Case C-16/09

Gudrun Schwemmer

v

Agentur für Arbeit Villingen-Schwenningen – Familienkasse

(Reference for a preliminary ruling from the Bundesfinanzhof)

(Social security – Regulations (EEC) Nos 1408/71 and 574/72 – Family benefits – ‘Anti-overlap’ rules – Article 76(2) of Regulation No 1408/71 – Article 10(1)(a) of Regulation No 574/72 – Children residing in a Member State with their mother who fulfils the conditions for drawing family benefits there, and the father of whom, working in Switzerland and fulfilling, at first sight, the conditions for drawing family benefits of the same type under Swiss legislation, refrains from applying for the grant of those benefits)

Summary of the Judgment

Social security for migrant workers – Family allowances – Community rules for prevention of overlapping benefits

(Council Regulations No 1408/71, Arts 73 and 76, and No 574/72, Art. 10)

On a proper interpretation of Article 76 of Regulation No 1408/71 and Article 10 of Regulation No 574/72, as amended by Regulation No 647/2005, a right, which is not subject to conditions of insurance, employment or self-employment, to benefits under the legislation of a Member State in which one parent resides with the children in favour of which those benefits are granted cannot be partially suspended in a situation in which the former spouse, who is the other parent of the children concerned, would in principle be entitled to family benefits under the legislation of the State in which he is employed, either simply by virtue of the national legislation of that State, or in application of Article 73 of Regulation No 1408/71, but does not actually draw those benefits because he has not made an application for them.

For it to be possible to regard family benefits as being due under the legislation of a Member State, the law of that State must recognise the right to the payment of benefits in favour of the member of the family who works in that State. It is thus necessary for the person concerned to fulfil all the conditions, as to both form and substance, imposed by the internal legislation of that State in order to be able to exercise that right, which may in some cases include the condition that a prior application must have been made for the payment of such benefits.

(see paras 53, 59, operative part)

JUDGMENT OF THE COURT (Second Chamber)

14 October 2010 (*)

(Social security – Regulations (EEC) Nos 1408/71 and 574/72 – Family benefits – ‘Anti-overlap’ rules – Article 76(2) of Regulation No 1408/71 – Article 10(1)(a) of Regulation No 574/72 – Children residing in a Member State with their mother who fulfils the conditions for drawing family benefits there, and the father of whom, working in Switzerland and fulfilling, at first sight, the conditions for drawing family benefits of the same type under Swiss legislation, refrains from applying for the grant of those benefits)

In Case C‑16/09,

REFERENCE for a preliminary ruling under Article 234 EC, by the Bundesfinanzhof (Germany), made by decision of 30 October 2008, received at the Court on 15 January 2009, in the proceedings

Gudrun Schwemmer

v

Agentur für Arbeit Villingen-Schwenningen – Familienkasse,

THE COURT (Second Chamber),

composed of J.N. Cunha Rodrigues, President of the Chamber, A. Arabadjiev, A. Rosas, A. Ó Caoimh (Rapporteur) and P. Lindh, Judges,

Advocate General: J. Mazák,

Registrar: K. Malacek, Administrator,

having regard to the written procedure and further to the hearing on 10 February 2010,

after considering the observations submitted on behalf of:

–        Mrs Schwemmer, by R. Romeyko, Rechtsanwalt,

–        the German Government, by J. Möller and C. Blaschke, acting as Agents,

–        the Lithuanian Government, by E. Matulionytė, acting as Agent,

–        the Austrian Government, by E. Riedl, acting as Agent,

–        the European Commission, by V. Kreuschitz, acting as Agent,

after hearing the Opinion of the Advocate General at the sitting on 15 April 2010

gives the following

Judgment

1        The reference for a preliminary ruling concerns the interpretation of Article 76 of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, and Article 10 of Council regulation (EEC) No. 574/72 laying down the procedure for implementing Regulation No. 1408/71, in the versions of those regulations as amended and updated by Council Regulation (EC) No 118/97 of 2 December 1996 (OJ 1997 L 28, p. 1), as amended by European Parliament and Council Regulation (EC) No 647/2005 of 13 April 2005 (OJ 2005 L 117, p. 1) (referred to as, respectively, ‘Regulation No 1408/71’ and ‘Regulation No 574/72’).

2        The application was made in the context of appeal proceedings on a point of law (‘Revision’) between Mrs Schwemmer and the Agentur für Arbeit Villingen-Schwennigen – Familienkasse (Villingen-Schwennigen Employment Agency – Family Allowances Office; ‘the Familienkasse’), concerning a refusal to pay Mrs Schwemmer the full amount of family benefits in Germany as from January 2006.

 Legal context

 The 1999 Agreement

3        The Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons, signed in Luxembourg on 21 June 1999 (OJ 2002 L 114, p. 6; 'the 1999 Agreement'), provides in Article 8 for a coordination of social security schemes.

4        Annex II to that agreement, headed ‘Coordination of Social Security Schemes’ provides in Article 1:

‘1.      The contracting parties agree, with regard to the coordination of social security schemes, to apply among themselves the Community acts to which reference is made, as in force at the date of signature of the [1999] Agreement and as amended by section A of this Annex, or rules equivalent to such acts.

2.      The term “Member State(s)” contained in the acts referred to in section A of this Annex shall be understood to include Switzerland in addition to the States covered by the relevant Community acts.’

5        In Section A, points 1 and 2, of Annex II to the 1999 Agreement, reference is made, respectively, to Regulations Nos 1408/71 and 574/72, as updated by various acts enumerated under those points, including, lastly, Council Regulation (EC) No 307/1999 of 8 February 1999 amending Regulation No 1408/71 and Regulation No 574/72 with a view to extending them to cover students (OJ 1999 L 38, p. 1).

 Regulation No 1408/71

6        Article 1 of Regulation No 1408/71 provides that, for the purposes of applying that article:

‘(a) employed person and self‑employed person mean respectively:

         (i) any person who is insured, compulsorily or on an optional continued basis, for one or more of the contingencies covered by the branches of a social security scheme for employed or self‑employed persons or by a special scheme for civil servants;

(ii) any person who is compulsorily insured for one or more of the contingencies covered by the branches of social security dealt with in this Regulation, under a social security scheme for all residents or for the whole working population if such person:

can be identified as an employed person by virtue of the manner in which such scheme is administered or financed, or,

–        failing such criteria, is insured for some other contingency specified in Annex I under a scheme for employed or self‑employed persons, or under a scheme referred to in (iii), either compulsorily or on an optional continued basis, or, where no such scheme exists in the Member State concerned, complies with the definition given in Annex I;

...

(iv)      any person who is voluntarily insured for one or more of the contingencies covered by the branches dealt with in this Regulation, under the socíal security scheme of a Member State for employed or self-employed persons or for all residents or for certain categories of residents:

–        if such person carries out an activity as an employed or self‑employed person, or

–        if such person has previously been compulsorily insured for the same contingency under a scheme for employed or self‑employed persons of the same Member State;

...

(f)      (i)   “member of the family” means any person defined or recognised as a member of the family or designated as a member of the household by the legislation under which benefits are provided ...; where, however, the said legislations regard as a member of the household only a person living under the same roof as the employed or self-employed person, this condition shall be considered satisfied if the person in question is mainly dependent on that person. ...;

...

...

(o)       “competent institution” means:

(i)       the institution with which the person concerned is insured at the time of the application for benefit; or

(ii)      the institution from which the person concerned is entitled or would be entitled to benefits if he or a member or members of his family were resident in the territory of the Member State in which the institution is situated

         ...

...

(q)       “competent State” means the Member State in whose territory the competent institution is situated;

...

(u)      (i)    “family benefits” means all benefits in kind or in cash intended to meet family expenses under the legislation provided for in Article 4(1)(h) ...

(ii)       “family allowances” means periodical cash benefits granted exclusively by reference to the number and, where appropriate, the age of members of the family;

...’

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

‘This Regulation shall apply to employed or self-employed persons and students who are or have been subject to the legislation of one or more Member States and who are nationals of one of the Member States or who are stateless persons or refugees residing within the territory of one of the Member States, as well as to the members of their families and their survivors.’

8        According to Article 4(1)(h) of Regulation No 1408/71, the latter applies to ‘all legislation concerning the following branches of social security: ... family benefits’.

9        Under Article 12(1) of the said regulation, the latter can neither confer nor maintain the right to several benefits of the same kind for one and the same period of compulsory insurance.

10      According to Article 13 of the same regulation, appearing under Title II thereof and headed ‘General rules’:

‘1.      … persons to whom this regulation applies shall be subject to the legislation of a single Member State only. That legislation shall be determined in accordance with the provisions of this Title.

2.      ...

(a)      a person employed in the territory of one Member State shall be subject to the legislation of that State even if he resides in the territory of another Member State …

... ’

11      Under Title III, Chapter 7, of Regulation No 1408/71, Article 73 of the latter, headed ‘Employed or self-employed persons the members of whose families reside in a Member State other than the competent State’, provides:

‘An employed or self-employed person subject to the legislation of a Member State shall be entitled, in respect of the members of his family who are residing in another Member State, to the family benefits provided for by the legislation of the former State, as if they were residing in that State, subject to the provisions of Annex VI.’

12      Also appearing in that Chapter 7, Article 76 of Regulation No 1408/71, headed ‘Rules of priority in cases of overlapping entitlement to family benefits under the legislation of the competent State and under the legislation of the Member State of residence of the members of the family’, provides:

‘1.      Where, during the same period, for the same family member and by reason of carrying on an occupation, family benefits are provided for by the legislation of the Member State in whose territory the members of the family are residing, entitlement to the family benefits due in accordance with the legislation of another Member State, if appropriate under Article 73 or 74, shall be suspended up to the amount provided for in the legislation of the first Member State.

2.      If an application for benefits is not made in the Member State in whose territory the members of the family are residing, the competent institution of the other Member State may apply the provisions of paragraph 1 as if benefits were granted in the first Member State.’

13      Point I of Annex I to Regulation No 1408/71, headed ‘Employed persons and/or self-employed persons [Article 1(a)(ii) and (iii) of the Regulation]’, provides:

‘…

D.      Germany

If the competent institution for granting family benefits in accordance with Chapter 7 of Title III of the Regulation is a German institution, then within the meaning of Article 1(a)(ii) of the Regulation:

(a)      “employed person” means [any person] compulsorily insured against unemployment or any person who, as a result of such insurance, obtains cash benefits under sickness insurance or comparable benefits or any established civil servant in receipt of a salary in respect of his/her civil servant status which is at least equal to that which, in the case of an employed person, would result in compulsory insuranceagainst unemployment;

(b)      “self-employed person” means any person pursuing self-employment [who] is bound:

–        to join, or pay contributions in respect of, an old-age insurance within a scheme for self-employed persons; or

–        to join a scheme within the framework of compulsory pension insurance.’

 Regulation No 574/72

14      Article 10 of Regulation No 574/72, headed ‘Rules applicable in the case of overlapping of rights to family benefits or family allowances for employed or self‑employed persons’, provides:

‘1.      (a)   Entitlement to benefits or family allowances due under the legislation of a Member State, according to which acquisition of the right to those benefits or allowances is not subject to conditions of insurance, employment or self-employment, shall be suspended when, during the same period and for the same member of the family, benefits are due only in pursuance of the national legislation of another Member State or in application of Articles 73, 74, 77 or 78 of the Regulation, up to the sum of those benefits.

(b)      However, where a professional or trade activity is carried out in the territory of the first Member State:

(i)      in the case of benefits due either only under national legislation of another Member State or under Articles 73 or 74 of the Regulation to the person entitled to family benefits or to the person to whom they are to be paid, the right to family benefits due either only under national legislation of that other Member State or under these Articles shall be suspended up to the sum of family benefits provided for by the legislation of the Member State in whose territory the member of the family is residing. The cost of the benefits paid by the Member State in whose territory the member of the family is residing shall be borne by that Member State;

         ...’

 German law

15      Paragraph 62 of the Law on Income Tax (Einkommensteuergesetz; ‘the EStG’) provides that any person having his permanent or ordinary place of residence in Germany is entitled to ‘child benefit’ (‘Kindergeld’) in respect of children within the meaning of Paragraph 63 of that Law.

16      The term ‘children’ is defined as follows in Paragraph 32(1) of the EStG:

‘“children” shall mean children related to the taxpayer in the first degree’.

17      Paragraph 65(1) of the EStG provides that child benefits are not to be paid to children who receive such benefits abroad or who would receive them if an application for them were made.

18      The documents submitted to the Court show that, under Paragraph 27(2) of Book III of the Social Security Code (Sozialgesetzbuch drittes Buch), read in conjunction with Paragraph 8(1) of Book IV of that Code (Sozialgesetzbuch Viertes Buch), persons in ‘minimal employment’ (‘geringfügige Beschäftigung’), within the meaning of that legislation, are not compulsorily insured against the risk of unemployment.

19      The documents also show that, pursuant to Paragraph 5(2) of Book VI of the Social Security Code (Sozialgesetzbuch Sechstes Buch), read in conjunction with Paragraph 8(3) of Book IV of that Code, persons in ‘minimal self-employment’ (‘geringfügige selbständige Tätigkeit’), within the meaning of that legislation, are not required to insure themselves or pay contributions in respect of the risk of old age to a scheme for self-employed persons, or to insure themselves in the context of compulsory retirement insurance.

 Swiss law

20      The order for reference shows that the cantonal allowances for dependent children and for education are not paid unless, amongst other things, application for them is made.

 Dispute in the main proceedings and questions referred

21      According to the order for reference, Mrs Schwemmer lives in Germany with two of her children, born in 1992 and 1995. During 2005, she was in ‘self-employment in the field of property management, caretaking and cleaning services’. As from May 2006, she was in ‘minor employment’ with a company. The documents before the Court show that it was a ‘minijob’ (minor salaried employment). That activity was exempt from social insurance.

22      During the period in dispute, Mrs Schwemmer paid voluntary contributions to the competent German bodies in respect of retirement insurance, sickness insurance and care insurance.

23      The father of the two children concerned, from whom Mrs Schwemmer has been divorced since 1997, works in Switzerland. He has not claimed in that State the family benefits, amounting to EUR 109.75 per child, to which, according to the referring court, he was entitled under Swiss law.

24      By decision of 21 March 2006, confirmed on an administrative appeal on 8 May 2006, the Familienkasse determined the amount of child benefit for each child, as from January 2006, at the partial amount of EUR 44.25 only, representing the difference between the amount of child benefit under German legislation, namely EUR 154, and the amount of the family benefits to which the father of the children was entitled in Switzerland, namely EUR 109.75.

25      The Familienkasse considers that, in order to determine the amount to which Mrs Schwemmer is entitled by way of child benefit, reference should be made to the provisions on the overlapping of benefits in Regulations Nos 1408/71 and 574/72. According to that body, since Mrs Schwemmer did not carry out any professional or trade activity in Germany within the meaning of Article 10(1)(b)(i) of Regulation No 574/72, according to Article 10(1)(a) of Regulation No 574/72 the entitlement to family benefits in Switzerland takes priority over the German entitlement to child benefit. In the view of the Familienkasse, the question of whether the family benefits were or were not actually claimed in Switzerland is, according to Article 76(2) of Regulation No 1408/71, which applies by analogy, irrelevant. In the view of that body, and of the Finanzgericht (Tax Court) before which legal proceedings were brought, the only possible interpretation of the discretion left to the Member State is that whereby it is only in well-founded exceptional circumstances that an assumption can be made that no family benefits have been granted in the country of employment.

26      Mrs Schwemmer challenges that interpretation before the referring court, arguing in particular that the father of the children refrained from applying for the benefits under Swiss legislation solely in order to cause detriment to her. She argues that that scenario is not governed by Regulation No 574/72. 

27      In those circumstances, the Bundesfinanzhof decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling:

‘(1)      Is the rule in Article 76(2) of Regulation No 1408/71 to be applied mutatis mutandis to Article 10(1)(a) of Regulation No 574/72 in cases where the parent with a right to claim does not apply for the family benefits to which he is entitled in the country of employment?

(2)      In the event that Article 76(2) of Regulation No 1408/71 is to be applied mutatis mutandis: on the basis of which discretionary considerations may the institution competent for family benefits in the country of residence apply Article 10(1)(a) of Regulation No 574/72 as if benefits had been granted in the country of employment? May the discretion to assume that family benefits have been received in the country of employment be restricted where the person entitled intentionally does not apply for the family benefits to which he is entitled in the country of employment in order to cause detriment to the person entitled to child benefit in the country of residence?’

 The questions referred

28      The documents before the Court show that, essentially, the dispute in the main proceedings concerns the question whether the German authorities are entitled to reduce the child benefit to which Mrs Schwemmer is entitled under German legislation in respect of the children concerned – such right not being subject to conditions of insurance, employment or self-employment – by an amount corresponding to the family benefits which would be due in Switzerland, according to those same authorities, to the former husband of Mrs Schwemmer, if only he applied for them.

29      In those circumstances, this Court considers that, by its two questions, which should be examined together, the referring court is, in essence, seeking a determination as to whether, having regard to the rules against the overlapping of benefits referred to in Article 76 of Regulation No 1408/71 and Article 10 of Regulation No 574/72, a right, which is not subject to conditions of insurance, employment or self-employment, to benefits under the legislation of a Member State in which one of the parents resides with the children in favour of which those benefits are granted may be partially suspended in a situation, such as that at issue in the main proceedings, in which the former spouse, who is the other parent of the children concerned, would in principle be entitled to family benefits under the legislation of the State in which he is employed, either simply by virtue of the national legislation of that State, or pursuant to Article 73 of Regulation No 1408/71, but does not actually receive those benefits because he has not applied for them.

30      By the second question, the referring court asks more particularly whether the reason why the family benefits at issue were not applied for is capable of having an impact on the solution to the dispute in the main proceedings. That question is asked only in the event that the Court should consider that the national authorities have a discretion as to whether or not to reduce those benefits.

31      In this case, it is common ground that, in accordance with the 1999 Agreement, particularly Annex II thereto, and as is apparent from paragraph 4 of this judgment, in situations such as that at issue in the main proceedings the expression ‘Member State(s)’ appearing in Regulations Nos 1408/71 and 574/72 is to be regarded as referring not only to Member States of the European Union covered by those acts but also to the Swiss Confederation, with the result that those regulations are capable of being applied in the dispute in the main proceedings.

32      In the present proceedings, having regard to the subject-matter of the dispute in the main proceedings, there is no need to adjudicate on the question of whether Regulation No 647/2005 is covered by the 1999 Agreement, as a rule equivalent, for the purposes of Article 1(1) of Annex II to that Agreement, to the acts of the Union referred to in that annex. Whether it is the version of Regulations Nos 1408/71 and 574/72 resulting from Regulation No 307/1999, namely the last amending regulation expressly mentioned as regards Regulations Nos 1408/71 and 574/72 in the said Annex II, which is taken into account, or that resulting from Regulation No 647/2005, the fact remains that, in the present case, the relevant provisions are the same.

33      It is undisputed that the child benefits provided for by the German legislation at issue in the main proceedings meet the necessary conditions for being regarded as ‘family benefits’ within the meaning of Article 4(1)(u) of Regulation No 1408/71 (see also, in relation to the benefits provided for by Paragraph 62 of the EStG, Case C‑352/06 Bosmann [2008] ECR I‑3827, paragraphs 10 and 27).

34      As regards the personal scope of Regulation No 1408/71, it is indeed apparent from the the case-law of the Court of Justice that, where it is a German institution that is competent to grant family benefits in accordance with Title III, Chapter 7, of Regulation No 1408/71, the definition appearing in Article 1(a) of that regulation is ousted by that contained in Annex I, point I, D (‘Germany’), of that regulation (see Case C‑194/96 Kulzer [1998] ECR I‑895, paragraph 35), so that only persons who, unlike Mrs Schwemmer, are compulsorily insured under one of the schemes mentioned in Annex I, point I, D, of Regulation No 1408/71 may be regarded as ‘employed persons’ or ‘self-employed persons’ within the meaning of Article 1(a)(ii) of that regulation (see to that effect, in particular, Joined Cases C‑4/95 and C‑5/95 Stöber and Piosa Pereira [1997] ECR I‑511, paragraphs 29 to 36; Case C‑266/95 Merino García [1997] ECR I‑3279, paragraphs 24 to 26; Case C‑85/96 Martínez Sala [1998] ECR I‑2691, paragraphs 42 and 43; and Case C‑262/96 Sürül [1999] ECR I‑2685, paragraph 89).

35      However, even were it to be acknowledged that a person in Mrs Schwemmer’s position cannot, for the purposes of the grant of family benefits in accordance with Title III, Chapter 7, of Regulation No 1408/71, be regarded as having the status of an ‘employed person’ or a ‘self-employed person’ within the meaning of the combined provisions of Article 1(a) of Regulation No 1408/71 and point I, D, of Annex I to the latter, it should be noted that it is common ground in this case that Mrs Schwemmer’s former husband, the father of the children concerned, carries on in Switzerland an activity as an 'employed person' within the meaning of Article 1(a) of the said regulation.

36      Moreover, the documents before the Court show that those children, who are dependent on Mrs Schwemmer and in whose favour child benefits are paid pursuant to Paragraph 62 of the EStG, must be regarded as having the status of ‘members of the family’, within the meaning of Article 1(f)(i) of Regulation No 1408/71, of Mrs Schwemmer’s former husband.

37      Furthermore, it can be seen from the case-law of the Court of Justice that, although Regulation No 1408/71 does not expressly cover family situations following a divorce, there is nothing to justify the exclusion of such situations from the scope of that regulation (see Case 149/82 Robards [1983] ECR p. 171, paragraph 15; Kulzer, paragraph 32; Case C‑255/99 Humer [2002] ECR I‑1205, paragraph 42; and Case C‑363/08 Slanina [2009] ECR I-0000, paragraph 30).

38      In those circumstances, the provisions of Regulations Nos 1408/71 and 574/72 on family benefits must be interpreted as being capable of being applied to situations such as that giving rise to the dispute in the main proceedings. In the first place, a situation such as that at issue in the main proceedings is, as is apparent from the order for reference, likely to give rise to the creation, in respect of one and the same period, of parallel rights to family benefits, some enjoyed by the mother, in favour of the children concerned, and others enjoyed by the father. Moreover, those children fall within the personal scope of Regulation No 1408/71, as members of the family of the parent having the status of employed person, it being immaterial whether or not the other parent forms part of the family of the former (see, by analogy, Case 104/84 Kromhout [1985] ECR 2205, paragraph 15).

39      Having regard to the above, a situation such as that at issue in the main proceedings is capable of falling within the scope of Regulations Nos 1408/71 and 574/72.

40      It should be recalled that the aim of the provisions of Regulation No 1408/71 which determine the legislation applicable to workers moving within the Community is in particular to ensure that the persons concerned shall, in principle, be subject to the social security scheme of only one Member State in order to prevent more than one system of national legislation from being applicable and to avoid the complications which may result from that situation. That principle is expressed in particular in Article 13(1) of Regulation No 1408/71 (see to that effect, inter alia, Case 302/84 Ten Holder [1986] ECR 1821, paragraphs 19 and 20, and Bosmann, paragraph 16).

41      With respect to family benefits, Article 73 of Regulation No 1408/71 provides that a worker subject to the legislation of a Member State shall be entitled, in respect of the members of his family who are residing in another Member State, to the family benefits provided for by the legislation of the former State, as if they were residing in that State (see Case C-153/03 Weide [2005] ECR I-6017, paragraph 20, and Bosmann, paragraph 17). That provision is designed to make it easier for migrant workers to draw family allowances in the State where they are employed, in cases where their family has not moved with them (see Case C‑117/89 Kracht [1990] ECR I‑2781, paragraph 15) and in particular to prevent a Member State from being able to make the grant or the amount of family benefits dependent on members of the worker’s family being resident in the Member State paying the benefit (see to that effect, in particular, Case C-543/03 Dodl and Oberhollenzer [2005] ECR I‑5049, paragraph 46, and case-law cited).

42      However, whilst that Article 73 constitutes a general rule in the matter of family benefits, it is not an absolute rule (see Dodl and Oberhollenzer, paragraph 49).

43      Thus, where there is a risk of overlap between rights under the legislation of the State of residence and rights under the legislation of the State of employment, provisions such as Articles 13 and 73 of Regulation No 1408/71 must be compared with the ‘anti-overlap’ rules appearing in the latter and in Regulation No 574/72 (see, to that effect, Dodl and Oberhollenzer, paragraph 49).

44      The present case must therefore be dealt with in the light of the provisions for preventing overlap, namely Article 76 of Regulation No 1408/71 and Article 10 of Regulation No 574/72, which lay down the rules for ending overlap of the rights provided for by the legislation of the State of residence of the children concerned with those arising from the legislation of the State of employment of one of their parents.

45      As its heading indicates, Article 76 of Regulation No 1408/71 contains ‘[r]ules on priority in cases of overlapping entitlement to family benefits under the legislation of the competent State and under the legislation of the … State of residence of … members of the family’. It follows from the terms of that provision that it is intended to resolve overlapping between, on the one hand, for example, rights to family benefits under Article 73 of that regulation and, on the other, national legislation of the State of residence of family members conferring a right to family benefits by reason of carrying on an occupation (see, to that effect, Dodl and Oberhollenzer, paragraph 53, and Slanina, paragraph 37).

46      However, it is common ground in these proceedings that German legislation confers the right to family benefits on the condition of permanent or ordinary residence in Germany, and not, as required for Article 76 to apply, ‘by reason of carrying on an occupation’. Therefore, Article 76 is not applicable to a situation such as that in the main proceedings.

47      It is therefore necessary to examine the application of Article 10 of Regulation No 574/72 to situations such as that at issue in the main proceedings.

48      As the Court has already, in effect, held, it follows from the anti-overlap rule laid down in Article 10(1)(a) of Regulation No 574/72 that benefits due in a Member State other than that in which the child concerned resides, either simply by virtue of the national legislation of that Member State or by the application, for example, of Article 73 of Regulation No 1408/71, take priority over benefits due under the legislation of the Member State of that child’s residence, which are consequently suspended. However, where an occupation is carried on in that latter State, Article 10(1)(b)(i) of Regulation No 574/72 prescribes the opposite solution, namely that the right to benefits paid by the Member State of the child’s residence prevails over the right to benefits payable by the Member State of employment, which are thus suspended (see to that effect, in particular, Case C‑119/91 McMenamin [1992] ECR I‑6393, paragraphs 17 and 18, and Weide, paragraph 28).

49      Although Article 10 of Regulation No 574/72 does not contain any provision analogous to Article 76(2) of Regulation No 1408/71, the Familienkasse argues, in the dispute in the main proceedings, that Article 10(1) of Regulation No 574/72 must be read in combination and/or by analogy with the said Article 76(2), which provides, in a 'converse' situation from that underlying the dispute in the main proceedings, characterised in particular by the absence of any application for the grant of family benefits submitted in the Member State of residence of the children concerned, for the possibility of reducing family benefits granted by the State of employment, where an application for benefit has not been submitted in the said State of residence.

50      Mrs Schwemmer argues before the referring court, albeit in the alternative, that, if the said Article 10(1) were to have to be interpreted by analogy with Article 76(2) of Regulation No 1408/71, the competent authorities should, in the exercise of the discretion conferred upon them by such an interpretation by analogy, take account of the fact that her former husband omitted to apply for the benefits prescribed by Swiss legislation, to which he was entitled, and acted in that way, according to her, for the purpose of causing her detriment.

51      On those points, it should however be remembered that Article 10 of Regulation No 574/72, as both its heading and its wording demonstrate, is intended only to resolve cases of overlapping of rights to family benefits where they are simultaneously due, irrespective of conditions of insurance or employment, in both the relevant child’s Member State of residence and, in application either of the national legislation of another Member State or of Article 73 of Regulation No 1408/71, in the Member State of employment (see, to that effect, Bosmann, paragraph 24).

52      For a finding that such overlapping is present in a given case, it is not enough, for example, for such benefits to be due in the relevant child’s Member State of residence and to be, in parallel, merely capable of being due in another Member State, where one of the parents of that child works (see, by analogy, McMenamin, paragraph 26).

53      Indeed, as is apparent from the case-law of the Court, for it to be possible to regard family benefits as being due under the legislation of a Member State, the law of that State must recognise the right to the payment of benefits in favour of the member of the family who works in that State. It is thus necessary for the person concerned to fulfil all the conditions, as to both form and substance, imposed by the internal legislation of that State in order to be able to exercise that right, which may in some cases include the condition that a prior application must have been made for the payment of such benefits (see, by analogy with a previous version of Article 76 of Regulation No 1408/71, Case 134/77 Ragazzoni [1978] ECR 963, paragraphs 8 to 11; Case 191/83 Salzano [1984] ECR 3741, paragraphs 7 and 10; Case 153/84 Ferraioli [1986] ECR 1401, paragraph 14; and Kracht, paragraph 11).

54      In that context, it should be noted that, in those judgments, the reasons for the absence of a prior application were not relevant to the answers given by the Court in the proceedings concerned.

55      It must therefore be held that suspension, under Article 10(1)(a) of Regulation No 574/72, of the right to family benefits due under the legislation of a Member State according to which the acquisition of the right to those benefits is not subject to conditions of insurance, employment or self-employment, such as the right under Paragraph 62 of the EStG, does not take place if the benefits were not paid in the other Member State concerned, on the ground that not all the conditions required by the legislation of that Member State for those benefits to be actually drawn were met, including the condition that a prior application must have been made (see, by analogy, Ragazzoni, paragraph 12; Salzano, paragraph 11; Ferraioli, paragraph 15; and Kracht, paragraph 11).

56      It is true that, as the Familienkasse points out, after the dates of the facts of the cases which gave rise to the judgments cited in the previous paragraph of this judgment, Article 76 of Regulation No 1408/71, in the version then in force, to which those judgments related, was amended to include a paragraph (2) designed to allow the Member State of employment to suspend the right to family benefits if an application for obtaining those benefits was not made in the Member State of residence and, consequently, the latter made no payment.

57      However, that fact does not deprive the case-law cited in paragraph 55 of this judgment of its usefulness in interpreting Article 10 of Regulation No 574/72, which, unlike the previous version of Article 76 of Regulation No 1408/71, was not supplemented by Council Regulation (EEC) No 3427/89 of 30 October 1989 (OJ 1989 L 331, p. 1), which none the less amended in various respects both the version then in force of Regulation No 1408/71 and that of Regulation No 574/72.

58      Moreover, as is apparent from the case-law of the Court of Justice, the legislation of the Union on the co-ordination of national social security legislation, taking account in particular of the underlying objectives, cannot, save in the case of an express exception in conformity with those objectives, be applied in such a way as to deprive a migrant worker or those claiming under him of the enjoyment of benefits granted simply by virtue of the legislation of a Member State (see, to that effect, Case 100/78 Rossi, [1979] ECR 831, paragraph 14; Case 733/79 Laterza [1980] ECR 1915, paragraph 8; Case 807/79 Gravina [1980] ECR 2205, paragraph 7; Case 320/82 D’Amario [1983] ECR 3811, paragraph 4; and Kromhout, paragraph 21). It follows that it would not be in accordance with the said objectives to interpret a provision for preventing overlap, such as Article 10 of Regulation No 574/72, in such a way as to lead to the actual grant of an amount which is less than either of those benefits taken individually (see in particular, by analogy, Rossi, paragraph 14 et seq.; Case 104/80 Beeck [1981] ECR 503, paragraph 12; and Kromhout, paragraph 21).

59      In the light of the above, the answer to the questions must be that, on a proper interpretation of Article 76 of Regulation No 1408/71 and Article 10 of Regulation No 574/72, a right, which is not subject to conditions of insurance, employment or self-employment, to benefits under the legislation of a Member State in which one parent resides with the children in favour of which those benefits are granted cannot be partially suspended in a situation, such as that at issue in the main proceedings, in which the former spouse, who is the other parent of the children concerned, would in principle be entitled to family benefits under the legislation of the State in which he is employed, either simply by virtue of the national legislation of that State, or in application of Article 73 of Regulation No 1408/71, but does not actually draw those benefits because he has not made an application for them.

 Costs

60      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Second Chamber) hereby rules:

On a proper interpretation of Article 76 of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community, and Article 10 of Council Regulation (EEC) No. 574/72 laying down the procedure for implementing Regulation No. 1408/71, in the versions of those regulations as amended and updated by Council Regulation (EC) No 118/97 of 2 December 1996, as amended by European Parliament and Council Regulation (EC) No 647/2005 of 13 April 2005, a right, which is not subject to conditions of insurance, employment or self-employment, to benefits under the legislation of a Member State in which one parent resides with the children in favour of which those benefits are granted cannot be partially suspended in a situation, such as that at issue in the main proceedings, in which the former spouse, who is the other parent of the children concerned, would in principle be entitled to family benefits under the legislation of the State in which he is employed, either simply by virtue of the national legislation of that State, or in application of Article 73 of the said Regulation No 1408/71, but does not actually draw those benefits because he has not made an application for them.

[Signatures]

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* Language of the case: German.