New provisions concerning the coordination of social security schemes Reg' 8832004

1
New provisions concerning the co-ordination of
social security schemesReg. 883/2004
2
Competences under the Treaty

• No harmonisation
• National competence to define and build social
  policy schemes remains unchanged, except
• Ban on discrimination
• Equal treatment of women and men
• Free movement of persons, goods and services
• Competition and State aid rules
• Public procurement
• Only co-ordination?

3
What is Co-ordination?

• Equal treatment
• Export of benefits
• Aggregation of periods
• Legal base in the Treaty frequent changes!
• Maastricht Art. 51 Art. 235 (self employed)
• Amsterdam Art. 42 Art. 18 (Union citizens)
  Art. 308 (self employed)
• Nizza Art. 42 Art. 308 (Union citizens self
  employed) Art. 63 Abs. 4 (third country
  nationals)
• European Constitution Art. III-136 Art.
  III-267 (third country nationals)

4
History

• Reg. 1408/71 already aged !
•  
• Ø does not cover new risks (long term care,
  child care)
•  
• Ø centred around gainful activities
•  
• Ø Parallelism Reg. 1408/71 ECJ Reg.
  1408/71 Reg. 1612/68
•  
• Start European Council of Edinburgh (1992)
•  
• SLIM - Simpler Legislation for the Single Market

5
Start of the work

• Proposal of the Commission December 1998
• Revolutionary changes
•  
• Ø open material and personal scope 
• Ø far reaching equalisation of facts 
• Ø pro-rata-reimbursement for pensioners 
• Ø 6 Months export of unemployment benefits 
• Ø Unemployment benefits for frontier workers by
  the last state of employment 
• Ø Always highest amount of family benefits

6
How far did we get?

• When will the new Reg. 883/2004 enter into
  force?
• on the 20th day after its publication
  27.6.2004 
• When will 883/2004 apply?
• From the entry into force of the new
  Implementing Reg.
• possible impediments on the way to new Reg.
  883/2004  
• Elaboration of the new Implementing Reg.
• 10 new Member States 
• Ø Missing Annex X (special non contributory
  besenfits) 
• Ø Missing Annex XI (special provisions)

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Personal scope of Reg. 1408/71

• Employed and self-employed persons, students, if
  they are nationals of a Member State, refugees or
  stateless
•  
• Members of the family irrespective of their
  nationality
• Employed and self-employed have to be covered by
  a national scheme of social security
•  

8
Personal scope of Reg. 883/2004

• All persons covered by a scheme
•  
• Nearly no influence on social insurance schemes
•  
• Third country nationals remain excluded
• legal base!!
•  
• Reg. 859/2003 remains applicable -gt therefore
• For third country nationals Reg. 1408/71 remains
  in force in its present form
•  

9
Third country nationals Reg. 859/2003

• Already applicable Reg. 1408/71 applies
  correspondingly
• Problems
• Third country nationals legally residing in the
  territory of a Member State
• cross border elements
• Does not apply in relation to DK, special
  provisions concerning family benefits granted by
  AT DE

10
Schemes beyond employment

• All persons subject to the legislation all
  persons covered
• All schemes covering the risks
• Invalidity / sickness / death
• Exemption of victims of war still valid
• Possible impacts - Annex XI?
• Damages caused by officials or military actions
• Schemes for victims of crime
• Insurance burden provisions

11
Material scopeReg. 1408/71

• Legislation concerning
• Benefits in case of sickness and maternity
• Benefits in case of old age, invalidity or to
  survivors
• Benefits in case of accidents at work and
  occupational diseases
• Death grants
• Unemployment benefits
• Family benefits

12
Material scope Reg. 883/2004

• Not very much innovation
• New 
• Paternity benefits equivalent to maternity
• Pre-retirement benefits
• Explicit exemption of advances of maintenance
  payments
• Inclusion of all special schemes for the Liberal
  professions
•  No solution 
• Special provision for long term care benefits
• Special provision for child care benefits
• Freedom to provide services (patient mobility)

13
Pre-retirement benefits

• What exactly is meant?
• Old age part-time? Not clear because in many
  Member States benefits to the employer, not to
  the employee
• Cases Kutz-Bauer und Steinicke Working
  conditions under Dir. 76/207
• Therefore not at the same time social security?
• In any way - No aggregation!

14
Advances of maintenance payments

• Cases Offermanns und Humer AT
  Unterhaltsvorschuss covered by Reg. 1408/71
•  
• Problems in case of residence of the child
  outside the competent state
•  
• Big success Advances to maintenance payments
  excluded from Reg. 883/2004 (Annex I)
•  
• Therefore no export but equal treatment (Art. 12
  EC - Cases Cowan, Martinez Sala)

15
Long term care benefits

• Cases Molenaar und Rs Jauch sickness benefits
• No special provision
• Nevertheless hope?
•  
• Art. 34 to avoid overlapping deducting the
  benefit in kind from the benefit in cash
• Annex X special non contributory benefits
  case Hosse pressure to elaborate a special
  chapter on co-ordination for such benefits

16
Long term care benefits - possible ways of
co-ordination

• Export of cash benefits only through the
  institution of the place of residence
• This institution has the obligation to inform the
  persons concerned
• This institutions deducts the amount of the
  benefit in kind
• Corresponding deduction of reimbursement (special
  provision in case of lump sums)
• Important Overpayments have to be avoided

17
Child care benefits

• No special provision
• Co-ordination problematic (e.g. child care in DE,
  mother frontier worker from AT still in
  employment)
• Family-view (like all other family benefits)
• Individualised-view
• ECJ Family view correct - case Dodl and
  Oberhollenzer

18
Special non contributory benefits

• New Definition (Art. 70)
• In case of supplementary, substitute or ancillary
  coverage minimum income
• In case of benefits solely for the protection for
  the disabled link to the social environment
• Non contributory no financing by contributions
  no problem for supplementary benefits to
  contributory benefits

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Equal treatment of facts

• New provision (Art. 5)
• (lit. a) equal treatment of benefits and income
  corresponds to Art. 12 (2) of Reg. 1408/71
• (lit. b) general equalisation
• where under the legislation of the competent
  Member State legal effects are attributed to the
  occurrence of certain facts or events, that
  Member State shall take account of like facts or
  events occurring in any Member State as though
  they had taken place in its own territory.

20
Equal treatment of facts Consequences

• Danger e.g. creation of periods of insurance
• Therefore no impact on aggregation (Rec. 10) or
  on competences (Rec. 11)
• Important one provision for all Member States
• ECJ up until now always in that direction
• Legal simplification

21
Equal treatment of factsLimits

• Example
• Child care periods in pension insurance
• Child care whenever in any Member State?
• Important Connection with competence (always
  state of residence?)
• Is correction of case Kauer possible?
• There are only very few possibilities for
  deviations
• Important Annex XI

22
Aggregation

• Central uniform provision (Art. 6)
• In case of voluntary insurance no restriction to
  persons who have been already gainfully active in
  that Member State
• Via equalisation of facts equivalent periods
  could be created by foreign periods of insurance
• Impact e.g. on periods of military or civilian
  service,
• School or university studies if equivalent
  periods under national legislation

23
Applicable legislation Reg. 1408/71

• Insurance only in one Member State allowed
  various designations of competent State
• place of gainful activity
• posting for a maximum of 12 months
• prolongation for further 12 months
• normally exercise of an activity in more than
  one Member State -gt State of residence
• problems in case of termination of the activity
• agreement on exceptions

24
Applicable legislation Reg. 883/2004

• Most important changes
• Legislation of the previous state of activity in
  case of receipt of short term benefits in cash
• For all non active persons the legislation of the
  state of residence applies
• 24 months of posting (no E 102 any more)
• Normally exercise of an activity in more than one
  Member State legislation of State where a
  substantial part of activity is exercised

25
Applicable legislation - Problems

• Unsolved problems
• Retroactive corrections to achieve lawful status
• Impact of labour law and workers protection on
  social security
• Obligation of employer without any representation
  in the state of exercise of the activity to
  information and to pay the contributions

26
Sickness benefitsReg. 1408/71

• Benefits in kind under the legislation of the
  state of residence or stay
• No special provisions for entitlement under the
  freedom to provide services
• Benefits in cash under the legislation of the
  competent state

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Sickness benefitsReg. 883/2004

• Important amendments (including those brought by
  Reg. 631/2004 to Reg. 1408/71)
• Equalisation of entitlements for all persons
  (already since 1.6.2004)
• European Health Insurance Card (already since
  1.6.2004)
• More rights for frontier workers
• New cost reimbursement provisions
• But again no codification of rights under the
  freedom to provide services

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Equalisation of entitlements

• No difference between employed or self-employed
  persons / pensioners / stay abroad of employed
  persons / students / holidays (since 1.6.2004)
• Entitlement depends on nature of the benefit and
  the expected length of the stay
• Direct contact to the service providers (doctors,
  hospitals) abroad (since 1.7.2004)
• E 112 authorisation has to be granted if
  treatment cannot be given within a time-limit
  which is medically justifiable (Reg. 883/2004)

29
European Health Insurance Card

• New since 1.6.2004 EHIC or replacement form
• States with transition period (AT, IT, LV, LT,
  MT, NL. PL, PT, SK, HU, UK, CY) introduction at
  the latest an 1.1.2006
• In many Member States combination with national
  cards
• Since 1.6.2004 in any case new E 111 after end
  of transition period for a Member State
  Replacement form

30
More rights to frontier workers

• Family members (like active frontier workers)
  automatic choice between benefits in state of
  residence or employment if no restriction in
  Annex III
• Retired frontier workers right to continue
  treatments already begun in state of employment
• Retired frontier workers continued right of
  choice if frontier worker during 2 years of the
  last 5 years and entry in Annex V
• More rights also for pensioners who receive
  treatment in the competent state entry in Annex
  IV

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Reimbursement

• Fight against inequalities especially in case of
  pensioners
• Principle real cost refund
• Lump-sum of 85 , state of residence costs of E
  112, competent state pays all other benefits
• Lump-sum of 80 , if competent state pays all
  benefits in its territory (Annex IV), E 112 costs
  by state of residence, competent state pays all
  other costs of treatment outside the state of
  residence

32
PensionsReg. 1408/71

• Important principles
• Aggregation for entitlement
• If aggregation is necessary calculation of
  theoretical amount for all periods and then
  pro-rata
• If aggregation is not necessary national or
  pro-rata-pension (highest amount)
• Insurance periods lt 12 months other state has
  to pay
• Equalisation of requests

33
Accidents at work and occupational diseases -
Reg. 1408/71

• Benefits in kind (e.g. treatment after an
  accident) same principles as in case of
  sickness
• Accident pensions are paid by the state where the
  accident occurred or in which the last period of
  exposition is reckoned
• Internal pro-rata of costs in case of special
  lung diseases (sclerogenic pneumoconiosis)

34
Pensions and accidents at work or occupational
diseases - Reg. 883/2004

• No major amendments
• Accident insurance No pro-rata in case of
  sclerogenic pneumoconiosis
• Pensions Equalisation of requests still open if
  information is missing
• Pensions Anti-Cumulation partition of
  deductible amount and not any longer of the
  amount of the benefit which will be suspended
• Pensions Problems with national reforms (funded
  schemes)

35
Unemployment benefitsReg. 1408/71

• Exportation max. 3 months receipt of benefits
  in previous state of employment for 4 weeks,
  return, otherwise loss of entitlement
• Frontier worker unemployment benefit under
  legislation of state of residence
• Seasonal workers either stay in state of
  employment, export of unemployment benefit for 3
  months or immediately unemployment benefit from
  state of residence

36
Unemployment benefitsReg. 883/2004

• Exportation same conditions, but 3 3 months
• Frontier workers unemployment benefit from state
  of residence but search of employment also in
  previous state of employment
• Seasonal workers and frontier workers
  reimbursement of unemployment benefit by previous
  state of employment 3 months 2 months (if
  insurance 12 months during last 24 months)

37
Family benefits - Reg. 1408/71

• Difference between active persons (all family
  benefits) and pensioners (only family allowances)
• Priority of gainful activity over residence
• Differential amount by state which has not the
  priority

38
Family benefits - Reg. 883/2004

• Clear new provision, identical for all persons
  for all benefits residence is not relevant
• Clear hierarchy of competences
• Gainful active persons
• Pensioners
• Entitlement only due to residence
• In case of entitlements of the same type -
  residence
• Suspended competence differential amount

39
Different other amendments by Reg. 883/2004

• Also in other fields essential amendments
• Replacement of data exchange by electronic
  exchange
• Collection of contributions and recovery of undue
  benefits directly applicable

40
First assessment

• Has the simplification been successful?
• XI in stead of VIII Annexes!
• Various possibilities for options in sickness
  insurance
• Complex provisions in the field of unemployment
• No solutions for new social risks, unresolved
  questions
• Decisions of ECJ not all transformed
• Central provision on equalisation of facts
• Central provision on aggregation
• Provisions and Annexes simplified
• Start for special co-ordination of long term
  care benefits

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Farewell to Reg. 1408/71?

• No! Complex parallelism of Reg. 1408/71 and Reg.
  883/2004
• Reg. 1408/71 remains applicable for
• Reg. 859/2003 concerning third country
  nationals
• EEA-Agreement
• Agreement on free movement in relation to CH
• Reg. 1661/85 concerning Greenland
• No farewell to Reg. 1408/71 but farewell to
  simplification!