Revision of the social security coordination Regulations (EC) No. 883/2004 & 987/2009 - COM(2016) 815 final Malcolm Scicluna Director (International Affairs)
Overview • Political & policy context for revision • Impact assessment & consultation • Overview of the main changes proposed • Current state of play
Political & policy context for revision • The current EU's social security coordination rules have been in force since 1st May 2010. • The labour market and society are constantly evolving, as are national social security systems and the case-law of the Court. • Targeted adjustments are needed to ensure that the rules are fair, simpler to apply and easier to enforce.
General Policy Objective To continue the modernisation of the EU Social Security Coordination Rules by: – further facilitating the exercise and protection of citizens' rights, – ensuring legal clarity, – ensuring a fair and equitable distribution of the financial burden and – promoting administrative simplicity and enforceability of the rules. Simply: clear, fair and enforceable rules
Impact Assessment Process • Key Elements of the proposal subject to Impact Assessment (SWD 461/2016) • No Impact Assessment for elements which clarify/reinforce existing obligations but still consultation with stakeholders • Executive Summary of proposal available in all languages (SWD 460/2016) • Positive Opinion of the Regulatory Scrutiny Board 21 January 2016 (SEC 539)
Consultation Process • Consultation of social security experts in Administrative Commission 2013-2015 • 10 June 2015: Meeting with social partners • 17 June 2015: Meeting with NGOs • Online public consultations 2013 & 2015
Overview of main changes • Access of economically inactive citizens to social benefits • Unemployment benefits • Long-term care • Family benefits • Social security of posted workers
Access to social benefits • Codification of CJEU case-law concerning economically inactive nationals • Member States may refuse access to social security benefits if EU law criteria for legal residence is not met • Free Movement Directive criteria: – having sufficient resources as not to impose a burden on host State's finances; – having comprehensive sickness insurance.
Access to social benefits Current situation Under the new proposal For economically inactive mobile citizens, a Member State may make access to both social assistance and social security benefits subject to the requirement that such citizens legally reside The proposal makes these principles more there. explicit, so that Member States and citizens have more clarity on their rights and obligations. In practice this means the citizen concerned must have comprehensive sickness insurance and sufficient resources so as not to impose an unreasonable burden on the social security system of the host state. This principle derives from case-law and is not expressly stated in the EU social security rules.
Unemployment benefits • Export – Extend the period of export to minimum 6 months – Stronger cooperation between Member States to support and monitor jobseekers • Aggregation: – Requirement to work at least three months in a new Member State before the duty to aggregate arises – Where three month condition not met the former Member State of work becomes competent
Unemployment benefits • Frontier workers – Provided a person has worked at least 12 months in a Member State, that Member State is responsible for paying unemployment benefits – Where 12 month period is not met, the Member State of residence would be responsible to pay.
Unemployment benefits Current situation Under the new proposal As a jobseeker you can take your unemployment You can take your unemployment benefits with benefits with you to another Member State for you to another Member State for 6 months, with 3 months, with a possible extension to 6 months. a possible extension to your whole period of entitlement. The employment services of your home country Your host country must send a monthly report to may request a monthly report on your activities your home country on your efforts to re-enter the from your host country. labour market.
Unemployment benefits Current situation Under the new proposal When you become unemployed after taking up The “aggregation” principle is not changed, but work and residence in a new Member State, you now there will be a minimum period set. may request that periods of previous insurance in other Member States where you have worked are You must work for at least three months in a new taken into account when your host country Member State before you can ask for assesses if you meet the minimum period to aggregation. qualify for unemployment benefits (so called “aggregation”). Your existing rights to unemployment benefits remain protected. If you have worked in your The current rules do not specify a minimum new country for a shorter period, you can seek period of prior employment in the new Member unemployment benefits from the Member State State before you can ask for such “aggregation”. where you previously worked.
Unemployment benefits Current situation Under the new proposal As a frontier worker you will now receive your unemployment benefits from the Member State of When you become unemployed as a frontier former employment, if you have worked there for worker, you must claim your unemployment at least 12 months. benefits in the Member State where you live. If you have worked there for less than 12 months, you will receive your unemployment benefits from the Member State where you live.
Long-term care benefits • Creation of a separate chapter, with a common definition of long-term care benefits, and criteria to identify them. • Reflects existing practice that the Member State of insurance provides long-term care benefits in cash and reimburses the cost of benefits in kind provided by the Member State of residence.
Long-term care benefits Current situation Under the new proposal Long-term care benefits are currently not explicitly defined in the rules. The rules will provide a common definition of long-term care benefits, criteria to identify them In practice they are coordinated as sickness and a list of benefits in each Member State. benefits. The same coordination rules continue to apply. This means that the Member State of insurance provides long-term care benefits in cash and reimburses the cost of benefits in kind provided by the Member State of residence.
Family benefits • No indexation • Update of the rules for child-raising allowances: – parent's individual right and – Member States will have the option to pay them in full to both working parents.
Family benefits Current situation Under the new proposal Child-raising allowances are currently considered as traditional family benefits and therefore are The rules will update the coordination mechanism coordinated as such. where it concerns child-raising allowances. In the case of a family in a cross-border situation, Member States will have the option to treat these the secondary competent Member State does not kind of allowances separately from the traditional make a distinction between traditional family family benefits and thus pay them in full to both benefits and benefits intended to replace the working parents. income of the parent due to child raising.
Social security of posted workers • Alignment of terminology concerning “posting”. This has no impact on scope. • Clearer procedure for issuing and withdrawal of portable document A1 and stronger cooperation • Extension of replacement ban to self-employed persons. • Alignment of safeguards for posting in one Member State to work in two or more Member States. • New implementing powers to Commission
Social security of posted workers Current situation Under the new proposal The 24-months rule is unchanged. The If you are posted for no longer than 24 months, requirement that in order to remain insured in the and if you don’t replace another posted worker, sending country you must not replace another you can remain insured in your home country. posted worker will also cover self-employed workers sent to another EU country. No details are given on the specific obligations of The sending country issuing the social security the issuing country or the timeframe for its documents of a posted worker must properly response, in case a host EU country has a doubt assess the relevant facts and guarantee their about the social security documents of a posted correctness. The A1 form is only valid if filled out worker. correctly. The sending country has clear deadlines to respond to a host country’s request to verify the documents. In case of fraud, the withdrawal of a document will have retroactive effect.
Social security of posted workers Current situation Under the new proposal If you are employed in more than one Member In order to avoid abuse, the legislation of the State and you don’t carry out any substantial Member State of the employer will only apply in activity in your home country, you fall under the such a case if that employer carries out legislation of the Member State where your substantial activity in the Member State where it employer is established. is established. This reduces the risk of letter-box companies being utilised to circumvent the rules.
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