Law Report: Prescription system for pensioners unlawful

The setting of different ages for exemption from prescription charges for men and women, to correspond with the different pensionable ages for men and women for granting pensions, was not allowed by Directive 79/7/EEC, which deals with the progressive implementation of the principle of equal treatment for men and women in matters of social security.

The European Court of Justice gave rulings on questions referred to it by the Queen's Bench Divisional Court.

Article 3(1) of Directive 79/7 provides:

This directive shall apply to (a) statutory schemes which provide protection against . . . sickness . . .

Article 7(1) provides:

This directive shall be without prejudice to the right of member states to exclude from its scope (a) the determination of pensionable age for the purposes of granting old-age and retirement pensions and the possible consequences thereof for other benefits . . .

The applicant, a retired man of 64 years, contended that he suffered discrimination on the ground of sex under regulation 6(1)(c) of the National Health Service (Charges for Drugs and Appliances) Regulations 1989 (SI no 419) which provides exemption from prescription charges for "a man who has attained the age of 65 years or a woman who has attained the age of 60 years". The Secretary of State contended that the prescription charges system and the exemptions from prescription charges were not matters covered by Council Directive 79/7 as defined in article 3(1), and that in any event the exemption for persons of pensionable age was excluded from its scope by article 7(1)(a).

The ECJ said that a benefit such as that provided for in regulation 6(1)(c) fulfilled the conditions for falling within the scope of Directive 79/7. First, being provided for by statute and implemented by regulation it formed part of a statutory scheme. Secondly, it afforded direct and effective protection against the risk of sickness referred to in article 3(1). In view of the fundamental importance of the principle of equal treatment and the aim of Directive 79/7, a system of benefits could not be excluded from the scope of the directive simply because it did not strictly form part of national social security rules. Article 3(1) was to be interpreted as meaning that a system such as that in regulation 6(1) exempting various categories of persons, in particular certain old people, from prescription charges fell within the scope of the directive.

A national rule such as regulation 6(1)(c) involved direct discrimination on the ground of sex and the age limits corresponded to the statutory pensionable ages for men and women in the United Kingdom for the grant of old-age and retirement pensions. Article 7(1)(a) of Directive 79/7 allowed member states to exclude from its scope not only the setting of pensionable ages but also the possible consequences thereof for other benefits.

The scope of the permitted derogation, defined by the words "possible consequences thereof for other benefits" contained in article 7(1)(a) was limited to forms of discrimination existing under the other benefit schemes which were necessarily and objectively linked to the difference in retirement age. That was so where the discrimination in question was objectively necessary in order to avoid disturbing the financial equilibrium of the social security system or to ensure coherence between the retirement pension scheme and other benefit schemes.

There was no evidence that changing the rules at issue would imperil the financial equilibrium of the social security system as a whole. The discrimination at issue was not objectively necessary to ensure coherence between the retirement pension system and the system provided for in regulation 6(1)(c). The form of discrimination at issue was not necessarily linked to the difference between the pensionable ages for men and for women and was not therefore covered by article 7(1)(a).

There was no factor to justify a derogation from the principle that a ruling on the interpretation of Community law took effect from the date on which the rule interpreted entered into force. There was no reason to limit the temporal effect of this judgment so that the direct effect of article 4(1) of Directive 79/7 might also be relied on to support claims for damages in respect of periods prior to the date of the judgment by persons who had not brought legal proceedings or made an equivalent claim prior to that date.