Court rules to reverse benefit discrimination

Date: 09/05/1996

By Michael Mann

THE surviving spouses of migrant workers have the same right to retirement and social security benefits as nationals of the countries in which they choose to live, according to a ground-breaking judgement from the European Court of Justice.

In a landmark decision which throws into doubt two decades of jurisprudence, the Court also found that spouses who themselves did not work in the guest country were entitled to keep their husband's or wife's pension rights on the same basis even after the working partner died.

While unemployment and invalidity benefits remain the preserve of the individual covered, the ruling should ensure non-discrimination in social security and pensions benefits for widows and widowers choosing to claim them in the member state in which their partners worked.

The Court found in favour of the widow of a Frenchman who had worked in the Netherlands for 18 years and challenged a Dutch law which forced her to pay higher voluntary contributions than Dutch citizens both because of her nationality and the fact that she had spent periods living in France.

The decision reverses previous cases which distinguished between the pension rights of a worker and the benefits received by his or her spouse.

The judges based their ruling on the principle that it was wrong that social security advantages should be lost as a result of exercising the right to freedom of movement.

The woman in question, Mrs Cabanis-Issarte, moved to the Netherlands with her husband in 1948 and lived there until 1960, when the couple moved back to France. They returned to the Netherlands three years later, but moved back to France again after her husband retired in 1969.

Although she continued to make voluntary pension contributions in the Netherlands when she returned to France, Mrs Cabanis-Issarte was forced to pay a higher rate than Dutch nationals.

The Luxembourg Court did not accept the Dutch argument that Mrs Cabanis-Issarte's pension rights should be affected by the fact that she had never worked in the country and the period in question included several years when she did not even live there.

To follow this argument would - the Court found - “run counter to the purpose and spirit” of EU rules covering the freedom of movement, which also provides the context in which EU rules on the coordination of social security are formed.

The ruling will come as a disappointment to the Commission, Germany, France, Austria and the UK, all of which supported the Dutch position that spouses could not rely on EU rules to determine contribution rates to qualify for old-age pensions.

Officials are not clear how great an impact the ruling will have on social security regulations in the various member states. But it is certain to throw the spotlight on the continuing inability of the EU to agree on cross-border mobility for voluntary pensions schemes.