European Commission v Republic of Austria.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2022:468
• Docket Number: C-328/20
• Date: 16 June 2022
• Celex Number: 62020CJ0328
• Court: Court of Justice (European Union)
• Procedure Type: Recurso por incumplimiento

Provisional text

JUDGMENT OF THE COURT (Second Chamber)

16 June 2022 (*)

(Failure to fulfil obligations – Coordination of social security systems – Regulation (EC) No 883/2004 – Articles 4, 7 and 67 – Freedom of movement for workers – Regulation (EU) No 492/2011 – Article 7 – Equal treatment – Family benefits – Social and tax advantages – Adjustment of amounts on the basis of price levels in the children’s State of residence)

In Case C‑328/20,

ACTION for failure to fulfil obligations under Article 258 TFEU, brought on 22 July 2020,

European Commission, represented by B.-R. Killmann and D. Martin, acting as Agents,

applicant,

supported by:

Czech Republic, represented by J. Pavliš, M. Smolek and J. Vláčil, acting as Agents,

Republic of Croatia, represented by G. Vidović Mesarek, acting as Agent,

Republic of Poland, represented by B. Majczyna, acting as Agent,

Romania, represented by E. Gane and L. Liţu, acting as Agents,

Republic of Slovenia, represented by J. Morela, acting as Agent,

Slovak Republic, represented by B. Ricziová, acting as Agent,

EFTA Surveillance Authority, represented by E. Gromnicka, C. Howdle, J.S. Watson and C. Zatschler, acting as Agents,

interveners,

v

Republic of Austria, represented by M. Klamert, C. Pesendorfer, A. Posch and J. Schmoll, acting as Agents,

defendant,

supported by:

Kingdom of Denmark, represented by M. Jespersen, J. Nymann-Lindegren and M. Wolff, acting as Agents,

Kingdom of Norway, represented by S. Hammersvik, J.T. Kaasin, L. Tvedt and P. Wennerås, acting as Agents,

interveners,

THE COURT (Second Chamber),

composed of A. Prechal, President of the Chamber, J. Passer, F. Biltgen (Rapporteur), N. Wahl and M.L. Arastey Sahún, Judges,

Advocate General: J. Richard de la Tour,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after hearing the Opinion of the Advocate General at the sitting on 20 January 2022,

gives the following

Judgment

1 By its application, the European Commission seeks a declaration from the Court that:

– by establishing a mechanism for adjusting family allowances and the child tax credit for workers whose children reside permanently in another Member State, the Republic of Austria has failed to fulfil its obligations under Articles 4, 7 and 67 of Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ 2004 L 166, p. 1) and under Article 7(2) of Regulation (EU) No 492/2011 of the European Parliament and of the Council of 5 April 2011 on freedom of movement for workers within the Union (OJ 2011 L 141, p. 1), and

– by establishing a mechanism for adjusting the Family Bonus Plus, the sole earner’s allowance, the single parent’s allowance and the tax credit for maintenance payments, for migrant workers whose children reside permanently in another Member State, the Republic of Austria has failed to fulfil its obligations under Article 7(2) of Regulation No 492/2011.

Legal framework

European Union law

Regulation No 883/2004

2 Recitals 8, 12 and 16 of Regulation No 883/2004 read as follows:

‘(8) The general principle of equal treatment is of particular importance for workers who do not reside in the Member State of their employment, including frontier workers.

…

(12) In the light of proportionality, care should be taken to ensure that the principle of assimilation of facts or events does not lead to objectively unjustified results or to the overlapping of benefits of the same kind for the same period.

…

(16) Within the Community there is in principle no justification for making social security rights dependent on the place of residence of the person concerned; nevertheless, in specific cases, in particular as regards special benefits linked to the economic and social context of the person involved, the place of residence could be taken into account.’

3 Article 1(z) of that regulation provides:

‘For the purposes of this Regulation:

…

(z) “family benefit” means all benefits in kind or in cash intended to meet family expenses, excluding advances of maintenance payments and special childbirth and adoption allowances mentioned in Annex I.’

4 Article 3(1)(j) of Regulation No 883/2004 provides:

‘This Regulation shall apply to all legislation concerning the following branches of social security:

…

(j) family benefits.’

5 Article 4 of that regulation, entitled ‘Equality of treatment’, provides:

‘Unless otherwise provided for by this Regulation, persons to whom this Regulation applies shall enjoy the same benefits and be subject to the same obligations under the legislation of any Member State as the nationals thereof.’

6 Article 5 of Regulation No 883/2004, entitled ‘Equal treatment of benefits, income, facts or events’, is worded as follows:

‘Unless otherwise provided for by this Regulation and in the light of the special implementing provisions laid down, the following shall apply:

(a) where, under the legislation of the competent Member State, the receipt of social security benefits and other income has certain legal effects, the relevant provisions of that legislation shall also apply to the receipt of equivalent benefits acquired under the legislation of another Member State or to income acquired in another Member State;

(b) where, under the legislation of the competent Member State, legal effects are attributed to the occurrence of certain facts or events, that Member State shall take account of like facts or events occurring in any Member State as though they had taken place in its own territory.’

7 Article 7 of Regulation No 883/2004, entitled ‘Waiving of residence rules’, provides:

‘Unless otherwise provided for by this Regulation, cash benefits payable under the legislation of one or more Member States or under this Regulation shall not be subject to any reduction, amendment, suspension, withdrawal or confiscation on account of the fact that the beneficiary or the members of his/her family reside in a Member State other than that in which the institution responsible for providing benefits is situated.’

8 Article 67 of Regulation No 883/2004, entitled ‘Members of the family residing in another Member State’, provides:

‘A person shall be entitled to family benefits in accordance with the legislation of the competent Member State, including for his/her family members residing in another Member State, as if they were residing in the former Member State. However, a pensioner shall be entitled to family benefits in accordance with the legislation of the Member State competent for his/her pension.’

9 Article 68 of that regulation lays down priority rules in the event of overlapping, as follows:

‘1. Where, during the same period and for the same family members, benefits are provided for under the legislation of more than one Member State the following priority rules shall apply:

(a) in the case of benefits payable by more than one Member State on different bases, the order of priority shall be as follows: firstly, rights available on the basis of an activity as an employed or self-employed person, secondly, rights available on the basis of receipt of a pension, and, finally, rights obtained on the basis of residence;

(b) in the case of benefits payable by more than one Member State on the same basis, the order of priority shall be established by referring to the following subsidiary criteria:

(i) in the case of rights available on the basis of an activity as an employed or self-employed person: the place of residence of the children, provided that there is such activity …

…

2. In the case of overlapping entitlements, family benefits shall be provided in accordance with the legislation designated as having priority in accordance with paragraph 1. Entitlements to family benefits by virtue of other conflicting legislation or legislations shall be suspended up to the amount provided for by the first legislation and a differential supplement shall be provided, if necessary, for the sum which exceeds this amount. …’

Regulation No 492/2011

10 Article 7(1) and (2) of Regulation No 492/2011, which is found in Chapter I thereof, under Section 2, entitled ‘Employment and equality of treatment’, provides:

‘1. A worker who is a national of a Member State may not, in the territory of another Member State, be treated differently from national workers by reason of his nationality in respect of any conditions of employment and work, in particular as regards remuneration, dismissal, and, should he become unemployed, reinstatement or re-employment.

2. He shall enjoy the same social and tax advantages as national workers.’

Austrian law

The FLAG

11 The Bundesgesetz betreffend den Familienlastenausgleich durch Beihilfen (Federal Law on compensation for family expenses by means of allowances) of 24 October 1967 (BGBl. 376/1967), as amended by the Bundesgesetz mit dem das Familienlastenausgleichsgesetz 1967, das Einkommensteuergesetz 1988 und das Entwicklungshelfergesetz geändert werden (Federal Law amending the Federal Law of 1967 on compensation for family expenses by means of allowances, the Federal Law of 1988 on the taxation of the income of natural persons and the Law on the status of development aid workers) of 4 December 2018 (BGBl. I, 83/2018) (‘the FLAG’) states, in Paragraph 1 thereof, that the benefits which it provides for are ‘granted with a view to compensating for expenses in the interests of the family’.

12 Under Paragraph 2(1) of the FLAG, persons who have their domicile or habitual residence in Austria are to be entitled to family allowances for minor children.

13 Paragraph 4 of the FLAG provides:

‘(1) Persons who are entitled to an equivalent benefit granted by another State shall not be entitled to family allowances.

(2) Austrian nationals who are excluded from entitlement to family allowances pursuant to subparagraph 1 or Paragraph 5[(4)] shall receive a supplementary payment if the amount of the equivalent benefit granted by...