secretary of State for Health, ex parte Richardson [1995] ECR I-3407, paragraphs8 and 9).

15.

    It should be noted, and indeed it has not been disputed before the Court, that thebenefit at issue in the main proceedings is part of a statutory scheme in so far asit is provided for by an enabling Act, namely the Act of 1992, and it is implementedby delegated legislation, namely the Regulations.

16.

    It is therefore necessary to examine whether the benefit at issue in the mainproceedings is directly and effectively linked to protection against any of the riskslisted in Article 3(1) of the Directive (see Richardson, paragraph 9).

17.

    According to Mr Taylor and the Commission, the winter fuel payment is directlyand effectively linked to one of the risks listed in Article 3(1) of the Directive,namely the risk of old age. In that regard, they emphasise that the making of thepayment is subject to the condition that its recipient has attained the age of 65, ifa man, or 60, if a woman. They point out that the fact that the Social Fund coversa number of needs and risks going beyond the scope of the Directive is notconclusive. They state, on that point, that, if general considerations relating to theSocial Fund were to constitute grounds for holding that an individual scheme ofpayments made from that fund does not fall within the scope of Article 3(1) of theDirective, the effectiveness of that directive would be compromised.

18.

    On the other hand, the United Kingdom and Austrian Governments submit thatthe benefit is not linked to a risk covered by the Directive in so far as that benefitaims to help people in need to pay their heating expenses during the winter, whichconstitutes a risk which is not covered by Article 3(1) of the Directive.

19.

    The United Kingdom Government relies, in particular, on the statutory context ofthe benefit, namely the Act of 1992 which confers power to make regulationsrelating to benefits to be paid from the Social Fund. The aim of that fund is to helpcategories of persons who are less well-off financially and materially. The fact thatthe criterion of old age is also relevant for the payment of the benefit at issue inthe main proceedings is not enough to bring it within the scope of the Directive.

20.

    In addition, the United Kingdom Government submits that, even if a distinctionwere drawn between the Regulations and their overall statutory context, it is clearfrom the very wording of the Regulations that one of the essential objectives of thebenefit is to help persons in financial need. In that regard, that governmentconsiders Regulation 2(2) and 2(6) together. It emphasises that the first categoryof persons, specified in Regulation 2(2), is limited to those who are in receipt ofincome support or income-based jobseeker's allowance; the second category, underRegulation 2(6), to which Regulation 2(5) refers, includes the same persons.

21.

    It should be pointed out that the aim of the Social Fund is not relevant for thepurpose of determining whether the benefit at issue in the main proceedings meetsone of the risks listed in the Directive, since that fund is one from which a widevariety of benefits are paid. It is therefore necessary to examine the legislationconcerning the benefit at issue in the main proceedings, namely the Regulations.

22.

    In that regard, it should be noted that the Regulations contain two differentdefinitions of persons who may receive the benefit, the first in Regulation 2(2), thesecond in Regulation 2(5) and (6). In so far as the question referred concerns onlythe second definition and that definition is independent of the first, it is necessary,contrary to what is claimed by the United Kingdom Government, to examine thatdefinition in isolation and to verify whether the benefit, whose purpose isdetermined in relation to the persons referred to in the second definition, fallswithin the scope of Article 3(1) of the Directive.

23.

    It is clear from Regulation 2(5) and (6) that the benefit may be granted to elderlypersons, even if they do not have financial or material difficulties. It follows that,contrary to what is claimed by the United Kingdom Government, protection againsta lack of financial means cannot be considered to be the aim of the Regulations.On the other hand, the benefit can be granted only to persons who have reachedthe minimum age of 60 for women and 65 for men. That is a condition for thegrant of the benefit, applicable to all those referred to in the provision concerned.

24.

    The fact is that the benefit at issue in the main proceedings is aimed only atpersons who have reached the statutory age of retirement and, consequently, isaimed at protecting them against the risk of old age mentioned in Article 3(1) ofthe Directive. That finding is not affected by the fact that the applicant for thebenefit must also be in receipt of one of the benefits listed in Regulation 2(6).Those benefits are varied in nature and only some of them are intended to protectagainst a lack of pecuniary means.

25.

    In so far as the grant of the winter fuel payment to any of the categories of personsreferred to is always subject to the materialisation of the risk of old age, thatpayment must be deemed to protect directly and effectively against that risk.

26.

    Consequently, the answer to the first question is that Article 3(1) of the Directivemust be interpreted as meaning that a winter fuel payment, such as that madeunder Regulations 2(5), 2(6) and 3(1), is covered by that directive.

The second question

27.

    By the first part of its second question, the High Court of Justice asks whether thederogation laid down in Article 7(1)(a) of the Directive is applicable to a winterfuel payment, such as that paid under Regulations 2(5), 2(6) and 3(1).

28.

    In accordance with the settled case-law of the Court, the application of differentages, according to sex, to a benefit scheme other than the old-age and retirementpension scheme can be justified only if the discrimination to which the differencein age gives rise is objectively necessary in order to avoid disrupting the financialequilibrium of the social security system or to ensure consistency between theretirement pension scheme and the other benefit scheme (see Case C-328/91Secretary of State for Social Security v Thomas and Others [1993] ECR I-1247,paragraph 12).

29.

    As regards, first of all, the condition concerning preservation of the financialequilibrium of the social security system, it should be borne in mind that the Courthas already held that the grant of benefits under non-contributory schemes topersons in respect of whom certain risks have materialised, regardless of theentitlement of such persons to an old-age pension by virtue of contribution periodscompleted by them, has no direct influence on the financial equilibrium ofcontributory pension schemes (see Thomas and Others, paragraph 14).

30.

    It is necessary, next, to note that the participants in the proceedings before theCourt have acknowledged that the argument concerning financial equilibrium couldnot apply to non-contributory benefits, such as those at issue in the mainproceedings.

31.

    In those circumstances, it must be accepted that eliminating discrimination has noimpact on the financial equilibrium of the social security system as a whole.

32.

    As regards consistency between the retirement pension scheme and the otherbenefit scheme, it is necessary to examine whether the unequal ages laid down forthe grant of the benefit at issue in the main proceedings are objectively necessary.

33.

    According to the United Kingdom Government, if the benefit at issue in the mainproceedings were regarded as designed to provide protection against the risk of old

age, it would not be consistent to choose an age other than that applicable topayment of the State retirement pension, which meets, specifically, the risk of oldage.

34.

    In that regard, it should be observed that, if the benefit is designed to provideprotection against the risk of old age and must, therefore, be paid only to thoseabove a certain age, it does not follow that that age must necessarily coincide withthe statutory age of retirement and, as a result, be different for men and women.

35.

    In the light of the foregoing, it must be concluded that discriminatory treatmentsuch as that at issue in the main proceedings is not necessarily linked to thedifference in the statutory age of retirement for men and women and is thereforenot covered by the derogation laid down in Article 7(1)(a) of the Directive.

36.

    Accordingly, the answer to the second question must be that the derogation laiddown in Article 7(1)(a) of the Directive is not applicable to a benefit such as thatpaid under Regulations 2(5), 2(6) and 3(1).

37.

    Having regard to the answer given to the first part of the second question, it is notnecessary to give an answer to the second part of that question.

Costs

38.

    The costs incurred by the United Kingdom and Austrian Governments and by theCommission, which have submitted observations to the Court, are not recoverable.Since these proceedings are, for the parties to the main proceedings, a step in theproceedings pending before the national court, the decision on costs is a matter forthat court.

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the High Court of Justice of Englandand Wales, Queen's Bench Division (Divisional Court) by order of 9 October 1998,hereby rules:

1.    Article 3(1) of Council Directive 79/7/EEC of 19 December 1978 on theprogressive implementation of the principle of equal treatment for men andwomen in matters of social security must be interpreted as meaning thata winter fuel payment, such as that made under Regulations 2(5), 2(6) and3(1) of the Social Fund Winter Fuel Payment Regulations 1998, is coveredby that directive.

2.    The derogation laid down in Article 7(1)(a) of Directive 79/7 is notapplicable to a benefit such as that paid under Regulations 2(5), 2(6) and3(1) of the Social Fund Winter Fuel Payment Regulations 1998.

SchintgenKapteyn Hirsch             Ragnemalm                    Skouris

Delivered in open court in Luxembourg on 16 December 1999.

R. Grass

J.C. Moitinho de Almeida

Registrar

President of the Sixth Chamber

1: Language of the case: English.