Current problems and latest developments in EU social secur

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Presentations text content in Current problems and latest developments in EU social secur

Slide1

Current problems and latest developments in EU social security coordination

Warsaw,

14

June 2013

Sasha Trevelyan

Rob

Cornelissen

Slide2

Structure of presentation

I.

Recent case-law Court : Format,

Hudzinski

,

Wecel

II. Residence issues

Directive 2004/38 (Residence Directive); notion 'social assistance'

Separate coordination system

Reg

883 for 'special non-contributory benefits'

Relationship Directive 2004/38 and

Reg

883/2004

Does 'social assistance' within meaning of Residence Directive include 'special non-contributory benefits' within meaning of

Reg

883?-

Conclusions

Adv

-Gen

Brey

case (29 May 2013)

Is right to reside test compatible with Union law?

Infringment

UK

Ad-hoc Group on habitual residence

The importance of having facts and figures

III. External dimension EU social security coordination

IV. EESSI

Slide3

I. Recent case-law of European Court of Justice

Format judgment (C-115/11), 4 October 2012

Format: Polish company operating in several Member states. Does not usually carry out significant activities in Poland. 3 consecutive contracts with

Mr

Kita, residing in Poland. According to terms of contract, place of employment for

Mr

K

ita: "

operations and building sites in Poland and within the territory of EU (Ireland,

F

rance, UK, Germany, Finland) as instructed by employer

". In fact,

Mr

Kita worked under first two contracts exclusively in France; under third contract exclusively in Finland. Between contracts: unpaid leave and termination of contract.

Format:

Mr

Kita is person "normally employed in territory of two or more Member States".

Slide4

Format judgment

Art. 14 (2) (b)

Reg

1408/71: A person normally employed in two or more MS is subject to legislation of MS in whose territory he resides, if he pursues his activity

partially

in that territory.

ZUS, after having issued E 101, contested that

Mr

Kita was "a person normally employed in territory of two or more MS".

Court: since it is not disputed that Format does not carry out significant activities in

P

oland:

no

posting (Art. 14 (1)

Reg

1408/71)

Court: facts show that employment in territory of a single MS constituted the normal arrangement for

Mr

Kita. Therefore, he is not a person who

normally

is employed in territory of two or more MS.

Court: divergence between terms of contract and practice

Slide5

Format judgment

Court: institution which issues E 101 is required to carry out proper assessment of facts relevant for application of

Reg

1408/71 and to ensure correctness of information contained in certificate

Generally, E 101 certificate is issued before or at start of period it covers. When assessing facts, institution has to take into account not only words of contract but also other factors such as: how were contracts implemented in past, circumstances surrounding conclusion of contracts, characteristics of work performed by company. It is incumbent on institution to base its findings on employed person's

actual

situation.

Slide6

Format judgment

Moreover, institution has to reconsider grounds for issuing certificate if institution of host State expresses doubts on correctness of facts on which certificate is

based

Not an easy task for institutions!

Slide7

Hudzinski judgment - joined cases C- 611/10 and 612/10 (12 June 2012)

Background: Art. 13 (1)

Reg

1408/71: "persons to whom this Regulation applies shall be subject to legislation of a

single

MS only"

Bosmann

judgment (2008).

Ms

Bosmann

lives with children (20 and 21 years) in D. Started to work in NL. Request for family benefits in NL refused(in NL only until 18 years). D legislation: all residents are entitled to family benefits for their children, when studying until 25years. Request for D family benefits refused. D institution: you are subject to NL legislation

. D:

Art. 13 (2) (a)

Reg

1408/71 has exclusive effect. So: you cannot be subject to D legislation.

Slide8

Hudzinski judgment

Court in

Bosmann

: all

provisions of

Reg

1408/71 must be interpreted in light of objective pursued: prevent that workers would be

penalised

in field of social security for reason of having moved.

Therefore, Art. 13 (2) (a)

Reg

1408/71 does not

require

D institution to grant family benefits, but it does not deprive D of the right to grant family benefits to those resident on its territory.

Bosmann

judgment confirmed in

Hudzinski,a

self-employed farmer covered by PL social security system.

Temporary

employed as

seasonal worker (in agricultural area)in D and continued to be subject to PL legislation during temporary work in D. As seasonal worker he was subject to unlimited income tax in D. D legislation: non-residents who are subject to unlimited income tax are entitled to family benefits

Slide9

Hudzinski

Mr

Wawrzyniak

is Polish national residing with family in Poland. Insured in Poland. Posted by employer to Germany for 1 year. Subject to unlimited income tax in Germany.

Mr

Hudzinski

and

Mr

Wawrzyniak

,

referring to

Bosmann

judgment

, claimed

family benefits for t

heir children

in Pl from D institution. Court: confirms

Bosmann

and goes even further.

In fact,

Huzinski

case differed from

Bosmann

in two aspects:

Mr

Hudzinski

and

Mr

Wawrzyniak

continued

to receive for

their

children

family

benefits from PL

The children did not reside in D, like in

Bosmann

, but in PL

Slide10

Hudzinski

Court: even under these circumstances, D cannot be deprived of the right to grant family benefits to

Mr

Hudzinski

and

Mr

Wawrzyniak

.

Connecting factor with D: Any person who, not having residence in D, has been made subject to unlimited income tax, is entitled to family benefits for his

children

Court: this means that D is entitled to grant family benefits to

Mr

Hudzinski

, even when he has

not suffered any legal disadvantage

for having moved to another MS and even when neither the child nor the worker resides in D.

Slide11

Hudzinski

Court goes even further! D legislation: D legislation excludes entitlement to family benefits in cases where a comparable benefit is paid in another State. Court: application of this rule would treat migrant workers less favorably than non- migrant workers. D is entitled to

reduce

PL family benefits from its amounts, but not entitled to

exclude

them from this right for the sole reason that they receive a comparable benefit from another

MS

Slide12

Wencel judgment, C- 589/10, 16 May 2013

Legal position assessed by the Court on the basis of Regulation 1408/71 and not the 1975 German – Polish Convention

• Judgement

confirms that for

the

application of

Regulation

(EEC) No

1408/71, Article 10 is to be interpreted as meaning a

person cannot

simultaneously have two

habitual residences in two different

Member

States

.

• Reiterates that the Member

State in which a person

resides is the

State in which that person habitually resides and where the habitual centre of his interests is to be found

Slide13

Wencel

In the circumstances of the case, under articles 12(2) and 46a, MS cannot withdraw

entitlement to a retirement pension

retroactively on

the ground that

a

survivor’s pension

was received in

another Member

State where the applicant was also resident

However, Article 45 does not preclude the

amount of the retirement pension paid in the first Member State

from being reduced

up to the limit of the amount of the benefits received in the other Member

State under domestic rules

Must not create an unfavourable situation in comparison with a situation where there is no cross-border

element, unless, where

there is disadvantage,

it can

be justified by objective considerations and

be

proportionate to

a legitimate

objective pursued by national law. This falls to the national court to verify.

Slide14

II. Residence issues

I.

Residence Directive (2004/38): lays down conditions governing right of free movement and residence

Right of

residence

for up to

three

months: without conditions or formalities

Right of residence for more than three months:

conditions

for economically

inactive

persons:

Have sufficient resources:

compare

with national criteria in host Member state to be granted basic social assistance

Have comprehensive sickness insurance

Objectives of these conditions: protection of public finances, being a legitimate interest of MS (Zhu judgment, points 32 and 33)

Slide15

Residence Directive

Interpretation Court of condition: "have sufficient resources":

Origin

of resources is

not

relevant; e.g. resources from an accompanying family member are also to be taken into

account (Zhu and Chen judgment)

Retention right of residence

First three months

: as long as person does not become "an unreasonable burden on the social assistance system of host MS"

After three months

: as long as person meets conditions, which means: being economically active or having sufficient resources and comprehensive sickness insurance

In case of reasonable doubt: verification by MS possible

Slide16

Expulsion

No expulsion of economically active persons and jobseekers

No expulsion "

as long as person does not become an unreasonable burden on social assistance system of host MS

", which means:

Expulsion measure no automatic consequence of recourse to social assistance system

Host MS must examine whether it is case of temporary difficulties, duration of residence, personal circumstances, amount of aid granted

Court: condition must be applied in compliance with Union law and in accordance with principle of proportionality: national measures must not go beyond what is necessary to achieve objective of protection of public finances of MS

Slide17

Notion of "unreasonable burden on social assistance system"

Depends on circumstances of each individual case

Those who arrive in host MS without fulfilling residence conditions cannot count on same approach as those who have fulfilled conditions and who have acquired right of residence for more than three months, but owing to circumstances are temporarily unable to fulfill conditions

Slide18

Directive 2004/38. Equal treatment

Union

citizens

residing

on basis of Directive 2004/38 in host MS

enjoy

equal

treatment

with

nationals

of

that

MS

within

scope of

Treaty

.

"

within

scope of

Treaty

"

includes

access

to social assistance and

housing

benefits

Exceptions: MS not

obliged

to

provide

social assistance

during

first

three

months

or

during

period

of

jobseekeing

No

definition

of "social assistance"

Court: must

be

interpreted

restrictively

(

V

atsouras

).

Benefits

intended

to

facilitate

acces

to labour

market

are not "social assistance"

Slide19

Regulation 883/2004 - Directive 2004/38

Reg 883/204

applies

to all Union

citizens

insured

under

legislation

of MS,

including

non-active

persons

Reg

guarantees

export of cash

benefits

acquired

in a MS to

territory

of

other

MS: impact on "

sufficient

resources

"

Reg

guarantees

access

to

health

care

in a MS

other

than

competent

MS: impact on "

having

comprehensive

sickness

insurance

"

Separate

coordination system for "

special

non-

contributory

benefits

":

benefits

aimed

at

avoiding

poverty:minimum

subsistance

benefits

,

listed

in

Annex

X of Reg 883/2004

Slide20

Separate coordination system for minimum subsistence benefits

Examples

: minimum

income

guarantee

(ES),

supplementary

allowances

(FR),

jobseekers

allowance

(Ireland),

income

replacement

allowance

(BE),basic subsistance

income

for

elderly

or

handicapped

persons

(DE),

income

support, DLA(UK),

compensatory

supplement

(AT)

To

be

granted

to

persons

covered

by Reg 883/2004 in MS of "

residence

"

"

Residence

" in

meaning

of Reg 883/2004:

based

on

factual

(not

legal

) situation :

where

is

centre of

interest

?

(

Swaddling

judgment

)

Not

necessary

to have

worked

in MS of "

residence

" in

order

to

be

entitled

to minimum subsistance

benefits

(

Snares

judgment

)

Slide21

Relationship Directive 2004/38 and Reg 883/2004

Do people

claiming

"

special

non-

contributory

benefits

"

within

meaning

of Reg

883/2004 put

their

right of

residence

under

Directive 2004/38

at

stake

,

because

they

no longer have the right to

reside

in host MS

under

Directive 2004/38?

Or the opposite?

Persons

entitled

under

Reg 883/2004 to "

special

non-

contributory

benefits

" do

they

automatically

fulfill

requirement

of

having

"

sufficient

resources

"

under

Directive 2004/38?

Slide22

Residence issues. Pending cases

Does "social assistance" within meaning of Directive 2004/38 include special non-contributory benefits within meaning of

Reg

883?

Mr

Brey

, German national receives modest German pension. Moves in 2011 to Austria. Applies for compensatory supplement. AT legislation: only persons legally residing in AT are entitled. AT: in order to reside legally in AT non-active person must have sufficient resources. German pension is lower than minimum subsistence level in AT: he does not reside legally in AT. Main issue concerns question whether or not

Mr

Brey

is entitled to Austrian supplement. But question referred to Court focusses on right of residence: is AT compensatory benefit "social assistance "in sense of Directive 2004/38?

Commission:

no

.

Adv

-Gen in

Brey

case:

yes

Slide23

Conclusions Adv Gen Brey case

Adv

-Gen (point 49):"

Concepts of 'social security' and 'special non-contributory benefit' are …mutually exclusive

". He refers to point 36

Hosse

judgment

Point 36

H

osse

judgment: "

A benefit which satisfies the conditions of a 'social security benefit'

within the meaning of Article 4 (1)

of regulation 1408/71 ..cannot be

analysed

as a 'special non-contributory benefit'

. In other words: if a benefit is a 'classical' social security benefit, it cannot be a 'special non-contributory benefit'. A 'special non-contributory benefit' is nevertheless a social security benefit covered by Regulations 1408/71 and 883/2004!

Slide24

Conclusions Adv-Gen Brey case

Adv

-Gen (point 56): "

Above all, the notion of 'social assistance' as used in the two legal instruments cannot be the same, as they have different objectives. The aim of Articles 3 (5) (a) and 70 (4) of Regulation 883/2004 is to prevent the export of the benefits which they govern. The aim of Article 7 (1) (b) of Directive 2004/38 is to ensure that beneficiaries of a right to residence do not become an unreasonable burden on social assistance system of host MS"

Article 3 (5) (a)

Reg

883: "

This Regulation shall not apply to social and medical assistance"

Article 70 (4)

R

eg

883 concerns 'special non-contributory benefits': "

The benefits referred to in par 2 shall be provided in the MS in which the persons concerned reside, in accordance with its legislation. Such benefits shall be provided by and at the expense of the institution of the place of residence

"

Slide25

Conclusions Adv-Gen Brey case

Adv

-Gen treats Art. 3 (5) (a) concerning social assistance on same footing as Art. 70 (4) dealing with 'special non-contributory benefits

'!

True, purpose of Art.70 (4)

Reg

883 first sentence is to prevent export of 'special non-contributory benefits'. But purpose of

second

sentence

of Art. 70 (4) is to

guarantee

the access of 'special non-contributory benefits" to all persons covered by

Reg

883 who

reside

in host State on basis of equal treatment as nationals of that State. Not mentioned at all in the 97 points of the conclusions!

Slide26

Is right to reside test compatible with Union law?

Since 2004: by virtue of UK legislation entitlement to all special non-contributory benefits listed in Annex X

Reg

883 is subject to condition that claimant has right to reside (on basis of national law or Directive 2004/38).

Commission: this legislation violates Union law. Since 1992: persons covered by

Reg

883 who reside in host State can claim special non-contributory benefits in same way as nationals of that State. Residence is of a

factual

nature. Does not depend on

legality

of that residence. A requirement in national legislation that claimants comply with additional condition, namely the right to reside, as a basis for accepting that they actually "reside" in host State within meaning of

of

Reg

883 is incompatible with this

Reg

Slide27

Is right to reside test compatible with Union law?

Commission:

entitlement

to "

special

non-

contributory

benefits"does

not

depend

of

having

a right to

reside

under

Directive 2004/38.

Sole

condition for

entitlement

to

such

benefits

:

reside

in host MS. Is centre of

interest

in host MS? If

yes

,

then

,

persons

are

entitled

to "

special

non-

contributory

benefits

" in host MS.

Infringment

proceedings against UK launched by Commission

31 May 2013: last step in proceedings: Commission brings UK before Court

Slide28

Residence issues: Ad-hoc Group on habitual residence

Concept

of "residence" has Union wide meaning: place where person habitually resides. Depends on a number of factors (Swaddling judgment: family situation, duration and continuity of presence, employment situation, exercise of non-remunerated activities, housing situation) aimed at determining

centre

of interests. A person who proves that his

centre

of interests is in host State has shown having a sufficient genuine link with host State in order to claim special non-contributory benefits.

Practice shows that institution often assumes that place of "residence" is identical with place where a persons has declared his home address. Therefore: Ad-hoc Group

Adm

Comm

has

e

laborated report providing guidance on determination of "residence"

Slide29

Ad-hoc Group on habitual residence

Report

contains number of concrete examples aimed at drawing attention to specific characteristics that might be common to many cases

Students

Pensioners

Inactive mobile persons

Slide30

Importance of having facts and figures

Public opinion: "benefit tourism" towards MS with most generous special non-contributory benefits

Perception: entitlement to certain benefits constitutes decisive motivation to use right to free movement within EU

Tress Think Tank report 2011: questionnaire. Vast majority of MS declared that no statistical data about number of cases was available

Size and impact of "benefit tourism"?

Commission launched study late 2012 to obtain statistical data on past, current and potential future flows of non-active intra EU migrants per category (jobseekers, pensioners, students, non-active)

Study also covers drivers for migration of non-active EU migrants and its impact on MS' social security systems

Slide31

External Dimension of EU Social Security Coordination

Adoption

of 2nd package of EU

negotiation

positions (Albania, San Marino, Montenegro and Turkey

)

On-going

negotiations with 10 countries

Follow

up to 2012 Communication

– Forum 14 March 2013

Slide32

State

of Play

2010 package

2012 package

Slide33

EESSI: Current position

MS feedback from the original EESSI IT solution design highlighted that some aspects were not fit for purpose.

A reflection period was instigated to provide the opportunity for a comprehensive review of all the requirements needed to deliver a comprehensive EESSI solution.

An investigation on how the requirements for EESSI could be met by the technical solution is

on going

as part of the reflection period.

A decision on the EESSI solution and the updated EESSI roadmap is scheduled to be made before the close of 2013.

Slide34

EESSI Project Planning

IT

Business

Nationalpreparations

Commence development of agreed IT solution

Test IT Solution with MSDeploy IT solution into Live Environment

Test/Utilise the Structured Electronic Documents and flows

May 2016

May 2015

January 2014

Development of national IT interfaces

Test National IT interfaces

Preparation

of institutions

Slide35

Slide36

Slide37


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