Made in accordance with Article 3(6) of the Statute of the European Ombudsman[1]

The case concerns the refusal of the European Investment Bank (EIB) to pay a child allowance to the complainant, whose husband is an employee of the EIB. The complainant and her husband are separated with divorce proceedings under way. Pending the finalisation of the divorce and a decision on child custody, a national court has ruled that their child should reside with the mother, the complainant in this case. In the meantime, the parents have joint custody of the child and share maintenance costs. The complainant asked the EIB to pay her at least half of the child allowance currently being paid in full to her husband. The EIB refused to do so on the basis that the father continued to have (joint) custody of the child. In the event that the mother were to be awarded full custody of the child, the EIB would pay her the child allowance.

The European Ombudsman inquired into the issue and found that the EIB's reliance on the fact of the father continuing to have custody was not convincing. She proposed to the EIB that it should pay the complainant half of the child allowance, pending the final decision of the national court on the issue of custody.

Regrettably, the EIB did not accept the Ombudsman's proposal and failed to provide convincing reasons for its decision. The Ombudsman has now made a recommendation to the EIB reiterating her solution proposal. She has also suggested to the EIB that it revise its internal rules on child allowances as quickly as possible in order to ensure that they will deal fairly with the types of situations which arise in cases of marital breakdown.

The background

1. The complainant is an EU official working for an EU Agency, who is in the process of getting divorced from an employee at the European Investment Bank (EIB). They have a child. While the divorce process is on-going, the competent national court ordered that the child should reside with the mother (the complainant). The order made no provisional arrangements for the financial support of the child.

2. The complainant's husband receives a family allowance and a dependent child allowance from the EIB. Following the national court's decision on the residence of the child, the complainant requested that the PMO[2], pay at least 50% of these allowances directly to her. The PMO informed her that this would not be possible for as long as her husband received the allowances from the EIB. It advised the complainant to turn directly to the EIB.

3. On 8 October 2013, the complainant asked the EIB to stop paying the allowances to her husband and to pay them directly to her.

4. The EIB explained that, as regards the family allowance, the EIB's internal rules provide that this allowance may be paid to an EIB staff member only. As regards the child allowance, the EIB considered that it is payable to the person who has custody of the child. It pointed out that the national court's decision dealt only with the place of residence of the child and that custody was shared between the parents, pending the final decision in the divorce proceedings. The EIB concluded that the child allowance would be paid in accordance with the applicable rules, i.e. to the EU official with the higher basic salary, which in this case is the father. For these reasons, the EIB rejected the complainant's request.

5. Dissatisfied with this outcome, the complainant turned to the Ombudsman on 25 February 2014.

6. The Ombudsman opened an inquiry into the complainant's allegation that the EIB wrongly considered the concept of custody of a child to prevail over the concept of residence of a child, and thus failed to comply with its own implementing rules and the European Commission's implementing provisions on family allowances. The inquiry also included the complainant's claim that the EIB should contact the PMO and pay at least 50% of these allowances directly to the complainant, since it had recognised that she shared the custody of the child[3].

Allegation that the EIB wrongly considered that the concept of a child's custody prevails over the concept of residence of a child

The Ombudsman's proposal for a solution

7. The Ombudsman examined the staff rules of both the EIB and the EU Agency concerned. As regards the family allowance, she found that the EIB's decision to pay it to the complainant's husband, pending the conclusion of the on-going divorce proceedings, is in line with the applicable rules.

8. As regards the child allowance, the Ombudsman noted that, according to the EIB's rules, a child allowance is granted where a parent effectively provides for the child's maintenance which, in practice, means that the child is either living with the parent or the parent supports the child's everyday living costs. The EIB stated that when these two criteria do not coincide, as in this case, the fact of providing financial support to the child prevails over the issue of residence. The EIB also clarified its interpretation of the concept of custody as the "fulfilment of the duty of child care by economic means".

9. In the Ombudsman's view, this interpretation would imply that if the custody is shared, the legal obligation to support the child should be shared also. However, since the EIB pointed out that the father of the child was voluntarily sharing the costs of the child's maintenance, the Ombudsman thus considered that it would be fair for the parents to also share the child allowance, until the issue of custody is finally decided by the competent national court.

10. Therefore, on 29 June 2015, after taking into account the arguments and opinions put forward by the parties, the Ombudsman made the following proposal for a solution:

"Pending the final decision of the national court on the issue of custody in the on-going divorce proceedings, the EIB should pay the complainant half of the child allowance".

11. In addition, the Ombudsman encouraged the EIB to amend its rules on child allowances so as to better reflect the current reality and practices in divorce proceedings. The Ombudsman suggested that the EIB could be guided by the European Commission's rules on the matter. Those rules provide explicitly for the division of allowances in cases where custody of the child is shared between two persons, and where there has been no court order or other order from a competent administrative authority[4].

12. In its reply of 7 September 2015, the EIB agreed to review its rules on child allowances. It informed the Ombudsman that, although this process might take some time, it would complete it as soon as possible. As regards, the Ombudsman's proposal for a solution, the EIB stated that in the absence of an amendment to the general rules applicable to the entirety of the EIB staff, paying the complainant half of the child allowance, as proposed by the Ombudsman, would exclusively target the complainant, and would therefore constitute a breach of the principle of equal treatment. This could be legally challenged by the complainant's husband, as well as by other agents and their spouses who would be in a similar situation. As a result, the EIB maintained its position that it could not pay the complainant half of the child allowance at this stage.

13. In her observations on the EIB's reply, the complainant welcomed the proposed forthcoming changes to the EIB rules, but expressed her dissatisfaction with the EIB's position concerning her specific case. She pointed out that the EIB did not state that it could not pay half of the child allowance due to the lack of legal basis, but that it would not do so because of a likely future legal action against it, either by the complainant's husband or by other EIB staff members in a similar situation. She also disagreed with the EIB's view concerning the principle of equal treatment and argued that she was discriminated against by the EIB, both vis-à-vis her husband and other EIB staff members.

14. Furthermore, she reiterated the argument that, although the EIB's rules do not explicitly provide for the sharing of the child allowance, there is nothing to prevent the EIB from paying half of the child allowance to each parent, as an exception to the general rule.

The Ombudsman's assessment after the proposal for a solution

15. The EIB did not contest the Ombudsman’s analysis of the case nor her conclusion that the position adopted by the EIB was not convincing. The Ombudsman’s view is that, even within its current rules, it is possible to divide the child allowance payment between the parents. The Ombudsman considers that, by refusing to divide the child allowance between the parents, the EIB is not complying with its own implementing provisions.

16. The Ombudsman welcomes the EIB's decision to respond positively to her suggestion that it should amend its rules on child allowances so as to better reflect the current reality and practices in divorce proceedings. However, she notes that one year after her proposal these rules have not yet been amended. Therefore, the Ombudsman urges the EIB to complete this amendment process as soon as possible and to inform her accordingly.

17. The Ombudsman regrets that the EIB has rejected her proposal that it should now pay the complainant half of the child allowance. While the EIB accepts the need to amend its rules, and has agreed to do so along the lines suggested by the Ombudsman, it continues to refuse to do so in the complainant's case. The arguments put forward by the EIB in support of its view, that it cannot pay half of the child allowance to the complainant at this stage, are, for the reasons set out below, far from convincing.

18. First, the EIB argues that paying the complainant half of the child allowance would constitute a breach of the principle of equal treatment as regards other EIB agents and their spouses who would be in a similar situation. The Ombudsman notes that the EIB does not point to any such similar situation. Even if other employees of the EIB were indeed in a similar situation, nothing would prevent the EIB from also treating them in the same way as the complainant, thus ensuring equal treatment for all. As the Ombudsman already pointed out[5], although the EIB's rules do not explicitly provide for the sharing of the child allowance, they do not exclude this possibility either, and therefore, there is nothing to prevent the EIB, in cases such as this one, from paying each parent half of the allowance in question. Given the EIB's commitment to amend its rules regarding child allowances, along the lines proposed by the Ombudsman, it is clear that it should do so now in the case of the complainant.

19. Second, the EIB argues that the complainant's husband would challenge the EIB's decision should it decide to pay half of the child allowance to her. It is important to clarify that the Ombudsman's proposal for a solution concerned the future payments of the child allowances only and not payments already made to the complainant's husband. Next, the Ombudsman notes that the dependent child allowance, although being a part of a staff member's remuneration, is not intended for that staff member's upkeep, but is intended, exclusively, for the upkeep of his child/children[6]. Moreover, the child allowance has a social objective, and is paid in recognition of the costs involved in maintaining a child[7]. The payment of allowances to the staff of the European Union's institutions is not governed by private law arrangements, but by the EIB's Staff Regulations. Thus, it would be for the European Court of Justice, as provided for at Article 41 of the Staff Regulations, and not for other courts, to decide about disputes between the complainant's husband and the EIB, regarding the correct interpretation of the provisions concerning child allowances.

20. The Ombudsman fails to see why the possibility of a legal challenge by complainant's husband should deter the EIB from taking what would be a correct and fair decision.

21. As an institution committed to good administration, the EIB is expected to act fairly and reasonably, to take into account and balance all the interests involved, and to be sensitive to individual circumstances. In this case, the divorce proceedings are on-going and the custody of the child has not been legally decided. However, there has been a formal decision on the residence of the child, and the relevant courts have recognised that both parents contribute to the maintenance of the child. Due regard must be given to the interests of the child, in conjunction with the principle of proportionality. It seems proportionate and reasonable, as the Ombudsman already pointed out[8], that half of the dependent child allowance is paid to each of the persons sharing the custody of the child. In this case, however, the EIB regrettably seems to have taken into account, exclusively and disproportionately, its own interest in avoiding legal proceedings.

22. In view of the above, the Ombudsman considers that there is no need for her to examine the other arguments submitted by the complainant in her observations on the EIB's reply. The Ombudsman makes the finding that the approach adopted by the EIB is incorrect and unfair and not in compliance with its own implementing rules. This constitutes maladministration.

23. The Ombudsman would expect the EIB take the opportunity offered by her inquiry to provide for a fair and proportionate solution for the complainant. She therefore makes a corresponding recommendation below, in accordance with Article 3(6) of the Statute of the European Ombudsman, which reiterates her proposal for a solution that the EIB pay half of the child allowance to the complainant.

The recommendation

On the basis of the inquiry into this complaint, the Ombudsman makes the following recommendation to the European Investment Bank:

Pending the final decision of the national court on the issue of custody in the on-going divorce proceedings, the European Investment Bank should, from the date of receipt of this recommendation, pay the complainant half of the child allowance.

Suggestion for improvement

The Ombudsman also makes the following suggestion for improvement to the European Investment Bank:

The European Investment Bank should amend its internal rules on child allowances as soon as possible in order to provide explicitly for situations of shared child custody and related situations.

The EIB and the complainant will be informed of this recommendation. In accordance with Article 3(6) of the Statute of the European Ombudsman, the EIB shall send a detailed opinion by 31 October 2016.

Emily O'Reilly

European Ombudsman

Strasbourg, 18/07/2016

 

[1] Decision of the European Parliament of 9 March 1994 on the regulations and general conditions governing the performance of the Ombudsman's duties (94/262/ECSC, EC, Euratom), OJ 1994 L 113, p. 15.

[2] PMO stands for "Paymaster Office". It administers, calculates and pays the financial entitlements of the staff of the European Commission and certain other EU institutions, bodies and agencies. See: http://ec.europa.eu/pmo/accueil_en.htm

^[3] For further information on the background to the complaint, the parties' arguments and the Ombudsman's inquiry, please refer to the full text of the Ombudsman's proposal for a solution available at: www.ombudsman.europa.eu/cases/solution.faces/en/69046/html.bookmark

[4] Article 3 of the Commission decision on General Implementing Provisions for giving effect to Articles 67 and 68 of the Staff Regulations and Articles 1, 2 and 3 of Annex VII thereto, C (2004) 1364.

^[5] See point 19 of the Ombudsman's proposal for a solution.

[6] See, in this sense, the case-law of the EU courts relating to the family allowances listed in Article 67(1) of the EU Staff Regulations (judgment of the Court of First Instance of 3 March 1993, Peroulakis v Commission, case T-69/91, point 34; judgment of the Civil Service Tribunal of 11 February 2014, Armani v Commission, case F-65/12, point 33). Although the EIB has its own Staff Regulations, the same considerations are applicable in a case like the one at hand.

[7] See Order of the Civil Service Tribunal of 27 April 2015 in case F-90/14, Meyer v Commission, point 26; see also judgment of 7 May 1992 in case Council v Brems, C-70/91 P, point 9.

[8] See point 18 of the Ombudsman's proposal for a solution.