Warsaw 14 June 2013 Sasha Trevelyan Rob Cornelissen Structure of presentation I Recent caselaw Court Format Hudzinski Wecel II Residence issues Directive 200438 Residence Directive notion social assistance ID: 248164
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Slide1
Current problems and latest developments in EU social security coordination
Warsaw,
14
June 2013
Sasha Trevelyan
Rob
CornelissenSlide2
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. EESSISlide3
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 practiceSlide5
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
MSSlide12
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 possibleSlide16
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 MSSlide17
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 conditionsSlide18
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 883/2004Slide20
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
RegSlide27
Is right to reside test compatible with U
nion 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 CourtSlide28
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 personsSlide30
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 systemsSlide31
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 2013Slide32
State
of Play
2010 package
2012 packageSlide33
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
National
preparations
Commence development of agreed IT solution
Test IT Solution with MS
Deploy 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