E-3/23 - A v Arbeids- og velferdsdirektoratet

EFTA-case 

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Deadlines: Motivation ministry:    5 July 2023
Written observations:                    21 August 2023

Keywords: social security, invalidity benefits

Subject:  Article 58 of Regulation No. 883/2004 of the European Parliament and the Council of 29 April 2004 on the coordination of social security systems.

Facts of the case:

A is a Norwegian national, born in 1966 and resident in Norway. In May 2018 he submitted a claim for invalidity benefits to The Norwegian Labour and Welfare Administration (NAV). It followed from the medical certificate accompanying the claim for invalidity benefits that he suffered from a serious long-term mental illness. A indicated that he had resided in Ireland from May 2006 until February 2014. The claim for invalidity benefits was granted with a degree of invalidity of 80 per cent. The onset of invalidity – that is to say, the time when the earning capacity was permanently reduced by at least half – was set to April 2014. A lodged an appeal against that decision, arguing that the degree of invalidity should be set to 100 per cent. It was correct that he ran a small computer service business, but A argued that it was almost as a hobby and that his ability to work was highly unpredictable. The income from the business varied and had declined in recent years. Nevertheless, NAV Appeals upheld the original decision. That decision was appealed to the National Insurance Court on 25 November 2019.

Before the National Insurance Court, A has maintained that the degree of invalidity should be set to 100 per cent. He has argued that he is entitled to be paid a guarantee supplement/additional benefit pursuant to Article 58 of Regulation (EC) No 883/2004, since the total of A’s pro rata benefits is lower than the minimum benefit under the second paragraph of Section 12-13 of the National Insurance Act (NIA). NAV Appeals referred the part of the case relating to prior membership back to the NAV Employment and Benefits Office for a reassessment. The NAV Employment and Benefits Office adopted a new decision in which the calculation of the invalidity benefit was amended so that A received a higher invalidity benefit. In the decision it was held that the appellant satisfied the condition for the exception in letter b of the second paragraph of Section 12-2 of the NIA through aggregation of Norwegian and Irish periods of insurance.

Under Sections 2-1 and 2-2 of the National Insurance Act, it is possible to be a member in the national insurance scheme either on the basis of being resident in Norway or being a worker in Norway. In A’s case, it is clear that the period of insurance falls under those chapters. Invalidity benefits are adjusted for periods of insurance. The full period of insurance is 40 years. If only actual periods of insurance until the onset of invalidity were to be included, the invalidity benefit could become very low. Therefore, future periods of insurance from the onset of invalidity up to and including the year in which the person concerned turns 66 years of age are also included in the calculation, so that the total period of insurance becomes the sum of actual and future periods of insurance.

From the time when the EEA Agreement entered into force for Norway on 1 January 1994 and until 2013, Norway granted a guarantee supplement under the regulation, on the basis of a guarantee level corresponding to the minimum pension as though all acquisition periods in the EEA were acquisition periods in Norway. The supplement thus ensured a benefit corresponding to the minimum annual benefit in the event of invalidity, calculated as though the total period of insurance in all EEA States was acquired in Norway. Regulation No 130 of 12 February 2015 on calculation of invalidity benefits under the EEA Agreement contains detailed provisions on the calculation of invalidity benefits from the national insurance scheme under Article 52(1)(b) of Regulation (EC) No 883/2004. That regulation contains rules on the determination of the basis for the calculation of invalidity benefits and, in particular, how the basis is to be determined in cases where the person has had employment income both in Norway and in another EEA State in the five years preceding the onset of invalidity.

The provisions in the Main Part of the EEA Agreement apply as Norwegian law and, in the event of conflict, prevail over the provisions of the National Insurance Act. Regulation (EC) No 883/2004 and Regulation (EC) No 987/2009 also apply as Norwegian primary law and take precedence over the provisions of the National Insurance Act.

Article 58 is the continuation of Article 50 of Regulation (EEC) No 1408/71. Article 50 had a somewhat different wording, but the National Insurance Court proceeds on the assumption that the substantive content of Article 58 is the same as the previous Article 50. This article states that a recipient of benefits to whom this chapter applies may not, in the Member State of residence and under whose legislation a benefit is payable to him, be provided with a benefit which is less than the minimum benefit fixed by that legislation for a period of insurance or residence equal to all the periods taken into account for the payment in accordance with this Chapter. The competent institution of that Member State shall pay him throughout the period of his residence in its territory a supplement equal to the difference between the total of the benefits due under this Chapter and the amount of the minimum benefit.

In (older) case-law of the ECJ it is stated that Article 50 only provided a basis for a guarantee supplement where national legislation contains an expressly guaranteed minimum amount to be paid in those cases where calculation of benefits on the basis of acquisition period and income does not make a reasonable standard of living possible in the country of residence. The referring Court is uncertain as to whether this viewpoint may be upheld in the light of Case C-189/16 Zaniewicz-Dybeck. The question may also be asked whether the Court of Appeal is basing itself on a correct interpretation of Case 22/81 Browning. As observed by the Advocate General in his Opinion, entitlement to the basic amount of the UK old-age pension was conditional on and varied according to the yearly average contribution. If that average did not exceed a minimum threshold, there was no right to an old-age pension at all.

Another question is whether the fact that the calculation of the minimum annual benefit under the second paragraph of Section 12-13 of the National Insurance Act – in a case such as the present one – seems to coincide with the manner in which the theoretical amount is calculated under Article 52(1)(b) of Regulation (EC) No 883/2004 precludes it from constituting a minimum benefit within the meaning of the regulation.  The Norwegian legislation contains provisions on a minimum annual benefit in the event of invalidity in the second paragraph of Section 12-13 of the National Insurance Act. The question in the case is what significance it has that the benefit is proportionally reduced in the event of a period of insurance shorter than 40 years. The period of insurance is in reality the only variable factor that affects the amount of the benefit. The referring Court has doubts as to whether the provision providing for a reduction means that the benefit is not a minimum benefit as referred to in Article 58 of Regulation (EC) No 883/2004.

Request for an advisory opinion:

Is there a minimum benefit within the meaning of Article 58 of Regulation (EC) No 883/2004 where the national legislation contains provisions on a minimum annual benefit in the event of invalidity, but at the same time provides that that benefit is to be proportionally reduced when the person has a shorter period of insurance than the full period of insurance, which is 40 years?

Cited (recent) case-law: 42) 64-77, 22/81; Case C-189/16.

Policy Area: SZW