COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Initiative to partially revise Regulation (EC) No 883/2004 of the European Parliament and of the Council on the coordination of social security systems and its implementing Regulation (EC) No 987/2009

EN EN
EUROPEAN
COMMISSION
Brussels, 16.12.2016
SWD(2016) 460 final/2
PART 1/6
Corrigendum
Annule e remplace le document SWD(2016) 460 final Part 1/6 du 13 décembre 2016. Erreur
cléricale sur la page de couverture.
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT
Initiative to partially revise Regulation (EC) No 883/2004 of the European Parliament
and of the Council on the coordination of social security systems and its implementing
Regulation (EC) No 987/2009
Accompanying the document
Proposal for a regulation of the European Parliament and of the Council
amending Regulation (EC) No 883/2004 on the coordination of social security systems
and regulation (EC) No 987/2009 laying down the procedure for implementing
Regulation (EC) No 883/2004
(Text with relevance for the EEA and Switzerland)
{COM(2016) 815 final}
{SWD(2016) 461 final}
Europaudvalget 2016
KOM (2016) 0815
Offentligt
EN 2 EN
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT
Initiative to partially revise Regulation (EC) No 883/2004 of the European Parliament
and of the Council on the coordination of social security systems and its implementing
Regulation (EC) No 987/2009
Accompanying the document
Proposal for a regulation of the European Parliament and of the Council
amending Regulation (EC) No 883/2004 on the coordination of social security systems
and regulation (EC) No 987/2009 laying down the procedure for implementing
Regulation (EC) No 883/2004
(Text with relevance for the EEA and Switzerland)
TABLE OF CONTENTS
1. INTRODUCTION AND BACKGROUND ................................................................4
1.1. EU rules on social security coordination ...........................................................4
1.2. Social and economic context .............................................................................5
1.3. Policy context.....................................................................................................7
2. OBJECTIVES & SCOPE OF THE INITIATIVE .....................................................10
2.1. Objectives of the review ..................................................................................10
2.2. Scope of the review..........................................................................................10
2.3. Methodology used for the purpose of the impact assessment..........................15
2.4. Stakeholder feedback.......................................................................................17
2.5. Definitions........................................................................................................18
3. WHY SHOULD THE EU ACT?...............................................................................18
4. LONG-TERM CARE BENEFITS.............................................................................19
4.1. Current Coordination Rules for Long-term Care Benefits ..............................19
4.2. Problems with the coordination of long-term care benefits.............................20
4.3. Baseline scenario .............................................................................................24
4.4. Objectives for coordination of long-term care benefits coordination rules .....24
4.5. What are the various options to achieve the objectives concerning long-
term care benefits? ...........................................................................................25
4.6. Stakeholder Support.........................................................................................28
4.7. What are the Impacts of the Different Options? ..............................................29
EN 3 EN
5. UNEMPLOYMENT BENEFITS ..............................................................................39
5.1. Current Coordination Rules for Unemployment Benefits ...............................39
5.2. Aggregation of periods for unemployment benefits ........................................42
5.3. Export of Unemployment Benefits ..................................................................66
5.4. The rules on the provision of unemployment benefits for frontier and other
cross-border workers........................................................................................80
6. ACCESS BY ECONONICALLY INACTIVE MOBILE CITIZENS TO
CERTAIN SOCIAL BENEFITS.............................................................................104
6.1. Introduction....................................................................................................104
6.2. Problems with access by economically inactive mobile citizens to certain
social benefits.................................................................................................105
6.3. Baseline Scenario...........................................................................................107
6.4. Objectives for the review of the rules on access by economically inactive
citizens to certain social benefits ...................................................................108
6.5. Options for addressing the problems of access by economically inactive
mobile citizens and jobseekers to certain social benefits...............................109
6.6. Stakeholder support .......................................................................................111
6.7. What are the impacts of the Different Options ..............................................112
6.8. Conclusions....................................................................................................123
7. FAMILY BENEFITS ..............................................................................................124
7.1. Current Coordination Rules for Family Benefits...........................................124
7.2. Problems with the export of family benefits and drivers behind them..........125
7.3. What are the various options to achieve the objectives concerning export
of family benefits ...........................................................................................133
7.4. Stakeholder Support.......................................................................................139
7.5. What are the Impacts of the Different Options..............................................140
8. OVERALL CONCLUSION....................................................................................163
9 HOW WOULD IMPACTS BE MONITORED AND EVALUATED?............171
10. ANNEX I: PROCEDURAL INFORMATION……………………………….178
11. ANNEX II: STAKEHOLDER CONSULTATION…………………………...182
12. ANNEX IIII: WHO IS AFFECTED AND HOW……………………………..202
EN 4 EN
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT
Initiative to partially revise Regulation (EC) No 883/2004 of the European Parliament and of
the Council on the coordination of social security systems and its implementing Regulation (EC)
No 987/2009
1. Introduction and background
1.1. EU rules on social security coordination
The right of EU citizens to freely move to and live in any EU country, along with their family
members, is one of the four fundamental freedoms enshrined in EU law and a cornerstone of EU
integration.
Free movement would not be possible without the guarantee that citizens do not lose their social
security protection when moving to another Member State. A system of social security coordination is
essential if freedom of movement is to work in practice. It is for this reason that Article 48 of the
Treaty on the Functioning of the European Union (TFEU) has assigned to the legislator the
competence to make arrangements to secure the right to benefits and the payment of the benefits to
persons resident in another EU Member State. EU rules on social security coordination have existed
since the 1950s for this purpose. They may be considered the "oil" that eases the wheels of free
movement, facilitating the process of mobility but not compelling or incentivising mobility itself. 1
The essence of social security coordination is about 'linking' a person to a social security system,
determining where he or she needs to pay social security contributions and where to claim for social
security benefits, if required. It also ensures that previous periods of insurance, work or residence in
other countries are taken into account when a person claims benefits.
The rules coordinate rather than harmonise: they do not address the national conditions for affiliation
or entitlement, nor do they envisage introducing a minimum level of protection, or oblige Member
States to introduce new benefits in their social security systems. Member States therefore retain the
autonomy to design their social security systems to meet national requirements. There remain
significant differences in both the range and level of social protection provided in different EU
Member States, which can be a source of political tension and public debate. The coordination rules
offer no guarantee that transferring one's residence or professional activities to another Member State
is neutral as regards social security. Given the disparities in social security legislation, such transfer
may work to one's advantage or not, depending on the circumstances.
The rules on the coordination of social security have been adapted several times to ensure that they
reflect legal and societal changes in Europe.2
The current rules, Regulation (EC) No 883/2004 and the Implementing Regulation (EC) No 987/2009,
came into force on 1 May 2010 and now apply to both workers (and their family members) and
citizens who are, or have been, covered by the social security legislation of a Member State and who
are in a cross border situation.
1
Benton, M., Reaping the benefits? Social security coordination for mobile EU citizens, MPI Policy Brief.
Series, November 2013, http://www.migrationpolicy.org/pubs/MPIEurope-SocialSecurity-MobileCitizens.pdf.
2
The current rules can be found in Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the
coordination of social security systems, OJ L 166, 30.4.2004, p. 1; Regulation (EC) No 987/2009 of the European Parliament and of the
Council of 16 September 2009 laying down the procedure for implementing Regulation (EC) No 883/2004 on the coordination of social
security systems, OJ L 284.
EN 5 EN
EU law, in particular Regulation (EC) No 883/2004, establishes four key principles which subject to
limited exceptions must be observed by all national authorities when applying national social security
legislation:
a) non‐discrimination on grounds of nationality;
b) the aggregation of periods of insurance, employment or residence;
c) the waiving of residence rules meaning that benefits in cash can be exported to another
Member State; and
d) the application of a single legislation in terms in respect of liability to contribute and
entitlement to benefits.
The material scope of the Regulation (EC) No 883/2004 extends to all legislation concerning the
following branches of social security: sickness (including long-term care benefits); maternity and
equivalent paternity benefits; invalidity pensions; old-age pensions; survivors’ benefits; benefits in
respect of accidents at work and occupational diseases; death grants; unemployment benefits; pre-
retirement benefits; and family benefits. This list is exhaustive. Consequently, a branch of social
security which is not mentioned is in principle outside the scope of the regulation. This is the case, for
instance, for housing allowances or social assistance.
Over and above these social security benefits, the coordination regulation also applies to special non-
contributory cash benefits listed in an annex (Annex X to Regulation (EC) No 883/2004).
It should also be noted that since 1 June 2003, citizens from third countries who are legally residing in
an EU Member State and whose situation is not confined within a single Member State also have
rights under the EU social security coordination rules.3
1.2. Social and economic context
With 11 million EU citizens of working age (over 14 million4
for all ages) resident in another Member
State, free movement – or the ability to live, work and study anywhere in the Union – is the EU right
most cherished by Europeans.5
The main motivation for EU citizens to make use of free movement is
work-related, followed by family reasons.
Today, 8.3 million EU citizens of working age are economically active6
and live in another EU
country, representing 3.4% of the total EU labour force7
. Furthermore, 1.6 million frontier workers
and other cross-border workers8,9
work in a Member State other than the one in which they reside, and
some 1.45 million workers are posted10,11
. Third-country nationals who live and work in more than
one Member State are also part of the intra-EU mobile labour force and therefore participate to the
much needed mobility of workforce across EU countries12,13
.
3
Regulation (EU) No 1231/10 extends the effect of Regulation (EC) No 883/2004 on the coordination of social security systems to third
country nationals in a cross-border situation who would not otherwise be covered by these rules. This instrument replaced Regulation (EC)
No 859/2003 which extended the earlier Regulation (EC) No 1408/71 on social security coordination to third country nationals.
4
14.3 million, EU LFS data 2014.
5
On 1 January 2014, 17.9 million citizens were living in a Member State other than their own. In Eurobarometer surveys, more than two
thirds of Europeans consider that free movement of people within the EU has economic benefits for their country (67%).
6
Economically active: working or looking for work.
7
There are 8.3 million active EU28 nationals living in another EU Member State, while 9.3 million active EU28 nationals live in another
EU/EFTA Member State. There are 8.4 million active EU28/EFTA nationals living in another EU Member State, while 9.4 million active
EU28/EFTA nationals living in another EU/EFTA Member State (EUROSTAT, EU LFS 2015)
8
Cross-border workers are those who work in a country different than the one in which they reside; frontier workers are cross-border
workers who return to their place of residence at least once a week.
9
1.2 million towards EU countries and 0.4 million towards EFTA countries.
10
Posted workers are those who have their employment contract in the home country, but work temporarily in another country, in the
framework of a cross-border service provision.
11
Data based on Portable Documents A1 (PD A1) issued for posting workers to other Member States in 2014, collected through the
Administration Commission for the Coordination of Social Security Systems and analysed in European Commission, Report on A1 portable
documents issued in 2014 (2015).
12
Though there is a lack of reliable statistical data, as shown in the EMN study (2013), Intra-EU mobility of third-country nationals
EN 6 EN
1.2.1 Free movement of workers
Recent trends in free movement of workers14
Of the 8.3 million active EU movers, around 4.3 million have moved to their current country of
residence in 2004 or later ('recent movers'): over one third of these recent movers reside in the United
Kingdom and around one fifth in Germany, and other important countries of recent active movers are
Spain and Italy15
.
While still significantly below the level of the US, intra-EU labour mobility further increased between
2012 and 2014. Flows from East to West continue to account for the bulk of movements, to a great
extent driven by differences in GDP per capita and wages16
: in 2013, about two-thirds of the intra-EU
mobility flows were from Eastern Member States to the West17
. Labour mobility has attenuated
disparities in unemployment, and was reflected in the increasing importance of South to North
mobility, from countries more affected by the financial and economic crisis to countries that were less
affected: while in 2008 about 8% of the EU mobility flows to the main destination countries
originated in the South, by 2013 this doubled to 17%18
. Spain, Italy, and France, where large numbers
of ‘older’ waves of EU movers still reside, have become less important as destination countries. In
terms of total inflows, as it has been the case for the past 10 years, the United Kingdom remains the
most important destination country, followed by Germany.
Figures from 2012 and 2014 confirm a slight decrease in mobility of young people compared to older
ones, most likely due to high rates of youth unemployment also in important destination countries due
to the economic crisis. Between 2008 and 2012, following the onset of the economic crisis, there has
been a large increase in the share of highly educated people moving to another country (among all
EU-28/EFTA movers). This share has not increased further between 2012 and 2014.
Characteristics of mobile EU citizens
Mobile EU citizens19
are more likely to be of working age (15-64) than nationals of host countries
(78.0% vs. 65.7%); those of working age are more likely to be in employment (69.2%) than nationals
(65.2%) and third country nationals (53.2%); EU mobile citizens have a significantly higher activity
rate than nationals (78.3% versus 72.3%), although in some prominent countries of residence, like
Germany, France and Spain, employment among recent mobile EU citizens is lower than among
nationals, while in some other prominent destinations like the United Kingdom and Italy the
employment rate of recent EU mobile is actually considerably higher than that of nationals20
. Mobile
EU citizens also have a slightly higher unemployment rate (11.7% versus 9.9%), and more recent
mobile EU workers even higher: this is likely to be linked to the fact that mobile EU workers, and
immigrants in general, tend to be more vulnerable to business-cycle fluctuations than natives, and
more recently arrived mobile EU workers more than long-established ones.21
Cross-border workers
In addition to the 8.3 mobile EU workers, who work and live in another country, cross-border (or
frontier) workers are EU citizens who live in an EU country and work in another one. In 2014, there
http://ec.europa.eu/dgs/home-affairs/what-we-do/networks/european_migration_network/reports/docs/emn-studies/intra-eu-mobility/emn-
synthesis_report_intra_eu_mobility_final_13th_august_2013.pdf
13
Highly mobile workers represent a specific group of workers; they may belong to different categories (e.g. posted workers, workers
working in more than one Member State…) and may be particularly present in certain sectors. For instance, around 2 million workers are
engaged in international road transport operations and carry out work on the territory of different Member States, often only for brief periods
of time (Commission estimate based on the number of Community licences) .
14
For more information, see 2015 Annual Report on Labour Mobility, European Commission (2015).
15
See Figure 1 in Annex I.
16
For the importance of GDP in explaining flows, see European Commission (2015), Labour Market and Wage Developments in Europe.
17
Calculations based on 2015 Annual Report on Labour Mobility, cit. above.
18
Calculations based on 2015 Annual Report on Labour Mobility, cit. above.
19
A total of 11 million EU/EFTA citizens of working age live in another EU Member State than their country of citizenship (which
comprises the 8.4 million living and economically active).
20
See 2015 Annual Report on Labour Mobility, cited above.
21
EUROSTAT/LFS (2013-2014); 2015 Annual Report on Labour Mobility, cit. above.
EN 7 EN
were about 1.6 million people who worked in a different EU or EFTA country from the one in which
they resided: about 1.2 million worked in another EU country (accounting for 0.6% of the employed
EU population), and 382.000 worked in an EFTA country (making up 5.4% of the EFTA employed
population).
The analysis above has been prepared with reference to data from 2014. As this report had been
approved by the Regulatory Scrutiny Board prior to the publication of the Annual Report on Labour
Mobility 2016, the authors have not substantially revised the data described above to include the latest
statistics available in relation to the reference year 2015. However, it should be noted that in 2015
there was a slight increase in the numbers of working-age EU-28 citizens who are working or seeking
work in one of the 28 EU Member States other than their country of citizenship to 8.5 million. This
variation is not anticipated to have a material impact upon the analysis contained in this report.
1.3. Policy context
Evidence points strongly to the economic benefits of labour mobility:22
the single market provides
broader economic opportunities than the sum of segmented markets, and labour mobility helps correct
imbalances between high and low unemployment regions by matching labour supply with demand.
This contributes to job creation, promoting economic growth,23
competitiveness and innovation.24
Labour mobility also helps to address skills mismatches across borders (skills gaps). This has been
particularly important in the context of the current economic and unemployment crisis where some
countries are facing higher unemployment (in particular amongst young highly qualified people),
while others face a shortage of skilled workers due to demographic trends within their own
population. Within the European Monetary Union, mobility may serve to mitigate cyclical adjustment
measures in response to asymmetric shocks25
. Intra-EU labour mobility may have prevented even
stronger spikes in unemployment during the crisis26
, and empirical analysis also suggests that intra-
EU labour mobility has played a significant equilibrating role during the crisis notwithstanding the
low levels of labour mobility.27
Available estimates suggest that up to a quarter of the asymmetric
labour market shock could be absorbed by migration within a year28
.
Between 2004 and 2009, the GDP of EU-15 has increased by around 1%29
in the long-run as a result
of mobility30
and even more in major destination countries, such as Ireland, the United Kingdom,
Spain or Italy. The effect of mobility since 2004 on the unemployment rate and wages in the
destination countries has been estimated to be marginal, at least in the long-run31
. The impact tends to
be short-term, moderate and concentrated on specific groups, in particular the low-skilled workers,
whilst it could also lead to reductions in the price of services and to consumer surpluses.32
22
See review of studies in European Commission, ESDE 2011 (chapter 6); EPC (2013);
23
Baas and Brücker, The macroeconomic consequences of migration diversion: evidence for Germany and the UK, 2012, NORFACE ERA-
NET (TEMPO).
24
European Commission, Mobile researchers lead to higher research impacts and more innovation, 2015
https://ec.europa.eu/commission/content/mobile-researchers-lead-higher-research-impacts-and-more-innovation_en.
25
Labour Market and Wage Developments in Europe 2015, European Commission.
26
ESDE 2015.
27
Chaloff, Jonathan, et al. (2012), “Free labour mobility and economic shocks: the experience of the crisis”, in OECD, Free Movement of
Workers and Labour Market Adjustment: Recent Experiences from OECD Countries and the European Union, OECD Publishing. The
impacts of labour mobility on unemployment in the EU27/EFTA area may have been reduced by about 6% at the maximum during the
crisis, yet this has to be compared with the low share of mobile workers.
28
OECD (2014), Matching Economic Migration with Labour Market Needs, OECD Publishing, Paris.
29
"The level of output in the EU-15 may have risen by about 0.7 per cent over the six year period to 2009 as a result of the population
movements, adding about 0.1 percentage points to GDP growth per annum on average" NIESR 2011, Labour mobility within the EU - The
impact of enlargement and the functioning of the transitional arrangements.
30
On the positive effects of intra-EU labour mobility following recent enlargements, see, for instance, European Commission, Report from
the Commission to the Council on the Functioning of the Transitional Arrangements on Free Movement of Workers from Croatia (2015)
31
NIESR 2011
32
European Commission, ESDE 2011, chapter 6, pp.275-276; Constant A.F., Do migrants take the jobs of native workers? IZA (2014);
Perini G, Do immigrant workers depress the wages of native workers? IZA (2014); M. Foged and G. Peri, Immigrants’ Effect on Native
Workers: New Analysis on Longitudinal Data*, IZA Discussion Paper No. 8961 (March 2015), arguing that immigration had positive effects
on native unskilled wages, employment and occupational mobility; and Dustmann, C., Frattini, T. and Preston, I. (2013), “The Effect of
Immigration along the Distribution of Wages”, Review of Economic Studies, 80 (1), 145–173, arguing that although immigration depresses
native wages below the 20th percentile of the wage distribution, it leads to slight wage increases in the upper part of the wage distribution,
EN 8 EN
Finally, to EU citizens, the wider freedom of movement is the right most closely associated with EU
citizenship33
; 56% of European citizens see it as the most positive achievement of the EU34
; 67% of
EU citizens think that free movement brings economic benefits for their country's economy35
.
Notwithstanding its overall economic benefits, the impact of labour mobility on the ground is subject
to debate both in countries of destination and countries of origin. Concerns have been raised, notably
in some countries of destination, in relation to potential negative effects of free movement of workers
and posting of workers such as the exploitation of mobile EU workers36
with adverse effects on local
jobs and wages, pressure on local services, socio-economic inclusion, and poverty migration (mobility
of unskilled workers who are at risk of losing their job and representing a welfare burden). Also, in
spite of evidence to the contrary37
, concerns have sometimes been raised about the risk of benefit
tourism, i.e. the idea that mobility is driven by differences in welfare benefits, or by fraudulent
behaviour.
Specific concerns have also been raised in some countries of origin, in relation to the adverse long-
term effects on economic development and consequences for access to essential services such as
healthcare, represented by the sudden outflow of workers, and particularly young workers (youth
drain), and highly educated workers (brain drain), including health workers38
. This is only partially
compensated by return migration (which made up 20% of migration flows in 2013) or remittances.
A general challenge, as highlighted above, is the fact that these popular concerns are difficult to
substantiate with hard facts and data, and often appear to be based on negative perceptions and
anecdotal accounts rather than well-founded on evidence. They also do not always acknowledge the
distinction between requirements imposed by EU law and the responsibility of Member States to
exercise national competencies to enforce the correct application of the rules and invest in detection
and prevention of abusive behaviour.
Commission President Juncker, in his Political Guidelines, has underlined that "free movement of
workers is one of the pillars of the internal market", a fundamental right enshrined in the Treaty.
However, at the same time he also underlined that the internal market must be fair and that there is no
place for abuse and fraud in the EU39
.
One of the Commission's priorities is work towards a deeper and fairer Internal Market. In the 2015
Work Programme, it has been underlined that "It will be important to support labour mobility,
especially in cases of persistent vacancies and skills mismatches, including across borders, while
supporting the role of national authorities in fighting abuse or fraudulent claims."
A balanced approach to mobility is therefore needed both in order to maximise the benefits, while
minimising possible unwanted consequences: measures should be taken to facilitate mobility, but
efforts should also focus on supporting national authorities to prevent fraud, abuse and error and
renewing efforts to ensure rules are clear, fair and enforceable. The Commission has indicated that it
will help public authorities to better implement and enforce existing rules and that it will revise the
rules where necessary to adapt them to the economic and social challenges raised by today’s mobility.
Achieving a modernised system of social security coordination that responds to the social and
economic reality in Member States has been one of the central drivers for the Commission to continue
the modernisation process of social security coordination that started more than a decade ago.
and has an overall positive wage effect. Bratsberg and Raaum, Immigration and Wages: Evidence from Construction, 2011, NORFACE
ERA-NET (MI3).
33
Flash Eurobarometer (EB) 365, February 2013 http://ec.europa.eu/public_opinion/flash/fl_365_en.pdf.
34
Standard EB 79, May 2013 http://ec.europa.eu/public_opinion/archives/eb/eb79/eb79_en.htm.
35
Flash Eurobarometer 365 (2013).
36
See European Union Agency for Fundamental Rights (2015), Severe labour exploitation: workers moving within or into the European
Union.
37
Giulietti, C., The welfare magnet hypothesis and the welfare take-up of migrants, IZA (2014).
38
Health professionals rank first on the number of decisions taken on recognition of professional qualifications for the purpose of permanent
establishment within the EU Member States, EEA countries and Switzerland
(http://ec.europa.eu/internal_market/qualifications/regprof/index.cfm?action=stat_ranking&b_services=false).
39
http://ec.europa.eu/commission/2014-2019/president_en.
EN 9 EN
Achieving greater clarity over the social security coordination system is an important step to face the
challenges and controversies that exist over intra-EU mobility and to address demographic challenges
ahead of us.
Coherence with other EU policies
This initiative may be seen to complement a number of existing, recent and planned initiatives in this
policy field including:
- Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the
right of citizens of the Union and of their family members to move and reside freely within the
territory of the Member States;40
- the Communication on Free movement of EU Citizens and their families: five actions to make a
difference (COM(2013)837final);
- the 2013 citizenship report (COM(2013)269);
- the Directive 2014/54/EU on measures facilitating the exercise of rights conferred on workers in
the context of freedom of movement for workers;
- the proposal (COM/2014/06final) for a regulation on a European network of Employment
Services, workers' access to mobility services and the further integration of labour markets, which
aims to enhance access of workers to intra-EU labour mobility support services, thus supporting
fair mobility and increasing access to employment opportunities throughout the Union;
- the Decision (EU) 2016/344 of the European Parliament and of the Council of 9 March 2016 on
establishing a European Platform to enhance cooperation in tackling undeclared work , which will
bring together different national enforcement authorities of the EU Member States to exchange
best practices, develop expertise and analysis and support cross-border operational actions;
- the proposal for a Directive of the European Parliament and of the Council (COM(2016) 128
final) amending Directive 96/71/EC of the European Parliament and of the Council of 16
December 1996 concerning the posting of workers in the framework of the provision of services
- The EU policy framework for legal migration, including the EU Blue Card Directive41
and Single
Permit Directive,42
measures for seasonal workers,43
intra-corporate transferees,44
for students and
researchers45
, measures for family reunification46
and long term residents;47
- the ongoing work on a comprehensive European Agenda on Migration, which is aimed at building
up a coherent and comprehensive approach to reap the benefits and address the challenges
deriving from migration, including make Europe an attractive destination for the talent and
entrepreneurship of students, researchers and workers;
40
Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and of their
family members to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing
Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC.
41
Council Directive 2009/50/EC of 25 May 2009 on the conditions of entry and residence of third-country nationals for the purposes of
highly qualified employment.
42
Directive 2011/98/EU of the European Parliament and of the Council of 13 December 2011 on a single application procedure for a single
permit for third-country nationals to reside and work in the territory of a Member State and on a common set of rights for third-country
workers legally residing in a Member State.
43
Directive 2014/36/EU of the European Parliament and of the Council of 26 February 2014 on the conditions of entry and stay of third-
country nationals for the purpose of employment as seasonal workers.
44
Directive 2014/66/EU of the European Parliament and of the Council of 15 May 2014 on the conditions of entry and residence of third-
country nationals in the framework of an intra-corporate transfer.
45
Council Directive 2004/114/EC of 13 December 2004 on the conditions of admission of third-country nationals for the purposes of
studies, pupil exchange, unremunerated training or voluntary service. In March 2013, the Commission made a proposal to further improve
current rules, including by setting clearer time limits for national authorities to decide on applications, providing for increased access to the
jobseeking markets, and facilitating intra-EU movement.
46
Council Directive 2003/86/EC of 22 September 2003 on the right to family reunification.
47
Council Directive 2003/109/EC of 25 November 2003 concerning the status of third-country nationals who are long-term residents
EN 10 EN
- ongoing work on the European Network of Employment Services strengthening the European job
mobility portal (EURES) and the cooperation between employment services;
- ongoing work on the Investment Plan for Europe;
- The planned Internal Market Strategy for Goods and Services.
- Ongoing work to implement the Electronic Exchange of Social Security Information (EESSI): an
IT system that will help social security bodies across the EU exchange information more rapidly
and securely – as required by Regulation (EC) No 883/2004 and its Implementing Regulation;
- The planned initiative for a Fresh Start to address the challenges of work-life balance faced by
working families;
- The planned review of the disability strategy 2010-2020 assessing progress to ensure the effective
implementation of the UN Convention on the Rights of Disabled Persons across the EU.
In addition, work on this initiative may be seen in the context of the deepening of EMU, and policies
addressing demographic ageing and structural reform in labour markets while promoting a social
agenda to support the economic recovery ensuring a Triple A social rating for Europe.
Furthermore, work has been conducted with regard to the European Parliament resolution of 16
January 2014 calling for the respect for the fundamental right of free movement in the EU.
2. OBJECTIVES & SCOPE OF THE INITIATIVE
2.1. Objectives of the review
The key policy objective of this initiative is to continue the modernisation of the EU Social Security
Coordination Rules by further facilitating the exercise of citizens' rights while at the same time
ensuring legal clarity, a fair and equitable distribution of the financial burden among the institutions
of the Member States involved and administrative simplicity and enforceability of the rules. It does
not envisage granting new rights to EU citizens but on the contrary clarifying the current methods of
coordination.
This initiative serves to facilitate the exercise of the right to free movement by ensuring social
security coordination is efficient and effective and does not act as a deterrent to free movement. It is
in the interests of all parties to design co-ordination rules that allow full exercise of rights of citizens
whilst ensuring coordination requirements for both citizens and Member States are clear and
transparent and thereby easy to apply and enforce. It is also important the rules are fair (in particular
in relation to the relative balance of responsibility between Member States who receive or have
received social security contributions and the obligation to pay benefits) and that perceptions of
unfairness are properly investigated and addressed when they arise. Further, the rules should be
efficient in terms of cost, administrative burden and risk of fraud or administrative error. Finally the
rules should be effective in relation to meeting the overall goals of coordination in particular
safeguarding the continuity of social security protection as citizens move from from one Member
State to another.
This overarching policy objective underpins and informs all elements of this partial review, however,
more specific objectives are included in each distinct area under consideration.
2.2. Scope of the review
To achieve this overall objective, this impact assessment report considers the impact of possible
improvements to the rules in four distinct areas:
• Long-term care benefits,
• Unemployment benefits,
• Access to social benefits for economically inactive mobile EU citizens,
EN 11 EN
• Family benefits.
These areas have been identified following the Commission's services assessemment of the extent to
which the current legal framework still ensures the effective coordination of social security rights.
Regulation (EC) No 883/2004 and the Implementing Regulation (EC) No 987/2009 came into force
on 1 May 2010. They contain formal review obligations which have obliged the Administrative
Commission for Social Security Coordination ('Administrative Commission')48
and the Commission
Services to review and assess the implementation and effectiveness of particular provisions contained
within the EU Social Security Rules and obligations undertaken by declaration.
In addition to these formal review obligations, the Commission's work has been informed by ongoing
dialogue with the Member States within the framework of the Administrative Commission and of
course feedback and complaints from citizens, social partners and other stakeholders, which identify
on the one hand where the rules are effective and on the other hand where problems arise. In April
2011, one year after the adoption of Regulations (EC) nos 883/2004 and 987/2009, Member States
took part in an informal evaluation exercise in Budapest. This discussion concluded that while the
rules were functioning well, there were some areas where improvements were necessary, in particular
in the field of long-term care benefits, where the lack of a bespoke legislative framework for
coordination was causing difficulties in practice.
In the field of unemployment benefits, the Council took the decision in December 2011 to review the
effect of adding a new provision on unemployment benefits for self-employed frontier workers within
a period of two years after its application. At this meeting and at the request of a majority of Member
States, the Commission issued a declaration that the review would be an occasion to open up a
broader discussion on the current coordination provisions in the field of unemployment benefits and
to assess the need for a review of its principles.
In addition, in relation to the views of stakeholders, the Commission's work has been informed by
reports from expert networks, such as TreSS and FreSsco, in particular the 2013 Think Tank Report
Key challenges for the social security regulations in the perspective of 2020.49
In light of the difficulties relating to long-term care benefits and unemployment benefits (the
competence for paying unemployment benefits to frontier workers and export of unemployment
benefits), a first analysis already took place in 2013/2014 on the coordination of these benefits. The
Impact Assessment Board gave a positive opinion on the Impact Assessment Report on 21 January
2014. In view of the finishing mandate of the Barroso II Commission, the adoption of any legislative
measures was not pursued in 2014.
Meanwhile, following developments in the Court's case law and in the socio-economic reality the
scope of the partial review was expanded to also respond to challenges in the field of family benefits
and access of economically inactive EU citizens to social benefits.
A Problem Tree showing the inter-relationship between the problems and drivers across the four
strands of this revision exercise is set out below together with a option tree summarising the options
that have been considered for each strand and how they relate to the general and specific policy
objectives.
For coherency reasons, the assessment of the '2014' and '2015' policy options has been combined in
this Impact Assessment report, with the underlying data for the '2014' analysis updated where
appropriate.
48
The Administrative Commission is comprised of Member States' representatives. Norway, Iceland, Lichtenstein and Switzerland
participate as observers. The committee is responsible for dealing with administrative matters, questions of interpretation arising from the
provisions of regulations on social security coordination, and for promoting and
developing collaboration between EU countries. The European Commission also participates in the meetings and provides its Secretariat.
49
The report may be consulted at:
http://www.tress-network.org/TRESS/EUROPEAN%20RESOURCES/EUROPEANREPORT/trESSIII_ThinkTank%20Report%202013.pdf
EN 12 EN
Finally, the revision will also include a number of proposals for technical amendments to the
coordination rules. The amendments will clarify the rules, but will not substantially revise them and
are not subject to a formal Impact Assessment. For further details of these proposals please see Annex
XX of this report.
EN 13 EN
Combined problem tree on the partial review of Regulation (EC) No 883/2004 of the European Parliament and of the Council on the
Coordination of Social Security Systems and its Implementing Regulation (EC) No 987/2009
EN 14 EN
EN 15 EN
2.3. Methodology used for the purpose of the impact assessment
For the purpose of this report, each section will summarise the economic,50
social and regulatory
impacts51
, of each policy option under consideration compared to the baseline scenario. In addition,
the analysis assesses other impacts which have been identified as relevant before making an overall
assessment of the effectiveness in achieving the specific objectives of the initiative, their efficiency
(cost-effectiveness/even burden sharing) and coherence with the general objectives of the EU.
In relation to social rights, the impact assessessment primarily examines the impact of an option in
relation to clarity, simplification and protection of rights.52
When assessing possible limitations in the
access of mobile EU citizens to certain benefits, the assessment refers to the maximum potential
impact, since Member States are always allowed to be more generous than what is prescribed in EU
law when granting benefits to mobile EU citizens. The impact on rights recognised under the EU
Charter of Fundamental Rights has also been assessed. 53
As regards economic impacts, the report focuses upon the direct costs for Member States for
providing social security benefits and the relative distribution financial costs between Member States.
In line with the legal basis for the EU Social Security Coordination rules the scope of the initiative is
to coordinate not harmonise social security legislation between Member States. Therefore, while the
impact of EU measures is assessed, this is distinguished from impact that already stems from
differences between Member State social security schemes. This means the options do not assess the
payment of 'contributions' by insured persons or employers (levies earmarked for social security
purposes) into national social security schemes before the contingency occurs.54
The impact on
taxation is also left aside, as under Regulation (EC) No 883/2004 only contributions are coordinated,
while general taxation is not. When assessing the economic impact of possible limitations in the
access of mobile EU citizens to certain benefits, the methodology assumes the maximum potential
impact were Member States to rely upon derogations which are permitted (but not required) by EU
law.
In addition, an assessment has been made of the other impacts associated with each option
specifically regulatory costs, the impact on the risk of fraud and abuse) and fair burden sharing
between Member States. In relation to secondary impacts, some cautious estimates of the impact upon
mobility flows have been done on the basis of studies in a selected number of States: however, also in
50
Quantified to the extent possible on the basis of the information in Annexes V, IX, X, XIII, XIV.
51
In line with the new better regulation guidelines it is essential that social aspects are considered on equal footing by the Commission
services and the Regulatory Scrutiny Board. In assessing social impacts, simplification and clarification of the coordination rules in
Regulation (EC) No 883/2004 and protection of rights of mobile EU workers have been assessed. This also includes possible effects with
regard to the risk of fraud and abuse. For the options concerning the competence for paying unemployment benefits to frontier and cross-
border workers, the re-integration into the labour market is also assessed.
52
Relating to policy domain v in the Impact Assessment Guidelines under the social pillar: Social protection,
health, coordination of social security and educational systems.
53
The rights deriving from the Charter of Fundamental Rights of the European Union against which the
options are assessed are the following:
- the protection of personal data (Article 8),
- freedom to choose an occupation and the right to engage in work in another Member State (Article 15);
- right to property (Article 17);
- non-discrimination (Article 21);
- best interests of the child (Article 24)
- the rights of the elderly (Article 25),
- integration of persons with disabilities (Article 26),
- the right to family and professional life (Article 33)
- social security and social assistance (Article 34);
- health care (Article 35);
- freedom of movement and residence (Article 45).
54
For instance, under the current situation as well as under each of the proposed options, a worker will continue to pay
contributions in the State in which he/she is insured. It should be noted the level of benefits paid and contributions imposed is a
matter of competence for the Member States and outside the scope of the EU social security rules.
EN 16 EN
light of the very low numbers of people who would be affected, such secondary impacts are estimated
to be marginal.55
Furthermore the report seeks to examine the overall impact of each option with reference to
coherence of each option with the general, specific objectives as set out in section 2.1 and depicted in
the option tree on page 12 of this report. Where relevant, this assessment also considers overall
coherence with the other EU policy initiatives and objectives referred to in section 1.3 of this report. 56
Each chapter of this report provides a summary and more detailed table of results of the impact of a
policy option. The degree to which options are relevant, effective and efficient are indicated on a scale
from one to three : ++ for a highly positive assessment, + for a moderate positive assessment, - for a
negative assessment. Where a option has both a negative and a postive aspect, a +/- is indicated,
highlighting the mixed impact. The sign 0 is used to indicate that the option is considered to be neutral
in comparison to the baseline scenario.
The combined effect of this analysis has been used to make an assessment of overall effectiveness and
overall efficiency. Effectiveness has been measured by a qualitive assessment of the effectiveness of
an option in achieving the the general and specific objectives and its score in respect of the social,
economic and other impacts referred to above. By contrast overall efficiency has been assessed by
reference to the overall effectiveness of each option compared to its financial impact (economic and
regulatory costs). The rationale used to underpin these overall assessments is explained in the
conclusions to each section of the report.
No impact on the competitiveness of specific sectors is foreseen by any of the options, as the subject
matter does not concern commercial activities of enterprises.57
The coordination rules are directly addressed to Member States and their institutions and only concern
the services provided under the public social security system. Small and medium size enterprises
(SMEs) are not directly affected. They will provide their services under the conditions set by the
national legislation. In the public online consultation, private organisations and public and private
employers had the opportunity to react.
Whilst it is true that mobility in itself entails movements between Member States and that these
movements are accompanied by vehicle emissions, no significant environmental impact58
is expected
from the options under consideration because of the marginal secondary impacts on mobility in
comparison to general mobility flows.
Several studies, using different analytical models and methodologies, have been used to prepare the
impact assessments.59
In general, the studies rely on a combination of data sourced through EU-wide
surveys such as the Labour Force Survey or data published by Eurostat. This has been complimented
by data collected from national competent authorities within the framework of the Administrative
Commission, in particular with reference to the payment of social security benefits within the
framework of the EU Social Security Rules or the issuance of portable documents attesting to rights
acquired under the Regulations on the basis of the sources identified in Annex IV. Since options on
the coordination of long-term care benefits, coordination of unemployment benefits for frontier
workers and export of unemployment benefits had been assessed in 2013-2014, an update with more
recent and newly available data has been conducted in 2015.60
55
For more information on who is affected and on the methodology, please refer to Annexes III and IV.
56
Secondary impacts are not considered in the final comparison in recognition of the limitations of the data available to conduct this
assessment
57
In case C-218/00, CISAL, EU:C:2002:36, the Court decided that public social security institutions cannot be regarded as
economic undertakings within the meaning of Articles 102 and 102 TFEU.
58
Impact on the climate, air quality, water quality and resources, biodiversity, soil quality and resources and waste production
and recycling.
59
For a detailed description of the analytical models and the methodologies used in each studies, please refer to Annexes V-XIX,
and XXVI.
60
Annex XXVI.
EN 17 EN
It should be noted that some statistical analysis is based on citizenship (Labour force survey) and
therefore identify EU mobile citizens/workers (those living/working in another country than their
country of citizenship) – while other data (administrative data collection) are based on headcounts of
case where citizenship is not collected and that therefore constitutes a broader definition of mobility,
i.e. includes not only EU mobile citizens/workers but also nationals returning to their country of
citizenship as well as third-country nationals moving between EU Member States. In light of this, the
Impact assessment adopts a broad definition of mobility which takes into account that in addition to
EU mobile citizens other groups also benefit from coordination. In addition, as there is no precise
statistical data on the number of frontier workers within the legal meaning of the coordination
Regulations, it has been assumed for statistical purposes that all cross-border workers residing in a
neighbouring country are frontier workers.
Since quantitative analyses have been mainly based on administrative data provided by Member
States, it has to be underlined that not all Member States were able to provide data on the different
benefits, nor was all data complete.
When reliable quantitative information on the total impact of the proposed initiative was not available,
the analysis has been based on a qualitative assessment and structured interviews conducted with
officials in representative Member States. Any limitations to this data are highlighted in the relevant
chapter.
An overview of the analytical models used for the impact assessment is provided in Annex IV.
2.4. Stakeholder feedback
As the preparatory work for the "Revision of Regulation (EC) No 883/2004 and Regulation (EC) No
987/2010" began in 2009, stakeholders were consulted on several occasions on the different elements
which were considered in the impact assessment:
1. Member States were consulted on coordination of long-term care benefits, export of
unemployment benefits, aggregation of unemployment benefits, coordination of unemployment
benefits for frontier workers, export of family benefits and access to special non-contributory cash
benefits for economically inactive persons, within the framework of the Administrative
Commission.
2. National administrations were also consulted via a specialised online survey on the coordination
of long-term care benefits, export of unemployment benefits and coordination of unemployment
benefits for frontier workers. Also, a group of national organisation in charge of the payment of
family benefits sent a position paper.
3. Social partners were consulted on the coordination of long-term care benefits, coordination of
unemployment benefits for frontier workers and export of unemployment benefits in the
framework of the Advisory Committee for the Coordination of Social Security Systems, and on
the coordination of family benefits, long-term care benefits, and unemployment benefits during a
dedicated hearing.
4. NGOs were consulted on the coordination of family benefits, long-term care benefits, and
unemployment benefits during an ad-hoc consultation workshop.
5. Two online consultations were also launched, one on the coordination of long-term care benefits,
export of unemployment benefits and coordination of unemployment benefits for frontier workers
which took place between December 2012 and February 2013; the other one on the coordination
of unemployment benefits and the coordination of family benefits which took place between July
and October 2015.
It has to be noted that the different consultations presented different degrees of specifity in relation to
the options assessed, and due to the high level of complexity of some topics, and the late definition of
some options, some consultations have been kept very wide (e.g. the public consultation on
aggregation of unemployment benefits; export of family benefits and social security coordination
rules on the posting of employed and self-employed persons). The views of different stakeholders are
EN 18 EN
presented in the assessment of each option, a more detailed description of the consultation process is
included in Annex II.
2.5. Definitions
Throughout the report, reference is made to the “competent Member State”, “Member State of
residence”, "Member State of last activity", “insured persons”, “frontier workers”, “cross-border
workers”, "mobile EU workers" meaning the following within the framework of Regulation (EC) No
883/200461
:
• "Member State" – Regulations (EC) Nos 883/2004 and 987/2009 apply to all countries within
the EEA and Switzerland. Within this report, the term "Member State" is sometimes used
to refer not only apply to EU-28 States but also Iceland, Liechtenstein, Norway and
Switzerland.
• “competent Member State”: Member State in which the institution with which the person is
insured is located, or the institution paying the social security benefit;
• “Member State of residence”: Member State where the institution which is competent to provide
benefits in the place where the person resides is located;
• "Member State of last activity": Member State where an unemployed person was most recently
working before becoming unemployed
• “insured person” any person satisfying the national legal conditions to have the right to benefits,
taking into account the provisions of this Regulation;
• “cross-border worker”: a person who resides in another Member State than the State of activity as
an employed or self-employed person. This can be divided into two subsets:
• (i) “frontier worker”: any person pursuing an activity as an employed or self-employed person
in a Member State and who resides in another Member State to which he/she returns as a rule
on a daily or weekly basis. These States need not be neighbouring countries. A person
working in Finland who returns every week on Friday evening to his/her home in Portugal is
a frontier worker. Distance is irrelevant;
• (ii)“other cross-border worker”: a cross-border worker who is not a frontier worker in the
legal sense because he/she does not return to the Member State of residence on a daily or
weekly basis;
• "Mobile EU worker": a worker who has moved his work or place of residence to another Member
State.”
3. Why should the EU act?
Social security coordination concerns cross-border situations where no Member State can act alone.
Coordination measures at EU level in the field of social security are required by Article 48 TFEU and
necessary to guarantee that the right to free movement can be exercised. Without such coordination,
free movement may be hindered, since people would be less likely to move if it meant losing social
security rights acquired in another Member State.
The EU coordinating legislation replaces the numerous pre-existing bilateral agreements. The creation
of an EU framework in this field ensures a uniform interpretation and protection of rights of mobile
EU citizens and their family members that could not be achieved by the Member States alone at
national level since this could potentially conflict with the Regulations.
61
See Annex XIII for the full glossary of terms.
EN 19 EN
This not only simplifies social security coordination for Member States, but also ensures equal
treatment of EU citizens who are insured in accordance with national social security legislation.An
effective and efficient coordination system at EU level requires that it takes account of changes in
Member States' national social security legislation and keeps track with changes in social reality that
affect the coordination of social security systems to achieve a fair and just distribution of financial
burden between Member States. Taking action at EU level aims to ensure a uniform interpretation and
creates a common basis that applies to all Member States. Conversely, without such an update of the
Regulations the financial and administrative burdens would be likely to be greater, as the provisions
would not meet changing needs of the Member States.
4. Long-term care benefits
4.1. Current Coordination Rules for Long-term Care Benefits
According to the OECD definition, long-term care benefits are a holistic type of benefits that bring
together a range of services for persons who are dependent on help with basic activities of daily living
over an extended period of time. Such benefits can be provided in kind or in cash. Examples include
allowances (of a fixed or differential amount) to compensate for the additional expenditure resulting
from the recipients’ condition of reliance on care (cash benefits) or the provision, direct payment or
reimbursement of the costs of home care services, specialised home adaptations or equipment
(benefits in kind).
Under the EU coordination rules, long-term care benefits are mentioned by Regulation (EC) No
883/2004 at several occasions. However, these benefits have so far not been expressly defined, nor
coordinated within the scope of Regulation (EC) No 883/2004 (leaving aside the clarification in Art. 1
(va) that also long-term care benefits in kind have to be regarded as benefits in kind for the
application of the sickness chapter).
The Court of Justice considered that long-term care benefits for the purposes of Regulation (EC) No
883/2004 are benefits intended to improve the state of health and quality of life of persons reliant on
care and as such, are intended to supplement sickness insurance benefits (irrespective of classification
under national law). If these benefits are granted on the basis of an objective and legally defined
position (i.e. in a non-discretionary way), they are covered by the Regulation. As a rule, long-term
care benefits are designed to promote the independence of persons reliant on care, in particular from
the financial point of view. Typically, they promote home care in preference to care provided in
hospital but also consist of grants, aids or subsidies for people staying in residential care facilities.
The conditions for the grant of the benefit or the underlying method of financing do not affect the
classification of a benefit. The fact that a benefit is non-contributory or that its grant is not linked to
payment of a sickness insurance benefit, is according to the Court, of irrelevant to its classification as
a long-term care benefit.
In the absence of a comprehensive and coherent coordination regime well suited to the particularities
of long-term care benefits, the Court has consequently decided that long-term care benefits should be
coordinated in line with the coordination rules applicable to sickness benefits.62
According to these
rules, long-term care benefits in kind are to be provided by the Member State of residence and
reimbursed by the competent Member State. Long-term care benefits in cash are to be provided and
paid by the competent Member State, including export to entitled persons residing in another Member
State. Residence for social security purposes, according coordination Regulations, means the place
where the person habitually resides. Competence of a Member State is established according to the
conflict rules laid down in these Regulations. In line with these rules, the Member State where a
person works is responsible for sickness benefits even if the person resides in another Member State.
62
Such clarifications are made by the Court on a case-by-case basis. At least 11 such cases were dealt with by the Court since the first time
in 1998, most of them concerning Germany, Austria and the United Kingdom, whose legislation provided for benefits having features of
long-term care benefits.
EN 20 EN
For pensioners, it is the State primarily responsible for their pension that is competent for sickness
benefits, even if they reside in another Member State. Family members of these categories of persons
are also covered by the said rules.
Regulation (EC) No 883/2004 also contains an anti-overlapping provision63
which applies in
situations where a person receives long-term care benefits in kind from the State of residence and
long-term care benefits in cash from competent Member State and both benefits are intended for the
same purpose. The benefits in cash have priority over the benefits in kind and the competent Member
State will deduct from the benefits in cash the amount for which it reimburses the State of residence
for the long-term care benefits in kind.
4.2. Problems with the coordination of long-term care benefits
Lack of clarity for citizens and institutions
There is a low level of understanding of the coordination rules for the recipients of long term care
benefits leading to confusion for both citizens and competent institutions.
Slightly more than 80% of the individual respondents to the EU Public Consultation claimed either
not to know (44%) or to have only a vague idea (38%) about the current rules on care benefits for
elderly and/or disabled persons when moving within the EU. These figures contrast with the 18% of
individuals who claimed to know the current rules. In addition, almost 57% of the participants
declared that they did not know in which country they could apply for long-term care benefits if they
or their family members would be in need of them. 16% of the individuals were not even aware of the
possibility to apply for long-term care benefits while living outside the Member State in which one is
insured. Moreover, 24% of the respondents replying on behalf of organisations (national
administrations, social partners and trade unions, civil society and NGOs and private companies) were
of the view that intra-EU migrants are not sufficiently aware of their rights.
A driver behind this problem is a lack of common definition or criteria to identify long-term care
benefits as a relatively new strand of social security rights. During the final years of the twentieth
century Member States have invested in the design of special schemes for persons in need of care.
63
Article 34 of Regulation (EC) No 883/2004.
EN 21 EN
The main purpose of these new schemes was to help the ageing population for which traditional
assistance from other family members was no longer readily available.
An additional driver is that at the national level, long-term care benefits are very diverse, either based
on insurance legislation (Belgium, France, Austria, Germany, the Netherlands, Luxembourg, Spain,
Portugal, Italy, Greece) or on residence legislation (Sweden, Denmark, Finland, United Kingdom,
Ireland), some being universal (Nordic countries, the United Kingdom), while others are not (Estonia,
Latvia, Lithuania, Poland, Czech Republic, Hungary, Slovakia, Romania, Bulgaria, Croatia)64
.
Benefits having characteristics of the long-term care benefits can be divided over several branches of
social security in some Member States, whereas in others separate legislation specific to long-term
care exists. This may lead to difficulties when more than one country is involved65
.
This lack of clarity has direct consequences for EU citizens who have or wish to exercise their right to
free movement, especially those who are vulnerable in light of their need for long-term care.
Lack of clarity in legal framework for long-term care benefits
While it is clear that sickness benefits are traditionally intended to improve the state of health and
invalidity schemes are traditionally intended to compensate for the loss of income due to invalidity,
there is not one and the same principle that applies to long-term care benefits. Although coordinated
as sickness benefits, long-term care benefits still have a number of distinctive features which
differentiate them from traditional sickness benefits. In particular, they are typically awarded for a
longer period of time than sickness benefits and may also have the purpose of compensating for loss
of income or other social risks faced by the claimant. This leads to lack of a common understanding at
EU level of what long-term care benefits are and how they should be coordinated, which can lead to
different outcomes for citizens and competent institutions. In the past three years (mid-2012 – mid-
2015), the Commission services received around 450 complaints or queries related to problems linked
to coordination of sickness and long-term care benefits. This shows that the current ad-hoc system of
coordination is an ongoing source of uncertainty.
Drivers behind this problem may be identified as the lack of a common definition or common criteria
to identify long-term care benefits, which, when recognizing the wide variety of different models of
long-term care provision between the Member States, results in a disparate approach. Not all the
benefits that correspond to the identified common characteristics at EU level are recognised as long-
term care benefits by the Member States. For instance, Greece, Italy, Portugal, Romania and Slovakia
have indicated that they do not have any long-term care benefits which fall in the scope of Regulation
(EC) No 883/2004, while information available shows that such benefits exist in these countries. Also,
Member States apply differing definitions in their national legislation, if they have a definition at all.
Bulgaria, Greece, Malta, Norway, Romania, Slovakia and the United Kingdom do not have in their
national law a definition of long-term care benefits. This does not mean that no long-term care
benefits exist, but that the benefits might be related to other social insurance risks, such as invalidity
or old age. 66
A further driver may be regarded as the "ad-hoc" system of coordination of long-term care benefits,
which is not always applied consistently either by national authorities or the Court. In its recent case-
law67
, the Court acknowledged that long-term care benefits may have characteristics of invalidity
benefits and old-age pensions. The Court may continue connecting long-term care benefits to other
social security risks than sickness, depending on the individual characteristics of the benefits. Such an
64
For an overview of the welfare systems, see page 18 of Annex V.
65
For example, some Member States, like Spain, consider a specific financial guarantee for persons in need of nursing care as independent
long-term care benefit, whereas in France it is paid as a supplement to the pension.
66
Austria, France, Finland, Hungary, Italy, Latvia, Lithuania, Poland, Slovenia, Slovakia, Sweden referred to the relationship with other
branches of social security in the questionnaire on long-term care benefits carried out by the trESS Network for the purpose of Analytical
Study 2012.
67
Case 388/09, Da Silva Martins, EU:C:2011:439, p. 48, Case C-503/09, Lucy Stewart, EU:C:2011:500.
EN 22 EN
ad-hoc coordination system contributes to legal uncertainty, inconsistent approaches by national
institutions and unpredictable outcomes for citizens.
In a survey of stakeholders, the lack of a uniform application and understanding of EU law by
Member States and the lack of awareness among mobile citizens were identified as significant
problems68
. The authorities69
confirmed that poor coordination and disputes follow from the lack of
consensus concerning the treatment of long-term care benefits across the Member States. The general
view shared by these authorities is that the system is unclear, administratively burdensome and
unstable.
The lack of legal clarity over classification of these benefits and their coordination increases the
likelihood of infringement proceedings and leaves it up to the Court to decide on a case-by-case, and
fragmented, basis which national benefits are to be considered a long-term care benefit. Moreover, the
Court only has the option of applying the existing coordination principles when categorising new
benefits and thus categorising them with the benefits which they seem to resemble most closely. In
these circumstances, the Court has determined in its case law a distinction between long-term care
benefits in cash and sickness benefits within the strict sense70
. It is likely that the Court will continue
its reasoning on that basis, and by connecting the long-term care benefits to other social security risks
on a case-by-case basis, which will not be helpful to come to a common understanding of long-term
care benefits.
This can have a number of adverse consequences for the potential users of these benefits. For
example, there may be difficulties in applying some of the traditional coordination mechanisms, such
as the aggregation of periods71
, the prevention of overlapping72
, the priority rules in case there is a
concurrent right from two Member States73
or the rules to provide supplements if a person would have
been entitled to a higher benefit from the State of insurance.74
While successful infringement procedures may lead to a change in the legislation or national general
practices, such successes are on a case by case basis and the advantages for individual citizens are
limited, as the specific effects for them have to be established by national courts. Furthermore,
infringement procedures may take a long time. In case of non-compliance, the case will be referred to
the Court and the rights of EU citizens will still be on hold.
Possibility of losing benefits, or double payments
There is a risk that a person may lose out on long-term care benefits if they are not properly classified
and coordinated. Another, more far-reaching situation is the one in which a person receives neither
benefits in cash or kind, as he or she moved from a State that only has benefits in kind (= non
exportable), to a State which only has benefits in cash to the detriment of the fundamental rights of the
person concerned.
68
Online consultation carried out among public authorities by Deloitte Consulting in 2012.
69
Twenty-two replies were received from public authorities in Belgium, Bulgaria, Cyprus, Denmark, Finland, France, Greece, Hungary,
Iceland, Ireland, Liechtenstein, Norway, Portugal, Romania, Switzerland and United Kingdom. See Annex II.
70
Case C-388/09 da Silva Martins, EU:C:2011:439.
71
If the entitlement to long-term care benefits is dependent on the completion of periods, equivalent periods fulfilled in another Member
State should be taken into account if necessary for the opening of the right to long-term care benefits.
72
Long-term care benefits differ from country to country. They could be paid in the form of a monthly allowance to persons, or take the
form of benefits in kind. In cross-border situations, there is a risk of accumulating benefits in cash and in kind from different Member
States. If a person is entitled to benefits in cash from the competent Member State and at the same time can claim benefits in kind
intended for the same purpose from the Member State of residence or stay that will have to be reimbursed by the competent Member
State, the amount of the benefits in cash shall be reduced by the amount of the benefit in kind which could be claimed from the competent
Member State.
73
Family members of insured persons can have a derived right to sickness benefits from the family member, or an independent right in the
Member State of residence, e.g. on the basis of their residence there. It is laid down in Article 32 of Regulation (EC) No 883/2004 that an
independent right shall take priority over a derivative rights, except where the independent right in the Member State of residence exists
directly and solely on the basis of the residence in that State.
74
In cases where the reimbursement of costs incurred on the benefits in kind provided in the State of stay, calculated under the rules in force
in that State, is less than the amount which application of the legislation in force in the State of affiliation would afford, the competent
institution, upon the request of the person concerned, will reimburse him/her the difference, within the limits of the costs actually
incurred.
EN 23 EN
As with the problem above, the drivers behind this problem are the lack of a common definition or
common criteria to identify long-term care benefits, which when recognizing the wide variety of
different models of long-term care provision between the Member States results in a disparate
approach. To distinguish between the benefits in kind and in cash, the Administrative Commission
prepared a simple 'yes/no' list without any further description of these benefits75
. In such a list for
long-term care benefits, 11 Member States have declared that they do not have cash benefits. Another
10 Member States have said that they do not have benefits in kind. These declarations appear
inconsistent with the Commission's own research.
The current "yes/no" list for long-term care benefits has proved to be inadequate. The user percentage
of long-term care benefits in cash is only equal to zero in Belgium, Bulgaria, Ireland, Hungary and the
Netherlands76
. Also, all Member States have benefits in kind and in cash that can qualify as 'long-term
care benefits'77
.
Solely listing benefits by means of a yes/no list may have the consequence that a mobile citizen may
either lose rights or alternatively lead to a duplication of rights leading to inefficient allocation of
welfare budgets between Member States. The current anti-overlapping provision in Regulation (EC)
No 883/2004 deals with the situation where a person receives long-term care benefits in kind from the
State of residence and long-term care benefits in cash from competent Member State and both benefits
are 'intended for the same purpose'. However, the current system makes it difficult for Member States
to be clear over whether two benefits are ‘provided for the same purpose’. In particular, a competent
Member State providing long-term care benefits in cash is unable to verify whether or not the person
in receipt of sickness benefits in kind from the State of residence for the same purpose and the same
time period; this would only reveal itself when the competent Member States receives a claim for
reimbursement from the Member State of residence which normally happens only annually. In cases
of overlap, the competent Member State is effectively taking on extra information obligations to
process claims for something that a person is already receiving.
75
See ‘list of cash benefits and benefits in kind as referred to in Article 34 of Regulation (EC) No. 883/2004.’
(http://ec.europa.eu/social/main.jsp?catId=868&langId=en), state of play for EU-27 in May 2010, and the MISSOC tables.
76
See the 2015 Ageing Report. Table 25 in Annex XXVI. Moreover, based on the 2012 Ageing Report none of the countries showed a user
percentage equal to zero.
77
See the mapping of systems of long-term care benefits in Annex XXI.
Example illustrating the risk of double payments: an Austrian pensioner with long-term care
needs moves to Germany after his retirement. He receives a full Austrian pension (and has no
pension entitlement from Germany or any other Member State). In accordance with the rules of
Regulation (EC) No 883/2004, Austria is the 'competent Member State' for providing long-term
care benefits in cash. Consequently, Austria has to export care allowances in cash, for example, a
cash benefit intended to cover the costs of a home carer. The German system also provides care
benefits in kind which can be claimed by the pensioner, such as trained carers who visit elderly
persons to provide assistance their home.
Austria will reimburse the costs for the benefits in kind provided by Germany. The Austrian care
allowance might no longer be necessary as the person already receives home care in Germany. It is
therefore necessary for the Member State to compare, in line with the anti-overlapping rule, the
two benefits to determine if they are intended for the same purpose and are paid for the same
period of time in order to prevent double-payments.
For instance, in 2012, 2570 persons exported Pflegegeld from Austria to another Member State
(Table 75 in Annex V), of which 70% of this long-term care benefit in cash was exported to
Germany. This is an important share, which makes the comparison with the benefits in kind in
Germany even more relevant.
It is noticed that the existing anti-accumulation rules at Article 34 are not working effectively in
this regard.
EN 24 EN
4.3. Baseline scenario
In total, there are 1.8 million persons covered by the Regulation who live in another Member State
than the one in which they are insured against sickness. Out of them, 45.000 mobile citizens use long-
term care benefits in kind and 35.000 mobile citizens use cash long-term care benefits78
.
The demographic changes in the EU (ageing population) and national legislative developments (new
types of benefits) are drivers for Member States to continue developing special schemes for persons in
need of care. On the basis of the demographic projections79
, the effect of ageing itself is expected to
result in an increase of need for long-term care and of public spending on long-term care benefits
from 1.6% of GDP in 2013 to 1.8 % of GDP in 2020 and 2.0% of GDP in 2030. The budgetary impact
of the baseline scenario in 2013 is of 792.796.846 EUR80
.
The differences in the concept of long-term care benefits and their treatment across Member States
can undermine the effective functioning of the reimbursement and mechanism of deduction for the
avoidance of double payments. In order to avoid the competent Member State reimbursing costs for
benefits in kind that overlap with the benefits in cash that it provides directly to the person concerned,
it is necessary to have a clear overview of benefits that are provided for the same purpose.The number
of cross-border users of long-term care benefits, who are today 80.000 (45.000 receiving long-term
care benefits in kind and 35.000 long-term care in cash ) might increase by 11% in 2020 in
comparison to 2013and by 28% in 203081
.
A lack of clear classification also limits the efficiency gains that might otherwise be foreseen by the
launch of the Electronic Exchange for Social Security Information (EESSI) scheduled for launch by
the end of 2016 with a deadline for full implementation in all Member State by the end of 2018 which
will introduce common structured electronic documents and a uniform procedure for all national
authorities to follow when processing claims social security benefits.82
In the absence of clear
classification, EESSI will have limited potential to support national institutions to process long-term
care benefits in a consistent and efficient manner.
Furthermore, non-action increases the risk of loss of confidence in the EU rules for citizens and
institutions. Keeping the current framework can also have knock-on effects on the administrative
costs for the Member States. Finally, it might also imply costs for citizens seeking to enforce their
rights in a legally uncertain environment.
4.4. Objectives for coordination of long-term care benefits coordination rules
As with all elements of this review exercise, the general policy objective of this initiative is to
continue the modernisation of the EU Social Security Coordination Rules by further facilitating the
exercise of citizens' rights while at the same time ensuring legal clarity, a fair and equitable
distribution of the financial burden among the institutions of the Member States involved and
administrative simplicity and enforceability of the rules.
In relation to long-term care in particular, this is reflected in the need to ensure coherence and clarity
in the rules applied to long-term care benefits and lay down a stable coordination system, while
recognising that the current inconsistent approach by Member States creates legal uncertainty for
citizens and national institutions and consequent difficulties in uniform application of these rules.
78
See the synoptic overview in Annex III and table 2.18 in Annex XXVI.
79
The total fertility rate (TFR) is projected to rise from 1.59 in 2013 to 1.68 by 2030 and further to 1.76 by 2060 for the EU as a whole.
However, during the same period, the proportion of young people (aged 0-19) is projected to remain fairly constant by 2060, while the total
age-dependency ratio (people aged below 20 and aged 65 and above over the population aged 20-64) is projected to rise from 64.9% to
94.5%. European Commission: The 2015 Ageing Report: Economic and Budgetary Projections for the 28 EU Member States (2013-2060):
Graph I.1.2.
80
Estimate based on data LFS and 2015 Ageing Report.
81
As follows from Table 27 in Annex XXVI.
82
Annex VI, p17.
EN 25 EN
In addition to the general objective, the specific objectives in the field of long-term care benefits are:
¾ To establish a stable regime appropriate to long-term care benefits which prevents loss of
benefits and lays a basis for effective and efficient coordination;
¾ To ensure a fair and equitable sharing of the financial burden between Member States: to
prevent double payment of sickness benefits in cash and ensure that the financial burden for
paying long-term care benefits to persons who are insured in the competent Member State are
shared proportionally between that Member State and the State of residence.
¾ To bring legal clarity and transparency for citizens, institutions and other stakeholders on
coordination rules applicable to them so that they are ensured what the citizens’ rights to long-
term care are when exercising their right to freedom of movement.
4.5. What are the various options to achieve the objectives concerning long-term care
benefits?
A number of policy options have been identified to meet the objectives set out in Section 1.4.
4.5.1 Option 0: Baseline scenario
No explicit legal framework is laid down in the coordination Regulations for long-term care.
Following the interpretation given by the Court, the existing rules on sickness benefits apply to long-
term care benefits.
EN 26 EN
The Member States in their national legislations, or in case of disagreements, the Court, decide on a
case-by-case basis which national benefits are to be considered as long-term care benefits.
4.5.2 Option 1: The competent Member State provides long-term care benefits in cash and
reimburses the cost of benefits in kind provided by the Member State of residence
This option applies the existing rules on sickness benefits to long-term care benefits and complements
them with some specific rules that take account of the characteristics of long-term care benefits.
Similarly to sickness benefits, long-term care benefits in kind are to be provided by the Member State
of residence in accordance with its legislation and reimbursed in full by the competent Member State.
This can be done at the actual or at fixed level of expenses, depending on the national system, as
shown in the accounts of the Member State of residence83
.
Long-term care benefits in cash are to be provided and paid by the competent Member State in
accordance with its legislation, including to the entitled persons residing in another Member State. By
agreement between the Member States, benefits in cash may, however, be provided by the Member
State of residence at the expense of the competent State and in accordance with the legislation of the
latter84
.
The following clarifications distinguishing the long-term care area from the sickness rules on
coordination are also proposed:
1) Inserting a new definition of long-term care benefits in Article 1 of Regulation (EC) No 883/2004
that takes into account the characteristics of long-term care benefits and facilitates their distinction
from sickness benefits in a strict sense. Specifically, this could be accomplished by introducing a new
chapter in the Regulation for long-term care benefits, based on the same principles as the sickness
chapter but allowing for the key distinctions between these two types of benefits.
2) Defining the risk of 'long-term care' in Article 3(1) of Regulation (EC) No 883/2004 so it clearly
falls as a distinct field of social security falling within the material scope of the EU rules;
3) Drawing up a list of long-term care benefits per Member State that covers all benefits that are
included or excluded for the purposes preventing double payment of long-term care benefits by the
institutions. This should be possible on the basis of the common elements in the definition and the
existing analysis of national systems.85
4.5.3 Option 2: The Member State of residence provides all long-term care benefits with
reimbursement by the competent Member State
Under this option the State of residence grants long-term care benefits in cash and in kind as they
exist under its national system. This is different from the baseline scenario, under which the
competent Member State pays the long-term care cash benefits directly to the insured person. By
making only one Member State responsible for providing long-term care benefits in cash and in kind,
the risk of overlapping or a total loss of benefits in kind is reduced.
Similarly to sickness benefits, the competent Member State shall reimburse expenses for long-term
care benefits in kind. This can be done at the actual or at fixed level of expenses, depending on the
national system, as shown in the accounts of the Member State of residence. An additional
reimbursement procedure for long-term care benefits in cash would however need to be introduced
between the Member States.
The situation can occur where the level of the long-term care benefits in the State of residence is
lower than in the competent Member State. The two sub-options described below explore the
possibilities for offering more favourable treatment of the persons concerned, in particular by giving
the best benefits from two countries. The sub-options are partly inspired by the coordination system
83
See Articles 17 and 35 of Regulation (EC) No 883/2004.
84
See Article 21(1) of Regulation (EC) No 883/2004.
85
Annex XXI.
EN 27 EN
that applies to family benefits in Regulation (EC) No 883/2004. In the field of family benefits, if two
rights coincide, the person is entitled to the highest amount that he/she is entitled to under either of the
two systems (for more information see Chapter 7.1).
4.5.3.1. Sub-option 2a) The benefits are provided at the level of the Member State of residence
without a supplement by the competent Member State
Under this sub-option, all long-term care benefits are provided by the Member State of residence at
the level as determined by its legislation, irrespective of where the person is insured. The person
concerned will not receive a 'top-up' from the competent Member State; even its benefits are higher
than those in the Member State of residence.
4.5.3.2. Sub-option 2b) The benefits at the level of the Member State of residence are supplemented by
the competent Member State
Under sub-option 2b, the person receives a supplement from the competent Member State in the event
that the benefits in the Member State of residence, or the amount of reimbursement, are at a lower
level than in the competent Member State. The 'top up' will be paid to the amount to which the person
would have been entitled in the competent Member State and will be paid directly to the person
concerned.
4.5.4 Discarded options
Three options were considered but discarded from assessment:
a) The introduction of a safeguarding provision
The competent Member State would award the long-term care benefits in cash for persons who reside
outside that Member State. In a situation where the legislation of the competent Member States does
not provide for long-term care benefits in cash and at the same time benefits in kind are non-existent
in the Member State of residence, the Member State of residence should grant the long-term care
benefits in cash existing under its legislation to avoid that a person is left with nothing. The competent
Member State would then reimburse the benefits in cash provided by the Member State of residence.
This option would be less clear than the baseline scenario and would give rise to a lot of uncertainties
for the Member State of residence about when benefits are or are not available in the competent
Member State86
. Although the right to a benefit for the person concerned would be guaranteed, this
option does not provide legal certainty about when the Member State of residence would provide
benefits, what benefits would be concerned and what amount.
b) Make the Member State of residence responsible for providing all long-term care benefits without
reimbursement by the competent Member State
86
The following sources supported the analysis: trESS Analytical Study 2012, Legal impact assessment for the revision of Regulation
(EC) No 883/2004 with regard to the coordination of long-term care benefits, to be consulted at: .http://www.tress-
network.org/tress2012/EUROPEAN%20RESOURCES/EUROPEANREPORT/trESS_Analytical%20Study%202012.pdf, p. 37-40 and
Deloitte, Consulting Study for the impact assessment for revision of Regulations (EC) Nos 883/2004 and 987/2009, 6 December 2013,
pages. 130-13, Tables 53 and 54. The study can be found in Annex V to this report.
A person is insured in Member State A and resides in Member State B, where he applies for home
care. The home care services costs EUR 5.100 including a service user charge of EUR 1.100 paid
for by the insured person. The amount corresponding to the level of cover provided by the
insurance system of Member State B is EUR 4.000. This amount is paid by the institution of
Member State B and is to be refunded by the institution of Member State A.
But if the level of cover under the system of Member State A is higher, e.g. EUR 6.000, the
person will also be able to receive the actual costs incurred in terms of the service user charge of
EUR 1.100 from Member State A.
EN 28 EN
The Member State of residence would be competent for providing all the long-term care benefits, in
cash and in kind, on the basis of its own legislation, thereby applying its own conditions for
entitlement and granting benefits at the level set in that Member State. The long-term care benefits
would remain fully at the expense of the Member State of residence.
Only one Member State is involved in providing long-term care benefits and this will make the
system administratively easier to handle. However, the Member State of residence will be faced with
an increase in applications for long-term care benefits, both from persons who are not insured against
sickness benefits in that Member State and who have not contributed to financing the system of long-
term care benefits (e.g. pensioners who are covered for health care in the country from which they
receive a pension) without recourse to any reimbursement. Moreover, the system could provide an
incentive to move to a country with more 'generous' long-term care benefits. This option would
therefore put too great a burden on the administrative and financial organisation of the system of long-
term care benefits in the Member State of residence.
c) Make the competent Member State responsible for providing all long-term care benefits to insured
persons residing abroad (export).
Under this option the competent Member State would become responsible for providing all long-term
care benefits to insured persons who are residing abroad. Where benefits are only available in the
form of services, the competent Member State would reimburse the relevant services provided for in
the Member State of residence according to the rates applicable in the Member State of residence.
This option would introduce a slight improvement in the protection of rights of the person concerned,
as all persons in need of long-term care will be treated equally in the competent Member State
(=Member State of insurance) and will not have their benefits reduced when they move to another
Member State. However, this option would have significant practical challenges, including the
necessity of increased information exchange between Member States. The benefits in kind available
in both countries would need to be compared to assess if the benefits in kind in the Member State of
residence could be provided under the same conditions as the competent Member State. If no benefits
in kind are available in the Member State of residence the competent Member State would have to
'value' these benefits in cash. In all, this option would not contribute to an even financial burden
sharing between Member States, and would make the system harder to administer for the competent
Member State.
4.6. Stakeholder Support
4.6.1 Baseline Scenario
In discussions in the Administrative Commission87
, the baseline scenario received support from 10
delegations88
; two delegations explicitly opposed the option89
. In the stakeholders’ EU public
consultation90
this option received support corresponding to replies from 18% of individuals91
, 17% of
social partners92
and 12% of NGOs93
.
87
Discussions took place in meetings of the Administrative Commission in the period 2009 to 2013. A Working Party dedicated to the
revision of the provisions on the coordination of long-term care benefits was held on 10 October 2013. The consultation within the
Administrative Commission concerns a consultation at expert level. The views expressed at the level of the Administrative Commission do
not necessarily represent the Government's view.
88
Belgium, Greece, Spain, Hungary, Malta, Poland, Sweden, Estonia as well as the United Kingdom and France without declaring their
definite position.
89
Italy, Luxembourg.
90
A public consultation between December 2012 and February 2013 invited citizens and organisations to provide their views on the main
problems linked to the coordination of long-term care benefits.
91
Out of 127 requested records relating to 6 different options considered.
92
Out of 12 social partners providing responses relating to 6 options considered.
93
Out of 8 NGOs providing responses relating to 6 options considered.
EN 29 EN
4.6.2 Option 1: The competent Member State provides long-term care benefits in cash and
reimburses the cost of benefits in kind provided by the Member State of residence
Option 1 gained the most support from the delegations in the Administrative Commission, whereby
12 delegations explicitly supported this option, seven other Member States did not object its elements
without taking definite position and none of the Member States declared to be against94
. Although the
opinions differed as regards their exact design, all delegations recognised the importance and the need
to have a definition and a list of long-term care benefits. The outcome of the public consultation
provided for the same result as the baseline scenario as the consultation did not make distinction
between it and option 1.
4.6.3 Option 2: The Member State of residence provides all long-term care benefits with
reimbursement by the competent Member State
Option 2 did not receive explicit support from any delegation in the Administrative Commission, four
Member States being against95
. The complexity and the administrative burden of supplement system
is generally the main reason for the low support for this option among national public authorities. One
of the comments was that when the system of providing long-term care benefits is decentralised and
local municipalities are responsible for providing long-term care benefits, this option will be difficult
to implement96
. In the stakeholders’ consultation option 2a) received support corresponding to replies
from 19% of individuals, 17% of social partners and 50% of NGOs, while option 2b) was supported
by 6% of individuals, 25% of social partners and none of the NGOs.
4.6.4 Discarded options
Although delegations in the Administrative Commission were not explicitly consulted on the
discarded options, the discussion was not limited to the selected options and possibility was given to
present any additional ideas. None of the delegations supported any of the discarded options.
In the public consultation97
, option a) received support from 14% of individuals, 8% of social partners
and 12% of NGOs, option b) was supported by 19% of individuals, 17% of social partners and 50% of
NGOs98
and option c) received support from 38% of individuals, 33% of social partners and 25% of
NGOs.
4.7. What are the Impacts of the Different Options?
For all of the options assessed, the potentially affected groups are the same. The options are
specifically targeted at cross-border workers, retired former cross-border workers, other mobile
pensioners and the family members of the said categories of entitled persons.
The fact there is no specific coordination regime and a common definition, made it difficult to collect
data on long-term care benefits as limited data exists at national level. Administrative data on long-
term care benefits are only available in specific forms dealing with the coordination rules of the
sickness chapter.
For the purposes of assessing the impact, two types of data sources were used: secondary data
(available literature and reports at EU and Member States’ level, particularly the trESS network
reports; replies to the online public EU Consultation on the need to revise of the current rules;
available statistical data with regard to mobility patterns and the use of long-term care benefits in
cross-border cases) and primary data, collected through interviews and a consultation of the
94
Luxembourg, Spain, Italy, Portugal, Lithuania, Poland, Belgium, Malta, Sweden, Czech Republic, Hungary and Latvia explicitly
supported the option, whilst Austria, Germany, France, Ireland, Slovenia, Slovakia and Greece, without taking definite position, supported
some elements of this option or did not object it.
95
Belgium, Germany, France and Sweden.
96
In Sweden for example, 290 municipalities in the future would also need to provide long-term care benefits in cash and set up a
reimbursement mechanism.
97
A public consultation between December 2012 and February 2013 invited citizens and organisations to provide their views on
the main problems linked to the coordination of long-term care benefits.
98
The results are identical to those for option 2a, as no distinction was made in the public consultation as to responsibility for reimbursement
of the cost of the benefits provided by the Member State of residence.
EN 30 EN
stakeholders (findings from strategic interviews with Commission officials; findings from interviews
with stakeholders at EU level, e.g. European umbrella organisations; findings form interviews with
key stakeholders at national level (health insurers, healthcare providers); replies to the EU-wide web-
based survey among responsible public authorities; new, generated statistical data with regard to
mobility patterns and the use of long-term care benefits in cross-border cases; findings from the 13
workshops/group interviews and 8 phone interviews on the administrative costs and administrative
burden related to the policy options).
For further information about the methodology see section 2.3 and Annex IV.
EN 31 EN
The Table below illustrates a summary of impacts of the different options:
Type of
impact
Clarification Simplification Protection
of rights
Fundamental
rights
Economic
impacts
Regulatory
costs
Risk
of
fraud
and
abuse
Equitable
burden
sharing
Member
State
Coherence
with EU
objectives
Overall
Effectiveness
Overall
Efficiency
(cost vs
effectiveness)
Baseline
Scenario
0 0 0 0 099
0 0 0 0 0 0
Option 1 ++ + + + 0 0 + 0 + ++ +
Option
2a
++ + +/- +/- + - - +/- + + +
Option
2b
+ -- ++ + -- -- - +/- + - -
99
The budgetary impact of the baseline scenario in 2013 has been estimated at 792.79 million euros. This is an estimate based on LFS data and the 2015 Ageing Report.
EN 32 EN
The following Tables demonstrate specific impacts for each of the considered policy options:
Policy Option 1: The competent Member State provides long-term care benefits in cash and reimburses
the cost of benefits in kind provided by the Member State of residence
Social impacts
Clarification ++ This option will coordinate long-term care benefits under a
separate umbrella, taking into account their specific
characteristics. The creation of a common EU definition of long-
term care benefits and a concrete list of the benefits is an
important step towards more clarity and a uniform approach will
lead to greater clarity and a uniform approach, while preserving
the method currently applied to sickness benefits.
Simplification + This option will not fundamentally change the principles of the
baseline as regards the differences between benefits in kind and in
cash. However, the proposed option will make it easier for
Member States and citizens to understand and apply the
coordination provisions on national long-term care benefits. The
option also offers a greater stability as it maintains the main
principles currently applied under the baseline scenario.
Protection of rights + This option will contribute to expediting the process by which
persons that require care receive the benefits by removing much of
the uncertainty over the status of the various long-term care
benefits. There will be no doubt about which benefits can be
claimed in a cross-border situation. Nevertheless, the actual receipt
of the benefits remains dependent on the distinction between
benefits in cash and in kind and the limitation that benefits in kind
cannot be exported. Theoretically, an insured person could still be
excluded from their benefits, for example, when the competent
Member State only grants long-term care benefits in kind and the
State of residence only has benefits in cash.
Financial impact 0 This option would involve no economic impact in comparison to
the baseline scenario, as Member States will continue to pay the
long-term care benefits under the same coordination rules as
before. The impact would only manifest itself if benefits that are
currently outside the scope of the existing rules would be included
in the list. For detailed budgetary impact for individual Member
States see Tables 2.19-2.23 in Annex XXVI.
Impacts on fundamental rights +
This option will contribute to a smoother application of the
coordination provisions for long-term care benefits and hence to
freedom of movement and residence (Article 45), and facilitate the
access to social security and social assistance (Article 34). It
would ensure that citizens, despite any vulnerability or care-need
they might have, are not disadvantaged in exercising their right to
free movement within the EU in accordance with the rights of the
elderly (Article 25) and the integration of persons with disabilities
(Article 26). There is no impact on the right of property, as rights
acquired under the national legislation of the competent Member
State and the State of residence are maintained on the same
footing.
Other impacts
Regulatory Costs 0 The information obligations for institutions and citizens under this
option will remain the same as under the baseline scenario as no
EN 33 EN
new obligations will be introduced. The option facilitates the
comparison of benefits in kind and in cash and could lead to fewer
disputes between institutions. In an initial phase the new legal
definition may increase the administrative burden for Member
States and impact the exchange of information between Member
States. In the long term the clarification would save time and
money for Member States, especially in light of increasing
demand for long-term care benefits.
Risk of fraud and abuse + In general, additional clarifications will always make the legal
situation clearer for the persons concerned and the institutions
Specifying the national benefits concerned will reduce the risk of
overlapping payments.
Fair burden sharing between
Member States
0 There are no fundamental changes in comparison to the current
situation. Depending on the definition of long-term care benefits
and the benefits to be included in the list, some benefits which
would currently not be coordinated under the Sickness Chapter
could be more or less beneficial for a Member State.
Coherence with General, Specific
and wider EU Objectives:
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of citizens'
rights while at the same time ensuring
legal clarity, a fair and equitable
distribution of the financial burden among
the institutions of the Member States
involved and administrative simplicity
and enforceability of the rules.
• Establish a stable regime
appropriate to long-term care
benefits;
• Ensure a fair and equitable
sharing of the financial burden
between Member States;
• Bring legal clarity and
transparency for citizens,
institutions and other
stakeholders on coordination
rules applicable to them.
+ This option, by introducing a legal basis for the already applicable
rules, leads to stability of the already applied regime appropriate to
long-term care benefits, while remaining compatible with the
system currently applied under the baseline scenario. In parallel, it
achieves legal clarity and transparency on the rules applicable both
for citizens and institutions as well as other stakeholders. Although
benefits in kind are provided by the residence State, costs of all
cash and in kind benefits provided are at the expense of the
competent Member State which ensures a fair distribution of the
financial burden. This option however will not solve existing
mismatches in case the competent Member State has no benefits in
cash and the State of residence has no benefits in kind.
Policy Option 2a: The benefits are provided by the Member State of residence without a supplement by
the competent Member State even if the benefits in the Member State of residence, or the amount of
reimbursement, are at a lower level than in the competent Member State
Social impacts
Clarification ++ Under this option, the same clarifying measures will be provided
as under option 1 so that the person will always know that he or
she needs to claim the benefits under the legislation of the Member
State of residence. There will be no doubts even if it is not clear
under the relevant legislation whether a certain benefit is a benefit
EN 34 EN
in cash or in kind.
Simplification + Only one Member State is exclusively competent to provide long-
term care benefits to the person concerned. Priority rules against
overlapping will be superfluous, which will simplify the procedure
for mixed-type systems but there will need to be an additional
reimbursement procedure for cash benefits.
Protection of rights +/- This option would ensure that the persons concerned are always
protected at the same level as all other persons in the Member
State of residence. Affiliation to the system of the State of
residence needs to be assimilated in cases where a person is not
covered by the legislation of the State of residence. This in itself
can be seen as positive in comparison to the baseline scenario.
However, depending on the system or level of long-term care
benefits in the Member State of residence, a person might be better
or worse of in comparison to the level of benefits in the competent
Member State as the level of protection will depend solely on the
level of benefits in the residence State.
Financial impact + Long-term care benefits in cash shall be provided by the State of
residence and no longer by the competent Member State. This
implies a considerable decrease of the budget which is needed to
finance the cross-border use of long-term care benefits in cash
(from € 203 Million to € 111 Million or a decrease of 45% (Annex
XXVI– Tables 2.19 and 2.20)). The details of the estimates reveal
that whereas more persons are using long-term care benefits in
cash, the average amount is much lower. The total budgetary
impact is estimated at € 701 million, which corresponds to a
decrease of 12% in comparison to the baseline scenario (Annex
XXVI – Tables 2.19 and 2.20).
On the level of Member States an especially positive impact (less
spending) is observed for Austria (decrease of 61% of expenditure
on long-term care benefits in comparison to now), Italy (-53%)
and Czech Republic (-41%) (Annex XXVI – Table 2.20).
Primarily, a negative impact (more spending) in comparison to the
other options is observed for the Slovak Republic (increase of 75%
of expenditure on long-term care benefits in comparison to the
baseline scenario), Croatia (+66%) and Hungary (+50%). These
countries have a rather low level of sickness benefits in cash. They
also have a rather low user rate of long-term care benefits in their
country. Under this option, Member States will have to reimburse
benefits in kind and in cash provided to persons who are insured
under their social security systems, but who reside in another
Member State where the level of long-term care benefits is higher.
This could entail paying more than permitted under national
legislation.
Member States in which no crucial negative or positive financial
impact is observed are: Estonia, Luxembourg, Sweden, Denmark,
Cyprus and France.
For detailed budgetary impact for individual Member States see
Tables 2.19-2.23 in Annex XXVI.
Impacts on fundamental rights +/- The impact is the same as for option 1 however; the impact on the
right of property will vary as depending on the system or level of
long-term care benefits in the Member State of residence, a person
EN 35 EN
might be better or worse of in comparison to the level of benefits
in the competent Member State.
Other impacts
Regulatory Costs - As only one Member State is competent for providing long-term
care benefits, this option does not require further implementing
arrangements or priority rules to avoid overlapping. The
competent Member State and the State of residence will however
need to set up a new reimbursement mechanism for benefits in
cash. This option may be difficult to implement in Member States
where the system providing long-term care benefits is
decentralised. The State of residence will have to assume
entitlement for benefits in cash for a person who is insured in
another Member State and will be confronted with an increase in
cases (from 45.000 to 80.000 per year, based on current
estimations of recipients of cross-border long-term care - table
2.18 - Annex XXVI). The administrative costs for long-term care
are expected to diminish in comparison to the baseline scenario,
but the relative share of the regulatory costs in the total budget for
long-term care could increase slightly (combined impact for both
benefits in cash and in kind - table 55 - Annex V).
Risk of fraud and abuse - The risk of fraud and abuse is slightly higher than in the baseline
scenario. Member States with more generous long-term care
benefits warned that this option could lead persons to move to a
Member with a higher level of benefits and claim long-term care
benefits there. This in itself is not fraud or abuse, but it can
contribute to the perception of so-called 'opportunistic behaviour'.
Fair burden sharing between
Member States
+/- Both the competent Member State and the Member State of
residence contribute to the costs of granting the benefit to the
person concerned. The competent Member State will have to
reimburse the costs made in the Member State of residence,
according to the level of the State of residence – even if this is
higher or the Member State of residence would anyhow provide
the benefits on the basis of its national legislation. This may entail
a higher or lower share of burden depending on the respective
level of benefits in the Member States concerned.
Coherence with General, Specific
and wider EU Objectives:
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of citizens'
rights while at the same time ensuring
legal clarity, a fair and equitable
distribution of the financial burden among
the institutions of the Member States
involved and administrative simplicity
and enforceability of the rules.
• Establish a stable regime
appropriate to long-term care
benefits;
• Ensure a fair and equitable
sharing of the financial burden
between Member States;
• Bring legal clarity and
transparency for citizens,
institutions and other
stakeholders on coordination
+ This option introduces a stable regime appropriate to long-term
care benefits. The regime however differs from the currently
applied rules and thus will require adaptation before full stability
is achieved. In parallel, the option brings legal clarity and
transparency on the rules applicable both for citizens and
institutions as well as other stakeholders. Although the overall
costs for the spending on long-term care benefits in cash is
decreased, this option might be less effective at achieving the
objective of a fair and equitable distribution of financial burden
between Member States as the costs are always reimbursed at the
level of the residence State. Also, introducing a separate
reimbursement procedure for long-term care benefits in cash
which will require setting up of a new system for the exchange of
information between Member States will entail additional
regulatory costs compared to the baseline scenario.
EN 36 EN
rules applicable to them.
Policy Option 2b: The competent Member State provides a supplement to the beneficiary in the event that
the benefits in the Member State of residence, or the amount of reimbursement, are at a lower level than
in the competent Member State
Social impacts
Clarification + Under this option, the person will always know that he/she needs
to claim the benefits under the legislation of the Member State of
residence. However, the person may also need to introduce a claim
for paying the supplement in the competent Member State, which
can only be done after the initial claim has been paid by the
Member State of residence.
Simplification -- This option is more complex than the baseline scenario as it opens
simultaneous entitlements under the legislation of several Member
States. Priority rules will have to be drawn up and a procedure will
need to be developed for the calculation of the supplement and
how the supplements shall be settled.100
Moreover, the option
deviates from currently applied sickness logic which is consistent
with the Court’s case-law.
Protection of rights ++ The social impact is the same as for option 1 and in addition the
insured person will always receive the highest benefit to which
he/she would have been entitled to in the competent Member
State.
Financial impact -- It is estimated that the total expenditure for long-term care benefits
would increase to € 1.4 billion, of which € 1.15 billion is for
benefits in kind (an increase of 95% in comparison to the baseline
scenario) and € 253 million for benefits in cash (an increase of
25%) (Annex XXVI – Table 2.24). The differences are caused by
the supplement, which is estimated at € 560 million for long-term
care benefits in kind and € 142 million for long-term care benefits
in cash which come from the account of the competent Member
State.
This option has no positive budgetary impact on any of the
Member States. The highest increase in comparison to the current
scenario is estimated to take place in Sweden (+318%), the
Netherlands (+297%) and Finland (+ 248%).
For detailed budgetary impact for individual Member States see
Tables 2.19-2.23 in Annex XXVI.
Impacts on fundamental rights + The impact is the same as for option 1 and in addition the insured
person will always receive the highest benefit to which he/she
would have been entitled to in the competent Member State.
100
It may not be possible to directly replicate the existing system for calculation of a differential supplement in the field of family
benefits and still respond to the specifics of long-term care..
EN 37 EN
Other impacts
Regulatory Costs -- This option is more complex than the baseline scenario as it opens
simultaneous entitlements under the legislation of two Member
States: one to be provided with the actual benefit and the other for
receiving the supplement. A procedure to compare the level of
benefits between the competent Member State and the State of
residence needs to be set up, as well as a procedure to settle the
payment of the supplement. It will necessitate an additional
exchange of information between the Member State of residence
and the Member State competent for paying the supplement.
Risk of fraud and abuse - The risk of fraud and abuse is slightly higher than in the baseline
scenario. Member States with more generous long-term care
benefits warned that this option could lead persons to move to a
Member with a higher level of benefits and claim long-term care
benefits there. This in itself is not fraud or abuse, but it can
contribute to a perception of so-called 'opportunistic behaviour'.
Fair burden sharing between
Member States
+/- As the supplement is paid directly to the person concerned, it will
not contribute to even burden sharing between Member States, but
will only increase the total costs of the benefits provided by these
Member States.
Both the competent Member State and the Member State of
residence have their share in granting the benefit to the person
concerned. The competent Member State will have to reimburse
the costs made in the Member State of residence, according to the
level of the State of residence –even in this is higher or the
Member State of residence would anyhow provide the benefits on
the basis of its national legislation. If the level of benefits in the
State of residence is lower, the competent Member State will also
have to 'top up' the benefits to the level applicable under its own
legislation.
Coherence with General, Specific
and wider EU Objectives:
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of citizens'
rights while at the same time ensuring
legal clarity, a fair and equitable
distribution of the financial burden among
the institutions of the Member States
involved and administrative simplicity and
enforceability of the rules.
• Establish a stable regime
appropriate to long-term care
benefits;
• Ensure a fair and equitable
sharing of the financial burden
between Member States;
• Bring legal clarity and
transparency for citizens,
institutions and other
stakeholders on coordination
rules applicable to them.
+ This option introduces a stable regime appropriate to long-term
care benefits and offers the maximum level of protection to the
person. The regime however differs from the currently applied
rules and thus will require adaptation before full stability is
achieved. In parallel, the option brings legal clarity and
transparency on the rules applicable both for citizens and
institutions as well as other stakeholders. The payment of the
supplement for benefits provided in residence State increases the
costs for the competent Member State. This option is thus less
effective at achieving the objective of a fair and equitable
distribution of financial burden between Member States.
Furthermore, the priority rules and calculation rules for the
reimbursement of the benefits and provision of the supplement
need to be introduced as well as an administrative procedure for
settling supplements.
EN 38 EN
Based on the above tables, some preliminary conclusions can be drawn on the strengths and
weaknesses of the different options and their overall effectiveness, efficiency and relevance in
achieving the various objectives while avoiding excessive costs.
Option 1 which introduces the legal basis for the already applicable rules, contributes positively to
bringing legal certainty, transparency and stability of the already applied regime appropriate to long-
term care benefits, while remaining compatible with similar system applicable to sickness benefits.
These effects are maximised by the inclusion of clarifications under a separate Chapter categorising
the rules for long-term care benefits separately and offering a clear distinction with the provisions on
sickness benefits and social assistance. Citizens and institutions will benefit from the clarification of
these rules. This option however will not solve existing mismatches in case the competent Member
State has no benefits in cash and the State of residence has no benefits in kind. This option will have
low implementation costs as it brings clarification without drastically changing the system of
coordination and the information obligations following from that system. In light of the effectiveness
at achieving the objectives this option is considered the most cost efficient101
. It is also coherent with
wider EU Policy objectives, in particular, the planned review of the disability strategy 2010-2020
assessing progress to ensure the effective implementation of the UN Convention on the Rights of
Disabled Persons across the EU and the ongoing work to promote a social agenda to support the
economic recovery ensuring a Triple A social rating for Europe, which advocates greater efficiency in
allocation of social protection to challenge examples of multiple benefits overlapping, poorly targeted
cash or in-kind benefits (services). The option was supported by a significant majority of experts from
Member States.
Sub-option 2a ensures a common understanding and increased transparency for citizens and
institutions and introduces a stable regime appropriate to long-term care benefits. The regime however
differs from the currently applied rules which are consistent with the logic applied to sickness benefits
and the Court’s case-law and thus, will require adaptation before full stability is achieved. The overall
costs for the spending on long-term care benefits in cash will decrease, caused by a lower level of
benefits in the State of residence, however this cost saving needs to be counter-balanced against the
fact this option is less effective at achieving the objective of a fair and equitable distribution of
financial burden between Member States. It should be also noted that while the costs will indeed
decrease in some Member States, a negative impact (more spending) may also be observed for other
Member States in comparison to the baseline scenario and some Member States of residence may be
required to pay more than permitted under their national legislation to reimburse costs spent by the
Member State of residence. In the alternative, the option may result in less beneficial result for persons
insured under the competent State’s system compared to those insured persons who remained resident
in that State. Introducing a separate reimbursement procedure for long-term care benefits in cash will
require setting up a new system for the exchange of information between Member States and
information obligations for the person concerned who has no ‘insurance link’ with the State of
residence. This will entail additional regulatory costs compared to the baseline scenario. The option
may be difficult to implement in decentralised systems providing long-term care benefits. The option
is, however, coherent with wider EU Policy objectives for the same reasons as set out in relation to
option 1. Option 2 did not receive explicit support from any delegation in the Administrative
Commission mainly on grounds of the perceived administrative burden.
Sub-option 2b ensures a common understanding and increased transparency for citizens and
institutions and introduces a stable regime appropriate to long-term care benefits. It offers the
maximum level of protection to the person, albeit this not being the aim of the Regulations. The
person concerned will open simultaneous entitlements under the legislations of more than one Member
State. Similarly to sub-option 2a, the regime differs from the currently applied rules and thus, will
require adaptation before full stability is achieved. Priority rules and calculation rules for the
reimbursement of the benefits and provision of the supplement need to be introduced as well as an
administrative procedure for settling supplements. This option is therefore less efficient than the
101
Table 2.21 in Annex XXVI.
EN 39 EN
current situation. The payment of the supplement will increase the costs especially for the competent
Member State, which has to reimburse the costs of all long-term care benefits provided by the State of
residence and pay the supplement up to the level in its national legislation directly to the person
concerned meaning it is less efficient than the other options. The coherence of the option with the
wider EU Policy Agenda is the same as for option 1. Option 2 did not receive explicit support from
any delegation in the Administrative Commission.
5. Unemployment Benefits
5.1. Current Coordination Rules for Unemployment Benefits
‘Unemployment benefits’ are benefits granted if the risk of loss of employment materialises.102
Typically an unemployed person is required to register as a person seeking for employment with the
employment service which is providing the benefit. Unemployed persons are usually required to be fit
for work, available for work and actively seeking work.
The coordination rules for unemployment benefits deal with three different areas and concern three
different scenarios, namely:
a) the aggregation of periods of insurance completed by mobile workers in different member
States,
b) the export of unemployment benefits for unemployed persons who want to move to another
Member State for the purpose of seeking employment there,
c) the determination of the Member State which is competent for providing unemployment
benefits for frontier and other cross-border workers.
The rules of coordination in respect of these three areas are briefly summarised below:
5.1.1 Rules as regards the principle of aggregation
The principle of aggregation of periods of social security protection is a basic principle of the
coordination rules, which ensures previous periods completed in another Member State are recognized
for the purposes of establishing entitlement. In respect of unemployment, the rules require that only
periods of insurance, employment and self-employment completed in different Member States have to
be aggregated. This can be explained by the fact that national unemployment schemes are not based on
periods of residence but rather periods of insured employment. The qualifying period varies from at
least 4 months in France to 24 months in the Slovak Republic. Most Member States apply a qualifying
period of some 12 months103
.
The Court has determined that the recognition of those periods,depends on the rules applicable in the
competent Member State. 104
This means that even periods of employment which did not qualify as an
insurance period in the country where they have been completed must be taken into account for the
purpose of aggregation, if such periods would be covered by the unemployment insurance in the State
providing the benefit.
Example: Denmark provides coverage in case of unemployment on a voluntary basis. According to
the interpretation of the Court, it is therefore possible that a mobile worker who elected not to be
covered by the unemployment insurance during a period of employment in Denmark would
nevertheless receive unemployment benefits from another Member State where they subsequently
become insured on the basis of the Danish periods of employment if those periods would qualify as
insured periods against the risk of unemployment in that Member State.
102
Case C-228/07, Petersen, paragraph 28; Case C-404/04, De Cuyper, paragraph 27.
103
Figure 2 in PACOLET, J. and DE WISPELAERE, F., Aggregation of periods for unemployment, Network Statistics FMSSFE, European
Commission, June 2015, Annex XXI.
104
Case 388/87, Warmerdam-Steggerda, EU:C:1989:196.
EN 40 EN
Moreover, the current rules require an aggregation of periods only subject to the condition that the
person concerned has most recently completed periods of insurance, employment or self-employment
in the Member State concerned. This particular condition applies only to mobile workers who move to
another country, i.e. who change their residence and claim unemployment benefits under the
legislation of their new country of residence. It does not apply to cross-border workers, who by
definition, already have their residence in another State.
This provision is based on the general principle that the Member State which has received the
contributions shall also bear the burden of the unemployment benefits. This requirement of ‘most
recent’ insurance also encourages the search for work in that Member State. As a result, it is not
possible for an unemployed person to simply move to another Member State or to return to his or her
State of origin and claim unemployment benefits in that State based on the principle of aggregation of
periods completed in another Member State without having first been employed and insured in that
Member State.
Example: Michael loses his job in Member State A and moves or returns to Member State B without
having registered as unemployed person in Member State A. In this case, Michael will only be entitled
to receive unemployment benefits from Member State B when he has most recently been insured
there, i.e. if he obtains employment in Member State B after his return but once again becomes
involuntarily unemployed.
The calculation of unemployment benefits in the event that a person had completed periods of
employment in more than one Member State are based on the principle that unemployed persons
should receive their unemployment benefit from the Member State of last activity in accordance with
the legislation applicable in that State.105
Consequently, the competent institution needs to take into
account exclusively the salary or professional income received in respect of the last activity as an
employed or self-employed person106
.
This rule does not affect Member States where unemployment benefits are paid on a flat-rate basis107
,
or those Member States which base the calculation of their benefits on the salary earned at the moment
when the person became unemployed108
. Most Member States, however, base their calculation on
average salaries earned during a reference period of 3,109
6,110
12111
or even 24 months112
.
5.1.2 The principle of export of unemployment benefits
One of the basic principles of social security coordination is the requirement that cash benefits shall be
paid irrespective of the place of residence of the beneficiary. In the area of unemployment benefits,
however, export is only possible subject to the specific conditions set out below and only for a limited
period of time.
An unemployed person who goes to another Member State in order to seek work must
105
This principle does to cross-border workers who resided during their economic activity in another Member State than the Member State
where the activity was performed.
106
Article 62(1) of Regulation (EC) No 883/2004.
107
Ireland, Malta, Poland, United Kingdom.
108
Table 9 in Annex VII: The Netherlands take the daily wage into account. Belgium refers to the average salary earned in the last position.
109
Croatia, Czech Republic, Denmark, Luxembourg.
110
Iceland, Spain, Switzerland.
111
Austria, Cyprus, France, Germany, Hungary, Latvia, Norway, Portugal, Romania, Sweden.
112
Bulgaria, Italy, Slovak Republic.
EN 41 EN
- have been registered with the employment service of the competent Member State for a period of at
least four weeks,113
- register with the unemployment service of the Member State where he/she is looking for work within
seven days after departing,
- comply with the control procedures organized by the unemployment service of that Member State.
Jobseekers who intend to look for work in another country shall request a certificate, namely the
Portable Document U2 (PD U2 – Retention of unemployment benefits) before departure which certifies
their right to continue to draw unemployment benefit. They should take care to return before expiry of
the maximum period, because if they return later, without the explicit permission of the employment
service of the state which is paying the benefits, they risk losing all remaining entitlement to
benefits.114
In the new country of stay, the jobseeker will be treated by the employment service exactly the same
way as any other jobseeker in this country. If the institution of this country becomes aware of any
circumstance which might affect entitlement to benefits, it will immediately inform the competent
institution and the jobseeker by issuing the document U3. This document informs the unemployed
person of the situation and advises him of his right of appeal to the competent institution if he/she does
not agree in order to ensure the continuation of the benefit payment.
The periods for which an unemployment benefit can be exported are limited. The original maximum
period of three months under Regulation 1408/71 was extended by Regulation No 883/2004 to a
minimum period of three months and a maximum period of six months.
5.1.3 Coordination of unemployment benefits as regards frontier and other cross-border
workers
Cross-border workers are workers who reside in another Member State than the State of activity. The
current rules differentiate between which Member State is competent for providing unemployment
benefits as regards to frontier works and other cross-border workers and between the situations, that a
cross-border worker is wholly, partially or intermittently unemployed. They provide that:
¾ Frontier workers shall receive their unemployment benefits from the competent institution in
their Member State of residence if they are wholly unemployed, and
¾ from the institution of the Member State of activity if they are only partially or intermittently
unemployed.
¾ The same applies to other cross-border workers if they are only partially or intermittently
unemployed.
¾ If they are wholly unemployed, they have a right of choice, i.e. they can return to their country
of residence and claim unemployment benefits from the institution of that State or remain in
the country of previous activity and claim benefits there.
To compensate the institution of the Member State for the fact that they are obliged to provide benefits
without having received contributions, the rules provide for a reimbursement of benefits paid for the
first three months or five months. The five-month reimbursement applies when the beneficiary had
been insured in the Member State of previous activity for at least 12 months within the last 24 months.
There are specific rules for frontier workers who were formerly self-employed. If they reside in a
country where there is no unemployment insurance for self-employed persons, they shall be entitled to
receive unemployment benefit from the institution in the country of last activity to which they had
been affiliated.
113
The underlying idea of this precondition is that an unemployed person should at first exhaust all possibilities of finding a new job in his
former country of employment before extending the search for employment to other countries. This period can be shortened, however, by the
institution concerned.
114
Unless otherwise provided for under the legislation of the competent Member State.
EN 42 EN
5.2. Aggregation of periods for unemployment benefits
5.2.1 Problems with the aggregation of periods for unemployment benefits and the drivers
behind them
5.2.1.1 Uneven application of the rules on aggregation of periods in a manner which leave
workers without protection and may disincentivise the search for work in another Member
State
Although the Court considered that a uniform interpretation of the principle of aggregation is a
prerequisite for its application115
, the condition116
that periods have to be aggregated by the institution
as soon as the unemployed person has ‘most recently’ completed periods of insurance, employment or
115
Case C-12/93 Drake EU :C:1994:336, paragraph 26; case 69/79, Jordens-Vosters, EU:C:1980:7, paragraphs 6 and 11.
116
This specific conditions has been justified by the Court in the case C-12/93 Drake EU :C:1994:336, paragraph 26:: “Article 51 of the
Treaty and Regulation 1408/71 provide only for the aggregation of insurance periods completed in different Member States and do not
regulate the conditions under which those insurance periods are constituted.” In the case 69/79, Jordens-Vosters, EU:C:1980:7, paragraphs
6 and 11, the Court stated: ‘It is well established that the requirement that Community law be applied uniformly within the Community
implies that the concepts to which that law refers should not vary according to the particular features of each system of national law but rest
upon objective criteria defined in a Community context.’ ‘The essential object of Regulation No 1408/71 adopted under Article 51 of the
Treaty is to ensure that social security schemes governing workers in each Member State moving within the Community are applied in
accordance with uniform Community criteria. To this end it lays down a whole set of rules founded in particular upon the prohibition of
discrimination on grounds of nationality or residence and upon the maintenance by a worker of his rights acquired by virtue of one or more
social security schemes which are or have been applicable to him.'
Drivers Problems
Unintended effect of the
calculation rule
(perceived unfair gains)
Divergence in MS' interpretation of the
rules of aggregation of periods
Access to unemployment benefits in
another MS after short periods of
employment in that State with the
help of the aggregation rules
Uneven application of
aggregation rules in a manner
which may disincentivise the
search for work in another
Member State
Access to unemployment benefits in
the MS of last activity on the basis of
the reference income earned there
after a short period of insurance or
(self-)employment
Unintended effect of the
calculation rule
(perceived unfair gains)
EN 43 EN
self-employment is not uniformly applied. This is due to the fact that the length of the required period
of 'most recent insurance' or (self-) employment is not specified in EU law. Most Member States take
the view that ‘any’ period of insurance or (self-)employment (even one day) will suffice in order to
trigger the application of the principle of aggregation. Some Member States117
, however, have
specifically defined periods for the application of the aggregation principle in their national law, for
example because periods of insurance or (self-) employment are expressed in weeks and not in days,
or as they understand a 'period' to comprise a longer period of time and that mere insurance or (self-)
employment is not sufficient.
In Finland, section 9 of Chapter 5 of the Unemployment Security Act (1290/2002) requires that
periods of insurance or employment completed in another State shall only be taken into account if the
person concerned has pursued an activity as an employed person in Finland for at least four weeks or
as a self-employed person for at least four months immediately before becoming unemployed.
In Denmark, section 2 of the Danish Ordinance No 490 stipulates that a person who has not been a
member of a Danish unemployment insurance fund within the last five years but has been insured in
another Member State will have his or her periods of insurance completed in another Member State
taken into account subject to, among other conditions, that the person must have worked continuously
in Denmark for at least 296 working hours in the past 12 weeks or three months, or for partially
employed persons 148 working hours in the past 12 weeks or three months. In case of self-
employment, the equivalent condition is eight full weeks within a period of 12 weeks or three months
prior to the unemployment.
A further difficulty is that there is no uniform application of the jurisprudence regarding the
recognition of periods completed in another Member State for the purpose of aggregation. The case-
law of the Court118
in this respect is not consistently applied. This leads to the situation that some
Member States also aggregate periods of employment or self-employment for which no contributions
have been paid, while others do not. According to an internal survey carried out by Poland as a follow-
up to the debate in the Administrative Commission, 18 Member States do not aggregate periods of
non-insured (self-) employment completed in another Member State whose legislation does not
provide for unemployment insurance coverage. This number is even higher (24) if the person
voluntarily decides not to insure him/herself in the State of activity and afterwards claims that he/she
has fulfilled periods of employment there.
Moreover, a debate was launched on this issue in 2011 in the Administrative Commission showed that
many Member States take the view that the wide interpretation of the Court leads to unjustified results.
There was support from seven delegations to change the rules on aggregation119
.
The driver behind these related problems is that Member States do not have the same understanding as
regards the recognition of periods to be aggregated or the condition of most-recent insurance. This
applies in particular with respect to the practice described above whereby some Member States require
under national law a specific period of insurance before applying the aggregation rules.
The consequence of this uneven application of the rules is legal uncertainty which may result in the
situation that an unemployed person who has not been insured for long enough in the competent
Member State is neither entitled to unemployment benefits in the State of last activity nor in the
former State where they previously worked.
117
For example Finland and Denmark.
118
Case 388/87, Warmerdam-Steggerda, EU:C:1989:196
119
Czech Republic, Germany, Austria, the Netherlands, Spain, Denmark.
EN 44 EN
It may also have the unwanted effect of dis-incentivising the search for work in another Member State.
The fear that taking up a position in another Member State could lead to a loss of social protection,
might discourage mobile EU workers from exercising their right to freedom of movement thereby
constituting an obstacle to that freedom. This would run counter to the objectives of the Treaty. The
Court has repeatedly held that the aim of Articles 45 TFEU and 48 TFEU would not be achieved if, as
a consequence of the exercise of their right to freedom of movement, mobile workers were to lose the
social security advantages afforded them by the legislation of one Member State, especially where
those advantages correspond to contributions which they have paid.120
5.2.1.2 Access to unemployment benefits in another Member State after short periods of
employment in that State with the help of the aggregation rules may lead to unintended gains
The most-recent-insurance requirement is intended to prevent unemployed persons from moving to a
new Member State and immediately claiming unemployment benefits without first having contributed
to that scheme.
In light of this aim it is doubtful whether it was the legislator's intent that unemployment benefits
should be paid by a new Member State in situations where a worker had been employed only for an
extremely short period, e.g. for only one day. A number of Member States121
argue that it is not
appropriate that simply taking up insurance in a Member State already suffices for making this
Member State responsible for providing unemployment benefits, when the entitlement to those
benefits is to a large extent based on periods of insurance completed in another Member State. They
argue that their respective schemes should be protected from claims of mobile workers who have not
in any substantial way contributed to the financing of their scheme122
.
This reasoning also plays a role in the case law concerning the rights of jobseekers to 'social
advantages123
' under Regulation (EU) No 492/2011. For instance, in joined cases C-22/08 and C-
23/08, Vatsouras and Koupatanze124
, the Court has concluded that jobseekers enjoy the right to equal
treatment under Article 45 TFEU and hence are entitled to receive jobseekers allowance on the same
footing as nationals of the Member State in which they are looking for work. However, a Member
State may decide to grant such an allowance only after it has been possible to establish a 'real link'
between the jobseeker and the labour market of that State125
.
120
See case C-548/11, Mulders, EU.C:2013:249, paragraph 47 and the case law cited therein
121
For instance: Denmark, Finland, Austria, France, Greece, Ireland and Romania.
122
See for example Barslund, M, Busse, M. and Schwarzwälder,J., Labour Mobility in Europe: An untapped resource?, CEPS
Policy Brief No. 327, March 2015, Brussels, p. 4.
123
The Court has held that social advantages means all the advantages which, whether or not linked to a contract, are generally
granted to national workers primarily because of their objective status as workers or by virtue of the mere fact of their residence
on the national territory and whose extension to workers who are nationals of other Member States therefore seems likely to
facilitate the mobility of such workers within the Community. This has been held to cover, for example, public transport fare
reductions for large families, child raising allowances, funeral payments, minimum subsistence payments, study grants. See, for
instance Case C-85/96, Martinez Sala, EU:C:1998:217.
124
Joined cases C-22/08 and C-23/08, Vatsouras and Koupatanze ECLI:EU:C:2009:344, paragraphs 36-38.
125
See also Cases C-224/98, D'Hoop, EU:C:2002:432, paragraph 28 and C-258/04, Ioannidis, EU:C:2005:559, paragraph 31.
Example: Dorothea has worked for five years in Sweden and then decides to move to Denmark
to take up a new position there. Unfortunately, she is dismissed after a probation period of two
months. As she does not fulfil the conditions set out in the Danish law (three months of
insurance), she cannot aggregate her insurance periods to claim unemployment benefits in
Denmark. At the same time, she will be refused unemployment benefits in Sweden, as she is no
longer insured there.
Had Dorothea spent her working life in Denmark (including the five years in Sweden), then she
would have been entitled to unemployment benefits in Denmark.
EN 45 EN
The available statistics for 23 Member States who were in a position to provide quantitative data in
this respect for 2013126
show that in 42% of the approximately 25.000 cases, aggregation was applied
before 3 months of periods of insurance or (self-)employment had been completed127
. When looking at
the Member States of 'destination' (United Kingdom, Belgium, Spain, France) relatively more requests
for aggregation were received within a period of 30 days, whereas in the Member States of 'origin'
(Hungary, Romania, Bulgaria, Poland, Slovakia), the majority of requests for aggregation of periods
were received after a period of three months. This could indicate that mobile EU workers are more
likely to stay in or return to the 'higher wage' Member States directly after they have become
unemployed. It is likely that this trend will continue due to a greater availability and use of temporary
or precarious working arrangements and the willingness of people to adjust their quantity of work
(part-time, on call, informal work, etc.) before returning home128
.
5.2.1.3 Calculation of unemployment benefits in the Member State of last activity only on the
basis of the reference income earned therein may lead to unintended results after a short
period of insurance or (self-)employment
Under the current rules, Member States cannot take into account salaries or professional income
earned during the reference period in different Member States, as they are only allowed to base the
calculation on salaries or professional income earned in their own territory. Although being
administratively easier to apply, this can also lead to situations where the calculation of the
unemployment benefit is based on salaries or professional income earned during a period which is
much shorter than the reference period fixed under national law. It cannot always be assumed that the
salary or professional income received during such a short period in one Member State is equal or at
least comparable to the salary or professional income received during the reference period in another
Member State. As a consequence, the current rules concerning the calculation of unemployment
benefits may lead to unintended results.
Example: Under Austrian law, the basic amount of earnings-related unemployment benefit amounts
to 55% of the average insured net earnings of the last calendar year. If a person has previously worked
in Germany and has worked in Austria for only four weeks before becoming unemployed again,
he/she would receive unemployment benefit in Austria only on the basis of the average salary earned
within the four weeks when he or she was employed there. The lower or higher average salary earned
in Germany during the reference period of one year would have no bearing on the amount of his or her
unemployment benefit in Austria.
In the situation above, it can be questioned to what extent the salary earned during four weeks in
Austria properly reflects the ‘reference earnings’ of the worker concerned129
.
Some Member States also fear that this may provide a 'pull factor' for opportunistic behaviour and
undermine the sense of the unemployment benefits coordination provisions. Such a concern has been
articulated by six delegations of the Administrative Commission130
and also by the legal experts
FreSsco.131
126
Table 6 in Annex VII. (Annex XII)
127
Table 2 in Annex XII.
128
European Commission, Economic and Social Developments in Europe, December 2014, p.48 and OECD Employment
Outlook 2015,table 1.7, p.30.
129
This aspect is also highlighted by FUCHS, B. (ed.), GARCIA DE CORTAZAR, C., BETTINA, K. and PÖLTL, M., Assessment of the
Impact of amendments to the EU socials security coordination rules on aggregation of periods or salaries for unemployment benefits,
Analytical report 2015, FreSsco, European Commission, June 2015 (Annex VII).
130
Austria, the Netherlands, Finland, Germany, Ireland, Norway, Denmark.
131
The same view has been taken by the authors of the FreSsco report FUCHS, B. (ed.), GARCIA DE CORTAZAR, C.,
BETTINA, K. and PÖLTL, M., Assessment of the impact of amendments to the EU socials security coordination rules on
aggregation of periods or salaries for unemployment benefits, Analytical report 2015, FreSsco, European Commission, June 2015.
On the other hand, whereas sometimes mobility can be at the advantage of a worker, in other situations this could not be the
case. The coordination rules do not always offer more 'advantageous' benefits to mobile workers. For instance, the current rules
also have as an effect those in cases of 'return migration’ a person could be faced with a lower level of benefits. For instance, a
EN 46 EN
The problem is exacerbated by the large differences between remuneration levels and the calculation
method of unemployment benefits. On the other hand, it is mitigated by the fact that 11 Member
States132
apply a maximum ceiling to earnings that can be taken into account. For example, in the case
of Belgium the lowest amount of benefits to be paid per day amounts to €36.66 and the highest
amount to € 61.66 regardless of actual earnings.
5.2.2 Baseline scenario
In the 23 Member States for which data are available for the year in 2013, 24.821 cases of aggregation
of periods for unemployment were reported. In relation to the total annual inflow of migrants of
working age in those States, this represents 2.1%. Given, however, that some large EU-15 Member
States (e.g. Germany and Italy) did not provide data and thus are not included in the above figures, the
total number of aggregation cases is likely to be higher.
On average, 0.11% of total unemployment spending by the reporting Member States could be related
to aggregation of periods.133
The total expenditure for unemployed benefits reported by 23 Member
States for the 24.821 cases of mobile EU workers who had to rely on periods of aggregation was
around € 100 million, of which € 36 (36%) million for workers who had worked for less than 30 days,
€ 15 million (15%) for workers who had worked between 1 and 3 months, and € 46 million (46%) for
workers who had worked 3 months or more.134
In absolute terms, France (€ 53 million) and Belgium
(€ 20.5 million) are the main spending Member States, which can be explained by the higher number
of aggregation cases and the higher average spending per unemployed persons in comparison to other
Member States. Romania (€ 2157), Cyprus (€ 3890) and Latvia (€ 4908) can be found on the lower
end, influenced by the low number of cases for aggregation and the lower annual average expenditure
per unemployed person.
As the Member State of last activity has to assume the costs for providing unemployment benefits, it is
also this State which is affected by the provisions on the calculation of those benefits. The current
rules stipulate that the calculation of unemployment benefits shall only be based on the earnings
received in the Member State of last activity. This leads to higher expenditure in all cases where the
reference earnings in the Member State of last activity are higher than in the Member State of previous
activity. In the reverse situation, this provision results in savings.135
The evolution of those numbers in the future will depend to a large extend on the evolution of the
number of new intra-EU movers, their risk of becoming unemployed and the qualifying period.
Moreover, the budgetary impact will also be influenced by the evolution of the unemployment benefit
and the average duration of unemployment.
If we assume that working age mobility flows will grow between 2015 and 2020 at the same rate as
they have grown for the overall flows year on year between 2010 and 2013 (5.6%),136
and if we
assume that 2.1% of the total annual inflow of migrants of working age will continue to rely on
aggregation, then we could estimate that in 2020 there would be some 33.000 cases of aggregation in
the 28 Member States.
If, alternatively, we assume that working age mobility flows will grow between 2015 and 2020 by the
same absolute amount per year as the overall flows year on year have grown between 2010 and 2013
(66.000),137
and if we still assume that 2.1% of the total annual inflow of migrants of working age will
continue to rely on aggregation, then we could estimate that in 2020 there would be some 32.000 cases
of aggregation in the 28 Member States.
Portuguese worker who has worked in the Netherlands for one year and decides to return to Portugal, where he falls unemployed
after two months, will receive unemployment benefits based on the salary received in Portugal, without taking account of the
potentially higher earnings in the Netherlands.
132
Belgium, Bulgaria, Germany, Spain, Croatia, France, Italy, Cyprus, Netherlands, Austria and Sweden.
133
Annex XIV, Table 10.
134
Annex XIV, Table 10.
135
Annex XIV, Table 2.
136
Rate is based on average of year on year absolute growth of population all ages based on Eurostat Migration flows data migr_imm1ctz.
137
Average of year on year absolute growth of population all ages based on Eurostat Migration flows data migr_imm1ctz.
EN 47 EN
Not undertaking action in the field of aggregation could lead to increased public disenchantment and
exacerbate criticism of, and anxiety about the consequences of free movement. It could lead to the
situation that (more) Member States apply their own interpretation of the current rules in a restrictive
way thus reducing legal certainty and risking that mobile EU workers will lose out on rights. If
Member States were free to apply the EU legal provisions on the coordination of unemployment
benefits at their discretion, the intended uniform application of these provisions could no longer be
guaranteed.
5.2.3 Objectives for review of the coordination rules on aggregation of periods
The general policy objective of this initiative is to continue the modernisation of the EU Social
Security Coordination Rules by further enabling the citizens to exercise their rights while at the same
time ensuring legal clarity and a fair and equitable distribution of the financial burden among the
institutions of the Member States involved and administrative simplicity and enforceability of the
rules.
In relation to the rules on aggregation of periods for the purpose of fulfilling qualifying periods set up
under national law for entitlement to unemployment benefits, this means in particular to provide
clarity in order to avoid divergent interpretations and to ensure a uniform application of the rules by all
Member States. At the same time, there is also a need to consider the underlying reasons for the
current discrepancies and to see how they can be taken into account without depriving mobile citizens
of the rights in case of unemployment which they may have acquired in different Member States.
In view of this general objective, the specific objective in this field can be defined as follows:
¾ Ensure a uniform and consistent application of the aggregation and calculation rules in a way
that also reflects the degree of integration of a worker in the insurance system of a Member State.
¾ Ensure mobile EU workers benefit from protection of rights when they move to another Member
State to take up employment there.
¾ Ensure a proportionate distribution of financial burden between Member States.
5.2.4 What are the various options to achieve the objectives concerning the aggregation of
periods of unemployment benefits?
EN 48 EN
5.2.4.1 Option 0 : baseline scenario
If the status quo were to be maintained, aggregation can only be applied from the moment when an
unemployed mobile person, has ‘most recently’ completed a period of insurance or (self-)employment
under the national unemployment insurance scheme, regardless of the duration of that employment.
Where the amount of the unemployment benefit is determined as a proportion of previous salary of
professional earnings, only the wages or incomes earned in the competent Member State are taken into
account.
5.2.4.2 Option 1: Formalization of the "one day rule"
A uniform interpretation of the requirement of ‘most-recent insurance can be achieved by introducing
a minimum period of prior employment in the text of Regulation (EC) No 883/2004. Option 1 entails
that the principle of aggregation can be invoked after one day of insurance or (self-employment) under
their system. This is shortest minimum insurance or employment requirement that can be applied. The
unemployment benefit shall be calculated on the basis of the salary earned or professional income in
the State of last activity.
Example: David moves from Member State A to Member State B and works there for two weeks
before becoming unemployed. Under this option, he could claim unemployment benefit immediately
in A based on his (aggregated) periods of insurance completed in B. The amount of the benefit will be
calculated on the basis of the wage earned during the two weeks of work in A.
5.2.4.3 Option 2: Introduction of a minimum period of insurance or (self-)employment of one
or three months
Instead of interpreting a period of insurance or (self-) employment as one day, reference to a longer
period of time can be considered as well. About half of the EU Member States use qualifying periods
of 50 or 52 weeks. Lithuania and Slovakia have qualifying periods of 64 weeks or longer. If the
EN 49 EN
employment history of the mobile worker in the Member State which has to aggregate should
sufficiently represent the link to the labour market in that State, introducing a minimum period of
insurance or work of:
a) at least one month (option 2a), or
b) at least three months (option 2b)
has been completed in the Member State of last activity.138
The periods are chosen with a view to enable the persons concerned to establish a ‘sufficient link’ to
the social security system of the competent Member State without depriving them of their rights. This
would also allow continuing applying the rule that unemployment benefits are only calculated on the
basis of the salary or professional income earned in the territory of the competent Member State as the
previously competent Member State would calculate the level of unemployment benefits on the basis
of the calculation rules applicable there.
Example: David moves from Member State A to Member State B and works there for four
months before becoming unemployed. David becomes entitled to unemployment benefits in B based
on his insurance periods in A because by working for four months he has completed in excess of one
month (option 2a) or three months (option 2b) of insurance or (self-)employment in Member State B.
The amount of the benefit would be calculated on the basis of the wage earned during the four month
period of work in B.
When discussing this option in the Administrative Commission, a number of Member States clearly
pointed out that a person should not lose out on rights when he/she is not able to make a claim for
aggregation and that a solution should be found for these situations139
. In general, other stakeholders
emphasized the need to respect the right of equal treatment.
It is obvious that the condition of one month of previous employment (option 2a) is easier to fulfil than
the condition of three months of employment (option 2b)140
. However, the urgency to satisfy this
condition is greatly reduced if the mobile worker can benefit from unemployment benefits paid by the
Member State of previous activity in such a case.
A gap in protection could indeed occur if a mobile worker like David would become unemployed after
a period of employment of for instance two weeks. In this case, he may not be able to claim
unemployment benefits in the Member State of previous activity due to the fact that he was not 'most
recently' insured in that State.
To overcome this situation, i.e. to allow the unemployed person to stay in the State of last activity to
search for new work there, both options should be combined with a provision that the previous
Member State of activity should export the unemployment benefit in accordance with its national
legislation. 141
This means that the previously competent Member State will have to apply its rules as if
the unemployed person were still insured there, irrespective of the fact that the unemployment
occurred in the Member State of last activity and that the unemployed person resides in that State142
.
To this end, it shall suffice that the unemployed person registers and makes him/herself available to
the employment services in the Member State of last activity and that he/she adheres to the obligations
applied to jobseekers in that Member State.
138
The length of these periods coincides with the current practice in some Member States (Denmark and Finland).
139
Portugal, Poland, Germany, Hungary, Austria, France, Greece, Ireland and Romania.
140
The three months also correspond to the current right to claim an export of unemployment benefits for at least such a period
and to the rule contained in Articles 6 and 24(2) of the Free Movement Directive 2004/38, according to which an inactive person
may move to another Member State without any further requirement regarding his income, but at the same time also without a
right to social assistance benefits in the host Member State.
141
The options with regard to the export of unemployment benefits are discussed in paragraph 5.3.4.
142
According to the case-law of the Court (Case C-308/84, Naruschawicus, EU:C:1996:28, paragraph 26), the requirement of
‘availability’ cannot have as a direct or indirect effect that a person should be required to change his or her residence.
EN 50 EN
This means that an unemployed person shall not be forced to return to the previously competent
Member State to register with the employment services there.
Example: If David had been in employment for only two weeks in Member State B in the example
above, he cannot claim unemployment benefits in Member State B as he does not satisfy the condition
of at least one or three months of employment there.
However, by using the export provision, he will nevertheless be able to receive unemployment
benefits from Member State A on the basis of his earnings and his periods of insurance there. He will
have to register with the employment services in Member State B, which will follow-up on his job
searching activities on behalf of the employment service in Member State A and which will report
back to Member State A.
Option 2a and 2b only apply to the specific situation where a person has moved his or her residence to
another State and then becomes unemployed after having completed less than one or three months of
insurance or (self-)employment. These options hence do not affect frontier and other cross-border
workers, that is to say those workers whose place of residence already was, and remains, in another
Member State than the Member State of last activity during their unemployment.
5.2.4.4 Option 3: Taking into account previous earnings received in another Member State if
a person has worked less than one or three months in the competent Member State
This option aims to establish a stronger link with the level of the previously earned salary or
professional income (‘reference earnings’).
Option 3 reflects this idea, but only in case where the person concerned has worked for a period
shorter than:
- one month (option 3a), or
- three months (option 3b) in the competent Member State.
These two sub-options allow Member States that calculate their unemployment benefit by reference to
previous average earnings to take into account also reference earnings that have been received in the
territory of another Member State.
Example: David moves from Member State A to Member State B and works there for two weeks
before becoming unemployed. Under this option, he could claim unemployment benefit immediately
in Member State B based on his (aggregated) periods of insurance completed in Member State A.
However, his unemployment benefit will be calculated on the basis of an average of the salaries in
Member States A and B.
Imagine that the reference period for calculating unemployment benefits in Member State B is 12
months. Imagine David has worked for 12 months in Member State A and 2 weeks in Member State
B. David has earned a monthly salary of € 1000 in Member State A and € 500 in Member State B. The
unemployment benefit in Member State B will be calculated on the basis of the following salary:
(2/52* € 500) + (50/52 *1000) = € 19.23 + € 961.53 = € 980.76.
Option 3 is an alternative to option 2. Both options lead to the result that in case of short employment
in the new Member State of less than one or three months, the calculation of the unemployment
benefit is (also) based on earnings received in the Member State of previous activity. However, under
option 2, the benefit is paid by and at the expense of the institution of the Member State of previous
activity, whereas under option 3, benefits are paid by the Member State of last activity.
5.2.4.5 Horizontal option: clarification of the conditions for the recognition of periods to be
aggregated
This option can be combined with each of the previous options, as its aim is to clarify the conditions
under which a person has a right to base his or her claim or unemployment benefits on periods
completed in another Member State.
EN 51 EN
The current Article 61 is the source of much controversy between Member States, as is shown by the
results of the survey carried out within the Administrative Commission under the Polish Presidency in
2011. This holds especially true when it comes to the question of whether periods of employment
always provide for coverage in the Member State in which they were fulfilled. In order to ensure a
uniform interpretation of Article 61 (1) of Regulation (EC) No 883/2004, it is important the legal text
be as clear and unequivocal as possible. This could either be done by introducing this clarification in
Article 61, or by applying the general rule on the aggregation of periods in Article 6 of Regulation
(EC) No 883/2004.
A uniform aggregation rule can accommodate Member States' desires that periods that do not give
entitlement to unemployment benefits in the Member State where they were completed are not taken
into account for the purposes of aggregation.
5.2.4.6 Discarded Option
The idea to introduce a reimbursement mechanism between the Member State of most recent
Employment and Member State of previous employment as an alternative to Option 2a and b was
considered but has been discarded, as the current problems with the reimbursement mechanism for
unemployed frontier workers show that such a mechanism is likely to create disputes and delays
between the institutions involved.
5.2.5 Stakeholders' views on the different options
5.2.5.1 Option 0 : baseline scenario
In consultations with stakeholders, maintaining the status quo was supported by ten delegations in the
Administrative Commission143
Further in the public consultation only 40% of organisations and 33%
of individuals indicated support that the current rules should be changed.144
However, some of the
social partners and NGO representatives145
took the view that they could accept a change of the rules if
the rights of mobile citizens continue to be safeguarded.
5.2.5.2 Option 1: Formalization of the "one day rule"
Ten delegations supported this option146
. In addition, in the public consultation only 40% of
organisations and 33% of individuals indicated support for moving from the prevailing practice that
one day of insurance suffices, however, amongst the comments from respondents there was support
for consistent practices among Member States.
Eight delegations147
indicated that they could accept option 1 if in return the calculation rule would be
amended, or vice versa, as either one of the rules is needed to establish a 'genuine link' with the
unemployment insurance system.
5.2.5.3 Option 2: Introduction of a minimum period of insurance or (self-)employment of at
least one month (option 2a) or three months (Option 2b)
Option 2a was supported by three delegations in the Administrative Commission148
. Option 2b gained
support from 10 delegations149
of which 5150
made an explicit written request to introduce a minimum
period of insurance or (self-) employment in Article 61. There is also support from an employer
143
The Bulgarian, Czech, Estonian, German, Croatian, Italian, Polish, Portuguese, Slovakian, and Slovenian delegations supported
this option.
144
A public consultation between July and October 2015 invited citizens and organisations to provide their views on
the main problems linked to the coordination of unemployment benefits, family benefits and posting of workers.
145
A global consultation with social partners and NGOs took place.
146
The Bulgarian, Czech, Estonian, German, Croatian, Italian, Polish, Portuguese, Slovakian, and Slovenian delegations supported
this option.
147
The Bulgarian, Italian, Portuguese, Belgian, Estonian, Irish, Polish and Swedish delegations
148
The Finnish, Luxembourgish and Hungarian delegations.
149
The Austrian, Danish, Greek, French, Irish, Latvian, Lithuanian, Maltese, Romanian and United Kingdom delegations.
150
Austria, France, Greece, Ireland and Romania.
EN 52 EN
association151
. Less than half of the respondents to the public consultation commented on the principle
of aggregation, but amongst that group there was general support for the idea of consistent practices
between Member States. In addition there was general support of introducing a minimum
employment/ contribution period at EU level. At the same time, many argued that the Member State
where the contributions are paid – namely the Member State of (the last) employment – should
provide the unemployment benefits. Among organisations responding to the consultation, the
proposed period was at least one month, while among individuals there was greater support for a
minimum qualifying period of insurance of at least three months (or longer).
5.2.5.4 Option 3: Taking into account previous earnings received in another Member State if
a person has worked less than one month (option 3a) or three months (option 3b) in the
competent Member State
This issue has been raised by six delegations152
in the Administrative Commission, where they have
proposed to introduce a stronger link between the salary or professional income earned and the amount
of the unemployment benefit awarded. Although only a minority of respondents to the public
consultation commented on the issue of "reference earnings", among those that did there was general
support for the principle that unemployment benefits should be calculated by reference to earnings for
the entire reference period including those earned in another Member State.
5.2.6 What are the Impacts of the Different Options on aggregation of periods of insurance
or (self-)employment
5.2.6.1 Introduction
For all of the options assessed, the potentially affected groups are the same. The options are
specifically targeted at mobile EU workers, that is to say: workers who have moved their residence to
the new State of activity. Hence, they do not concern frontier workers or other cross-border workers.
National governments will have to administer the rules in the framework of their national legal
systems and allocate resources to the national, regional of local institutions to apply the principle of
aggregation. At the executive level, national, regional or even local institutions providing
unemployment benefits to workers will have to deal with claims for aggregation of periods of
insurance or (self-)employment.
In relation to fundamental rights all options aim to facilitate the exercise of the right to engage in work
in another Member State (Article 15) by clarifying the provisions on aggregation of unemployment
benefits. They also respect the right to social security benefits (Article 34). In terms of respecting
equal treatment and the right to free movement under Article 45 of the Charter as well as Article 45
TFEU, the Court has held that the legislator can attach conditions to the rights granted by Article 45
TFEU153
, as long as mobile workers are not put at an unjustified disadvantage in comparison to
national workers, for example where they will have to pay social security contributions in which there
is no return154
. Although the options are directly targeted at mobile EU workers, a difference in
treatment can be justified only if it is based on objective considerations distinct from the nationality of
the persons concerned and is proportionate to the legitimate aim pursued under national law.
In relation to the economic impact, it has to be pointed out that the aggregation of periods is a
mechanism to open, retain or recover a right to unemployment benefits. The principle as such does not
have a direct budgetary impact, whereas the direct consequence of applying that principle, namely the
payment of unemployment benefits, has. A detailed overview is provided in Annex XXII. It has to be
151
UEAPME.
152
Austria, the Netherlands, Finland, Germany, Ireland and Norway.
153
Case C-62/91, Gray, EU: C:1992:177, paragraph 11.
154
See, to that effect, Cases C-393/99 and C-394/99, EU:C:2002:182, paragraph 51, C-493/04, Piatkowski, EU:C:2006:167,
paragraph 34, C-345/09, Van Delft, EU:C:2011:57, paragraphs 100 and 101; C-388/09, da Silva Martins, EU:C:2011:439,
paragraph 72 and 73.
EN 53 EN
noted that a total of 23 Member States155
(Belgium, Bulgaria, Denmark, Estonia, Spain, France,
Croatia, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Poland, Romania,
Slovakia, Finland, Sweden, United Kingdom, Liechtenstein, Norway, Switzerland) provided
quantitative data, of which three Member States (France, Spain and Estonia) were not able to provide a
breakdown by Member State of origin. The missing data for a number of large Member States, in
particular EU-15 Member States, have entailed some limitations in the assessment of some of the
options156
. The full study is attached in Annex XIV.157
Based on the data from the administrative questionnaire on the aggregation of periods for
unemployment the budgetary impact of the current rules and the different alternative options could be
calculated. Member States had to provide a breakdown by Member State of origin and a breakdown by
length of insurance. The reported cases have been multiplied by the annual average expenditure per
unemployed person (also by taking into account the annual average duration of the payment of the
unemployment benefit) in order to estimate the public unemployment spending. Option 3 (change of
the calculation method) required more detailed information about the unemployed recent migrant
worker’s salary. No information on the salary earned in the competent Member State as well as in the
Member State of origin was collected via the administrative questionnaire. Therefore, wage data
published by Eurostat has been used.
The analysis solely focuses upon the cost to the competent Member State for the provision of
unemployment benefits. It is recognised that in relation to option 1 and 2 there could be a shift in the
competence for other social security benefits (in particular for family and sickness benefits) for the
cases where a person has worked for an insufficient period in the Member State of last employment to
qualify for aggregation of unemployment benefits meaning that competence shifts to the Member
State of previous employment. However, insufficient data is available to quantify the economic impact
resulting therefrom.
When looking in particular at economic impact, regulatory costs and secondary impact for option 2, as
already explained above158
, this option has evolved during the impact assessment, notably by making
the Member State of previous employment responsible for exporting unemployment benefits for those
workers who have not completed a period of insurance of one or three months in the Member State of
last employment. For this reason, a quantitative assessment has only been made for the first version of
the option, whereas a qualitative assessment could be made for the final version of the option.
There are large differences between the salaries across the 23 Member States surveyed159
, and it
should be borne in mind that data limitations are even more significant than for the other options as the
economic impact for this option could only be estimated for some 14 Member States. The estimated
budgetary impacts do not take into account the 'flattening' of the level of unemployment benefits due
to a ceiling of earnings applicable in some Member States or minimum or maximum amount of
benefits. The negative impact thus can be mitigated by such a ceiling.
The regulatory costs for both public administrations and citizens were assessed through a number of
interviews with public officials working for administrations dealing with the aggregation of
unemployment benefits (both as Member States of last employment and of previous employment) in
six Member States (Germany, Denmark, the Netherlands, Poland, Romania, the United Kingdom).
The full study is attached to this report in Annex XVII.160
155
For the purpose of Social security coordination rules, the term Member State refers to the EU-28 + Switzerland, Norway, Liechtenstein
and Iceland.
156
For a detailed reporting on the questionnaire on the aggregation of periods for unemployment, see Annex XII.
157
Pacolet, J. & De Wispelaere, F, Aggregation of periods or salaries for unemployment benefits - Analysis of the economic impact of the
options, 2015 (Annex XIV).
158
See above, chapter 4.3 (Option 2 – Introduction of a minimum period of insurance or (self-)employment of one or three
months).
159
Table 17, Annex XIV.
160
Katrine Julie Abrahamsen, Monica Lind, Peter G. Madsen , Administrative costs of handling aggregation of periods or salaries for
unemployment benefits, 2015 (Annex XVII).
EN 54 EN
The proposed policy options can also have an incidence on mobility decision and mobility patterns of
mobile EU workers. The secondary impacts of the options in terms of inflows and outflows of EU
citizens were estimated on the basis of case studies in eight Member States (Germany, Denmark,
France, the Netherlands, Italy, Poland, Romania, and the United Kingdom). They provide an
indication on the direction and the general magnitude of the variation generated by the implementation
of the policy options. The full study is attached to this report in Annex XIX.161
Finally, the options have been compared to the baseline scenario and with regard to their effectiveness
in achieving the general and specific objectives of the initiative, their efficiency (cost-
effectiveness/even burden sharing), coherence with the general objectives of the EU and their impacts
as assessed below.162
161
Michele Raitano, Matteo Luppi, Riccardo Conti, Diego Teloni, Secondary effects following a change of regulations on the aggregation of
periods or salaries for unemployment benefits, 2015 (Annex XIX).
162
Secondary impacts are not considered in the final comparison in recognition of the limitations of the data available to conduct this
assessment.
EN 55 EN
5.2.6.2 Summary of the impact of different options concerning the aggregation of periods for entitlement to unemployment benefits
Type of
impact
Clarification Simplification Protection of
rights
Fundamental
rights
Economic
impacts
Regulatory
costs
Risk of fraud
and abuse
Equitable
burden
sharing
Member
State
Coherence with
General,
Specific and
EU objectives
Overall
Effectiveness
Overall
Efficiency
(cost vs
effectiveness
Baseline
Scenario
0 0 0 0 0163
0164
0 0 0 0 0
Option 1 + + + + 0 +/- - - - ++ ++
Option 2a + + + + +/-165
+/- + + + 0 +
Option 2b + +/- + + +/- +/- + ++ 0 0 ++
Option 3a +/- +/- +/- + -166
-167
+ - 0 + -
Option 3b +/- - + + -168
+/-169
+ - + + -
Horizontal
Option
+ + +/- 0 0 + + + + + +
163
€ 100 m is the budget devoted to aggregation of UB in 23 reporting Member States, equating to on average, 0.11% of total unemployment spending by the reporting Member States - Annex XIV, Table 10.
164
Costs for handling aggregation of UB varies between € 100 – 40,000 in selected Member States.
165
Decrease of €21 million (-22%) for Member State of last employment (= Member State of residence), but corresponding increase for Member State of previous employment.
166
Small decrease (-3.2%).
167
Increase by 28% .
168
Small decrease (-4.1%).
169
Increase by 29%.
EN 56 EN
5.2.6.3 Impacts of Policy Option 1: Formalisation of the "one day rule"
Policy Option 1: Formalisation of the “one-day-rule”
Social impacts
Clarification + Clarity of the legal rule on aggregation will be improved by
eliminating the divergent interpretations on the application of the
aggregation rule, thereby increasing legal certainty.
Simplification + A uniform interpretation of the rules on aggregation will contribute
to simplifying the aggregation procedure for the institutions
concerned as they will all apply it as from the same moment. A
limited number of Member States (Denmark, Finland) would have to
change their national legislation.
Protection of rights + Uniform application of the principle, that aggregation takes place
after one day of insurance, employment or self-employment in the
competent Member State will faciltate access for mobile EU citizens
to their rights to unemployment benefits, as Member States will
apply a consistent approach to aggregation of periods completed in
another Member State.
Economic impacts
Financial impact 0 On average, 0.11% of the total unemployment spending (around €
100m) by the reporting Member States is related to aggregation of
periods. This option is likely to entail a slight increase of expenditure
for those Member States170
which currently require in a longer period
of insurance or(self-)employment before aggregation is applied in
accordance with their national legislation. However, as 26 Member
States currently apply the one day rule as the 'standard' period for
triggering aggregation the overall impact is expected to be
negligible.171
Impact on fundamental rights + This option aims to facilitate the exercise of to the right to engage in
work in another Member State (Article 15 of the Charter), as well as
to a better protection of rights for workers who have made use of
their right to free movement (Article 45 of the Charter). The right to
property (Article 17 of the Charter) will be respected as well, as
periods acquired in a previous Member State can be added to periods
of insurance or (self-)employment as of the first day of insurance or
(self-) employment in the host Member State and no 'gap' in the
protection of the worker can occur. The principle of equal treatment
(Article 21 of the Charter) is also respected as nationals and non-
nationals are subject to the same conditions as regards their rights to
unemployment benefits.
170
Denmark and Finland.
171
There may be an increase could be expected in the number of workers being able to claim unemployment benefits in those Member States
that today require a longer period of work than one day before aggregation can take place, for instance Denmark (now applying a three-
month period for those who have not yet been a member of an unemployment insurance fund for at least five years) and Finland (now
applying a one-month period).
EN 57 EN
Other impacts
Regulatory Costs +/- This option will not have a significant effect on the administrative
burden of institutions as it will reflect existing practice in 26 of the
28 Member States. A marginal increase of aggregation cases and the
corresponding regulatory costs may occur in those Member States
that today require a longer period of work than one day before
aggregation of previous periods of employment can take place
(Denmark and Finland).
Risk of fraud and abuse - In principle, the requirement of one day of employment may be used
by some mobile workers or employers to engage in bogus
employment, although there is no evidence in this respect.
Fair burden sharing between
Member States
- This option does not contribute to a fairer sharing of burden between
Member States as a Member State may become responsible for
providing unemployment benefits even in cases where they have
received a relatively (very) small part of the social security
contributions.
Mobility 0 In terms of mobility flows, it is estimated that a formalisation of the
"one day rule" could result in a negligible increase in workers and
jobseekers movements towards those countries that today require a
longer period of work than one day before aggregation of previous
periods of unemployment can take place. Considering the low
number of aggregation cases even in countries that apply the one day
rule, the increase in flows is expected to be very limited.172
Coherence with General,
Specific and wider EU
Objectives:
Continue the modernisation of
the EU Social Security
Coordination Rules by further
facilitating the exercise of
citizens' rights while at the same
time ensuring legal clarity, a fair
and equitable distribution of the
financial burden among the
institutions of the Member States
involved and administrative
simplicity and enforceability of
the rules.
• Ensure a uniform and
consistent application of
the aggregation and
calculation rules reflecting
the degree of integration in
the Member State.
• Ensure mobile EU workers
benefit from protection of
rights
• Ensure a proportionate
distribution of financial
burden between Member
States
- This option introduces legal clarity and simplicity for unemployed
persons and is easy to implement from an administrative point of
view for the majority of Member States. It also has negligible
budgetary impact On the other hand; it fails to require a genuine link
with the unemployment insurance system in the State of last activity.
This option in itself is therefore not the most effective option to
strike a balance between the aims of protecting mobile workers and
requiring a certain degree of integration in the labour market and
insurance system of the State of last activity, before it becomes
responsible for the payment of benefits. It is neutral in relation to
coherence with wider EU policy objectives.
172
See table 3.1.1, Annex XIX.
EN 58 EN
5.2.6.4 Impacts of Policy Option 2: Introduction of a minimum period of insurance or (self)-
employment of one month (sub option2a) or three months (sub option 2b)
Policy Option 2: Introduction of a minimum period of insurance or (self-)employment of one month (sub
option 2a) or three months (sub option 2b)
Social impacts
Clarification + Clarity of the legal rule on aggregation will be improved by
elminating the divergent interpretations.
Simplification + A uniform interpretation of the rules on aggregation will contribute
to simplifying the aggregation procedure for the institutions
concerned as they will all apply it as from the same moment. A
limited number of Member States (Denmark, Finland) would have to
change their national legislation. A small number of citizens, who do
not have the requisite minimum period of insurance may experience
a change in the competent Member State responsible for their
unemployment benefits as competence would revert to the Member
State of previous activity. However, such administrative
arrangements would be largely dealt with by the competent
institutions.
Protection of rights + Uniform application of the principle, that aggregation takes place
after one month (option 2a) or three months (option 2b) of insurance,
employment or self-employment in the competent Member State can
affect those mobile EU citizens who claim their right to
unemployment benefits within a period of one (option 2a) or three
(option 2b) months. As a consequence, a group of 6.742 (1month) or
10.082 (3 months) mobile EU workers concerned would not be
entitled to unemployment benefits in the last State of activity as long
as they have not fulfilled this minimum period meaning they would
have no right to unemployment benefits from the competent State.
This would negatively affect their right to free movement.
However, this disadvantage will to a large extent be compensated by
an export of unemployment benefits from the Member State of
previous activity.
Economic impacts
Financial impact +/- This option is likely to entail a slight increase of expenditure for the
Member States of previous emploment (to a larger extent under sub
option 2b than under sub option 2a), but a corresponding decrease of
expenditure for the Member States of last activity (37% for option 2a
vs 51% for option 2b). Overall, there will be a positive impact with a
decrease of the expenditure of €21 million (22%) for 2a) and of
approximately € 29 million (42%) for 2b)173
The most significant reductions will occur in Belgium (€ 6.8 million
173
This is based on a calculation of €51 million (€36 million for workers with less than 30 days of insured work + €15 million workers with
less than 3 months who will not fulfil the minimum period for aggregation minus €22 million (amount to be paid by the previous
Member State responsible for unemployment benefits considering a 3 month entitlement (see Annex XIV Table 16).
EN 59 EN
for 2a and €12.8million for 2b ), Spain (€ 3.1 million for 2a and
€4.5million for 2b) and France (€ 25 million for 2a and €33 million
for 2b)174
, being the Member States with currently the highest
number of aggregation cases.
While increases in public employment expenditure in the Member
States of previous employment: of € 3.4 million in respect of option
2a and €6.5 million in respect of option 2b (both calculations
assuming an entitlement for 3 months), with the Netherlands (€ 1
million in respect of option 2a and €2million in respect of 2b ) and
France (€ 0.4 million in respect of 2a and €0.6 million in respect of
2b) being the most affected countries175
.
Furthermore, there could be a shift in the competence for other social
security benefits (in particular for family and sickness benefits) for
the 6,471 (one month) or 10,082 (3 months) cases from the Member
State of last employment to the Member State of previous
employment. However, insufficient data is available to quantify the
economic impact resulting therefrom.
Impact on fundamental rights + Under option 2, the rights of mobile EU workers will be protected
through securing export from the previously competent Member
State. Limiting the time for the export of unemployment benefits is
one of the conditions which are permitted176
. In terms of respecting
the principle of proportionality, the introduction of a minimum
period of work and (self-) employment the objective of establishing a
sufficient link to the social security system of the host Member
State177
is balanced with safeguards to ensure continuity of
protection for the worker.178
The right to property (Article 17) is
respected by ensuring that the person can receive unemployment
benefits from the previously competent Member State, at least during
the period of export.
Other impacts
Regulatory Costs +/- This sub option does not impose new information obligations on
unemployed persons or require new implementing arrangements for
the institutions. It does however result in shifting the responsibility
between Member States. Where previously an unemployed mobile
EU worker could apply for aggregation in the State of last activity to
claim unemployment benefits there, he/she now needs to apply for an
export of unemployment benefits from the previously competent
Member State. To that end there may be additional administrative
tasks for the respective Member States of most recent employment
and previous employment.
On the basis of the interviews conducted with national
administrations, it is estimated that the administrative tasks for the
institutions of the Member State of last employment would remain
almost unchanged. Interviewees from Germany, Denmark,
Netherlands and United Kingdom expect a reduction in the number
of cases – see also mobility below – which would translate into a
174
Tables 10, 11 and 14 Annex XIV.
175
Tables 12 and 15 Annex XIV.
176
Joined cases 41/79, 121/79 and 796/79, Testa, EU:C:1980,163, paragraph 14.
177
Case C-62/91, Gray, EU: C:1992:177, paragraph 12.
178
In terms of respecting equal treatment and the right to free movement under Article 45 of the Charter as well as Article 45 TFEU, the
Court of Justice has held that the legislator can attach conditions to the rights granted by Article 45 , as long as mobile workers are not put at
an unjustified disadvantage in comparison to national workers, for example where they will have to pay social security contributions in
which there is no return..
EN 60 EN
marginal reduction of the total regulatory costs in Germany (€300 for
option 2a and €400 for 2b), Denmark (€200 for 2a and 2b) and
Poland (€350 for 2a and €2700 for 2b)179
.
In the Member States of previous employment, a corresponding
increase is to be expected, though it was not possible to quantify it180
.
Risk of fraud and abuse + In particular option 2b ensures a clearer link between the State
responsible for awarding benefits and where contributions have been
paid, but could also provide for an incentive to accept part-time or
low-paid employment in the Member State of last activity just for the
purpose of being able to claim unemployment benefits.
Fair burden sharing between
Member States
++ This option – in particular sub option 2b - contributes to a fairer
sharing of burden between Member States as their institutions
become responsible for providing unemployment benefits only to
those mobile workers who had been a member of the scheme and
who had therefore contributed to the financing of the schme for a
substantial period. In comparison to the baseline scenario, a
reduction of approximately € 3.6 million (37%) in the expenditure
for unemployed benefits for people needing aggregation for 23
reporting Member States can be estimated.
Mobility 0 An estimation (on the basis of the case studies aimed at measuring
the effects generated by this option in terms of intra-EU mobility) 181
,
which did not take into account the fact of making the Member State
of previous employment competent, concluded that a reduction in the
mobility flows could occur, notably towards Denmark (up to 6%),
Italy (up to 4.5% for 2a and 6% for 2b), France (up to 2.5% for 2a
and 3.4% for 2b) and Germany (up to 2.5% for 2a and 3.3% for 2b).
In the United Kingdom, the impact of option 2a could be rather
moderate (a decrease of 0.6%)182
. These results are driven by the
country-specific figures on migration flows, average levels of
unemployment benefits and income differentials183
. However, these
reductions are likely to disappear if, as proposed now under this
option, the Member State of previous employment would become
responsible for paying unemployment benefits.184
Coherence with General,
Specific and wider EU
Objectives:
Continue the modernisation of
the EU Social Security
Coordination Rules by further
facilitating the exercise of
citizens' rights while at the same
time ensuring legal clarity, a fair
and equitable distribution of the
financial burden among the
institutions of the Member States
involved and administrative
+ This option (whether applied for one or three months) more
effectively strikes a balance between the protection of workers and
the protection of unemployment insurance schemes in the Member
State of last activity as they require a certain degree of integration in
the labour market and the insurance system of the State of last
activity before benefits become due. This applies in particular for
option 2b. The rights of the workers remain safeguarded if they
become entitled to unemployment benefits from the Member State of
previous activity although such export shall be limited to a period of
six months.
Both options are coherent with the wider EU objective of supporting
179
Tables 3-1, 3-2, 3-3 and 3-4, Annex XVII.
180
Page 23, Annex XVII. However, it was possible to quantify (minimal) changes for the Member State of previous employment, but only
for the previous version of the option, which did not foresee the Member State of previous employment becoming competent for
unemployment benefits: see Tables 3-5, 3-6, 3-7, 3-8, Annex XVII.
181
Annexe IV, XIX . This analysis was based upon Behavioural (dis)incentives to move to another Member State to take up employment
there can be linked to the costs of moving, the (long-term) perspective of staying in employment in the new Member State set off against
the risk of falling unemployed and the level of benefits in the previously competent Member State.
182
Figure 4.1, Annex XIX.
183
Page 22, Annex XIX.
184
Pages 29-30, Annex XIX.
EN 61 EN
simplicity and enforceability of
the rules.
• Ensure a uniform and
consistent application of
the aggregation and
calculation rules reflecting
the degree of integration in
the Member State.
• Ensure mobile EU workers
benefit from protection of
rights
Ensure a proportionate distribution
of financial burden between Member
States
fair mobility (fair for both jobseekers and tax-payers) and increasing
access to employment opportunities throughout the Union.
5.2.6.5 Impacts of Policy Option 3: Taking into account previous earnings if a person has
worked less that one month (sub-option 3a) or three months (sub-option 3b) in the competent
Member State
Policy Option 3: Taking into account of previous earnings if a person has worked less than one (sub option
3a) or three months (sub option 3b) in the competent Member State
Social impacts
Clarification +/- Clarity of the legal rule on aggregation will be improved in
combination with the baseline scenario.
Simplification +/- In combination with the baseline scenario, a uniform interpretation
of the rules on aggregation will be achieved. On the other hand, the
options would also result in an increase in the administrative burden
for workers applying for unemployment benefits, as they would have
to wait longer before receiving benefits, and they would face
increased requirements to provide the relevant information
themselves.
Protection of rights +/- This can be to the advantage of the unemployed person concerned,
for example when he or she moves from a Member State with a
higher wage to a Member State with a lower wage. But it could also
cause a disadvantage in the reverse situation, where the worker could
be faced with a lower level of unemployment benefits but is residing
in a Member State with a comparatively higher cost of living.
However, there is a risk that the additional information exchanges
between Member States required to determine the correct salary may
lead to delays for the determination of the average level of reference
earnings and payment of benefits to the disadvantage of the
unemployed person.
Economic impacts
Financial impact - Option 3a would result in a reduction of 3.2% of the budget devoted
to the aggregation of unemployment benefits in comparison to the
baseline scenario for the 14 reporting Member States; option 3b
would result in a reduction by 4.1% in the budget devoted to the
aggregation of unemployment benefits.
It would have a positive budgetary impact on Belgium (€ 1.4 million
EN 62 EN
for 3a or € 2.3 million for 3b), Denmark (€ 80.000 for 3a or €78.000
for 3b), the Netherlands (€26.000 for 3a or €40.000 for 3b) and
Finland (€34.000 for 3a or €90.000 for 3b), being Member States
with a higher level of wages, compared to the Member States where
the mobile EU workers were previously working. There could be a
negative financial impact for Bulgaria (€ 36.000 for 3a or €230.000
for 3b), Latvia (€ 5.000 for 3a and 3b), Hungary (€ 5.000 for 3a or
€6.000 for 3b), Slovakia (€ 200.000 for 3a or €370.000 for 3b) and
Sweden (€25.000 for 3a and €50.000 for 3b), as relatively low wage
Member States, compared to the Member State of previous
employment.
There would be no impact for those Member States which do not use
previous earnings as reference for the calculation of unemployment
benefits.185
Impact on fundamental rights + These options aim to facilitate the exercise of to the right to engage
in work in another Member State (Article 15 of the Charter), as well
as to take a balanced approach to free movement and the right to
social security (Articles 34 and 45 of the Charter). Taking into
account a previously earned salary or professional income does not
compromise the right to equal treatment (Article 21 of the Charter),
as the unemployment benefit paid to national workers is generally
calculated over their average income during a certain reference
period. The right to property (Article 17 of the Charter) is also
respected as this sub option does not affect the entitlement to
unemployment benefits as such.
Other impacts
Regulatory Costs - These option will have a significant effect on the administrative
burden of institutions, as they may become obliged to deal with a
variety of different salary statements of other Member States and to
interpret the content thereof. The options would also lead to an
increase in man hours devoted to collect information on the income
earned in the previous Member State and to calculate the amount of
unemployment benefits. It is estimated that there will be an increase
by 28-9% in the administrative tasks of Member States of last
employment, mainly due to an increase in man hours devoted to
collect information and calculate unemployment benefit.
This may translate into an increase in the total annual cost of
handling aggregation of unemployment benefits for Germany (€
8,700 for 3a or €43,000 for 3b), Denmark (€ 700 for 3a or €900 for
3b) and the Netherlands (€ 1,300 for 3a or €1000).186
Also, a further increase could be expected for Germany (€ 4,800 for
3a and b) and Denmark (€ 900 for 3a and b) which as Member State
of previous employment have to provide the Member State
responsible for aggregating periods and calculating the
unemployment benefits with additional information.187
This option would also result in an increase in the administrative
burden for workers as they would face increased requirements to
provide the relevant information themselves188
.
185
Ireland, Malta, Poland and the United Kingdom.
186
Tables 3-1, 3-2, 3-3 and 3-4, Annexe XVII.
187
Tables 3-5, 3-6, 3-7, 3-8, Annexe XVII.
188
Page 25, Annexe XVII.
EN 63 EN
Risk of fraud and abuse + From the point of view of the Member States, changing to the
calculation mechanism in such a way could contribute to reducing
'possible’ artificial conduct to obtain an unfair advantage189
. On the
other hand, this sub option could also provide a disincentive for a
person to accept employment in a lower wage Member State if this
person receives an unemployment benefits which are based on a
much higher salary or professional income.190
Fair burden sharing between
Member States
- This option does not contribute to a fairer sharing of burden between
Member States. Although it could for higher wage Member States
mean that the amount of the unemployment benefits would be lower,
lower-wage Member State may be required to pay a higher amount
than under national law. This may also happen in cases where the
beneficiaries have paid a relatively small part of the contributions.
Mobility - A moderate reduction in the mobility flows could occur as a result of
this option, notably in Denmark (up to 1.9% for 3a and b) and in
Italy (up to 1.7% for 3a and 2.2% for 3b)191
. These results mainly
concern flows of mobile EU citizens coming from Poland and
Romania towards Germany, Denmark, Italy, the Netherlands and the
United Kingdom and coming from the United Kingdom, Germany
and Italy towards France.192
Coherence with General,
Specific and wider EU
Objectives:
Continue the modernisation of
the EU Social Security
Coordination Rules by further
facilitating the exercise of
citizens' rights while at the same
time ensuring legal clarity, a fair
and equitable distribution of the
financial burden among the
institutions of the Member States
involved and administrative
simplicity and enforceability of
the rules.
• Ensure a uniform and
consistent application of
the aggregation and
calculation rules reflecting
the degree of integration in
the Member State.
• Ensure mobile EU workers
benefit from protection of
rights
• Ensure a proportionate
distribution of financial
burden between Member
States
0 Options 3a and b aim at establishing a better reflection of the
previously earned reference salary or professional income in
calculating the level of the unemployed benefits. Thereby would
avoiding ‘random’ results in levels of unemployment benefits based
on extreme short periods of insurance which disrupt the balance of
financial burden. However, they would also entail an increase of
regulatory costs, as it would require more exchange of information
between the institutions of the Member States to receive information
on the last earned salary or professional income, and would thus lead
to potential delays in providing the unemployment benefits to the
detriment of workers' rights. In addition, these options would
possibly provide a financial advantage only for Member States with
a high level of earnings, not for those with a comparatively lower
wage level. The uncertain outcomes means this option therefore may
be considered less coherent with the wider EU objective of
supporting fair mobility and increasing access to employment
opportunities throughout the Union.
189
See Annex VII, p. 47.
190
It is true that the same could occur under option 2, if benefits calculated on the earnings received in the previous Member State are paid.
However, such a payment would only be made for the limited export period of three or six months, whereas option 3 would entail a payment
based on those earnings for the whole period of entitlement.
191
Figure 4.1, Annex XIX. These can be explained by the differences in average earnings in the Member State of origin compared to the
Member State of destination and average levels of unemployment benefits p26-29 Annex XIX.
192
Pp. 26-29, Annex XIX.
EN 64 EN
5.2.6.6 Impacts of Horizontal Policy Option: Clarification regarding the recognition of
periods for the purpose of aggregation
Horizontal Policy Option: clarification regarding the recognition of periods for the purpose of aggregation
of periods of insurance, employment or self-employment
Social impacts
Clarification + Clarity of the legal rule on aggregation will be improved by
elminating the complications introduced by divergent interpretation
of the rules.
Simplification + Whilst differences between the nature of the periods continue to
exist, a uniform interpretation of the rules on aggregation will
contribute to simplifying the aggregation procedure for the
institutions concerned.
Protection of rights +/- A uniform application of the rules on aggregation would partially
improve the protection of rights. It would ensure equal treatment in
all cases where the rules will have to be applied and there is no risk
that a person might lose out on rights due to existing different
interpretations. On the other hand, if it were to be decided that
periods of (self-) employment are only those periods that provide for
cover under the legislation of the Member State in which they were
fulfilled, this means a restriction in comparison to the baseline
scenario (although this restriction is already applied by a majority of
Member States). Nevertheless, the person that pursues an activity
which does not afford any cover under an unemployment scheme in
the competent State does not (and cannot) have any legal expectation
that such period should give rise to an entitlement to unemployment
benefit from an unemployment scheme of a different State. On the
contrary, the result that such uninsured period will not be taken into
account by any other State preserves the principle of equal treatment
and puts national and mobile workers on exactly same footing.
Economic impacts
Financial impact 0 This option will not have a substantial budgetary impact for Member
States. If there is any marginal impact to be noticed, this would be
positive. The social security coordination provisions will take into
account insured periods only reflecting contributions or levies paid to
the social scheme or public finance.
Impacts on fundamental rights 0 As regards option 3, taking into account a previously earned salary
or professional income does not compromise the right to equal
treatment (Article 21), as the unemployment benefit paid to national
workers is generally calculated over their average income during a
certain reference period. The right to property (Article 17) is also
respected as this sub option does not affect the entitlement to
unemployment benefits as such.
EN 65 EN
Other impacts
Regulatory Costs + The impact is expected to be positive, as Member States will not be
required to investigate periods of insurance not normally recognised
or recorded under their national legislation. Thereby the clarification
could lead to fewer disputes between Member States.
Risk of fraud and abuse + The clarification reduces the risk of abuses claims made with
reference to periods of employment in respect of which no record
exists.
Fair burden sharing between
Member States
+ This option could contribute to a fairer sharing of burden between
Member States if it were clear that all periods under all
circumstances need to confer an entitlement to unemployment
benefits in the country in which they are fulfilled.
Coherence with General,
Specific and wider EU
Objectives:
Continue the modernisation of
the EU Social Security
Coordination Rules by further
facilitating the exercise of
citizens' rights while at the same
time ensuring legal clarity, a fair
and equitable distribution of the
financial burden among the
institutions of the Member States
involved and administrative
simplicity and enforceability of
the rules.
• Ensure a uniform and
consistent application of
the aggregation and
calculation rules reflecting
the degree of integration in
the Member State.
• Ensure mobile EU workers
benefit from protection of
rights
• Ensure a proportionate
distribution of financial
burden between Member
States
+ The horizontal option responds to the general objective as it provides
for a clear and uniform rule for the recognition of periods completed
in another Member State for aggregation purposes. the purpose of
aggregation providing ention the acquisition of unemployment
benefits. This option is also considered efficient and coherent with
the wider EU objective of supporting fair mobility and increasing
access to employment opportunities throughout the Union.
5.2.7 Conclusions
The baseline scenario, from a merely administrative point of view, is the easiest option to implement
and it has the support of a large number of stakeholders. It can however lead to uneven results when it
comes to the protection of the mobile EU worker due to the unilateral introduction of minimum
periods of insurance or (self-)employment by some Member States. The fact that the requirement of a
‘genuine’ link with the unemployment insurance system and labour market of a Member State is not
explicitly expressed in the current rules may lead to unintended gains.
Option 1 introduces legal clarity and simplicity for unemployed persons and is relatively easy to
implement from an administrative point of view for the majority of Member States. It also has a minor
budgetary impact only for those Member States which currently apply a minimum period of insurance
EN 66 EN
or (self-)employment. On the other hand, it fails like the baseline scenario to require a genuine link
with the unemployment insurance system in the State of last activity. Eight delegations193
have
expressed in the Administrative Commission the view that they could accept option 1 if in return the
calculation rule would be amended, or vice versa, as either one of the rules is needed to establish a
'genuine link' with the unemployment insurance system. This option in itself is therefore not the most
effective option to strike a balance between the aims of protecting mobile workers and requiring a
certain degree of integration in the labour market and insurance system of the State of last activity,
before it becomes responsible for the payment of benefits. It is neutral in relation to coherence with
wider EU policy objectives.
Options 2a and 2b more effectively strike a balance between the protection of workers and the
protection of unemployment insurance schemes in the Member State of last activity as they require a
certain degree of integration in the labour market and the insurance system of the State of last activity
before benefits become due. This applies in particular for option 2b. The rights of the workers remain
safeguarded if they become entitled to unemployment benefits from the Member State of previous
activity although such export shall be limited to a period of six months. Taking into account the
relative costs compared to the effectiveness of achieving objectives option 2b offers superior
efficiency to option 2a (both are more efficient than the baseline). The idea to introduce a
reimbursement mechanism instead has been discarded, as the current problems with the
reimbursement mechanism for unemployed frontier workers show that such a mechanism is likely to
create disputes and delays between the institutions involved. Both options are coherent with the wider
EU objective of supporting fair mobility (fair for both jobseekers and tax-payers) and increasing
access to employment opportunities throughout the Union.
Options 3a and 3b aim at establishing a better reflection of the previously earned reference salary or
professional income in calculating the level of the unemployed benefits. They would avoid ‘random’
results in levels of unemployment benefits based on extreme short periods of insurance. However, this
aim would be achieved in a less effective and efficient way than under option 2194
. They would also
entail an increase of regulatory costs, as it would require more exchanges of information between the
institutions of the Member States to receive information on the last earned salary or professional
income, and would thus lead to potential delays in providing the unemployment benefits. In addition,
these options would possibly provide a financial advantage only for Member States with a high level
of earnings, not for those with a comparatively lower wage level. The uncertain outcomes means this
option therefore may be considered less coherent with the wider EU objective of supporting fair
mobility (fair for both jobseekers and tax-payers) and increasing access to employment opportunities
throughout the Union.
The horizontal option responds to the general objective as it provides for a clear and uniform rule for
the recognition of periods completed in another Member State for aggregation purposes. Taking into
account the negligible anticipated costs of this option compared to the potential success in realising
objectives this option is also considered efficient and coherent with the wider EU objective of
supporting fair mobility (fair for both jobseekers and tax-payers) and increasing access to employment
opportunities throughout the Union.
5.3. Export of Unemployment Benefits
5.3.1 Problems with the limited export of unemployment benefits and drivers behind them
193
The Bulgarian, Italian, Portuguese, Belgian, Estonian, Irish, Polish and Swedish delegations.
194
It should be borne in mind, that unemployment benefits paid by the Member State of previous activity in accordance with options 2 are
also calculated on the basis of reference earnings received in those States, and not on the earnings received for only a short period in the
Member State of last activity.
EN 67 EN
5.3.1.1 There are currently low numbers of persons exporting their unemployment benefits
and the period of export does not give a realistic chance for a jobseeker to find work in
another Member State
A worker who has acquired an entitlement to unemployment benefits has a right to look for a job in
another Member State while retaining the unemployment benefit for a limited period of time. Under
the current rules the period of export is limited to a minimum of three months and a maximum of six
months.
The right to export unemployment benefits is either certified by the Portable Document U2 (PD U2 –
Retention of unemployment benefits) or at request of the institution in the host State by the Structured
Electronic Document U008 (SED U008). Statistical data about the number of PD U2/SED U008
issued195
shows that the mobility of jobseekers is rather limited, because only approximately 27.000
unemployed persons have exported their unemployment benefits in 2013 and in 2014196
representing
on average only 1 out of 1.000 unemployed persons received this document in 2013 and in 2014.
Spain (3,128), Portugal (1.751), Germany (± 1.600) and France (1.510) issued the highest number of
PD U2 during the second semester of 2013, whereas Malta (6) and Romania (3) issued the fewest.
There is anecdotal evidence that the period of three months generally considered too short to respond
to the aspiration of unemployed persons that they will find abroad. Nine individual respondents to the
public consultation had requested the export of unemployment benefits at some point in their lives.197
Out of these nine, five reported problems when asking to receive their benefits abroad. In the public
consultation, a mobile worker living in Sweden and with a full-time job pointed out that “With the
current high unemployment and fierce competition it is almost impossible to find a job in 3 months,
considering you have to create a new network, learn a new language, get into a new culture and the
society as a whole. I would really like to see the rules changed to be the same for every Member State
concerning exporting / receiving unemployment benefit for at least 6 months."
195
Pacolet, J. and De Wispelaere, F., Export of unemployment benefits – PD U2 Questionnaire, Network Statistics FMSSFE, European
Commission, June 2014, p25.
196
Pacolet, J. and De Wispelaere, F., Export of unemployment benefits – PD U2 Questionnaire, Network Statistics FMSSFE, European
Commission, June 2014, 25 p.
197
A public consultation between December 2012 and February 2013 invited citizens and organisations to provide their views on
the main problems linked to the export of unemployment benefit.
EN 68 EN
There is also statistical evidence that a prolongation of the export period is likely to enhance the
chances of the unemployed person to find a job. The available statistical data show an average success
rate between 11% (average percentage of the reporting sending Member States) and 8% (average
percentage of reporting receiving Member Sedates). The figures also show an increase of the total
success rate by 3 percentage points in case a prolongation was granted.198
Drivers behind these problems are that Member States do not consistently promote the right to export
unemployment benefits. Under the current rules, the competent institution can decide if, depending on
the circumstances of the case, an extension of the export period of another three months will be
granted. Currently nine Member States structurally do not grant an extension of the export period,199
even if this would increase the person's chances of finding employment in one of these Member States.
Furthermore, the negotiations in Council on the Chapter on Unemployment Benefits in the
coordination Regulations showed that Member States are reluctant to grant a prolonged export of their
unemployment benefits. This is not only due to considerations of financial interests, but also by
concerns regarding the possibilities to supervise the jobseeking activities of the unemployed person.
One of the drivers for the more stringent attitude of some countries seems to be inspired by (potential)
difficulties in the mutual cooperation between Member States for monitoring the person's jobseeking
activities, as well as the fear that the person is not genuinely looking for work. These factors seem to
be mutually reinforcing and give a clear signal that the mutual cooperation mechanism needs to be
strengthened. This is also confirmed by the online consultation by Deloitte Consulting200
which shows
that the current cooperation mechanism is not regarded as a sufficient safeguard that all necessary
checks are performed due to the fact that employment services in the host State have no financial
incentive to verify jobseeking efforts undertaken by those unemployed persons. Member States find it
much more difficult to trust information confirming active jobsearch from foreign employment
services institutions than from their own institutions. Public authorities in Austria, Czech Republic,
Hungary, Italy, Lithuania, the Netherlands, Poland and Portugal who believe that the export of
unemployment benefits could lead to increased risk of misuse of rights, proposed, among other
measures, that the host Member State should assume more responsible for jobseekers who have
exported their unemployment benefit from another Member State.201
However, there is no evidence202
that points to a wide-scale abuse of the system. The Final Report of
the Ad-hoc Group on Combatting Fraud and Error through the exchange of personal data within the
framework of the Administrative Commission203
shows that difficulties and obstacles in exchanging
data do not derive from the Regulations, but are rather due to a lack of cooperation, prioritisations,
long delays in answering and fragmented replies, as well as to limitations in domestic law in certain
Member States to exchange personal data with institutions across the border. It is anticipated that these
issues will be greatly reduced by the introduction of the Electronic Exchange for Social Security
Information (EESSI) scheduled for launch by the end of 2016 with a deadline for full implementation
in all Member State by the end of 2018 which will introduce common structured electronic documents
and a uniform procedure for all national authorities to follow when processing claims for social
security benefits has the potential to address the concerns raised by competent Member States
concerning the need to monitor a jobseeker's compliance with active labour market requirements when
seeking work in another Member State.204
Increased mobility can play a key role in tackling EU-wide unemployment. Whilst some areas of the
EU are experiencing an acute unemployment crisis, there exist about 2 million positions that have
198
Pacolet, J. and De Wispelaere, F., Export of unemployment benefits – PD U2 Questionnaire, Network Statistics FMSSFE, European
Commission, October 2015, 25 p. 15.
199
Cyprus, Denmark, Finland, France, Hungary, Italy, Ireland, the Netherlands and the United Kingdom.
200
Mentioned by representatives of public authorities from Austria, Hungary, Czech Republic, Ireland, Italy, Lithuania, the Netherlands,
Poland, Portugal and Slovenia.
201
See Annex II, p. 7.
202
Following the annual discussion on Fraud and Error within the framework of the Administrative Commission.
203
To be published on https://Circabc.europa.eu.
204
Annex VI, p17.
EN 69 EN
remained unfilled for a significant period of time, according to information by the EURES network.
Export of unemployment benefit allows a citizen to search for work in another Member State without
becoming a burden to the social security system of that State. Instead, they continue to receive benefits
to which they contributed in their 'home' Member State. The consequences of the comparatively small
percentage of persons using the possibility to look for employment in another Member State points
very clearly that the current rules are not achieving their full potential. EU rules on export and
coordination should take this into account, whilst at the same time recognising the concerns of
Member States in this respect.
5.3.1.2 Member States apply inconsistent criteria in determining whether to grant the
extension of the export period leading to comparative disadvantages for persons looking for
work in another Member State
Under the current rules Member States have a discretion to determine whether they export
unemployment benefits only for the minimum period of three months or the maximum period of six
months. However, the restrictive attitude from Member States towards granting export in general is
also reflected in granting an extension of the export period beyond three months. The results of a
survey carried out by the trESS network205
and a questionnaire launched within the framework of the
Administrative Commission206
show that still a considerable number of Member States do not let their
institutions make use of this discretion at all, or only exceptionally:
• 3 months, no extension: Cyprus, Denmark, Finland, France, Croatia, Greece, Sweden, Hungary,
Italy, Ireland, the Netherlands and the United Kingdom;
• 3 months, possibility to extend: Austria, Belgium, Bulgaria, Spain, Germany, Luxembourg, Malta,
Romania, Estonia, Latvia, Lithuania, Slovenia, Slovakia, Poland, Portugal;
• 6 months by default207
: Czech Republic and Malta.
The main reasons for not granting an extension of the export period vary as well. Sometimes, the
national legislation does not allow for an extension or does not contain any criteria for granting an
extension (e.g. the United Kingdom). Other Member States have developed their own criteria. In
Germany for example, the expected national demand for labour in the coming months, the individual
reasons for a preferred work abroad and better integration opportunities are taken into account in the
decision of whether to extend the export period.
Luxembourg and Romania grant the extension every time upon an individual request. In some
Member States, such as Belgium, the extension of export is exceptional and can only be granted if
there is proof that the intensive search for employment and a further stay are indispensable in the light
of ongoing applications. Similarly, the Austrian institutions request proof of whether there is a job
offer available in the home country before grating an extension and the Spanish authorities ask the
unemployed person to prove that he or she is likely to find work during the extended period. Also,
Latvia, Lithuania, Estonia, Slovenia, Bulgaria and Slovakia examine every case individually after the
expiry of the the three months of export.
Unemployed persons in countries which never grant an extension of the period of export are put at a
disadvantage compared to those who get their benefit from more ‘generous’ institutions. They
therefore have more limited support in their search for work in another Member State.
The consequence of this problem is that there is inconsistent treatment of applications to extend the
period of export of unemployment benefits across the EU and mobile jobseekers face inconsistent
treatment when they seek work in another Member State depending on which Member State is
205
Think tank report 2012, Coordination of Unemployment Benefits, to be consulted at: http://www.tress-
network.org/tress2012/EUROPEAN%20RESOURCES/EUROPEANREPORT/trESS_ThinkTankReport2012.pdf.
206
Pacolet, J. and De Wispelaere, F., Export of unemployment benefits – PD U2 Questionnaire, Network Statistics FMSSFE, European
Commission, June 2014, 25 p.
207
i.e. PDs U2 had immediately been granted for the maximum period from the outset.
EN 70 EN
competent for payment of the unemployment benefits. Once again this suggests the EU social security
rules are not achieving their full potential to support the internal market by facilitating intra-EU
mobility in particular to target asymetrical spikes in unemployment or to address skills mismatches or
shortages in skilled workers.
5.3.2 Baseline scenario
There are about 24.000 persons exporting unemployment benefits to another Member State,
representing only 0.1% of all unemployed persons in the EU208
. Only limited data is available on the
countries to which unemployed persons export their benefits in table 65 in Annex V.209
From that table
it follows that persons mainly apply to export their benefits to a neighbouring country. For example,
Belgium issued the highest number of PD U2 forms for persons moving to France. Unemployed
persons in Poland, Denmark and the Netherlands tend to look for work in Germany. The United
Kingdom is also a preferred destination of jobseekers, most probably for linguistic reasons. On the
basis of the current spread over the destination countries, a large influx of unemployed persons in
either of these countries not to be expected.
Based on the projections of the 2015 Ageing report, assuming that the unemployment rate in the EU
will diminish between 2015 and 2020, and assuming that the rate of unemployed persons exporting
unemployment benefits will remain stable at 0.1%, then we could expect that the number of people
exporting unemployment benefits when moving abroad under the current scenario would decrease to
around 23,000 in 2020 and 19,000 in 2030. However, as this report only describes the effect of the
demographic development and as other factors such as the general evolution of the economy in the
different Member States has a more decisive impact on the rate of unemployment and on movements
of unemployed persons between Member States, these projections alone do not necessarily present the
likely future trends in this area.
Providing the right to export unemployment benefits is, in itself, not sufficient to encourage people to
work where they are most needed, or where the chances of finding a job are higher. A person's
motivation to move is always a combination of 'push factors' in the home country and 'pull factors' in
the receiving country. The decision to move is inspired by better prospects for the future and the
potential costs are carefully weighed against the knowledge of the potential costs associated with the
migration210
. If we look at the reasons to move for unemployed persons, 24% declared that they wish
to move to a particular country due to the employment opportunities there, while 43% wish to earn
more money.211
Not undertaking action in the field of export of unemployment benefits would maintain the current
divergences as regards the application of the existing rules. It would also stifle the mobility of
jobseekers between national labor markets and not only deprive them of a chance of finding more
suitable employment, but also the Member States of a chance to fill in persistent vacancies and to even
out skill mismatches.
The Electronic Exchange for Social Security Information (EESSI) scheduled for launch by the end of
2016 with a deadline for full implementation in all Member State by the end of 2018 which will
introduce common structured electronic documents and a uniform procedure for all national
authorities to follow when processing claims for social security benefits has the potential to address
the concerns raised by competent Member States concerning the need to monitor a jobseeker's
208
European Commission, Export of Unemployment Benefits (2015).
209
See also Pacolet, J. and De Wispelaere, F., Export of unemployment benefits – PD U2 Questionnaire, Network Statistics FMSSFE,
European Commission, June 2014, 25 p. However, no data with regard to the bilateral flows between Member States are available.
Different reasons to export the unemployment benefit might appear (a lower unemployment rate compared to the competent Member State,
familiarity with the Member State where looking for employment, ‘return’ of the mobile worker to his/her country of birth etc.).
210
European Policy Centre ,Making progress towards the completion of the Single European Labour Market, EPC Issue Paper no. 75, May
2013, p. 17. http://www.epc.eu/documents/uploads/pub_3529_single_european_labour_market.pdf. and Drinkwater and Garapich, Migration
Plans and Strategies of Recent Polish Migrant to England and Wales: Do they Have Any and How do they Change? NORFACE-ERA NET
(TEMPO), Nov. 2013.
211
European Commission, Geographical and labour market mobility, Special Eurobarometer Review N. 337, June 2010, p. 36.
EN 71 EN
compliance with active labour market requirements when seeking work in another Member State.
Electronic exchange will provide a more consistent and efficient means for Member States to
cooperate and exchange information in cases of export of unemployment benefits.212
5.3.3 Objectives for review on the export of unemployment benefits
The general policy objective of this initiative is to continue the modernisation of the EU Social
Security Coordination Rules by further enabling the citizens to exercise their rights while at the same
time ensuring legal clarity and a fair and equitable distribution of the financial burden among the
institutions of the Member States involved.
In relation to the rules on export of unemployment benefits, this means in particular to ensure that
jobseekers can benefit from the opportunities of the European labour market and exert their right to
free movement without having to fear a loss of their benefit entitlements. As long as they can enjoy
their acquired rights to unemployment cash benefits, they are less likely to become a burden on the
welfare system of the host Member State to which they went in order to seek employment there. It also
generally supports financial equilibrium within the internal market by serving to mitigate cyclical
adjustment measures in response to asymmetric shocks213
spikes in unemployment and skill
mismatches between Member States.214
In view of this general objective, the specific objective in this field can be defined as follows:
¾ Protection of rights of unemployed persons when they move to another Member State to take up
employment there.
¾ Promotion of integration of unemployed persons into the labour market across the EU.
¾ Provision of a systematic and easy to administer cooperation and control mechanism in order
to monitor the fulfilment of their rights and obligations.
212
Annex VI, p17.
213
Labour Market and Wage Developments in Europe 2015, European Commission.
214
ESDE 2015.
EN 72 EN
5.3.4 What are the various options to achieve the objectives concerning the export of
unemployment benefits?
5.3.4.1 Option 0: baseline scenario
Under the status quo, export of unemployment benefits can be granted for a period of three months
with a possibility for extension of up to six months.
5.3.4.2 Option 1: Extend the period for export of unemployment benefits to a minimum period
of 6 months (or end of entitlement period if shorter)
This option can be combined with the previous options as all unemployed persons have the
opportunity to look for a job in another Member State while maintaining their right to unemployment
benefits. Clear guidance, provided by the Commission, on the correct application of the export period
of unemployment benefits could be helpful to attain more uniformity in the interpretation of this
particular export rule.
The time limit of 6 months is chosen for several reasons and aims at increasing the number of persons
exporting their benefit. The first one is the increased chances of finding a job after a period of 6
months. Based on figures provided by 9 Member States, the average success rate increases by 3
percentage points if an extension from 3 to 6 months is granted. 215
215
Pacolet, J. and De Wispelaere, F., Export of unemployment benefits – PD U2 Questionnaire, Network Statistics FMSSFE, European
Commission, October 2015. Based on figures provided for 2014 on PDs U2 or SEDs U008 issued in the year 2014, they calculated an
average total success rate, i.e. the percentage of unemployed persons exporting their unemployment benefit who have found work abroad of
between 11% (average percentage of the reporting sending Member States) and 8% (average percentage of the reporting receiving Member
States). This rate increases by 3 percentage points in case of prolongation of the export period up to 6 months.
EN 73 EN
The period of six months also coincides with the period that was seen as appropriate for a person to
find a job independently of active labour market assistance216
. It is also the time limit awarded to
jobseekers under EU law217
for having a right-to-reside as a jobseeker. An extension of the period will
also be beneficial for the unemployed cross border workers who wish to return to their State of
residence and look for work there.218
It is also beneficial to mobile EU workers who have not
completed a sufficient periods of insurance or (self-)employment to apply for aggregation of
periods.219
In addition, the competent institution paying the unemployment benefits can decide to
extend export of unemployment benefits beyond the period of six months on the basis of an individual
assessment of the chances and efforts made to find employment in another Member State.
5.3.4.3 Option 2: Provide for export of unemployment benefits until the end of the entitlement
period.
This option stipulates that an unemployed person has the right to search for a job in another Member
State and to receive unemployment benefits for as long as the entitlement to such benefits under
national legislation of the competent Member State lasts. The availability for the labour market in
another Member State should be considered parallel to the availability to the labour market in the
competent Member State.
In relation to both options, ensuring improved support for Member States to address their concerns
over the administrative burden caused by benefit coordination is important.Therefore in relation to
both options extension of the export period will be coupled with a reinforced cooperation mechanism
to facilitate the information exchange between Member States and to increase mutual trust over
performing effective checks on the person's jobseeking activities. The verification procedure will
consist of:
a) The possibility to ask for 'ad hoc' checks by the employment services in the receiving State.
b) Introducing a system of automatic reporting by the employment services in the ‘receiving State’ to
the employment services of the competent Member State. An automatic process, expedited by EU law,
could help to remove much of the problems quoted by administrations involving delays in receiving
the information they need to verify jobseeking activities.
c) Introducing a legal basis in Regulation (EC) No 883/2004 for ''data matching" (i.e. the comparison
of bulk data of insured persons). Such data transmission can take place in a case where there is no
actual doubt about the accuracy of the information provided to enable Member States to identify any
fraud or error in the proper implementation of the Regulations. For example, it allows Member State A
to provide Member State B with personal data which Member State B will check against its own data
in order to identify any inconsistencies which would affect the proper application of the Regulations.
This "data-matching" may be used by Member States to identify whether there is fraud and error in the
payment of unemployment benefits to persons living outside the paying State, by comparing lists of
persons in receipt of such exported benefits living in State B against data held on persons in
employment by that State.
Under this option, the delivery of support services to assist any person interested in matching,
placement and recruitment through the EURES network can be an important complement to the
person's jobseeking activities220
.
216
Grubb, David, Key features of successful activation strategies, PES to PES dialogue conference “Activation and integration: working with
individual action plans” OECD Employment and Analysis Policies Division, Brussels, 8-9 March 2012.
217
Antonissen C-292/89 ECLI:EU:C:1991:80158, 30.4.2004, p. 77..
218
For more information about the rules that apply to cross-border workers see paragraph 5.4
219
For more information about the rules that apply to aggregation of unemployment benefits see paragraph 5.2.
220
Receiving assistance with matching, recruitment and placement for, including in gaining access to both active labour market measures and
information and advice on social security as proposed in the Communication on the reformed EURES network.
EN 74 EN
5.3.5 Stakeholder Support on amending the rules on the export of unemployment benefits
5.3.5.1 Option 1: Extend the period for export of unemployment benefits to a minimum period
of 6 months
Based on the first consultation in the Administrative Commission of Member States' opinions as
regards the extension of the export period, 8 delegations221
have indicated to support his option.16% of
the individual respondents to the public consultation supported this option and no clear preference was
identified among the respondents from social partners.
5.3.5.2 Option 2: Provide for export of unemployment benefits until the end of the entitlement
period
None of the experts within the Administrative Commission seemed to support this option explicitly.
Three delegations222
seemed flexible to introduce this option. The results of the online consultation by
Deloitte Consulting show that 79% of the public authorities think that the risk of misuse or abuse of
rights is particularly high if the unemployment benefits would be provided until the end of a
persons’entitlement, according to the rule of the Member State which provides them.
On the other hand, it seems that almost 60% of the individual respondents to the public consultation
support this option and 18% of the representatives of social partners.
All delegations recognised the importance of reinforcing the cooperation mechanism while keeping
the administrative burden on an acceptable level.
5.3.5.3 What are the impacts of the Different Options on the export of unemployment benefit
The options have been compared to the baseline scenario and with regard to their effectiveness in
achieving the specific objectives of the initiative, their efficiency (cost-effectiveness/even burden
sharing), coherence with the general objectives of the EU and their impacts as assessed above.223
Figures for all EU-Member States on the export of unemployment benefits have become available via
the administrative PD U2 Questionnaire launched in 2015 within the framework of the Administrative
Commission (for 2013). Additional data available for Belgium has been used to describe the impact of
the prolongation period on finding a job abroad. Finally, figures of Eurostat (based on the LFS) were
used to calculate the average duration of the unemployment period.
221
Czech Republic, Luxembourg, Portugal, Italy, Malta, Slovakia, Slovenia and Romania.
222
Czech Republic, Italy and Portugal.
223
Secondary impacts are not considered in the final comparison in recognition of the limitations of the data available to conduct this
assessment.
EN 75 EN
5.3.5.4 Summary of the impact of different options concerning the export of unemployment benefits
Type of impact Clarification Simplification Protection of
rights
Fundamental
rights
Economic
impacts
Regulatory
costs
Risk of fraud
and abuse
Equitable
burden sharing
Member State
Coherence
with General,
Specific and
EU objectives
Overall
Effectiveness
Overall
Efficiency
(cost vs
effectiveness
Baseline
Scenario
0 0 0 0 0 0 0 0 0 0 0
Option 1 +224
+ + + +/-225
- + + ++ ++ ++
Option 2 +226
+ + + +/- - + +/- + + +
224
Duration of export up to 6 months is no longer at the discretion of Member State.
225
The economic impact is expected to be neutral, because the duration of export does not affect the overall period of entitlement.
226
No discretion as regards duration of export.
EN 76 EN
5.3.5.5 Impact of Policy Option 1: extension of the export period up to a minimum of 6
months
Policy Option 1: extension of the export period up to a minimum of 6 months
Social impacts
Clarification + This option eliminates the uncertainty derived from the degree of
flexibility applied by the national institutions. There would be a
clear and uniform standard for all persons wishing to take their
unemployment benefits with them when looking for a job in
another Member State.
Simplification + This option would make an end to the widely varying practices that
currently exist across Member States. The period of six months
also coincides with the periods that was seen as appropriate for
jobsearch within the framework of freedom of movement and in
which persons can find a job independently of active labour market
assistance227
.
Protection of rights + This option would ensure that the persons concerned can retain
their entitlement to unemployment benefit for a longer period than
under the existing rules. It would also allow them to make better
use of the possibilities offered by the host Member State to find
suitable employment.
Economic impacts
Financial impact +/- This option does not affect substantially the duration, nor the
amount of unemployment benefits paid by the competent Member
State. It does not have any significant financial impact on the
Member States, either at an individual or aggregate level, as it does
not create a right for unemployment benefits, but only maintains an
existing right to benefit in case of search of employment in another
Member State.
Impacts on fundamental rights + This option contributes to the freedom to choose an occupation and
the right to engage in work in another Member State (Article 15),
as well as to a better protection of rights for workers who have
made use of their right to free movement (Article 45). There is no
impact on the right to property (Article 17) as acquired rights to
unemployment benefits are maintained.
Other impacts
Regulatory Costs - Improving and standardising unemployment benefit export
between Member State, including introducing a new co-operation
and control mechanism, will contribute to reducing the
administrative burden that is often cited by Member States as being
experienced by their competent institutions. Currently the length of
time for which Member States will export unemployment benefit
227
Grubb, David, Key features of successful activation strategies, PES to PES dialogue conference “Activation and integration: working with
individual action plans”, OECD Employment Analysis and Policies Division, Brussels 8-9 March 2012.
EN 77 EN
varies between Member States, necessitating separate processes for
granting an extension of the period of export. Setting up the
reinforced cooperation mechanism requires an increased effort in
comparison to the baseline scenario, for the person concerned to
inform the employment services and for the employment services
to communicate the follow-up on the unemployed person’s job
searching activities. It is not expected that this will have a
substantial impact on the administrative burden of the individual
Member States. The total number of PD U2 forms issued is still
rather moderate and varies between 0,001% and 1,26% of the total
population of unemployed persons in 2013.
Risk of fraud and abuse + Combined with the intended introduction of a reinforced
cooperation mechanism, it is expected that this option will entail a
lower risk of fraud and abuse than the current rules.
Fair burden sharing between
Member States
+ During the export period, the person concerned remains covered by
the legislation of the Member State which provides the benefit.
This reduces the risk that the person concerned has to rely on
welfare benefits from the host Member State if he stays there
beyond the current minimum export period of three months.
Moreover, the investment that an employment service in the host
state may make in cooperation activities may pay itself back when
the person actually succeeds in finding a job in that country, starts
working and paying social security contributions.
Coherence with General,
Specific and wider EU
Objectives:
Continue the modernisation of the
EU Social Security Coordination
Rules by further facilitating the
exercise of citizens' rights while at
the same time ensuring legal
clarity, a fair and equitable
distribution of the financial burden
among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
• Ensure a uniform and
consistent application of the
export rules.
• Offer jobseekers the best
chance of (re)integrating into
the labour market
• Provide for a systematic and
easy to administer
cooperation and control
mechanism to monitor the
fulfilment of obligations by
the jobseeker in exchanges
between Member States
++ By setting a minimum period for the export of unemployment
benefits that is longer than the current three months, option 1 is
effective in providing opportunities for job searching activities in
another Member State supporting better allocation of labour force
(and human capital) within the internal market and indirectly
resulting in savings in terms of public funds devoted to payments
of unemployment benefits and social assistance. 228
A new
cooperation mechanism that would be more effective and efficient
than the current one would reduce the fear of fraud and error. This
option may therefore be considered coherent with the wider EU
objective of supporting fair mobility and increasing access to
employment opportunities throughout the Union while limiting the
time in which a jobseeker does not have direct access to activation
measures and support from the competent Member State. It is also
aligned with 2013 citizenship report (COM(2013)269) which as its
key action 1 refers to the proposal to extend the export of
unemployment benefits to six months.
228
European Policy Centre, Making progress towards the completion of the Single European Labour Market,
available at: http://www.epc.eu/documents/uploads/pub_3529_single_european_labour_market.pdf.
EN 78 EN
5.3.5.6 Impact of Policy Option 2: extension of the period of export of unemployment benefits
until the end of the entitlement period
Policy Option 2: extension of the period of export of unemployment benefits until the end of the
entitlement period.
Social impacts
Clarification + The adoption of this option could have positive effects in
comparison to the baseline scenario, as the period of export will be
subject to a uniform rule with no room for differing interpretation
or practices.
Simplification + A direct link between the export and the entitlement period will be
aligned with national rights in a way mobile workers may find
easier to understand.
Protection of rights + This option would ensure that the persons concerned retain their
entitlement to unemployment benefit for the whole period in case
of search for work in another Member State. It would also allow
them to make full use of the possibilities offered by the host
Member State to find suitable employment. Figure 2.1 in Annex IX
shows that 55.5% jobseekers exit unemployment after 12 months
and 75% after 24 months. The increases are proportionally not as
substantial as between 3 and 6 months.
Economic impacts
Financial impact +/- The impact is the same as for option 1.
Impacts on fundamental rights + The impact is the same as for option 1.
Other impacts
Regulatory Costs - The impact of this option on the administrative burden is the same
as for option 1.
Risk of fraud and abuse + Combined with the intended introduction of a reinforced
cooperation mechanism, it is expected that this option will entail a
lower risk of fraud and abuse than the current rules.
Fair burden sharing between
Member States
+/- The effect is the same as for option 1, although potentiallly for an
even longer period.
Coherence with General,
Specific and wider EU
Objectives:
Continue the modernisation of the
EU Social Security Coordination
+ Extension until the end of the entitlement period under option 2
will allow a person to perform jobseeking activities in another
Member State throughout the full entitlement period and it
complies with the 2013 citizenship report (COM(2013)269)
proposal to extend the export of unemployment benefits to six
EN 79 EN
Rules by further facilitating the
exercise of citizens' rights while at
the same time ensuring legal
clarity, a fair and equitable
distribution of the financial burden
among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
• Ensure a uniform and
consistent application of the
export rules.
• Offer jobseekers the best
chance of (re)integrating into
the labour market
• Provide for a systematic and
easy to administer
cooperation and control
mechanism to monitor the
fulfilment of obligations by
the jobseeker in exchanges
between Member States
months. However, the effects on length of time spent unemployed
are in the long-term unclear and it is uncertain longer entitlement to
unemployment benefits actually increases likelihood of
reintegration into the labour market. It could increase the
administrative burden for the State of destination, through needing
to actively monitor the person's employment situation over a longer
period. Moreover, there will be little incentive for the country to
which the person has gone to provide active labour market
assistance throughout the full period of the payment of the
unemployment benefit, if that institution has no power to control
the payment of unemployment benefits or is not compensated
financially by the competent Member State. This measure may
therefore be considered less effective in achieving the wider EU
objective of supporting fair mobility (fair for both jobseekers and
tax-payers) and increasing access to employment opportunities
throughout the Union and promoting access to labour market
activation measures.
5.3.6 Conclusions
By setting a minimum period for the export of unemployment benefits that is longer than the current
three months, option 1 is more effective in providing opportunities for job searching activities in
another Member State. It will involve communication between Member States for an extended period
of time and an effective cooperation mechanism to take away the fear of fraud and error in Member
States. This option may therefore be considered coherent with the wider EU objective of supporting
fair mobility (fair for both jobseekers and tax-payers in the competent Member State) and increasing
access to employment opportunities throughout the Union while limiting the time in which a jobseeker
does not have direct access to activation measures and support from the competent Member State. It is
also aligned with 2013 citizenship report (COM(2013)269) which as its key action 1 refers to the
proposal to extend the export of unemployment benefits to six months.
Although extension until the end of the entitlement period under option 2 will allow a person to
perform jobseeking activities in another Member State throughout the full entitlement period, it will
not be effective if not accompanied by an established control mechanism that will allow competent
Member States to follow up on the jobseeking activities of the person. The effects on length of time
spent unemployed are in the long-term unclear. It could increase the administrative burden for the
State to which the person has gone, through needing to actively monitor the person's employment
situation. Moreover, there will be little incentive for the country to which the person has gone to
provide active labour market assistance throughout the full period of the payment of the
unemployment benefit, if that institution has no power to control the payment of unemployment
benefits or is not compensated financially by the competent Member State. This measure may
therefore be considered less effective in achieving the wider EU objective of supporting fair mobility
(fair for both jobseekers and tax-payers) and increasing access to employment opportunities
throughout the Union and promoting access to labour market activation measures even if it complies
with the 2013 citizenship report (COM(2013)269) proposal to extend the export of unemployment
benefits to six months. This option is therefore not the most effective, or efficient option. The results
of the online consultation by Deloitte Consulting show that 79% of the public authorities think that the
risk of misuse or abuse of rights is particularly high if the unemployment benefits would be provided
until the end of a persons’entitlement, according to the rule of the Member State which provides them.
EN 80 EN
5.4. The rules on the provision of unemployment benefits for frontier and other cross-border
workers
5.4.1 Problems with the coordination rules on the provision of unemployment benefits for
frontier and other cross-border workers
5.4.1.1 Frontier workers are disadvantaged compared to other cross-border workers
The legislator has made an explicit choice in Regulation (EC) No 883/2004 that a frontier worker
should receive unemployment benefits in the State of residence. This is a derogation from the general
principle that a person pursuing a gainful activity should be affiliated to the social security scheme of
the State in the territory of which he/she is employed or self-employed (lex loci laboris principle).
However, this derogation is not applied consistently:
1) It applies only to frontier workers, but not to other cross-border workers. Cross-border workers who
do not return on a regular basis to their country of residence have a right of choice, i.e. they can
remain in their country of activity and claim unemployment benefits there or they can claim
unemployment benefits from the country of residence, provided they return to that country.
2) Moreover, the derogation only applies to frontier workers who are wholly unemployed, whereas
frontier workers, who are only partially or intermittently unemployed continue to receive their
unemployment benefit from the country of last activity.
3) In addition, it does not necessarily apply to those frontier workers who were formerly self-
employed. If they reside in a country where there is no unemployment insurance for self-employed
persons, they shall be entitled to receive unemployment benefit from the institution in the country of
last activity to which they had been affiliated.
The derogation for unemployed frontier workers is based on the assumption that, as a rule, they have
closer ties to the Member State of residence then to the Member State of previous employment and
therefore better prospects of finding a job there Moreoever, unemployed persons have to register with
the employment service which is competent for them in order to receive their benefits and they are
required to available for work. It has been assumed that this condition can more easily be fulfilled in
Drivers Problems
Presumption that frontier workers
always have closer ties with the State
of residence no longer reflects reality
Frontiers workers are
disadvantaged compared to
other cross-border workers
Current rules on administrative
procedure for reimbursement are
inadequate and burdensome
Increased administrative
burden & unbalanced
distribution of financial
burden between MS
EN 81 EN
the country of residence than in the State of previous employment and that, for this reason, frontier
workers can get their benefits in the State of residence under more favourable conditions. 229
However, this assumption appears to be flawed when looking at the latest statistics230
. An estimated
average of 927.000 cross-border workers231
(76% of the total number of cross-border workers) were
employed for longer than 12 months in the State of activity before becoming unemployed which
indicates that they have established a strong link to the labour market of the State of activity.
Compared to that, only 287.000 cross-border workers (or 24% of the total number of cross-border
workers) had been employed less than 12 months in their State of activity.
Moreover, distances can nowadays more easily be bridged by modern means of transport and also by
electronic means of comunication which are more and more frequently used by employment services
of Member States also for the purpose of registration and supervision of the jobseeking activities of an
unemployed person.
Another problem derives from the fact that it is not always easy to distinguish between frontier
workers and other cross-border workers. A number of Member States have pointed out in the
discussions within the Administrative Commission232
that it has become more and more difficult to
assess in practice if a person is a frontier worker or another cross-border worker. Large distances can
be more easily overcome nowadays, so that it cannot be excluded that for example, a person who
works in Brussels returns every weekend to London and is therefore a frontier worker. The Member
States concerned have therefore questioned if it is still justified to make a distinction between frontier
workers and other cross-border workers on the basis of their commuting patterns.
It has also to be acknowledged that a consequence of the current different treatment of unemployed
frontier workers and other cross-border workers may disadvantage the first group in comparison to the
latter, especially when the legislation of the State of last employment would have resulted in a more
favourable level of unemployment benefits for the unemployed frontier worker. This became apparent
in the Case C-443/11 Jeltes233
and there are also numerous complaints (28 from August-December
2012 and 35 in the period of January-September 2013) showing that the current rules are not always in
the interest of the workers’ concerned. Being bound to claim unemployment benefit in their country of
residence, they are at a significant disadvantage compared to cross-border workers, who have right of
choice. As cross-border workers tend to work in countries where comparatively higher wages and
benefits are paid, there is some evidence that, as a general rule, they will be entitled to higher
unemployment benefits when they are allowed to claim them in their country of last activity. There is
a difference of 68% between the amount of the unemployment benefits paid by the State of last
activity and the State of residence.234
229
For these reasons and in spite of the inherent flaws, the compatibility of this provision with the principle of free movement of persons had
been confirmed by the Court in the Case C-443/11, Jeltes, EU:C:2013:224, paragraph 51.
230
Pacolet, J. & De Wispelaere, F., Update of the analytical studies for an impact assessment for revision of Regulations (EC) Nos 883/2004
and 987/2009: coordination of LTC benefits and unemployment benefits , HIVA - KU Leuven, September 205, See Annex XXVI.
231
Average figure for the years 2013 and 2014.
232
Czech Republic, Poland, Finland, Spain, Portugal, Slovenia, Latvia.
233
Case C-443/11, Jeltes, EU:C:2013:224.
234
Tables 2.7 and 2.8 in Annex XXVI.
Example: The Austrian authorities in the framework of the Impact Assessment Study presented
the case of a Hungarian frontier worker, who resided in Hungary and worked for a period of 30
years in Austria, after which he became unemployed. An average monthly salary of € 2000 gives
entitlement to three months of unemployment benefits in Hungary of around € 340 per month. Had
the frontier worker applied for unemployment benefits in Austria, he would have been entitled to
€ 1100 for a period of at least nine months.
EN 82 EN
5.4.1.2 The reimbursement procedure for unemployment benefits between Member States is
inadequate and burdensome
Regulation (EC) No 883/2004 introduces a reimbursement mechanism between the State of last
activity and the State of residence to compensate for the fact that the institution in the Member State of
residence has to provide unemployment benefits to unemployed cross-border workers without having
collected any contributions or taxes for the period of last activity carried out in another Member State.
From a financial and administrative point of view, the reimbursement mechanism is not satisfactory.
The current mechanism only partially covers the additional expenses incurred in the Member State of
residence. This is due to a number of limitations:
1) The amount of reimbursement to be paid by the State of last activity is capped at the amount that
the State of last activity would pay under its national legislation. As a result the actual reimbursement
by the State of last activity to the State of residence, on average, is 23% lower than the amount of the
claims representing the amount of unemployment benefit paid by the State of residence235
. For
Luxembourg and the Netherlands, the discrepancy is 0%; i.e. they pay out the entirety of the benefit
reimbursement that is claimed from them. At the other end of the scale are Romania, Bulgaria and
Poland which reimburse, on the average, only 5% or less of the amount claimed.
2) Reimbursement is limited in time. The competent Member State is only obliged to reimburse the
first three months of the unemployment benefit payment. This period is extended to 5 months if the
person has been insured in the competent Member State for at least 12 months in the preceding 24
months. Any unemployment benefit payments beyond that period are not reimbursed creating a
disproportionate burden for the Member State of residence.
3) The reimbursement only covers the ‘gross amount’ of the unemployment benefit, i.e. the full
amount of those benefits before any deductions (e.g. taxes or contributions levied on the benefit). It
does not cover other benefits which may become payable due to the fact that the State of residence
also becomes responsible for other social security benefits (e.g. health care or family benefits).
Table 2.7 in Annex XXVI gives a complete overview of the division of costs between the competent
Member State and the State of residence. Based on the average amount of unemployment benefits, the
yearly expenditure by the State of residence on unemployment benefits to cross-border workers is
estimated at € 277 million, of which € 238 million is related to frontier workers and € 39 million to
other cross-border workers (Annex XXVI, table 2.7236
). Of the yearly expenditure on unemployment
benefits, 67% is paid by the State of residence and 33% is paid by the State of last activity on
average237
. However, these figures mask very large discrepancies in the share of the burden shared by
the Member States of last activity and of residence. For example, in the cases of countries with a very
low number of incoming cross-border workers, the cost is mainly borne by the State of residence.
This demonstrates quite clearly that the current system is particularly disadvantageous for States of
residence with a high number of 'outgoing' frontier workers or with a higher level of unemployment
benefits compared to the States of last activity238
. Member States that are net 'exporters' of frontier
workers can, in a time of economic downturn, find themselves confronted with a much larger number
of former frontier workers claiming an unemployment benefit for which the State of residence never
received social security contributions.
Another problem is that the reimbursement procedure is administratively burdensome. It requires that
for each single case, that information is exchanged on the working period of the person concerned, the
235
Annex XXVI - Table 2.3.
236
In order to estimate the budgetary impact of the baseline scenario, the estimated number of unemployed cross-border workers
(based on the LFS and the unemployment rates of the 2015 Ageing Report) is multiplied by the annual unemployment benefit per
unemployed person taking into account the annual average duration of the payment of the unemployment benefit.
237
After reimbursement, these percentages are 55% and 45%.
238
Table 2.2 in Annex XXVI.
EN 83 EN
reimbursement period and payment dates239
. The debtor Member State then has to check if
reimbursement has not already been applied for the same periods, or if the ceiling under national
legislation has been reached. If a request for reimbursement is refused, or only partially accepted,
further exchange on the reasons for refusing the requests is needed. Delays of reimbursement are
mentioned as a common problem by 22% of the respondents on behalf of organisations240
to the EU
public consultation. This leads to uncertainty in the Member State of residence if and when it will
receive the reimbursement requested from the Member State of last activity.
It follows from the online consultation by Deloitte Consulting241
that the long processing time of a
case is seen as very problematic for claimants of unemployment benefits, because as long as a
Member State does not have the required information about a claimant, it is not able to make a
decision about the unemployment benefit. Communication between institutions of Member States is
perceived as an area with margin for improvement. Problems of delays are reported by public
authorities in the online survey by Deloitte Consulting and the public consultation. Only 10% of the
respondents to the Deloitte survey think that the communication with other Member States in dealing
with individual claims for unemployment benefits is effective and smooth. About 25% of the
respondents describe the communication as ineffective and slow.
Member States have therefore agreed on an administrative procedure for the reimbursement of
unemployment benefits in Decision U4 of the Administrative Commission242
. Although this Decision
constitutes a good step towards a joint interpretation of the reimbursement mechanism, it is not applied
consistently across the EU. Member States even have started questioning its value, despite it being
applicable as of 2012 only. The Decision states that reimbursement can be claimed ‘regardless of the
eligibility conditions for unemployment benefits laid down by the legislation of the creditor State.”
This is not complied with by a State which makes the reimbursement conditional upon the fulfilment
of sufficient periods of contributions, because it argues that otherwise, the maximum amount payable
under its own legislation is zero. In December 2013, the Commission received a letter from the Chair
of the Administrative Commission raising the collective concern that one particular Member State is
not applying Decision U4 in a correct way.
Another problem concerns disputes about the determination of the place of residence. In these
situations, it is frequently extremely difficult to verify retroactively where the place of residence of the
person concerned had actually been during his or her past period of employment.243
239
Institutions at national, regional and local level to that end exchange information via 'Structured Electronic Documents' (SEDs). SEDs U
20 to U 27 are developed to communicate in cases when reimbursement is requested: U 20 (Reimbursement Request), U 21 (Reimbursement
Full Acceptance), U 22 (Reimbursement Non Acceptance), U 23 (Partial Acceptance of Request for Reimbursement), U 24 (Reimbursement
Payment Notification), U 25 (Reimbursement Receipt/Closing Notification), U 26 (Charging Interest (in case of delay)), and U 27 (Reply on
Charging Interest). A number of Member States (Belgium, Czech Republic, Germany, Austria, Slovakia and Finland) apply reimbursement
on the basis of fixed amounts.
240
The group 'organisations' consists of national administrations, social partners and trade unions, civil society and non-governmental
organisations and a private company.
241
Annex II.
242
Administrative Commission for the Coordination of Social Security Systems, Decision No U4 of 13 December 2011concerning the
reimbursement procedures under Article 65(6) and (7) of Regulation (EC) No 883/2004 and Article 70 of Regulation No 987/2009, OJ C. 5,
25.2.2012.
243
This issue had been raised by Poland, the Czech Republic and Malta in the 342nd and 343rd
meeting of the Administrative Commission in
2015.
In the online consultation carried out by Deloitte consulting, 72% of the respondents from public
authorities indicated that the current rules are not uniformly understood and applied by the Member
States. A recurrent concern is the reimbursement procedure between Member States which are not
sufficiently detailed and clear. 40% of the participating public administrations in the online
consultation by Deloitte consulting reported that the EU rules create significant administrative costs
for national administrations. The reimbursement was repeatedly mentioned as a source of burden
mainly due to slow and ineffective communication between Member States.
EN 84 EN
5.4.2 Baseline Scenario
There are some 1.2 million cross-border workers employed in the EU28 who are potentially affected
by the provisions on unemployment benefits244
. It can be assumed that some 793,000 of them are
frontier workers, because they reside in a neighbouring country.245
Applying the national
unemployment rates on those figures, results in an estimate of 91,700 unemployed cross-border
workers 53,500 of whom are frontier workers.
The evolution of those numbers in the future will depend to a large extent on the evolution of the
number of frontier workers and other cross-border workers and the unemployment rates. Cross-border
work has increased over the last 10 years in absolute figures largely due to the accessions of the new
Member States. However, in relative terms (% of employed population) it remained at a low level
(from 0.5% in 2006 to 0.7% in 2014). If we assume that the number of cross-border workers remain
stable in relative terms as a % of the employed population between 2015 and 2020, then we could
expect some 1.3 million cross-border workers in 2020, but the numbers of unemployed cross-border
workers may indeed go down as a lower unemployment rate is projected for 2020246
.
Not undertaking action in the field of coordination of unemployment benefits would mean maintaining
rules which no longer reflect the real interests of the persons concerned and it would mean to maintain
the current reimbursement procedure with all its inherent flaws.
5.4.3 Objectives for review of the existing rules on the provision of unemployment benefits
for frontier and other cross-border workers
The general policy objective of this initiative is to continue the modernisation of the EU Social
Security Coordination Rules by further enabling the citizens to exercise their rights while at the same
time ensuring legal clarity and a fair and equitable distribution of the financial burden among the
institutions of the Member States involved.
In relation to the rules on the provision of unemployment benefits for frontier and other cross-border
workers, this means in particular to remove unjustified differentiations and to strengthen the link
between the acquisition and the provision of unemployment benefits, i.e. between the payment of
contributions by the insured person and the payment of benefits for the insured persons.
In view of this general objective, the specific objective in this field can be defined as follows:
• Frontier and other cross-border workers, who reside in another Member State than the State of last
activity, shall benefit from the same protection of rights in case of unemployment.
• Frontier and other cross-border workers, who reside in another Member State than the State of last
activity, shall benefit from the best available opportunities of reintegration in the labour market.
• The financial burden for paying unemployment benefits shall be distributed between the
competent Member State of last activity and the Member State of residence in a manner that
corresponds to contributions or taxes received in a way which is easy to administer and achieves
fair results.
244
2015 Annual Report on Labour Mobility.
245
This is a gross estimation, because there are no figures available on the number of frontier workers in the sense of the legal definition
contained in Regulation (EC) No 883/2004.
246
2015 Annual Report on Labour Mobility, European Commission (2015).
EN 85 EN
5.4.4 What are the various options to achieve the objectives concerning the provision of
unemployment benefits for frontier and other cross-border workers
A number of policy options have been identified to meet the objectives set out above.
5.4.4.1 Option 0: baseline scenario
Under the status quo, unemployed cross-border workers who are not frontier workers can choose
either to remain available to the employment services in the territory of the competent Member State
or to make themselves available to the employment services in the territory of the Member State where
he/she resides. In the first case, they receive their unemployment benefits from the Member State
where they were last employed, in the second case from the Member State where they reside.
Frontier workers, i.e. those cross-border workers who return to their State of residence on a regular
daily or at least weekly basis do not have this right of choice, as they can claim their unemployment
benefits only from the employment service at their place of residence.
A reimbursement system has been established in order to compensate for situations in which the
Member State of residence is obliged to pay unemployment benefits to former cross-border workers
without having benefited from their contributions or taxes during their previous economic activity.
5.4.4.2 Option 1: Introduce a right of choice for frontier workers to receive unemployment
benefits from the Member State of last activity, or the Member State of residence
This option ‘copies’ the baseline scenario by offering frontier workers the same right of choice as
other cross-border workers currently enjoy under the status quo. This option thus abolishes the
distinction between frontier workers and other cross-border workers as regards the State in which they
can claim the benefits, while offering the best chance of reintegrating into the labour market across the
EU.
The choice would imply making oneself available to the employment services in the Member State
where the benefits are claimed. This requires that the competent Member State creates a legal fiction
EN 86 EN
of residence and pays the unemployment benefits as if the person resided on its territory. If the person
decides to be available for the labour market of the State of former activity and is claiming benefits
there, this State should pay the unemployment benefits as if he/she resided on its territory.
The choice for one Member State does not exclude that the unemployed frontier worker may also go
and look for work in the other Member State. To increase the opportunities to find work the
unemployed frontier worker may also register with the employment services in the Member State not
paying the benefit as a supplementary step which does not affect the obligations that the unemployed
person needs to fulfil in the State paying the benefits. Therefore, the obligations and/or jobseeking
activities in the Member State which pays the benefit take priority over any obligations in the second
Member State.
5.4.4.3 Option 2: Provide for the payment of unemployment benefits by the Member State of
last activity
This option aims to ensure that the country which has received the contributions or income tax is the
one that should pay the benefit. It will also abolish the distinction between frontier and other cross-
border workers. The sub-options differ as regards the country in which the person registers with the
employment services and is available for the labour market.
5.4.4.3.1 Option 2a: The unemployed cross-border worker shall register with the
employment services in the State of last activity
Under this option, the unemployed cross-border worker registers with the employment services of the
State of last activity and will claim benefits there.
This option assumes that the worker is to a certain degree integrated into the labour market of the State
of last activity and is orienting towards finding a job in this Member State. If the person rather wishes
to return to the State of residence to look for work there, he/she can make use of the right to export the
unemployment benefits from the competent Member State to the Member State of residence. Whilst
the unemployed worker still needs to comply with the obligations in the State of last activity, the
employment services in the Member State of residence will carry out verification procedures and
provide assistance with jobseeking activities on behalf of the competent institution.
5.4.4.3.2 Option 2b: The unemployed cross-border worker is awarded the choice to
register with the unemployment services in the State of last activity, or the State of residence
This option is the same as option 2a when it comes to the payment of the benefit, but offers the
unemployed cross-border worker the opportunity to either register with the employment services in the
State of last activity, or in the Member State of residence.
The aim of this option is to offer cross-border workers whose habitual place of residence is far away
from their place of last activity the opportunity to fulfil the jobseeking activities in their Member State
of residence. If the legislation of the competent Member State requires participation in activation
measures, training and physical presence, a person will satisfy these criteria by performing the
obligations in the State of residence.
Secondly, this option also aims to facilitate the check on jobseeking obligations by the employment
services in the State of residence on behalf of the State of last activity247
.
As the Member State of residence will be made responsible for following up on the jobseeking
activities of the person concerned, but will not reap the financial benefits from these activities,
incentives will require introduction for the Member State of residence to check this. In this respect, the
employment services in the State of residence should be given discretionary power to mandate extra
activity that meets the needs of the regional labour market. Enhanced mobility support services and
improved exchanges of information within the EURES network could contribute to providing
247
The CJEU has concluded in the Caves Krier case (Case C-379/11) that a Member State may not make the registration of a jobseeker
subject to the condition of residence on its territory.
EN 87 EN
assistance to persons on behalf of the employment services in another Member State. In addition, the
public employment services (PES) are encouraged to develop partnerships to promote a coherent
service package to employers as regards intra-EU labour mobility248
.
5.4.4.4Option 3: Provide for the payment of unemployment benefits by the Member State of
last activity only in situations where the cross-border worker has worked there for a
sufficiently representative period (at least 12 months)
When discussing this option in the Administrative Commission, it was noticeable to what extent the
delegations were divided between keeping the system as it is now249
, and moving to a coordination
system under which the State of last activity is paying the unemployment benefits. The delegations in
favour of the status quo feared that a change of the coordination system would not provide adequate
protection for the person and would put a heavy financial burden on the State of last activity in case of
short periods of employment there. Moreover, this option would require more stringent monitoring
and control measures from the labour market authorities in the Member State paying the benefits.
The divide between Member States was the reason to develop a third option that could meet the
concerns raised250
. This option only makes the State of last activity competent if the cross-border
worker is deemed to have a 'sufficient link' with the labour market of the State of last activity. This
'sufficient link' is reflected in the duration of insurance for unemployment benefits in the State of last
activity. The rationale for this option is that Member States will not be confronted with claims for
unemployment benefits after only a very short period of insurance in that Member State. Moreover,
the option aims at a better correlation between the level of the benefit and the earning level of the
person concerned.
The link with the labour market of the State of last activity arises from the insurance under an
unemployment scheme of that State for at least the last 12 months before becoming unemployed. This
length of the period is based on the average length of the reference periods in Member States251
, the
distribution of the average duration of current unemployment spells among cross-border workers, plus
the fact that nearly all conflict rules in Regulation (EC) No 883/2004 refer to the period of 12 months
as a reference period for establishing either a connection to the social security system of a Member
State252
, or for acquiring rights253
.
It is also based on the assumption that having been insured in another Member State for at least 12
months254
creates a close link with the labour market of the State of last activity, which gives the
unemployed cross-border worker a good chance of finding suitable employment in that State. If the
person wishes to register with the employment services in the State of residence, he/she can opt to
export the unemployment benefits from the State of last activity.
In the situation where a person has not fulfilled the reference period in the State of last activity, the
Member State of residence is competent for paying the unemployment benefits,255
therefore rendering
the current reimbursement mechanism redundant. Also under this option, two sub-options can be
248
. The Commission Staff Working Document on Reforming EURES to meet the goals of Europe 2020
(SWD(2012) 100 final) sets out the goals and lines along which the EURES reform will take place.
249
Germany, Ireland, Denmark, the Netherlands, Austria, Greece, Slovakia.
250
This option is a compromise solution and no explicit consultation has taken place.
251
Source: www.missoc.org. The reference period should be sufficiently long enough to avoid parallel entitlements in two Member States at
the same time.
252
Title II of Regulation (EC) No 883/2004.
253
For example pension rights: only periods of insurance or residence of at least a year will be taken into account for calculating pension
rights.
254
How the 'insurance' is established, is a matter of national law. Regulation (EC) No 883/2004 defines as a period of insurance "periods of
contribution, employment or self-employment as defined or recognized as periods of insurance by the legislation under which they were
completed or considered as completed, and all periods treated as such, where they are regarded by the said legislation as equivalent to
periods of insurance" (Article 1 (t)) . It must be stressed that Regulation (EC) No 883/2004 cannot take away rights that have been
acquired independently on the basis of national legislation. If the national reference period in the State of last activity is shorter than 12
months, the person can choose if he would like to receive the unemployment benefits from that Member State.
255
If the Member State of residence has no unemployment benefit system for self-employed frontier workers, the Member State
of last Portugal, without taking account of the potentially higher earnings in the Netherlands activity will have to export the unemployment
benefits as is currently the case.
EN 88 EN
explored that differ as regards the possibilities to register with the employment services in the State
(not) paying the benefits:
5.4.4.4.1 Option 3a: The unemployed person shall register with the employment services
in the State of last activity
In the situation where the State of last activity is competent to pay the unemployment benefits, the
unemployed cross-border worker is required to register with the employment services in the State of
last activity.
5.4.4.4.2 Option 3b: The unemployed person is awarded the choice to register with the
unemployment services in the State of last activity, or the State of residence
Under this option, the competent Member State will remain responsible for paying the unemployment
benefits, whereas the unemployed cross-border worker can register with the employment services in
the State of residence. The employment services of the State of residence will follow up on performing
the checks on the jobseeking activities on behalf of the competent Member State. Enhanced mobility
support services and improved exchanges of information for the EURES network could be used to
provide assistance to persons on behalf of the employment services in another Member State.
5.4.5 Stakeholder support for the different options concerning the provision of
unemployment benefits for frontier and other cross-border workers
5.4.5.1 Option 1: Introduce a right of choice for frontier workers to receive unemployment
benefits from the Member State of last activity, or the Member State of residence
Only one delegation of the Administrative Commission seemed to support this option. Concerns were
expressed that rather than the employment opportunities, the level of the benefits could be a decisive
factor for making the choice. The option was supported by almost half of the individual respondents to
the public consultation and 29% of the respondents who are representatives of the social partners.256
5.4.5.2 Option 2: Provide for the payment of unemployment benefits by the Member State of
last activity either with registration with the employment services in the State of last activity
(2a) or giving the worker a choice of registering with the employment services in the State of
last activity or the State of residence (2b)
When presenting this option to the Administrative Commission, it was favoured by nine delegations
for reasons of simplification257
. Looking at the results of the public consultation, 40% of the individual
respondents and 47% of the social partners supported this option.
5.4.5.3 Option 3: Provide for the payment of unemployment benefits by the Member State of
last activity only in situations where the cross-border worker has worked there for a
sufficiently representative period either with registration with the employment services in the
State of last activity (3a) or giving the worker a choice of registering with the employment
services in the State of last activity or the State of residence (3b)
These options were developed in direct response to feedback from Member States in the
Administrative Commission to address concerns about the potential financial burden on the State of
256
A public consultation between December 2012 and February 2013 invited citizens and organisations to provide their views on
the main problems linked to the coordination of unemployment benefits for cross-border workers.
257
Czech Republic, Spain, Portugal, Poland, Italy, Romania, Slovenia, France and Malta.
EN 89 EN
last activity in case of short periods of employment there and the need for robust monitoring and
control measures from the labour market authorities in the Member State paying the benefits. Option 3
(and its sub-options) was developed as a compromise in response to this feedback but no formal
consultation on this option has taken place.
5.4.6 Impact assessment of the different options concerning the provision of unemployment
benefits for frontier and other cross-border workers frontier workers
These options are assessed for the specific group of frontier workers and cross-border workers. It has
not been possible to give quantitative estimations for the possible secondary effects on their mobility.
As the number of outgoing and incoming cross-border workers differs between Member States, an
assessment of the economic impact has to combine both situations. Moreover, the reimbursement
mechanism has to be taken into account. Calculations are based on the assumption that frontier
workers claim benefits in their country of residence and other cross-border workers will choose the
highest amount and based on the assumption that they will receive the country-specific average
amount for an average duration of unemployment.258
Based on Labour force Survey (LFS) data for 2013 and 2014, an estimation of the number of cross-
border workers has been made. In the further analysis we considered all workers who worked in
another country than the country of residence as cross-border workers. Workers who worked in a
neighbouring country are considered as frontier workers. This is different from the legal definition
provided in Regulation (EC) No 883/2004. National unemployment rates from Eurostat were applied
to the number of cross-border workers in order to estimate the number of unemployed cross-border
workers. The unemployment rates of the country of last activity and not of the country of residence
have been applied on the number of cross-border workers. In order to estimate the budgetary impact of
the baseline scenario, the estimated number of unemployed cross-border workers are multiplied by the
annual unemployment benefit per unemployed by taking into account the annual average duration of
the payment of the unemployment benefit (on the basis of ESSPROS, Eurostat figures and the LFS).
There are no reliable figures on the administrative cost for handling claims for unemployment benefits
for cross-border workers. A stylised and cautious estimate on the regulatory costs on the basis of a
limited number of Member States comes to the conclusion259
, that in all cases, in which the State of
residence pays the unemployment benefit, this results in an additional administrative cost of around €
43 for the handling of a PD U1 in the State of residence and some € 20 in the State of last activity. For
the processing of a reimbursement claim, the regulatory costs are estimated at € 20 in both countries.
Multiplying this estimated standard cost with the total number of cases results in a total administrative
cost for the payment of the unemployment benefit has been used to estimate the regulatory costs.
258
Source: Table 2.4 in Annex XXVI.
259
See Table 2.9 of Annex XXVI.
EN 90 EN
5.4.6.1 Summary of the impact of different options concerning the provision of unemployment benefits for frontier and other cross-border workers
Type of
impact
Clarification Simplification Protection
of rights
Fundamental
rights
Economic
impacts
Regulatory
costs
Risk of
fraud and
abuse
Equitable
burden
sharing
Member
State
Coherence
with General,
Specific and
EU objectives
Overall
Effectiveness
Overall
Efficiency
(cost vs
effectiveness
Baseline
Scenario
0 0 0 0 0260
0261
0 0 0 0 0
Option 1 - - ++ + -262
+263
- - + + -
Option 2a + + + + -264
+265
+/- +/- ++ + +
Option 2b + +/- + + -266
-267
+/- +/- + + -
Option 3a + + + + -268
+269
+ + ++ ++ ++
Option 3b + +/- + + -270
-271
+ + + ++ +
260
€ 416 m is budget devoted to the payment of unemployment benefits to frontier and other cross-border workers This figure also takes the effect of the reimbursement mechanism into account Table
2.4 in Annex XXVI.
261
€ 9.9 m is the cost of handling unemployment benefits for frontier and other cross-border workers.
262
Budget devoted to the payment of unemployment benefits increases to € 556 m.
263
The regulatory costs decrease to € 4.9 m See Table 2.9 of Annex XXVI.
264
Budget devoted to the payment of unemployment benefits increases to € 499 m.
265
The regulatory costs decrease to € 3.7 m.
266
Budget devoted to the payment of unemployment benefits increases to € 499 m.
267
Regulatory costs will increase due to additional cooperation and control mechanisms.
268
Budget devoted to the payment of unemployment benefits increases to € 442 m.
269
The regulatory costs decrease to €5.1 m.
270
Budget devoted to the payment of unemployment benefits increases to € 442 m.
271
Regulatory costs will increase due to additional cooperation and control mechanisms.
EN 91 EN
5.4.6.2 Impacts of Policy Option 1: Introduce a rights of choice for frontier workers to reeive
unemployment benefits either in the State of last activity or State of residence.
Policy Option 1: Introduce a right of choice for frontier workers to receive unemployment benefits either
in the State of last activity or the State of residence
Social impacts
Clarification - For the workers and public institutions, this option will cause a
significant increase in uncertainty as the choice is only made at
the moment when a person falls unemployed.
Simplification - In comparison to the baseline, this option does not lead to a
simplification, as the right of choice is only made at the
moment when the person claims unemployment benefit. It also
requires effective follow-up of the jobseeking activities of the
unemployed person who does not reside in the Member State
paying the benefit.
Protection of rights ++ This option contributes to optimise a frontier worker's chances
of resuming employment under the most favourable conditions
by providing the worker with the maximum amount of freedom
to decide where they have the best chances of finding work
Financial impact - This option will lead to an overall increase of the annual
unemployment benefit expenditure for cross-border workers of
34% (€ 556 million instead of € 416 million under the baseline
scenario272
) due to the fact that the persons concerned are
likely to choose the scheme providing the highest benefit
(Annex IX – Table 2.10 and Annex XXVI – Table 2.4). The
estimated effect differs for the individual Member States
depending on the average amount of benefits paid by the
Member States concerned. For 8 Member States273
this is the
most expensive option and the least expensive option for 9
Member States274
.
Impacts on fundamental rights + This option contributes to the freedom to choose an occupation
and the right to engage in work in another Member State
(Article 15), as well as to a better protection of rights for
workers who have made use of their right to free movement
(Article 45). There is no incidence on the right to property
(Article 17) as acquired rights to unemployment benefits are
maintained.
Other impacts
Regulatory Costs + This option will reduce the number of reimbursement cases
between Member States, as they will be distributed between
the State of last activity and the State of residence. The
unemployed person makes his/her choice explicit by applying
for unemployment benefits, thereby providing all the
272
Calculations are based on the average amount of unemployment benefits paid in 2013/2014 and an assumed average duration of payment
of 3 months.
273
Czech Republic, Denmark, Germany, Ireland, Spain, Luxembourg. Netherlands and Finland, see Table 2.6 in Annex .
274
Bulgaria, Estonia, Latvia, Hungary, Poland, Portugal, Slovak Republic, Sweden and the United Kingdom.
EN 92 EN
information required under the national legislation. If the
unemployed person wishes to receive the unemployment
benefit from the State of residence, they can request a PD U1
from the State of last activity and submit it to the institution
where they claim unemployment benefit. If the unemployed
person opts to receive unemployment benefits from the State of
last activity, this will result in a ‘permanent export’ of the
unemployment benefits by that State, necessitating information
exchange between the institution in the State of residence and
in the competent Member State on the follow-up of the
jobseeking activities of the person concerned. The
administrative cost for the State of residence is estimated at
€ 4.9 million (Annex XV - Table 15 and Annex XXVI – Table
2.9). This is a decrease of 50% in comparison to the baseline
scenario (of € 9.9 million euro). The costs for issuing PD U1s
by the State of last activity drops from € 51.400 to € 18.500; a
decrease in the administrative burden of 64% (Annex XV -
Table 14275
).
Risk of fraud and abuse - This option itself does not lead to an increased risk of fraud
and abuse, as the person concerned is subject to the same
obligations as any other unemployed person in the Member
State of which he or she chooses to receive the unemployment
benefits. The risk of 'opportunistic behaviour' rather relates to
the choice from which country to receive unemployment
benefits. As was indicated by many public authorities in the
stakeholder consultation, the labour market chances may
frequently not outweigh the choice for the most generous
unemployment benefits.
Fair burden sharing between
Member States
- This option is likely to put a additional burden in particular on
the Member States with comparatively high unemployment
benefits and will therefore not lead to a more equitable
distribution of the financial burden for Member States.
Coherence with General, Specific
and wider EU Objectives:
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of
citizens' rights while at the same time
ensuring legal clarity, a fair and
equitable distribution of the financial
burden among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
• Frontier and other cross-border
workers, who reside in another
Member State than the State of
last activity, shall benefit from
the same protection of rights in
case of unemployment.
• Frontier and other cross-border
workers, who reside in another
Member State than the State of
last activity, shall benefit from
the best available
opportunities of reintegration
+ The unemployed frontier worker is offered the greatest
flexibility to re-integrate into the labour market of their choice.
It will eventually reduce the administrative burden of
processing reimbursement and will shift a part of the financial
burden from the State of residence to the State of last activity.
However, this is fully dependent on the choice that the person
makes and this option entails great uncertainty for the Member
States. This option also entails an overall increase in budgetary
costs. It could also encourage the unemployed person to
choose the State with the most generous unemployment
benefits, rather than the one with the best prospects for re-
integration. However, this may still be considered coherent
with the wider EU policy objective to promote greater support
and labour activation measures to promote reintegration into
the labour market.
275
This calculation is based on stylized estimates.
EN 93 EN
in the labour market.
• The financial burden for
paying unemployment benefits
shall be distributed between
the competent Member State of
last activity and the Member
State of residence in a manner
that corresponds to
contributions or taxes received
in a way which is easy to
administer and achieves fair
results.
5.4.6.3 Impacts of Policy Option 2a: Member State of last activity provides the unemployment
benefits to frontier workers and other cross-border workers – registration for employment
services in Member State of last activity
Policy Option 2a: Introduce the rule in Regulation (EC) No 883/2004 according to which the Member
State of last activity provides the unemployment benefits to frontier workers and other cross-border
workers – requirement to register with the employment services in the Member State of last activity
Social impacts
Clarification + This option will bring more clarity for the unemployed cross-
border workers and the institutions, as it will always be the
institution in the Member State of last activity that pays out the
benefit. The person will receive all benefits from the same
source, which will provide welcome clarification in relation to
cases where a person receives another benefit from the of last
State (i.e. a partial invalidity benefit).
Simplification + One system will apply to all unemployed persons and there will
no longer be a distinction between frontier and other cross-
border workers. A direct link will be established between
benefits and contributions and there is no need for a
reimbursement mechanism. Persons residing at a large distance
from the Member State of last activity may face more
difficulties in meeting the eligibility conditions, as they will
have to travel a longer way for this purpose to their competent
employment service, but these could be mitigated by an option
to claim an export of their unemployment benefits to their
Member State of residence. This means that persons who prefer
to orientate to the labour market of the State of residence can
return to that State by using the right to export their
unemployment benefits. This means that the unemployed
person can be more responsive to the relative likelihood of
finding a job in the different Member States, and can direct his
or her efforts to the Member State with the best job
opportunities in their particular field.
Protection of rights + This option ensures that cross-border workers are not treated
differently from other workers in the same situation, who work
and reside in the same Member State. It also ensures that
unemployment benefits are paid under the conditions and at the
amount acquired by the payment of contributions.
EN 94 EN
Financial impact - The total expenditure on unemployment benefits will increase
from € 415 million to € 499 million; an increase of 20% in
comparison to the current scenario. This is due to the fact that
cross-border workers use to work in countries with
comparatively heigher wages and correspondingly higher
benefits (see (Annex XV - Table 2.2 and Annex XXVI – Table
2.4). The estimated effect differs for the individual Member
States depending on the average amount of benefits paid and
depending on the relation of frontier works to other cross-
border workers residing in the Member State concerned.276
From a Member States' perspective, very short period of
employment can have a negative financial impact, when no
contributions were received in proportion to the cost for paying
the unemployment benefit.
Impacts on fundamental rights + This option eliminates differences in treatment between frontier
workers and other cross-border workers and contributes to the
freedom to choose an occupation and the right to engage in
work in another Member State (Article 15) as well as to a better
protection of rights for workers who have made use of their
right to free movement (Article 45). The right of property
(Article 17) is protected, as the person directly receives the
benefits from the State to which he/she lastly paid
contributions.
Other impacts
Regulatory Costs + Only one Member State will be competent for paying
unemployment benefits and monitoring the availability of the
person to the labour market. The unemployed person can apply
directly to the institution in the Member State in which he/she
was insured during the last employed activity. Reimbursement
arrangements are no longer necessary. Member States will have
to waive residence conditions for persons registering with their
employment services and may have to make changes to their
administrative procedures to check upon persons residing
outside their territory. It is also the cheapest option, as the total
regulatory costs are reduced from around € 9.9 million to € 3.7
million, i.e. to 37% of the costs under the baseline scenario
(Annex XXVI – Table 2.9).
Risk of fraud and abuse +/- This option itself does not lead to an increased risk of fraud and
abuse, as all unemployed persons are subject to the same
obligations as any other unemployed person in the Member
State of last activity.However, in the case of export of
unemployment benefits there may be a perceived risk that
jobseeking obligations are not fully complied with (see section
5.3.1).
Fair burden sharing between
Member States
+/- This option will lead to a more equitable distribution of the
costs related to the payment of benefits for Member States who
have a relatively large number of unemployed frontier workers
residing in that Member State. It will also remove the obligation
to reimburse the Member State of residence. However, it may
also lead to the situation that benefits have to be provided by a
276
It is the most expensive option for Greece, Cyprus, Malta, Austria and the United Kingdom
EN 95 EN
Member State after a relatively short period of insurance.
Coherence with General, Specific
and wider EU Objectives:
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of
citizens' rights while at the same time
ensuring legal clarity, a fair and
equitable distribution of the financial
burden among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
• Frontier and other cross-border
workers, who reside in another
Member State than the State of
last activity, shall benefit from
the same protection of rights in
case of unemployment.
• Frontier and other cross-border
workers, who reside in another
Member State than the State of
last activity, shall benefit from
the best available
opportunities of reintegration
in the labour market.
• The financial burden for
paying unemployment benefits
shall be distributed between
the competent Member State of
last activity and the Member
State of residence in a manner
that corresponds to
contributions or taxes received
in a way which is easy to
administer and achieves fair
results.
++ This option restores the direct link between receiving
unemployment benefits and availability for the labour market.
The financial and administrative burden shifts to the State of
last activity, leading to an absolute increase in terms of
financial and administrative burden in States that have a high
number of incoming cross-border and frontier workers,
although overall in fewer Member States this option has the
lowest budgetary impact. Moreover, this option does not
prevent the Member State of last activity becoming competent
even after a very short period of activity there, which would in
reality not contribute to an even burden sharing. This option
provides for some flexibility for the person concerned, who can
continue looking for work in the State of last activity or, by
making use of the export of benefits, can return to the Member
State of residence to look for employment there. However,
where the person is residing far away from the place where
he/she is registered with the employment services, he/she can
experience difficulties in following up on the jobseeking
activities. This therefore may not be considered entirely
coherent with the wider EU policy objective to promote greater
support and labour activation measures to promote reintegration
into the labour market.
5.4.6.4 Impacts of Policy Option 2b: Member State of last activity provides the unemployment
benefits to frontier workers and other cross-border workers – choice of registration for
employment services in either Member State of last activity or State of residence
Policy Option 2b: Introduce the rule in Regulation (EC) No 883/2004 according to which the Member
State of last activity provides the unemployment benefits to frontier workers – choice to register with the
employment services in the Member State of last activity, or the Member State of residence
Social impacts
Clarification + This option will bring more clarity for the unemployed person
and the institution, as it will always be the institution in the
Member State of last activity that pays out the benefit for all
unemployed persons. On the other hand, it contributes to
optimise a frontier worker's chances of resuming employment
under the most favourable conditions, either in the Member
State of last activity, or in the State of residence
Simplification +/- One system will apply to all unemployed persons and there will
no longer be a distinction between frontier and other cross-
border workers. A direct link will be established between
benefits and contributions and there is no need for a
reimbursement mechanism. However, the split of competences
EN 96 EN
between the payment of the benefits and the responsibility to
follow-up on the jobseeking activities of the person concerned
calls for new arrangements between the competent Member
State and the State of residence.
Protection of rights + This option ensures that all cross-border workers are treated
equally. They would also get the same benfits under the same
conditions as workers who work and reside in the Member
State in which they pursued their activity.
From the point of view of the Member States this is also
positive; as it is in their interest to allow their unemployed
persons to look for work in the Member State where they are
most likely to find it. Therefore, the impact in comparison to
the baseline scenario is considered as being positive.
Financial impact - The economic impact is the same as for option 2a. The costs for
the introduction of the cooperation mechanism will depend on
the specifics of the mechanism and could therefore not be
quantified.
Impacts on fundamental rights + The impact on fundamental rights is the same as for option 2a.
Other impacts
Regulatory Costs - The impact on regulatory costs is the same as for option 2a.
However, additional cooperation and control mechanisms need
to be established, as the responsibility for paying
unemployment benefits and checking availability for work can
lie with different institutions. The cooperation mechanism
should not only include regular reporting on the situation of the
unemployed person, but also provide for incentives for the
employment services in the State of residence to actively
follow-up on the jobseeking activities, and possible financial
compensation for providing active labour market measures on
behalf of another Member State. This could have a negative
impact on the administrative burden in comparison to the
baseline scenario, depending, in each case, on the actual
measures taken.
Risk of fraud and abuse +/- This option itself does not lead to an increased risk of fraud and
abuse, as all unemployed persons are subject to the same
obligations as any other unemployed person in the Member
State of last activity. There may be a need to incentivise the
employment services in the State of residence to actively
follow-up on the jobseeking activities.
Fair burden sharing between
Member States
+/- From the perspective of providing the unemployment benefits,
this option establishes a direct link between receiving
contributions and providing unemployment benefits. It will also
EN 97 EN
remove the obligation to reimburse the Member State of
residence. Active labour market assistance measures will, in the
first place, be at the expense of the employment services in the
State of residence. However, it may also lead to the situation
that benefits have to be provided by a Member State after a
realtively short period of insurance.
Coherence with General, Specific
and wider EU Objectives:
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of
citizens' rights while at the same time
ensuring legal clarity, a fair and
equitable distribution of the financial
burden among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
• Frontier and other cross-border
workers, who reside in another
Member State than the State of
last activity, shall benefit from
the same protection of rights in
case of unemployment.
• Frontier and other cross-border
workers, who reside in another
Member State than the State of
last activity, shall benefit from
the best available
opportunities of reintegration
in the labour market.
• The financial burden for
paying unemployment benefits shall
be distributed between the
competent Member State of last
activity and the Member State of
residence in a manner that
corresponds to contributions or taxes
received in a way which is easy to
administer and achieves fair
results.
+ This option offers the person concerned the opportunity to
register with employment services in the State of residence.
This option provides the unemployed persons a right of choice
as regards their registration which may be convenient for them
in particular in those situations where their place of residence is
far away from the place where the competent institution in the
Member State of last activity is located. They may also prefer
to deal with their local institution for linguistic reasons. There is
however also a drawback to this option as the current rules only
provide for an export of cash benefits, but not necessarily also
for the provision of training and reactivation measures in a
country different from the one where the competent institution
is located. This therefore may not be considered coherent with
the wider EU policy objective to promote greater support and
labour activation measures to promote reintegration into the
labour market. The institution in the State of residence may
want to be compensated for these type of activities provided to
the person concerned.
5.4.6.5 Impacts of Policy Option 3a: Member State of last activity provides the unemployment
benefits to frontier workers and other cross-border workers only if person has worked there
for 12 months– registration for employment services in Member State of last activity
Policy Option 3a: Introduce a rule in Regulation (EC) No 883/2004 that the State of last activity only pays
unemployment benefit if the person has worked there for a sufficiently representative period , i.e. for 12
months – registration with the State of last activity
Social impacts
Clarification + This option establishes a direct causal link between the level of
integration in the labour market of a Member State and
compensation for lost employment periods. The link with the
labour market arises from the length of the contributions paid in
the State of activity and will provide a balanced reflection of
the relationship between the contribution period and acquiring
the right to unemployment benefits.
EN 98 EN
Simplification + There will be a 'switch' between the competent Member State
and the State of residence dependent on the employment
duration of the former cross-border workers. The impact for
persons residing at a large distance from the Member State of
last activity will be the same as 2a.
Protection of rights + The unemployed person will always receive unemployment
benefits from the State with which he/she has the closest link
with the labour market, either from the State of last activity or
the State of residence.
Financial impact - This option will lead to an increase of 6% in budgetary costs for
Member States from € 416 million to € 442 million (Annex IX
– Table 2.10 and Annex XXVI – Table 2.4277
). For 6 Member
States , this option has the lowest budgetary impact, whereas
for 5 Member States, it is the most costly option (Annex X–
Table 2.6 and and Annex XXVI – Table 2.4). Many 'outgoing'
(seasonal) workers have their place of residence in these
countries. They are mostly employed less than 12 months,
which means that they will have to claim unemployment
benefits in their State of residence.
When looking at the distribution of unemployment benefits for
incoming cross-border workers, under this option 12% of the
total unemployment benefit will be paid by the State of
residence and 88% by the State of last activity (Annex XXVI –
Table 2.7). The Member State of last activity thus has a higher
share in the payment of unemployment benefits than under the
current scenario (68%), but it is guaranteed that it has received
contributions corresponding to at least 12 months of insurance.
Based on 2.2c of Annex XXVI, 53.800 unemployed frontier
workers would receive unemployment benefits in the State of
last activity on the basis of their insurance for at least 12
months there. In the baseline scenario, only the 28.500 cross-
border workers can claim unemployment benefits from the
State of last activity (73.700 – 45.200 frontier workers). This
explains why the 70-30% division between the State of last
activity and the State of residence moves to 88%-12% under
this option, as more frontier workers will receive
unemployment benefits from the State of last activity.
Impacts on fundamental rights + The impact on fundamental rights is the same as for option 2.
The right to property (Article 17) is protected, as the person
will always have an entitlement to unemployment benefits
corresponding to the period of contributions paid into a system.
Other impacts
Regulatory Costs + Depending on the employment history of the person during the
277
The same calculation method has been used as for option 1. Calculations are based on the assumption that the ‘sufficiently representative
period’ is set at 12 months.
EN 99 EN
last 12 months, the competence for paying unemployment
benefits will switch between the State of last activity and the
State of residence. Member States do not have to apply the
aggregation rules for determining the period of 12 months (it
concerns a minimum period that the person must have worked
in the State of last activity) and hence there is additional
information exchange needed between the competent Member
State and the State of residence as regards the reference period
of 12 months. For the opening of the right to unemployment
benefits the information obligations for the person and the
information exchanges between Member States or the purposes
of aggregation will be the same as under the baseline scenario.
In combination with the annulment of the reimbursement
procedure, this option has a postive impact on administrative
burden for the institutions in comparison to the baseline
scenario. The total amount of the regulatory costs for this
option are estimated at around € 5.1 million, a reduction of
approximately 4.8 million or 51% of the baseline scenario. As
verification of jobseeking activities and benefit payment will
both be dealt with by the same institution in the State of last
activity, this option can help reduce administrative burden
caused by 'cross-border' monitoring of the benficiary.
Risk of fraud and abuse + This option itself does not lead to an increased risk of fraud and
abuse. There is no incentive for 'opportunistic behaviour' due to
the binding effect of the conflict rule. Moreover, this option
excludes the possibility that a person can claim unemployment
benefit in a Member State after having worked there for only
one day, or too short a period to have a genuine link with the
labour market of the State of last activity. Periods of insurance
in other Member States cannot be aggregated for the calculation
of the 12 month period to avoid 'forum shopping'. Verification
of jobseeking activity and benefit payment are linked and
carried out by the same institution. This makes ensuring
applicable jobseeking activities are being carried out easier for
the institutions of the State of last activity.
Fair burden sharing between
Member States
+ This option ensures that the cost of the unemployment benefits
are divided between the relevant Member State in a way that is
proportional to level of contributions or income tax received by
the competent Member State. A reimbursement mechanism is
no longer needed.
Coherence with General, Specific
and wider EU Objectives:
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of
citizens' rights while at the same time
ensuring legal clarity, a fair and
equitable distribution of the financial
burden among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
• Frontier and other cross-border
workers, who reside in another
Member State than the State of
last activity, shall benefit from
the same protection of rights in
case of unemployment.
++ This is a 'compromise' solution. It not only restores the direct
link between receiving contributions and paying unemployment
benefits, but also guarantees a ‘sufficiently close link’ in terms
of received contributions and labour market integration. It may
therefore be considered to promote greater efforts by the worker
to reintegrate into the labour market by requiring the worker to
register with the employment services in this location in a
manner aligned to wider EU policy objectives on active labour
market policy. This can meet the objective of proportionate
sharing of the burden between Member States.
EN 100 EN
• Frontier and other cross-border
workers, who reside in another
Member State than the State of
last activity, shall benefit from
the best available
opportunities of reintegration
in the labour market.
• The financial burden for
paying unemployment benefits
shall be distributed between
the competent Member State of
last activity and the Member
State of residence in a manner
that corresponds to
contributions or taxes received
in a way which is easy to
administer and achieves fair
results.
5.4.6.6 Impacts of Policy Option 3b: Member State of last activity provides the unemployment
benefits to frontier workers and other cross-border workers only if worker has worked there
for 12 months– choice of registration for employment services in either Member State of last
activity or State of residence.
Policy Option 3b: Introduce the rule in Regulation (EC) No 883/2004 that the State of last activity only
pays unemployment benefit if the person has worked there for a sufficiently representative period –
choice of registration
Social impacts
Clarification + This option establishes a direct causal link between the level of
integration in the labour market of a Member State and
compensation for lost employment periods. The link with the
labour market arises from the contributions paid in the State of
activity and will provide a balanced reflection of the
relationship between the contribution period and acquiring the
right to unemployment benefits.
Simplification +/- Member States' institutions may have to apply a greater amount
of flexibility when it comes to recognising the availability for
the labour market in another Member State with availability in
the competent Member State and procedures need to be set up
for that purpose for both the citizen and the national authority.
Protection of rights + This option will be beneficial for persons receiving
unemployment benefits from the State of last activity and
residing far away from the State of last activity. It will
contribute to optimising the unemployed person's chances of
resuming employment under the most favourable conditions,
either in the State of residence or in the State of last activity.
EN 101 EN
Financial impact - The impact is the same as for option 3a.
The costs for the introduction of the cooperation mechanism
will be dependent on the specifics of the mechanism and could
therefore not be quantified.
Impacts on fundamental rights + The impact on fundamental rights is the same as for option 2a.
Other impacts
Regulatory Costs - Depending on the employment history of the person during the
last 12 months, responsibility for paying unemployment
benefits will switch between the State of last activity and the
State of residence. Member States do not have to apply the
aggregation rules for determining the period of 12 months and
the Member State of last activity only needs to take into
account the periods effectively fulfilled within its territory. A
reimbursement procedure is no longer necessary, but additional
cooperation and control mechanisms need to be established, as
responsbility for paying the unemployment benefits and
checking the availability for work lie with different institutions.
The cooperation mechanism should not only include regular
reporting on the situation of the unemployed person, but also
provide for incentives for the employment services in the State
of residence to actively follow-up on the jobseeking activities
of the person, and possible financial compensation for
providing active labour market measures to the person on
behalf of another Member State. This will have a negative
impact in comparison to the baseline scenario.
Risk of fraud and abuse + This option itself does not lead to an increased risk of fraud and
abuse. There is no opportunity for the unemployed person to go
'forum shopping' due to the binding effect of the conflict rule.
Moreover, this option excludes the possibility that a person can
claim an unemployment benefit in a Member State after having
worked there for only one day, or too short a period to have a
genuine link with the labour market of the State of last activity.
The employment services in the State of residence may need to
be incentivised to actively follow-up on the jobseeking
activities without the responsibility for the payment.
Fair burden sharing between
Member States
+ From the perspective of providing the unemployment benefits,
this option establishes a direct link between receiving
contributions and providing unemployment benefits. There is
no need for reimbursement of the unemployment benefits.
Active labour market assistance measures will, in the first
place, be at the expense of the employment services in the State
of residence.
Coherence with General, Specific + This option offers the person concerned the opportunity to
register with the employment services in the State of residence.
EN 102 EN
and wider EU Objectives:
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of
citizens' rights while at the same time
ensuring legal clarity, a fair and
equitable distribution of the financial
burden among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
• Frontier and other cross-border
workers, who reside in another
Member State than the State of
last activity, shall benefit from
the same protection of rights in
case of unemployment.
• Frontier and other cross-border
workers, who reside in another
Member State than the State of
last activity, shall benefit from
the best available
opportunities of reintegration
in the labour market.
• The financial burden for
paying unemployment benefits
shall be distributed between
the competent Member State of
last activity and the Member
State of residence in a manner
that corresponds to
contributions or taxes received
in a way which is easy to
administer and achieves fair
results.
From the point of view of the need for a sufficiently close link
with the labour market, is seems more difficult to justify why
payment of benefits should be separated from availability for
the labour market. Without a cooperation and reimbursement
mechanism, the incentive for the institution in the State of
residence to actively support the unemployed person could be
low. This therefore may not be considered coherent with the
wider EU policy objective to promote greater support and
labour activation measures to promote reintegration into the
labour market. This option is more effective for the
unemployed person concerned, but has as an important
drawback in that it necessitates setting up a new cooperation
mechanism, which may increase regulatory burden contrary to
the objective of establishing an easy to administer system.
5.4.7 Conclusions – Combination of Preferred Options
Except for the horizontal option on the recognition of periods for the purpose of their aggregation, all
the other options cannot be seen in isolation. A compromise is required between the objective to
ensure a proportionate distribution of the financial burden, the objective of providing a unifom and
consistent application of the aggregation and culcuation rules that reflect the degree of integration of
the worker with the insurance system and the objective to ensure the best conditions for the
unemployed person for reintegration in the labour market and to protect him/her against the loss of
rights.
Such a compromise should aim at ensuring that a Member State becomes responsible for paying the
unemployment benefit only after a sufficient link had been established by the mobile worker to the
scheme in question, it should aim at ensuring administrative simplicity which means that – where
possible –the full administrative procedure of registration, determination and payment of benefits, and
assistance in offering job opportunities should be in the hand of one institution and that this competent
institution should be, where possible, the institution which is in close distance to the place of
residence of the beneficiary. Should the latter not be the case, then an extended period for exporting
unemployment benefits will allow the unemployed person to stay in or return to the Member State
with which he/she has the closest ties and the highest probability of finding a job.
From the comparison of the options under Section 7, it follows that:
For the coordination of unemployment benefits, the best compromise would be a combination of
option 2b for the aggregation of periods in combination with the horizontal option regarding the
EN 103 EN
recognition of periods for the purpose of aggregation, option 1 for the export of unemployment
benefits, and option 3a for competence and registration, of.
This combination of options would ensure that:
a) Periods completed in another Member State are only taken into account by way of
aggregation, where those periods would also have been considered as periods of insurance in
that Member State where they have been completed;
b) The Member State of last activity becomes competent for the aggregation of periods in all
cases in which the insured person had been most recently insured that State for at least three
months;
c) The Member State of previous activity becomes competent and has to export the benefit
whenever this condition has not been satisfied;
d) Cash benefits are exported, i.e. are paid to unemployed persons looking for a job in another
Member State than the competent one for an extended period of at least six months in order to
provide sufficient time for an effective job search;
e) The Member State of last activity would remain competent for providing unemployment
benefits to frontier and other cross-border workers in all cases where those persons have been
insured there for at least 12 months, because it can be assumed that this suffices to create a
strong link to the labour market of this State;
f) The Member State of residence becomes competent for those who have not satisfied this
requirement and thus have not established such a strong link.
EN 104 EN
6. Access by econonically inactive mobile citizens to certain social benefits
6.1. Introduction
For a number of years social security institutions have had to deal with two distinct sets of EU rules
regarding access to welfare benefits by economically inactive citizens from other EU Member States.
On the one hand, Regulation (EC) No 883/2004 which provides for equal treatment in relation to
social security benefits. On the other hand, Directive 2004/38/EC on the right of citizens of the Union
and their family members to move and reside freely within the territory of the Member States (“the
Free Movement Directive”)278
which applies limitations and conditions to the residence of EU citizens
and their families in other Member States and contains a number of exceptions from equal treatment
as regards access to Member States' social assistance systems. Although Regulation (EC) No
883/2004 and Directive 2004/38/EC were negotiated partly at the same time and adopted by the EU
legislators on the same day (30 April 2004), Regulation (EC) No 883/2004 makes no reference to the
Directive; nor does the Directive make any reference to the coordination Regulation. The relationship
between the two sets of rules has therefore not been entirely clear.
Social assistance encompasses all assistance schemes established by the public authorities to which
recourse may be made by an individual who does not have resources sufficient to meet his own basic
needs and those of his family. By reason of that fact, such an individual may, during his period of
residence, become a burden on the public finances of the host Member State which could have
consequences for the overall level of assistance which may be granted by that State.
Regulation (EC) No 883/2004 extends to all legislation concerning defined categories of social
security. The material scope is exhaustive. Consequently, a branch of social security which is not
mentioned, is in principle, outside the scope of the regulation. This is the case, for instance, for social
assistance.
However, some benefits, falling within the Regulation, the so-called special non-contributory cash
benefits (SNCBs), have characteristics both of social security legislation and of social assistance.
SNCBs are defined as benefits which are provided under legislation which, because of its personal
scope, objectives and/or conditions for entitlement, has characteristics both of the social security
legislation and of social assistance (Article 70(1) Regulation (EC) No 883/2004).
SNCBs can either provide supplementary, substitute or ancillary cover against the risks covered by
the branches of social security, and which guarantee the persons concerned "a minimum subsistence
income having regard to the economic and social situation in the Member State concerned” or “solely
specific protection for the disabled, closely linked to the said person's social environment in the
Member State concerned” (Article 70(2)(a) Regulation (EC) No 883/2004).
If all conditions for belonging to the SNCB category are satisfied and if the claimant falls within the
personal scope of Regulation (EC) No 883/2004, SNCBs are provided exclusively in the Member
State where the persons concerned reside, in accordance with its legislation and are not exportable.
As explained below, the access of economically inactive EU citizens and jobseekers to social benefits
constituting social assistance in the Member State where they are not nationals has been the subject of
rulings form the Court of Justice in recent years, which have clarified the relationship between the
Regulation and the Free Movement Directive. At the time of preparing this Impact Assessment Report
the jurisprudence of the Court of Justice was limited to finding that SNCBs could be subject to the
conditions of the Free Movement Directive.
On 14 June 2016 the Court gave its ruling in the case of C-308/14 European Commission v United
Kingdom holding that access of economically inactive EU citizens to classic social security benefits
(not constituting social assistance within the meaning of the Free Movement Directive) could also be
subject to such conditions.279
This ruling has impacted on the base line scenario and hence also on the
278
OJ L158, 30.4.2004, p.77.
279
C-308/14 European Commission v United Kingdom.
EN 105 EN
impact assessment of alternative options compared to that scenario. Following the judgment,
codifying the case law of the Court by introducing a dynamic reference to the limitations to equal
treatment in the Free Movement Directive implies that, in relation to economically inactive persons,
Member States may make the access both to social assistance and social security benefits, subject to
fulfilling the conditions referred to in that Directive. The situation is different in respect of jobseeker
whose right of residence is conferred directly by Article 45 of the Treaty on the Functioning
of the European Union. As a consequence, for economically inactive citizens, options 1a and 1b
have become virtually the same; and option 1c and 2 have been overtaken by the jurisprudence. It
should be noted, however, that following this judgment option 1a must be understood as permitting
Member States, for economically inactive citizens, to derogate from the principle of equal treatment
in respect of social security as well as social assistance where such a person does not fulfil the
conditions for legal residence as set out in the Free Movement Directive, while for jobseekers that
limitation is only possible in relation to social assistance. As this report had been approved by the
Regulatory Scrutiny Board prior to the aforementioned judgment, the authors have not substantially
revised the options described below or the analysis of their impact, which does not reflect this
differentiated treatment of economically inactive citizens and jobseekers.
6.2. Problems with access by economically inactive mobile citizens to certain social benefits
6.2.1 Lack of clarity and transparency for economically inactive mobile EU citizens and
institutions concerning entitlement to certain social benefits
According to the recent jurisprudence of the CJEU, Member States may choose to limit equal
treatment for special non-contributory cash benefits claimed by economically inactive citizens and
jobseekers to the extent permitted by the Free Movement Directive. Specifically the Free Movement
Directive provides that there is no obligation for Member States to award social benefits for an
economically inactive citizen for the first three months of residence and after three months Member
States may still refuse to award benefits if the person lacks sufficient resources not to impose an
unreasonable burden on the host Member State or does not have comprehensive sickness insurance.
This is not however apparent from the current wording of Regulation (EC) No 883/2004, which
suggests that all mobile citizens are entitled to full equal treatment. In the absence of clear wording
within the Regulation, economically inactive EU mobile citizens and jobseekers do not have a clear
view of what their rights are. This lack of transparency also affects national social security institutions
EN 106 EN
which pay such benefits. This is also reflected in the high number of court cases instituted in some
Member States (in particular in Germany but also in the United Kingdom) seeking clarity as to the
interaction between the Free Movement Directive and Regulation (EC) No 883/2004.280
The driver behind these specific problems is the recent jurisprudence of the Court that has changed
the previous understanding of the relationship between the Social Security Coordination Rules and the
Free Movement Directive. In September 2013 the Court of Justice delivered a judgment in Case C-
140/12 Brey, subsequently confirmed in Case C-333/13 Dano in November 2014, which clarified that
Regulation (EC) No 883/2004 on the coordination of social security systems can in certain
circumstances be read in conjunction with the provisions of the Free Movement Directive. Both
judgments concerned economically inactive EU mobile citizens who were claiming a specific type of
minimum subsistence benefit, classified as a “special non-contributory cash benefit” within the
meaning of Regulation (EC) No 883/2004. The Court held that these benefits could, under certain
conditions, be regarded as social assistance within the meaning of the Free Movement Directive and
that therefore the exceptions from equal treatment in the Directive could be applied to such benefits.
These conclusions were confirmed in the Court’s judgment of 15 September 2015 in Case C-67/14
Alimanovic where the Court provided clarification of when EU law requires Member States to pay
social assistance benefits to jobseekers (mobile jobseekers enjoy a specific legal status under EU law
and form a separate category of mobile citizens from economically inactive citizens281
). In particular,
the Court held that special non-contributory cash benefits providing for a minimum level of
subsistence and which form part of a scheme which also provides for benefits to facilitate the search
for employment282
, are to be considered as social assistance if this is their predominant function. The
Court also held that jobseeking EU citizens who have worked for less than one year, in case of
involuntary unemployment retain their status of workers for no less than 6 months as provided for in
Article 14(4)b of the Directive. As long as they retain their status as workers, these jobseeking EU
citizens benefit from equal treatment and thus are entitled to social assistance benefits for this period
of six months. After that period of six months, Member States are not obliged to grant social
assistance by virtue of Article 24(2) of the Directive which allows Member States not to confer
entitlements to social assistance during the longer period provided for in Article 14(4)b of the
Directive. The Court clarified that there was no need to carry out an individual assessment before
refusing to grant such benefits beyond the period of six months since such a proportionality test had
already been carried out by the legislator by setting the conditions in the Directive.
The recent judgments of the Court mean that Member States can choose to limit equal treatment for
special non-contributory cash benefits (and potentially other non-contributory tax financed benefits)
claimed by these economically inactive citizens and jobseekers to the extent permitted by the Free
Movement Directive. This is not however apparent from the wording of Regulation (EC) No
883/2004, which still suggests that full equal treatment is the rule and furthermore the material scope
of this derogation remains unclear pending the judgment of the Court in case C-308/14 European
Commission v United Kingdom.283
This means economically inactive EU mobile citizens and
jobseekers do not have a clear view of what their rights are. It also affects national social security
institutions which pay such benefits: EU legislation does not set out what limitations they can apply to
280
There have been 99 first instance court or tribunal decisions in Germany since 1 May 2010 concerning the relationship between
Regulation (EC) no 883/2004 and Directive 2004/38/EC, 67 of which have been appealed to a higher national court . There have been 11
first instance court or tribunal decisions in Germany since 1 May 2010 concerning the relationship between Regulation (EC) no 883/2004
and Directive 2004/38/EC, 2 of which have been appealed to a higher national court.
281
See Recital 9 and Article 14(4)(b) of Directive 2004/38/EC.
282
the CJEU has held that Member States must accord jobseekers from other Member States equal treatment in respect of "benefits of a
financial nature intended to facilitate access to employment in the labour market of a Member State", provided the jobseeker can show "a
genuine link” with “the employment market of that state" Case C-138/02 Collins of 23 March 2004, para. 63.
283
The case C-308/14 European Commission v United Kingdom (judgment pending) relates to the question of whether it is possible to
require a right of residence as a condition of access to tax financed family benefits. Advocate General Cruz Villalón's indicated in his
opinion dated 6 October 2015 that there was nothing to indicate that the findings of the Court in the cases of Brey and Dano should apply
exclusively to social assistance benefits or special non-contributory benefits with which those cases were concerned (paragraph 74). The
scope of "social assistance" and whether or not it may include certain classic social security benefits was also raised by a number of Member
States in the Reflection Forum of the Administrative Commission in December 2014 and June 2015.
EN 107 EN
payment of benefits to economically inactive EU mobile citizens and jobseekers. This is also reflected
in the high number of court cases instituted in some Member States (in particular in Germany but also
in the United Kingdom) seeking clarity as to the interaction between the Free Movement Directive
and Regulation (EC) 883/2004.284
The consequences of this problem are that there is a lack of clarity and transparency for EU citizens as
regards their right to claim special non-contributory cash benefits in their host state in order to have a
minimum subsistence. There is also a similar lack of clarity for mobile jobseekers on whether they are
entitled to access subsistence jobseekers’ benefits when looking for work in their host State.
Moreover, social security institutions which are responsible for taking decisions on claims to benefits
made by these groups of mobile citizens do not have the necessary legal certainty in the rules. In
particular in relation to the question of whether for the purposes of Regulation (EC) No 883/2004, the
exceptions from equal treatment in the Directive apply only to special non-contributory cash benefits
providing for a minimum level of subsistence, or whether the principle may extend further to other
types of "classic" social security benefits for the purposes of the EU social security coordination rules.
This question still awaits clarification in the case of C-308/14 European Commission v United
Kingdom.285
6.3. Baseline Scenario
Out of a total EU-28 mobile population of 14.3 million in 2014286
, there were an estimated 3.7 million
economically inactive mobile EU citizens287
. If we assume that the 3.1% average yearly growth of
mobile EU citizens between 2009 and 2014 continues between 2015 and 2020, and that the ratio
between active and non-active mobile EU citizens also remains constant, then we can expect that in
2020, out of a total EU-28 mobile population of 17.5 million288
, there will be some 4.4 million
economically inactive mobile EU citizens289
.
This group comprises many vulnerable citizens, for example, old-age pensioners, persons with a
disability who cannot work, parents temporarily outside of the labour market as they are looking after
children. Nearly 80% of economically inactive mobile citizens derive rights (residence rights and/or
rights to benefits) from economically active family members with whom they are living in the host
Member State and are entitled to equal treatment with the family members of national workers.
However, there still remains a significant group of economically inactive mobile EU citizens who
cannot derive rights from others. It is this group of EU citizens that is affected by the current lack of
clarity and transparency as regards their right to claim certain social benefits in their host state in
order to have a minimum subsistence income on which to live.
Mobile jobseekers are also affected by this lack of transparency. There are in the region of 1 million
EU jobseekers looking for employment in Member States other than their own290
. Assuming that the
unemployment rate in the EU between 2015 and 2020 remains at 11.7%, and that the share of mobile
EU jobseekers over the total EU population also remains constant at 9%, then we can estimate that in
2020 there will be some 1.2 million EU jobseekers looking for employment in Member States other
284
There have been 99 first instance court or tribunal decisions in Germany since 1 May 2010 concerning the relationship between
Regulation (EC) no 883/2004 and Directive 2004/38/EC, 67 of which have been appealed to a higher national court. There have been 11
first instance court or tribunal decisions in Germany since 1 May 2010 concerning the relationship between Regulation (EC) no 883/2004
and Directive 2004/38/EC, 2 of which have been appealed to a higher national court.
285
C-308/14 European Commission v United Kingdom (ibid).
286
All ages (LFS, 2014).
287
All ages except 0-14 (LFS, 2014).
288
All ages.
289
All ages except 0-14.
EN 108 EN
than their own. Moreover, 25% of EU citizens say they would definitely (8%) or probably (17%)
consider working in another EU country in the next ten years.291
6.4. Objectives for the review of the rules on access by economically inactive citizens to
certain social benefits
This initiative serves to facilitate the exercise of the right to free movement by creating and enabling a
conducive environment. It is in the interest of all parties to design co-ordination rules that allow full
exercise of citizens' rights whilst making the requirements of Member States clear, manageable and
efficient.
As with other elements of the revision, the general policy objective of this initiative is to continue the
modernisation of the EU Social Security Coordination Rules by further facilitating the exercise of
citizens' rights while at the same time ensuring legal clarity, a fair and equitable distribution of the
financial burden among the institutions of the Member States involved, and administrative simplicity
and enforceability of the rules.
In particular, this is reflected in the need to ensure legal clarity in the rules in relation to the
limitations and conditions to the residence of EU citizens and their families in other Member States
and the exceptions from equal treatment as regards access to Member States' social assistance
systems. This is also an issue of protection of rights as in the absence of clarity in the current rules
there is inconsistent treatment of such benefits by different Member States which creates uncertainty
for citizens and competent institutions and consequent difficulties in enforceability and litigation risk.
Promoting legal certainty is therefore also anticipated to improve effective and efficient
administration and reduce administrative burden.
The specific objective can be defined as follows:
Ensure legal clarity and transparency on the distinctions between the rights of workers, jobseekers and
economically inactive mobile EU citizens, including the extent to which Member States’ social
security institutions are permitted to limit the equal treatment principle for economically inactive
mobile EU citizens and jobseekers who claim certain tax financed social benefits.
291
Special Eurobarometer 398 – Internal Market, October 2013.
EN 109 EN
6.5. Options for addressing the problems of access by economically inactive mobile citizens
and jobseekers to certain social benefits
6.5.1 Option 0: Baseline scenario
The case-law of the Court is directly applicable in national law and this option leaves it to national
decision-makers to apply the Court’s judgments directly. Where questions of interpretation arise, they
can be solved in national courts, which if necessary can refer issues to the Court.
6.5.2 Option 1: Amendment of Regulation (EC) No 883/2004 to make reference to the
limitations in Directive 2004/38EC
This option codifies the Court's case-law by stipulating that the equal treatment principle of
Regulation (EC) No 883/2004 may be limited in relation to payment of certain social benefits to
economically inactive mobile EU citizens and jobseekers.
As the discussion with experts in the Administrative Commission in June 2015 showed, it is possible
to take either a broad or a narrow approach to amending Regulation (EC) No 883/2004 to make
reference to the Free Movement Directive. Option 1 can therefore be sub-divided into three sub-
options:
• Introducing a general amendment to the equal treatment principle in Article 4 of Regulation (EC)
No 883/2004 by referring to the possible limitations in Directive 2004/38/EC
• Introducing a general amendment to the equal treatment principle in Article 4 of Regulation (EC)
No 883/2004 by referring to the possible limitations in Directive 2004/38/EC, but extending the
limitations by analogy to other tax-financed benefits
EN 110 EN
• Making a more limited amendment to Article 70 of Regulation (EC) No 883/2004, which permits
Member States to limit equal treatment only in relation to the specific category of special non-
contributory cash benefits, which provide subsistence income.
6.5.2.1 Option 1a Amendment of Article 4 of Regulation (EC) No 883/2004 to make a
dynamic reference to the limitations to equal treatment in Directive 2004/38/EC
This option would permit Member States to apply the provisions of the Free Movement Directive
generally to limit equal treatment in Regulation (EC) No 883/2004. This option would permit national
legislators to derogate from the principle of equal treatment in respect of social assistance in
accordance with the limitations in Directive 2004/38/EC specifically to provide that Member States
are not obliged to award social benefits to economically inactive persons or first time jobseekers for
the first three months of residence and further are only required to award social benefits to an
economically inactive citizen or first time jobseeker after three months of residence if that person has
sufficient resources not to pose an unreasonable burden on public finances and has comprehensive
sickness insurance. This option does not propose to define the material scope of social assistance
within Regulation (EC) No 883/2004 meaning that it can evolve according to the case law of the
Court of Justice.
6.5.2.2. Option 1b: Amendment of Article 4 of Regulation (EC) No 883/2004 to make a dynamic
reference to the limitations to equal treatment in Directive 2004/38/EC and to extend these
limitations by analogy to other tax-financed benefits
This option would also permit national legislators to derogate from the principle of equal treatment in
respect of social assistance in accordance with the limitations in Directive 2004/38/EC as described in
option 1a. In addition, it would expressly define the material scope to apply to certain tax-financed
social security benefits, specifically non-contributory family benefits, long-term care benefits and
sickness benefits for economically inactive EU mobile citizens and jobseekers in the same way as
special non-contributory cash benefits, which provide subsistence income.
6.5.2.3 Option 1c Amendment of Article 70 of Regulation (EC) No 883/2004 to make a
reference to the limitations in Directive 2004/38/EC in the context of benefits that provide a
minimum subsistence income
This option would make clear that Member States can apply the provisions of the Free Movement
Directive to limit equal treatment only in relation to special non-contributory cash benefits providing
a minimum subsistence income under Regulation (EC) No 883/2004. This would have the effect of
permitting national legislators to derogate from the principle of equal treatment in relation to a limited
category of benefits only, namely special non-contributory cash benefits linked to minimum
subsistence income payable to economically inactive citizens.
The report of the FreSsco network of experts on free movement of workers and social security
coordination identified this as a possible legislative solution for dealing with the Court's recent
judgments. It noted that Article 70 of the Regulation would be the appropriate place to incorporate a
new provision dealing with access to social assistance benefits.292
6.5.3 Option 2: Remove SNCBs providing subsistence income from Regulation (EC) No
883/2004
This option removes SNCBs which provide a minimum subsistence income from the scope of
Regulation (EC) No 883/2004. This would effectively de-classify such benefits as "social security
benefits" and would leave them subject to a common, albeit non-coordinated, regime of rules under
the Free Movement Directive concerning all benefits classified as social assistance.
EN 111 EN
The report of the FreSsco network of experts advised against this option on the ground that such a
change would be detrimental for both citizens and for social security administrations as many of the
practical and protective rules in the social security coordination rules would no longer apply.293
The
option is retained nonetheless as it offers a simple solution for dealing with the impact of the Court's
rulings.
6.5.4 Option 3: Provide administrative guidance
This option takes a “soft law” approach through which the Commission would draw up administrative
guidance on how the Court’s judgments should be interpreted. Such guidelines could deal with both
questions of what benefits are covered by the judgments and with the extent to which the rules of the
Free Movement Directive limit rights in Regulation (EC) No 883/2004. Such guidance would offer
the advantage of containing considerably more detail than a legislative amendment. It is also easier to
update and change guidance than in the case of legislation. Moreover, given the opportunities for
consultation with national administrators in drawing up this guidance, it should also meet the
objectives of ensuring as far as possible a common understanding of the judgments and a uniform
application by national social security institutions. This option could stand on its own or be combined
with another option.
6.6. Stakeholder support
6.6.1 Baseline Scenario
This option was supported by nine delegations as a first or second choice in discussions in the
Administrative Commission in June 2015294
. In addition, nine delegations supported the status quo as
at least a short-term strategy, given that further judgments of the CJEU are pending295
.296
6.6.2 Option 1: Amendment of Regulation (EC) No 883/2004 to make reference to the
limitations in Directive 2004/38/EC
6.6.2.1 Option 1a Amendment of Article 4 of Regulation (EC) No 883/2004 to make a
dynamic reference to the limitations to equal treatment in Directive 2004/38/EC
In discussions in the Administrative Commission in June 2015, eleven Member States supported this
option as a first or second choice297
. However, there was no consensus on exactly how such an
amendment should be drafted and some of those Member States were in favour of awaiting the
outcome of the pending court cases before adopting a fixed position.
6.6.2.2 Option 1b Amendment of Article 4 of Regulation (EC) No 883/2004 to make a dynamic
reference to the limitations to equal treatment in Directive 2004/38/EC and to extend these
limitations by analogy to other tax-financed benefits
This option has not been subject to discussions with external stakeholders.
6.6.2.3 Option 1c Amendment of Article 70 of Regulation (EC) No 883/2004 to make a
reference to the limitations to equal treatment in Directive 2004/38/EC in the context of
SNCBs that provide for a minimum subsistence level
No Member State expressly supported this proposal.
293
See Annex VIII at p.52.
294
Malta, Hungary, Italy, Poland, Portugal, Finland, Lithuania, Sweden and Spain.
295
Czech Republic, Germany, France, Lithuania, Latvia, Luxembourg, Netherlands, Sweden and United Kingdom.
296
Case C-299/14 Garcia-Nieto; Case C-308/14 Commission v United Kingdom.
297
Austria, Belgium, Czech Republic, Germany, Estonia, France, Ireland, Lithuania, Latvia, Poland, United Kingdom
EN 112 EN
6.6.3 Option 2: Remove SNCBs providing subsistence income from Regulation (EC) No
883/2004
In discussions in the Administrative Commission in June 2015, two Member States supported this
option298
. Eight Member States regarded this option as being a backward step in the development of
the EU rules on social security coordination.
6.6.4 Option 3: Provide Administrative Guidance
In discussions in the Administrative Commission in June 2015, four Member States favoured this
option299
.
Consultations with social partners and NGOs indicated mixed views as to whether there was a need
for change in relation to access to benefits by economically inactive persons. Some stakeholders
advocated stronger enforcement of the existing legislation to ensure public confidence in the current
provisions.300
Other stakeholders emphasised the risks to vulnerable mobile citizens and the
importance of ensuring such persons were not left without social protection.301
6.7. What are the impacts of the Different Options
6.7.1 Introduction
For all of the options assessed, the potentially affected groups are the same. The options are
specifically targeted at mobile economically inactive citizens and jobseekers who are unable to derive
rights from an economically active family member.
For the purposes of assessing the impact, a range of criteria has been identified with reference to the
general and specific policy objectives and the Commission's Better Regulation Guidelines. In relation
to social impact, the options are assessed against the criteria of clarification; simplification;
protection of rights and impact upon fundamental rights. This analysis draws upon the findings of
the FreSsco Legal Experts report at Annex VIII supplemented by the Commission's Services own
analysis and the findings from the stakeholder consultations and the Inter-Service Steering Group.
In relation to the economic impact and regulatory costs for both public administrations and citizens
no specific studies have been conducted as, with the limited exception of Option 1b, the options under
consideration are codification of the EU case-law which is already directly applicable and therefore
there is no anticipated impact on Member States' budgets. However, potential administrative burden
of implementing the various options under consideration have been qualitatively assessed.
In relation to option 1b, it should be noted that the estimated budgetary impact may be an under-
estimation for the EU-28. Calculations have been based on data from LFS 2012 of proportion of
EU28/EFTA migrants residing less than 1 year in their new Member State of residence including the
proportion who live in a household with at least one child where no adults in the household are in
work for the age-group 15-64 compared with all ages and the proportion aged over 65. This
estimation has limitations as it is not possible to identify what proportion of the identified group are
unemployed jobseekers or how long such jobseekers may have been seeking work. There is also no
information about the level of income or resources of the identified group or whether or not they are
currently in receipt of particular social security benefits. These numbers have then been applied to
average expenditure per capita in Member States in relation to long-term care benefits, family benefits
and sickness benefits. Such a model does not distinguish between contributory and non-contributory
systems and also assumes that EU mobile citizens will make use of such benefits in the same
proportions as native citizens. The calculation needs to be construed in light of these multiple
limitations.
298
Estonia and Ireland.
299
Spain, Finland, Hungary, Sweden
300
For example CEC and Business Europe
301
For example, Eurodiaconia
EN 113 EN
With reference to coherence with the general objective, the options have also been assessed with
reference to their impact upon; legal clarity; risk of fraud and abuse and ability of Member States to
counteract such risks and by reference to the objective of achieving equitable burden-sharing
between Member States (corresponding to the specific objective to ensure legal clarity and
transparency on the distinctions between the rights of workers, jobseekers and economically inactive
mobile EU citizens, including the extent to which Member States’ social security institutions are
permitted to limit the equal treatment principle for economically inactive mobile EU citizens and
jobseekers who claim certain social benefits).
Finally the assessment considers overall coherence with EU objectives with reference to relevant
policies identified at section 1.3 of this report.
EN 114 EN
6.7.2 Summary of the impacts of the options for access by economically inactive mobile citizens and jobseekers to certain social benefits
Type of
impact
Clarification Simplification Protection of
rights
Fundamental
rights
Economic
impacts
Regulatory
costs
Risk of fraud
and abuse
Equitable
burden
sharing
Member
State
Coherence
with EU
objectives
Overall
Effectiveness
Overall
Efficiency
(cost vs
effectiveness
Baseline
Scenario
0 0 0 0 0 0 0 0 0 0 0
Option 1a
Legislative
Amendment to
Article 4
+ + + 0 0 +/0 + 0 + ++ ++
Option 1b
Legislative
Amendment to
Article 4 and
extension of
limitations
+ + - - 0 -/0 + 0 +/- ++ ++
Option 1c
Legislative
Amendment to
Article 70
+ +/- + 0 0 +/0 + 0 + + +
Option 2
Remove
SNCBs
providing for
subsistence
income from
Regulation
++ ++ - 0 0 -- - 0 - - -
Option 3
Administrative
Guidance
+/0 ++ +/0 0 0 +/0 + 0 + + +
EN 115 EN
6.7.3 Impacts of Policy Option 1a: Dynamic reference to Directive 2004/38EC
Policy Option 1a: Amendment of Article 4 of Regulation (EC) No 883/2004 to make a dynamic
reference to the limitations to equal treatment in Directive 2004/38/EC
Social impact
Clarification + The codification of existing case-law would clarify the
rights of EU mobile citizens and would enable citizens to
make an informed choice when exercising their rights to
move to another Member State.
Simplification + The codification of existing case-law would also simplify
the process whereby EU mobile citizens and national
institutions could verify their respective rights and
obligations by making explicit the relationship between
Regulation (EC) No 883/2004 and the Directive
2004/38/EC. As this measure contains a dynamic reference
to the Directive, it is anticipated that it will not require
further amendment even if the case law of the CJEU
continues to evolve.
Protection of Rights + By increasing clarity the application of the case law of the
CJEU, legal certainty is also increased thereby facilitating
greater uniformity in application by Member States and
facilitating the ability of citizens to enforce their rights.
Financial impact 0 There will be no direct impact on Member States' budgets as
this measure simply reflects codification of the case-law of
the Court.
Impacts on fundamental rights 0 Mere codification of the case-law of the Court. Any impact
on fundamental rights already exists in EU law – the
amendment to the Regulation will merely reflect this.
Other impacts
Regulatory costs +/0 Costs related to lack of clarity/transparency/legal certainty
(for instance litigation costs, legal advice, elaboration of
administrative guidance) for both citizens and public
authorities could be reduced. However, as this option sets
out the limits on the equal treatment principle only in very
general terms, it is likely that some litigation on the
relationship between the Regulation and the Directive would
continue. Public administrations may additionally decide
themselves to improve clarity by producing detailed
guidance at national level (although such measures will be at
their own discretion).
EN 116 EN
Risk of fraud and abuse + This option gives greater visibility to the safeguards in EU
law against abusive behavior including the need to prevent
economically inactive Union citizens from using the host
Member State's welfare system to fund their means of
subsistence, which may act as a deterrent to such conduct.
Fair burden sharing between
Member States
0 As codification of the case-law this option is not anticipated
to have a direct impact on the distribution of financial
burden between Member States.
Coherence with General,
Specific and wider EU
Objectives:
Continue the modernisation of the
EU Social Security Coordination
Rules by further facilitating the
exercise of citizens' rights while at
the same time ensuring legal clarity,
a fair and equitable distribution of
the financial burden among the
institutions of the Member States
involved and administrative
simplicity and enforceability of the
rules.
to ensure legal clarity and
transparency on the distinctions
between the rights of workers,
jobseekers and economically inactive
mobile EU citizens, including the
extent to which Member States’
social security institutions are
permitted to limit the equal treatment
principle for economically inactive
mobile EU citizens and jobseekers
who claim certain social benefits.
+ This option will increase legal clarity and transparency on
the rights of economically inactive mobile EU citizens and
jobseekers and also on the extent to which Member States’
social security institutions are permitted to limit the equal
treatment principle for such persons in relation to access to
certain social benefits. It is anticipated to thereby improve
administrative simplicity and enforceability of the rules.
6.7.4 Impacts of Policy Option 1b: Dynamic reference to Directive 2004/38EC and
extension of limitations by analogy
Policy Option 1b: Amendment of Article 4 of Regulation (EC) No 883/2004 to make a dynamic
reference to the limitations to equal treatment in Directive 2004/38/EC and extend the limitations by
analogy
Social impact
Clarification + The option would clarify the rights of EU mobile citizens
and would enable citizens to make an informed choice when
exercising their rights to move to another Member State.
Simplification + The option would also simplify the process whereby EU
mobile citizens and national institutions could verify their
respective rights and obligations by making explicit the
relationship between Regulation (EC) No 883/2004 and the
Directive 2004/38/EC. As this measure expressly defines the
material scope to which the conditions of the Directive
apply it is possible that it may require further amendment if
the case law of the CJEU continues to evolve.
EN 117 EN
Protection of Rights - In relation to any extension of the potential derogation to
non-contributory family benefits, long-term care benefits
and sickness benefits there will be a loss of rights compared
to the baseline scenario. The affected population of
economically inactive citizens is estimated at 70.700 of
whom approximately 14.000 live in a household with at
least one child and of whom 2.500 are aged 65 or older)
Financial impact 0 In relation to an extension of the existing case-law to non-
contributory family benefits, there would be a total
estimated decrease for the EU-28 of between €37.7 and 79.2
million (equivalent to a reduction of 0.03% to 0.06% of total
expenditure on child benefits)302
in the case of long-term
care benefits there would be an average estimated decrease
of €31.5 million (equivalent to 0.014% of total expenditure
on long-term care benefits)303
and in relation to sickness
benefits there would be an average estimated decrease of
€185.1 million (equivalent to 0.017% of total expenditure on
sickness benefits)304
Impacts on fundamental rights - The option is expected to adversely affect the best interests
of the child (Article 24), the freedom to choose an
occupation and the right to engage in work in another
Member State (Article 15), as well as protection of rights for
jobseekers who have made use of their right to free
movement but who do not retain worker status (Article 45).
There may also be an adverse impact on the right to social
security and social assistance (Article 34) when compared
with the baseline scenario.
Other impacts
Regulatory costs -/0 The assessment is likely to be similar to option 1a. However,
by extending the limitations of Directive 2004/38/EC by
analogy to a wider range of benefit decisions, there may be
additional regulatory costs for case handlers in public
authorities. Conversely, there may be a reduced risk of
ongoing litigation costs as the legislature will have resolved
the question of whether or not the limitations of the
Directive apply also to tax-financed social security benefits.
Risk of fraud and abuse + This option gives greater visibility to the safeguards in EU
law against abusive behavior including the need to prevent
economically inactive Union citizens from using the host
302
Estimation based on HIVA's own calculations. It should be noted that the calculation relates to child benefits and therefore the estimated
budgetary impact may be an under-estimation for the EU-28. The calculation is made using data in relation to only 9 Member States
(although those Member States have on average a higher stock of EU mobile citizens than average) and the calculation needs to be
construed in light of these limitations.
303
Annex XXIV, Table 2, Estimation based on HIVA's own calculations. It should be noted that the calculation relates to average
expenditure per capita in Member States which does not distinguish between contributory and non-contributory long-term care benefits
systems. It assumes that EU mobile citizens will make use of long-term care benefits in the same proportions as native citizens. The
calculation needs to be construed in light of these limitations.
304
Annex XXIV, Table 3, Estimation based on HIVA's own calculations. It should be noted that the calculation relates to average
expenditure on healthcare per capita in Member States using ESSPROS figures. It assumes that EU mobile citizens will make use of
healthcare in the same proportions/frequency as native citizens. The calculation needs to be construed in light of these limitations.
EN 118 EN
Member State's welfare system to fund their means of
subsistence, which may act as a deterrent to such conduct.
Fair burden sharing between
Member States
0 This option is not anticipated to have a direct impact on the
distribution of financial burden between Member States.
Coherence with General,
Specific and wider EU
Objectives:
Continue the modernisation of the
EU Social Security Coordination
Rules by further facilitating the
exercise of citizens' rights while at
the same time ensuring legal clarity,
a fair and equitable distribution of
the financial burden among the
institutions of the Member States
involved and administrative
simplicity and enforceability of the
rules.
to ensure legal clarity and transparency
on the distinctions between the rights of
workers, jobseekers and economically
inactive mobile EU citizens, including
the extent to which Member States’
social security institutions are permitted
to limit the equal treatment principle for
economically inactive mobile EU citizens
and jobseekers who claim certain social
benefits.
+/- This option may be considered coherent with the wider EU
objective of supporting fair mobility (fair for both mobile
citizens and tax-payers in the State of destination) but is less
coherent with objectives to promote a social agenda in
particular in relation to mobility for more vulnerable groups
within the Union.
6.7.5 Impacts of Policy Option 1c: Specific reference to Directive 2004/38/EC (SNCBs)
Policy Option 1c: Amendment of Article 70 of Regulation (EC) No 883/2004 to make reference to the
limitations in Directive 2004/38/EC in the context of benefits that provide a minimum subsistence
income
Social impact
Clarification + The codification of existing case-law would clarify the
rights of EU mobile citizens and would facilitate citizens to
make an informed choice when exercising their rights to
move to another Member State. In particular, it is specified
that in accordance with the jurisprudence of the CJEU,
derogation of the principle of equal treatment solely applies
to SNCBs providing for a minimum level of subsistence as
listed in Annex X of the Regulation, thereby achieving a
greater level of legal certainty.
Simplification +/- As per option 1a, the codification of existing case-law would
also simplify the process whereby EU mobile citizens and
national institutions could verify their respective rights and
obligations. The precise nature of the codification ensures
the scope of application is clear, however, it is possible
further amendments may be necessary if the case law of the
CJEU continues to evolve leading to trade-offs between
clarity and simplicity.
EN 119 EN
Protection of Rights + As Option 1a and for the same reasons.
Financial impact 0 There will be no direct impact on Member States' budgets as
this measure simply reflects codification of the case-law of
the Court.
Impacts on fundamental rights 0 Mere codification of the case-law of the Court. Any impact
on fundamental rights already exists in EU law – the
amendment to the Regulation will merely reflect this.
Other impacts
Regulatory costs +/0 Costs related to lack of clarity/transparency/legal certainty
(for instance litigation costs, legal advice, elaboration of
administrative guidance) for both citizens and public
authorities could be reduced. However, as this option sets
out the limits on the equal treatment principle only in very
general terms, it is likely that some litigation on the
relationship between the Regulation and the Directive would
continue. Public administrations may additionally decide
themselves to improve clarity by producing detailed
guidance at national level (although such measures will be at
their own discretion).
Risk of fraud and abuse + As with Option 1a
Fair burden sharing between
Member States
0 As with Option 1a
Coherence with General,
Specific and wider EU
Objectives:
Continue the modernisation of the
EU Social Security Coordination
Rules by further facilitating the
exercise of citizens' rights while at
the same time ensuring legal clarity,
a fair and equitable distribution of
the financial burden among the
institutions of the Member States
involved and administrative
simplicity and enforceability of the
rules.
to ensure legal clarity and transparency
on the distinctions between the rights of
workers, jobseekers and economically
inactive mobile EU citizens, including
the extent to which Member States’
social security institutions are permitted
to limit the equal treatment principle for
economically inactive mobile EU citizens
and jobseekers who claim certain social
+ As with Option 1a although it is foreseen that if the case law
of the CJEU continues to evolve there may be trade-offs
between clarity and simplicity.
EN 120 EN
benefits.
6.7.6 Impacts of Policy Option 2: Remove SNCBs providing for minimum level of
subsistence from scope of Regulation (EC) no 883/2004
[Policy Option 2: Remove SNCBs providing subsistence income from Regulation (EC) No 883/2004
Social impact
Clarification ++ This option achieves clarity by clearly delineating between
social security rights which fall within the scope of
Regulation (EC) No 883/2004 in respect of which citizens
retain a full right to equal treatment and those to which the
limitations in Directive 2004/38/EC apply. This would
facilitate citizens to make an informed choice when
exercising their rights to move to another Member State.
Simplification ++ This option also achieves simplicity by separating the
material scope of Regulation (EC) No 883/2004 from
Directive 2004/38/EC apply in a manner which means both
citizens and institutions only need to refer to one legal
instrument at a time.
Protection of Rights - A significant disadvantage of this option is that some of the
rules in Regulation (EC) No 883/2004, which can be
beneficial for mobile EU citizens (e.g. for example, the rule
that social security institutions may not reject documents
submitted to them in an official language of another
Member State;305
or the rule of assimilation of facts which
requires Member States to take into account facts or events
occurring in any Member States as though they had taken
place on their own territory.306
), would no longer apply. It
seems likely that it may become more difficult for mobile
EU citizens to claim such benefits in other Member States.
Some EU citizens could be discouraged from exercising
their free movement rights as a result.
Financial impact 0 There will be no direct impact on Member States' budgets as
this measure simply reflects codification of the case-law of
the Court.
Impacts on fundamental rights 0 Mere codification of the case-law of the Court. Any impact
on fundamental rights already exists in EU law – the
guidelines will merely reflect this.
Other impacts
Regulatory costs -- While there may be some savings for both citizens and
public authorities related to lack of clarity/transparency/legal
certainty(for instance litigation costs, legal advice,
elaboration of administrative guidance) There would be
305
Article 76(7) of Regulation (EC) No 883/2004.
306
Article 5 of Regulation (EC) No 883/2004.
EN 121 EN
some noticeable administrative costs for Member State
social security institutions arising as a result of (a) changes
to procedures and (b) being unable to benefit from the
existing cooperation procedures for information exchange
and verification provided under the Regulation, (for
example, to check with institutions in other Member States
the validity of documents or accuracy of facts supplied to
them).307
In addition, institutions would not be able to
benefit from the efficiencies of the EESSI electronic
information exchange platform due to be launched by the
end of 2016 with full implementation by 2018. As
institutions may be required to separately establish
mechanisms for information exchange to ensure rights and
obligations are respected.
Risk of fraud and abuse - There may be an increased risk of fraud and abuse because
Member States would not be able to benefit from the
existing cooperation procedures for information exchange
and verification provided under the Regulation, if this option
were followed. In addition, the provisions in the Regulation
concerning recovery of benefits that are paid in error could
also not be used.308
Fair burden sharing between
Member States
0 As with Option 1a.
Coherence with General,
Specific and wider EU
Objectives:
Continue the modernisation of the
EU Social Security Coordination
Rules by further facilitating the
exercise of citizens' rights while at
the same time ensuring legal clarity,
a fair and equitable distribution of
the financial burden among the
institutions of the Member States
involved and administrative
simplicity and enforceability of the
rules.
to ensure legal clarity and transparency
on the distinctions between the rights of
workers, jobseekers and economically
inactive mobile EU citizens, including
the extent to which Member States’
social security institutions are permitted
to limit the equal treatment principle for
economically inactive mobile EU citizens
and jobseekers who claim certain social
benefits.
- As with Option 1a although it is foreseen that there may be
trade-offs between clarity and simplicity of establishing a
clear separation between Regulation (EC) No 883/2004 and
Directive 2004/38/EC and the protection of rights for
citizens and regulatory burden/risk of fraud and error for
national institutions arising from the loss of application of
the Regulation to SNCBs.
6.7.7 Impacts of Policy Option 3: Provide Administrative Guidance
Policy Option 3: Provide administrative guidance
Social impact
307
Article 5(3) of Regulation (EC) No 987/2009.
308
Article 71 to 85 of Regulation (EC) No 987/2009.
EN 122 EN
Clarification +/0 Guidance could provide detailed explanations on when
limitations on the equal treatment principle could be applied
and circumscribe closely the group of benefits which are
affected (namely special non-contributory cash benefits
providing a minimum subsistence income). Although
guidance is not legally binding it is more flexible and easier
to update and modify and allows to better explain the legal
rules to citizens. However, the non binding character of
guidance limits its impact.
Simplification ++ Guidance may be provided in a range of accessible formats,
giving precise guidance on specific scenarios which may be
easier for citizens to understand than legal text.
Protection of Rights +/0 By increasing clarity the application of the case law of the
CJEU, legal certainty is also increased thereby facilitating
greater uniformity in application by Member States and
facilitating the ability of citizens to enforce their rights.
Financial impact 0 There will be no direct impact on Member States' budgets as
this measure simply reflects codification of the case-law of
the Court.
Impacts on fundamental rights 0 Mere codification of the case-law of the Court. Any impact
on fundamental rights already exists in EU law – the
guidelines will merely reflect this.
Other impacts
Regulatory costs +/0 Costs related to lack of clarity/transparency (for instance
litigation costs, legal advice) for both citizens and public
authorities could be reduced. It is anticipated that these
savings may be achieved sooner in the light of the relative
ease of implementing guidance compared with a legislative
measure. But given the non binding character of guidance
this measure in isolation may not entirely reduce litigation
risk.
Risk of fraud and abuse + As with Option 1a although the benefits are anticipated to be
greater in light of the increased transparency of the
guidance.
Fair burden sharing between
Member States
0 As with Option 1a.
Coherence with General,
Specific and wider EU
Objectives:
Continue the modernisation of the
EU Social Security Coordination
Rules by further facilitating the
exercise of citizens' rights while at
the same time ensuring legal clarity,
a fair and equitable distribution of
the financial burden among the
institutions of the Member States
+ As with Option 1a although it is foreseen that there may be
trade-offs between clarity and simplicity of establishing
clear and accessible guidance and the non-binding nature of
guidance which may not be the most effective means of
achieving legal certainty or reducing litigation risk.
EN 123 EN
involved and administrative
simplicity and enforceability of the
rules.
to ensure legal clarity and transparency
on the distinctions between the rights of
workers, jobseekers and economically
inactive mobile EU citizens, including
the extent to which Member States’
social security institutions are permitted
to limit the equal treatment principle for
economically inactive mobile EU citizens
and jobseekers who claim certain social
benefits.
6.8. Conclusions
Based on the above table, the following preliminary conclusions can be drawn.
The baseline scenario is the most straightforward to implement. However, this option does not
however, address the objective of ensuring legal clarity and transparency nor the wider EU objective
of supporting fair mobility.
Option 1a) introduces legal clarity for economically inactive mobile EU citizens and jobseekers and
the persons/institutions involved in the enforcement of the legislation. This option addresses the
objective identified and at the same time provides flexibility if the case-law on the relationship
between the Directive and the Regulation evolves. This option may be considered coherent with the
wider EU objective of supporting fair mobility and reflects the case-law of the CJEU. However, it
also means that full clarity on the relationship between the Regulation and the Directive will have to
await further jurisprudence from the CJEU.
Option 1b) introduces legal clarity for economically inactive mobile EU citizens and jobseekers and
the persons/institutions involved in the enforcement of the legislation. This option addresses the
objective identified and at the same time provides flexibility if the case-law on the relationship
between the Directive and the Regulation evolves. The extension of the limitations to non-
contributory family benefits, long-term care benefits and sickness benefits is anticipated to result in a
total cost saving estimated at €37.7 and 79.2 millions in relation to family benefits; €31.5 millions in
relation to Long-term care benefits and €185.1 millions in relation to sickness benefits for the EU-28
Member States compared with the baseline (although it is also noted there would be a potential
negative impact on the social and fundamental rights of economically inactive EU mobile citizens and
jobseekers). This option may be considered coherent with the wider EU objective of supporting fair
mobility (fair for both mobile citizens and tax-payers in the State of destination) but less coherent
with objectives to promote a social agenda in particular in relation to mobility for more vulnerable
groups within the Union.
Option 1c) may be considered to provide greater legal certainty. This option also addresses the
objective identified but if the case-law on the relationship between the Directive and the Regulation
evolves, further legislative changes might be necessary meaning this may not be the most efficient
method of achieving the objective nor the wider EU objective of supporting fair mobility.
Option 2 would not contribute to the attainment of the objective identified. On the contrary, it presents
a major draw-back since several beneficial rules of the Regulation would no longer apply. This is
therefore considered neither an efficient or effective means of addressing the problems identified nor
the wider EU objective of supporting fair mobility or objectives to promote a social agenda.
Option 3, on its own, would be less effective and less efficient in achieving the identified objective
since the Regulation would not contain all the elements necessary for its direct applicability to the
detriment of both citizens and the persons/institutions involved in its enforcement.
EN 124 EN
7. Family Benefits
7.1. Current Coordination Rules for Family Benefits
Family benefits are all benefits in kind or cash intended to help to meet family expenses which arise
from the obligation to maintain children.309
This covers a wide diversity of social security benefits
including not only the traditional "child benefits" but also other types of benefits for families e.g. to
encourage educational attainment, labour market participation by parents or to replace income during
child-raising periods.
The principle of exportability contained within the EU social security coordination rules means that
when the child of a worker resides in another State, the worker can export the full amount of the
family benefits received from the State of activity to the State where the child resides: in fact, a
mobile citizen cannot be denied access to family benefits in cash under the national legislation of a
Member State solely on grounds that the person concerned and/or his/her family reside in another
Member State. The regulation effectively overrules any residency requirement in national legislation
regarding such cash benefits and doesn't allow cash benefits to be reduced, amended, suspended,
withdrawn or confiscated.310
The EU social security rules provide that primary responsibility for payment of family benefits lies
with the Member State of economic activity, on the assumption that the country of employment will
usually be the country where a mobile EU citizen pays social security contributions and taxes.
However, in the field of family benefits, it is very common that families in a cross-border situation to
have overlapping entitlements to family benefits. This is because a child normally has two parents,
who may each have independent entitlements to family benefits from different States. To address this
issue, the coordination rules provide specific anti-overlapping rules which establish an order of
priority for the Member States to make payments.311
Under these rules, the primary competent
Member State will pay its family benefits in full, but entitlement to family benefits in cash under the
legislation of the Member State with secondary competence will be suspended up to the amount of the
benefits due under the legislation of the State that takes priority (usually the Member State of
Employment or in the case of two economically active parents, the place of residence of the child).
The current rules also provide that in the event of overlapping entitlements the family concerned will
always receive an amount equivalent to the highest level of benefits available.312
Consequently, if the
amount of family benefit provided for by the legislation of the former State is higher than that
provided in accordance with the legislation of the other State; the former State will pay a supplement
or "top up" corresponding to the difference between the two benefits.
A further important principle in the rules on family benefit coordination is that family benefits are
considered benefits for the family as a whole. 313
This means that a family member may have a
derived right to claim such benefits even if they reside and work in another Member State and have no
personal connection to the social security system of the Member State awarding the benefit.314
The current rules include an important safeguard for Member States against the risk of abuse or undue
burden on national social security systems. There is no obligation for a country to export a differential
309
Article 1(z) Regulation (EC) No 883/2004 . The definition expressly excludes advances of maintenance payments and special childbirth
and adoption allowances mentioned in Annex 1 of Regulation (EC) No 883/2004.
310
Article 7 of Regulation (EC) No 883/2004. The current rules do not provide for any such derogation in relation to family benefits while
the CJEU has accepted derogation from the principle of export in relation to special non-contributory benefits and unemployment benefits
(Snares, C-20/96, EU:C:1997:518) although such derogation must be construed narrowly. Article 48 TFEU on the minimum content of the
coordination Regulations explicitly mentions two principles: aggregation and exportability of the acquired rights to facilitate the exercise of
freedom of movement. For more detailed overview of current EU legal framework, see Annex XXII.
311
The priority rule is defined in Article 68 of Regulation (EC) no 883/2004. See Annex XXII for details.
312
The Court has been explicit in its case law by concluding that "the Regulation cannot be applied in such a way as to deprive the worker,
by substituting the benefits provided by one Member State for the benefits payable by another Member State, of the most favourable
benefits" (Case C-73/79, Laterza).
313
Joined cases C-245/94 and C-312/94 Hoever and Zachow.
314
See for example, Article 68A of Regulation (EC) no 883/2004 and Article 60(1) of Regulation (EC) 987/2009 supporting the rights of a
parent or person in loco parentis to assert derived rights.
EN 125 EN
supplement where a right to family benefit is derived solely on the basis of residence of an EU mobile
citizen.315
Based on data collected from 19 Reporting Member States and EFTA States in the survey on export
of family benefits,316
a total export of € 983 million in family benefits was declared for 2013, which
includes export of child benefits (an important sub-category of family benefits) to 324 thousand
households or 506 thousand children living in another Member State. This is equal to a total
expenditure of € 942 million. Benefit export amounted to 0.8% of EU-28 expenditure on child and
family allowances.317
On average 1% of child benefits are being exported abroad, which represents
1.6% of total public spending on child benefits.318
7.2. Problems with the export of family benefits and drivers behind them
7.2.1. The lack of correlation between the amount of exported benefits and the costs incurred in
raising a child in the State of residence of the child is perceived as unfair
The family benefit systems differ considerably in terms of eligibility criteria, design and generosity
across the EU.319
These differences reflect the diversity in the economic and social context between
Member States, which to some extent have been exacerbated by austerity measures adopted in
response to the recent economic crisis.320
For example, in Luxembourg, a family with one child might
expect to receive child benefit at the rate of €185 per month, by contrast in Bulgaria, the child benefit
315
Article 68(2) Regulation (EC) No 883/2004 . In the case of two economically inactive parents, the Member State of residence of the child
would have primary competence to pay family benefits in accordance with its national legislation.
316
Annex XI
317
In 2012, total family and child allowance expenditure was € 126,043 million. (ESSPROSS, Pacolet 2015)
318
Table 11, Annex XI (Data based on 16 reporting Member States)
319
For more details, see section 3, p. 156-169 in Annex XXI.
320
By mid-2010, austerity measures affecting family policy had either been adopted or announced in 11 Member States (Czech Republic,
Denmark, Estonia, Germany, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Spain and the United Kingdom OECD (2011), Doing
Better for Families.
EN 126 EN
would be €18 per month. 321
This means that a worker in Luxembourg whose family resides in
Bulgaria may be able to export €185 per month to Bulgaria to support his or her family; conversely a
worker in Bulgaria whose family resides in Luxembourg would only be entitled to export €18 per
month.322
A worker based in Luxembourg may be entitled to family benefits that represent 190% of
the average earnings of a one-earner married couple with two children in Bulgaria, while on average
child benefits equal to 10% of the net earnings of household in EU-28/EFTA.323
Furthermore, there is a perceived unfairness of the system as in accordance with the statutory
definition of family benefits as "all benefits in kind or cash intended to meet family expenses,"324
the
primary objective of such benefits is to help to meet the additional expenses which arise from the
obligation to maintain children (e.g. additional or special nutrition, nappies, prams, school books,
childcare, etc.). Those expenses will often be linked to the actual costs of goods or services in the
place of residence of the child, which means that the level of such expenses can differ significantly
from one Member State to another. Viewed from this perspective, recipients of exported family
benefits may be in a privileged position compared to nationals because exported benefits may provide
a comparatively greater purchasing power in the country of residence.
Such perceptions of unfairness are sustained (reinforced) both by the non-contributory nature of
family benefits that are predominantly financed wholly or partially through general taxation325
and the
fact that in the majority of Member States entitlement to family benefits is on the basis of legal
residence whereas under the EU social security rules priority is awarded to the State of economic
activity.326
This results in a tension between the EU social security rules and principles of national
legislation and leads to the perception that Member States of residence are abdicating their social
security responsibilities in relation to children resident within their territory to another Member
State.327
As a consequence of this perceived unfairness, there is a risk of negative attitudes towards
migration amongst the general population, as are already observed in the public debate in some
Member States, which entails a risk that public and political support for the EU social security
coordination rules may be undermined with a subsequent negative impact on labour mobility. There is
also a risk of unilateral imposition of restrictive measures by Member States. For example, there have
been a number of examples of public criticism of the current EU rules on export of family benefits
and counter-proposals by senior politicians challenging the concept of export for family benefits.328
This political discourse may be perceived as both a catalyst and a reaction to sentiments expressed by
national media outlets and public opinion in some329
(although by no means all330
) Member States and
321
In 2014, Luxembourg had a GDP per capita in PPS of more than two and a half times above the EU-28 average while Bulgaria had it less
than half the EU-28 . http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=tec00114&plugin=1
322
Family living in Luxembourg may receive a differential supplement from Luxembourg up to the level of the national family benefits. For
the definition of differential supplement see the glossary in Annex XXIII.
323
Annex XI.
324
Article 1(z) Regulation (EC) No 883/2004 . The definition expressly excludes advances of maintenance payments and special childbirth
and adoption allowances mentioned in Annex 1 of Regulation (EC) No 883/2004.
325
16 Member States, finance family benefits exclusively through general taxation FreSsco, The relationship between social security
coordination and taxation law, 2014.
326
The priority for social security competence accorded to the Member State of Work is a consistent principle across the EU social security
coordination rules for both contribution and non-contribution based social security benefits based on the economic logic that the worker
usually pays taxes and contributions in the State of employment (Article 11(3) Regulation (EC) no 883/2004).
327
A member state of residence will only be obliged to pay a differential supplement if the level of family benefits under its national
legislation is higher than that available from the Member State of Work. For the definition of differential supplement see the glossary in
Annex XXIII.
328
Statements by the Austrian Foreign Minister Ziarul Financiar: "The Austrians control Romania's oil, banks, insurance sector and forests,
..." page: 3 info: by Pâslaru Sorin date: Monday, June 22, 2015; Prime Minister of the United Kingdom's speech at JCB, Staffordshire. It
includes proposals made as Leader of the Conservative Party, 28 November 2014 https://www.gov.uk/government/speeches/jcb-
staffordshire-prime-ministers-speech.
329
Berlingske Tidende: "Danskerne vil begrænse vandrende arbejdstageres adgang til velfærdsgoder..." date: Saturday, June 6, 2015 In
Denmark, 83% of the respondents in a new survey say that they agree that foreigners should only receive child benefits if their children are
living in the country where their parents work.
330
. Waterfield, ‘Poland attacks David Cameron plan to ban Polish and EU migrants from claiming child benefit’, The Telegraph, 6 January
2014, available at http://www.telegraph.co.uk/news/worldnews/europe/poland/10553020/Poland-attacks-David-Cameron-plan-to-ban-
Polish-and-EU-migrants-from-claiming-child-benefit.html (last accessed 17 March 2015). He argued that Polish people contributed about
double the amount to the British economy than they withdrew in benefits and that in the long run the United Kingdom is receiving the fiscal
EN 127 EN
is in spite of studies331
which consistently show both support for332
and the positive effect of free
movement of workers: mobile EU workers make a positive contribution to the mix of skills, fill labour
shortages, increase the GDP, and tend to make a net positive contribution to the national budget
(including welfare systems). In addition the evidence demonstrates that mobile workers use welfare
benefits no more intensively than the host country's nationals.333
Further two-thirds of Europeans
believe that legal immigrants should have the same rights as national citizens.334
This belief is also
reflected in relation to specific studies on equal rights in the field of welfare and social protection.335
Underneath the heated political discourse, the situation is more complex. It is to be noted that despite
the widely held view that family benefits correlate to the social and economic environment of the
competent Member State, the level of family benefits are not directly linked to the minimum or
average wage, subsistence level or living costs in any Member State.336
Moreover, despite the
criticism that the general model for determining competence under the EU social security rules is
inappropriate for family benefits, it is significant that in 12 out of 28 Member States, family benefits
are financed either through a combination of general taxation and employer/employee contributions,
or are exclusively contribution-based.337
While some critics believe the current model for coordinating family benefits leads to an unfair
distribution of burden between the Member State of Work and the Member State of Residence, this
does not acknowledge either the fact that a mobile citizen will normally pay taxes and social security
contributions in the State of Work. Nor does such criticism acknowledge the financial contribution of
the Member State of residence in providing and financing family benefits in kind (such as subsidized
child-care services),338
or benefits outside the scope of the coordination rules, such as advances to
maintenance payments and to special childbirth and adoption allowance.339
In addition, while family
expenses may vary according to the actual costs of goods or services in the place of residence of the
child, families in a cross-border situation may also face increased expenses (e.g. travel and
communication costs to maintain contact or additional child-care costs for the parent with primary
caring responsibilities due to the absence of the other parent). There may also be further socio-
economic consequences of family separation for example, the impact on the level and extent of labour
market participation that the parent with primary caring responsibilities may engage in and the
psychological and emotional consequences for the child.340
7.2.2. Risk that the anti-accumulation rules reduce incentives for both parents to remain
economically active and share child-raising responsibilities and difficulties in awarding
"parent-centred" benefits on the basis of derived rights
contribution of migrants’ work, without paying for the education and training that enables them to work. Ziarul Financiar: "The Austrians
control Romania's oil, banks, insurance sector and forests, ..." page: 3 info: by Pâslaru Sorin date: Monday, June 22, 2015.
331
See review of studies in European Commission, ESDE 2011 (chapter 6); EPC (2013).
332
Eurobarometer 83, (Spring 2015) “the free movement of people, goods and services within the EU” was regarded as the most positive
result of the EU by 57%, ahead of peace (55%) among member states. Both of these items have always been mentioned by at least a half of
Europeans since this question was first asked.
333
See OECD's International Migration Outlook 2013, the Centre for Research and Analysis of Migration study on Assessing the Fiscal
Costs and Benefits of A8 Migration to the UK and the study by the Centre for European Reform and ICF GHK in association with Milieu
Ltd Fact finding analysis on the impact on Member States’ social security systems of the entitlements of non-active intra-EU migrants to
special non-contributory cash benefits and healthcare granted on the basis of residence.
334
Special Eurobarometer 380 "Awareness of home affairs", December 2011.
335
Jurgen Gerhards, Holger Lengfeld, European Citizenship and Social Integration in the European Union, (Routledge 2015).
336
For example, child allowances in both Luxembourg and Sweden are awarded on a flat rate not related to living costs, average or
minimum income and regardless of the relative income level of the recipients. Similarly, Member States don't adjust its level of family
benefits to reflect different costs of living within the relevant territory (even where significant variations exist). There may be indirect links
to subsistence or minimum wage in relation to certain means-tested family benefits in Belgium, Bulgaria, Croatia and Slovenia. In addition
indirect links to cost of living in the Member State concerned is apparent from indexation rules in Austria, Belgium and Slovenia (Annex
VI, p.22-25.).
337
FreSsco, The relationship between social security coordination and taxation law, 2014.
338
Member State expenditure on family benefits in kind typically ranges between 0.2 and 1.7 percent of GDP . Annex XIII: Table 3.
339
Article 1(z) Regulation (EC) no 883/2004.
340
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2432946 http://opus.bath.ac.uk/46410/.
EN 128 EN
The EU social security coordination rules contain a wide definition of family benefits, which include
child-raising allowances.341
A child-raising allowance is a benefit intended to cover wages/income lost
when a parent stays home from work to take care of the child and may be calculated by reference to
salary or professional income or may be flat-rate.
It is a core principle of the EU social security coordination rules that two Member States are not
simultaneously obliged to pay social security benefits for the same purpose in respect of the same
period (anti-accumulation principle). This is also the basis of the priority rules for overlapping family
benefits explained at section 7.1 above. However, applying the anti-accumulation rules to child-
raising allowances is perceived as unfair by some citizens because in contrast to other family benefits
a child-raising allowance is intended to cover wages lost when a parent stays home from work to take
care of the child. It is therefore perceived as a sum that parent has "earned" and which should be
awarded without deduction.342
Some critics also complain that the application of the anti-accumulation rules undermines the policy
objective of promoting greater gender equality by encouraging parents to share child-raising
responsibilities as the potential loss in household income that results from the anti-overlapping rules
acts as a deterrent against both parents claiming child-raising allowances at the same time.343
A driver
for these challenges is the social security trend among Member States to promote parents’ (in
particular mothers’) participation in the workplace. Reconciliation of work life balance and gender
balance is an objective for family policy in 24 Member States,344
while 22 Member States have a
benefit intended to replace income during child-raising periods.345
A related problem with the application of the current coordination rules to child-raising allowances is
that these are generally considered "parent-centred" rights, intended to protect the individual parent
concerned. However, under EU law, family benefits are deemed benefits for the family as a whole.
This means that either parent may have a derived right to claim such benefits even if such parent is
residing and working in another Member State and has no personal connection to the social security
system of the Member State awarding the benefit.346
Some national authorities complain that there are
administrative and practical challenges for their institutions when a claim is made as a derived right
by a spouse or partner as it is difficult to determine if national conditions are satisfied. These
complexities are exacerbated for salary-related child raising allowances where a claim is made by a
341
Joined cases C-245/94 and C-312/94 Hoever and Zachow.
342
Annex VI p18 and 26 in relation to Sweden.
343
For critique of the application of the anti-accumulation rules to salary-related child-raising allowances see Sakslin, M. (2000) ‘Social
Security Co-ordination – Adapting to Change’, European Journal of Social Security, 2(2), p184 and Holm, E " Parental Benefits in the
Coordination Regulation: Where do they fit in the Swedish Example" European Journal of Social Security, Volume 16 (2014), No. 2: p136
344
The Council of Europe Family Policy Database.
345
Annex XXV p 7.
346
For example, David works in country A, while Marie with a child lives and works in country B. Member State A has a salary-related
child allowance. David can share part of his parental related benefits entitlements with Marie without any loss to the household income
providing that Marie fulfils the conditions under A's national law, i.e. she has taken leave from work to take care of the child.
Example: David and Marie live with their child in Member State A. David is working in Member State A and
Marie is a frontier worker in Member State B. They both work part-time and share child-care responsibilities.
Member State A has a child raising allowance calculated with reference to salary while Member State B has a
flat-rate child-raising allowance regardless of salary or income. David is entitled to €75 per week based on his
salary in Member State A, and Marie is entitled to €25 per week. Member State A is primarily competent to pay
child allowance because of child's residence and David's work. Member State B is the secondary competent and
obliged to pay only the differential supplement (see Annex XXII for details). In calculating differential
supplement, Member State B takes into account the benefits paid in Member State A in line with the anti-
accumulation rules. The level of allowance in Member State A (€75) is higher than the amount in Member State
B (€25) and therefore Member State B does not pay Marie anything during periods when she takes leave from
work to take care of her child. The family gets €75 but it would get €100 if the child-allowance based on
individual salary would be treated as individual right and not as an entitlement for the entire family.
EN 129 EN
family member who does not have earnings in the Member State awarding the benefit.347
Consequently, some Member States refuse to coordinate such benefits as family benefits under the EU
Coordination rules, instead classifying them as maternity or equivalent paternity allowances in a
manner that circumvents both the anti-accumulation rules and the application of derived rights. The
2012 Nordic Convention348
excludes benefits intended to compensate for income loss from
professional activity when calculating differential supplements for family benefits.349
In other cases,
Member States restrict entitlement to this type of benefit exclusively to a person who is insured under
the national social security insurance.350
Consequently, notwithstanding enforcement action taken by
the Commission, 351
very few Member States are currently fully complying with EU law.352
The consequence of such divergent approaches is inconsistent treatment of families and uneven
distribution of burden between Member States. The other secondary competent Member States are
unable to "off-set" such awards when calculating the differential supplement in a manner which may
be seen as unfair, if those Member States categorize similar benefits according to the social security
rules as family benefits.353
Likewise, there may be increased accumulation of benefits by families and
increased risk of infringement proceedings.
7.2.3.Delays in processing claims for family benefits
Situations of overlapping entitlements are very common when insured parents with dependent
children live and work in different Member States. The priority rules define the process in
establishing the primary and secondary competent states and the way to calculate level of benefits and
differential supplements.354
This requires a number of exchanges of information between the Member
States and increases time needed to process the claims for the export of family benefits.355
In addition,
a number of sociological changes (that are outside the scope of this initiative such as legalisation of
same-sex marriage, increased instances of lone parents, divorce, family breakdown and remarriage)
347
See results of FreSsco mapping exercise Annex VI p27.
348
A multilateral convention based on Regulation (EC) No 883/2004 between Sweden, Denmark, Finland, Norway and Iceland. Iceland and
Norway apply Regulations (EC) Nos 883/2004 and 987/2009 pursuant to the 1994 European Economic Area Agreement. According to the
Article_8.2 of Regulation (EC) No 883/2004, such agreements shall be based on the principles of the Regulation and in keeping with the
spirit thereof.
349
Article 11 of the Nordic Convention 2012.
350
For instance, in Austria entitlement to the income replacement scheme requires (among others) that the person concerned has been
employed for a minimum period of six months before childbirth under the Austrian social security insurance. Thus, a person who resides in
Austria but is working in another Member State and is therefore subject to the social security scheme of that Member State, is not entitled to
income replacing cash childcare benefits in Austria. Similarly in Belgium, in order to qualify under the ‘professional’ scheme, work has to
be carried out in Belgium. For more, see Annex VI (p. 37).
351
European Commission, June Infringement Package: Key Decisions “Commission requests SWEDEN to comply with EU coordination
rules in relation to its parental allowance” 18 June 2015 http://europa.eu/rapid/press-release_MEMO-15-5162_en.htm
352
Only four of the seventeen Member States who have salary-related child-raising allowances recognise claims based on derived rights See
also the FreSsco report by J. De Coninck, ‘Reply to an ad hoc request for comparative analysis of salary-related child-raising allowances',
FreSsco, European Commission, September 2015. Annex XXV, p14.
353
Member States where parental benefits are included in the total sum of family benefits will have higher benefits, and are more often
obliged to pay supplements. See an evaluation made by the Swedish Social Insurance Agency on the payment of family benefits
Försäkringskassan analyserar 2005:3 Utbetalning av familjeförmåner med stöd av EG-lagstiningen under 2004. p. 20 and Försäkringskassan
analyserar 2007:10 Utbetalning av familjeförmåner med stöd av EG- lagstiftningen _ under 2006. p. 18.
354
See Annex XXII for details.: if there are overlapping entitlements to family benefits in cash (i.e. entitlements under two or more
legislations in respect of the same family member and for the same period) on different bases, the order of priority is as follows: firstly,
rights available on the basis of an activity as an employed or self-employed person, secondly, rights available on the basis of receipt of a
pension and finally, rights obtained on the basis of residence. In the case of rights available on the same basis, the Member State where the
children reside shall be competent by priority right but in cases where a right exists solely on the basis of residence, there shall be no
obligation for the secondary competent Member State to export the differential supplement in respect of children residing in another
Member State . It should be noted, these rules apply to family benefits in cash, in the case where a child does not reside in the State which
has primary competence, the State of residence of the child will usually be responsible for providing benefits in kind (subject to a family
fulfilling conditions of entitlement).
355
Exchanges of information are necessary to establish relative order of competence depending on the place of residence and economic
status of both parents and subsequently to calculate the benefit to be awarded based on the family circumstances as a whole (in the case of
the secondary competent Member State this will entail calculation of the differential supplement) . Such calculations may be subject to
periodic adjustments relating to changes in the families circumstances or changes to the level of family benefits granted by the other
Member State . Where a sum has been awarded to the family on a provisional basis (pending final determination of competence by the
Member States concerned), there may be a need for additional exchanges and other administrative tasks to arrange recovery of the
overpayment; likewise delays in communicating changes of circumstance may also result in the need to initiate recovery procedures.
EN 130 EN
have increased the complexity of family structures.356
These new patterns of family formation, and
divergences in legislation between the Member States in relation to legal rights for different family
structures have increased the need for the exchange of information and necessitate in many cases
sensitive and time-consuming investigations to establish entitlement.
There are considerable delays in processing claims in the field of export of family benefits.357
For
example, data from the Latvian national authorities suggest that in over 65% of cases requests for
information to other Member State to establish primary competence take longer than two-months for a
response and in some cases even more than eight months.358
Your Europe report a number of
complaints received from citizens concerning excessive delays in processing their family benefit
claims or receiving payment of family benefits.359
The driver for delays primarily relates to the investigations and subsequent exchange of information
between competent institutions in the field of export of family benefits. First, there is no common
understanding between Member States as to the deadlines for responding to a request for information
from another Member State as the EU rules only oblige to exchange the information "without
delay".360
A second driver is the inefficient exchange of information between competent national
institutions. Pending the implementation of a pan-European Electronic Exchange for Social Security
Information (EESSI)361
it is permissible for institutions to exchange information via paper and
electronic means in a variety of different formats in a manner which also hinders efficient
exchange.362
The consequences of long procedures are twofold. The families concerned have to wait for a long
time before they receive the full amount of benefit they are entitled to. The regulatory costs and
burden for national authorities may increase in circumstances where repeated requests need to be
made for information or a provisional decision on calculation on benefits transpires to be incorrect
necessitating time-consuming recovery or reimbursement procedures.363
7.2.4. Baseline scenario
Export of family benefits
The number of EU mobile workers has increased sharply in absolute terms over the last decade,
however in terms of the overall active population it has only gone up one percentage point (from 2.1%
in 2005 to 3.3% in 2014).364
On the basis of the demographic projections365
there is no reason to anticipate dramatic increases in
the expenditure for Member States in the field of family benefits while the increase in the age-
dependency ratio may place greater pressures on national administrations to finance such benefits:
356
Between 1965 and 2011, the crude marriage rate in the EU-28 declined by close to 50 % while crude divorce rate increased from 0.8 per
1 000 persons in 1965 to 2.0. Further, the rate of births outside marriage has increased . In the EU-28 as a whole, some 40 % of children
were born outside marriage in 2012. Eurostat, Marriage and Divorce Statistics, June 2015.
357
The FreSsco mapping exercise revealed administrative problems and delays in all participating Member States, Annex VI , p.16-17
358
Note presented by Latvian authorities to the Reflection Forum of the Administrative Commission on Social Security Coordination March
2015.
359
Your Europe Advice, Quarterly Feedback Report No 11 (First Quarter, January-March 2015)
360
Articles 68(3) and 76(4) of Regulation (EC) No 883/2004 and Articles 2, 60(2) and (3) of Regulation No (EC) 987/2009. The Regulation
expressly provides only that provisional decisions on which Member State has primary competence will become binding after two months.
361
Decision E1 of the Administrative Commission for Social Security Coordination.12 June 2009 C 106, 24/04/2010, p. 9
362
Administrative problems in the cross-border exchange of data associated with paper exchange of documents were reported by a number
of Member States. See Annex VI (p. 17).
363
Only a small minority of national administrations have a good view on the actual administrative burden or are able to support their
arguments with quantitative data or a detailed description of the burden. A detailed analysis for seven Member States shows, that the
national administration of primary competence spends on averages around two man-hours per case. For details, see Annex XVI
364
Eurostat, LFS and European Commission calculations.
365
The total fertility rate (TFR) is projected to rise from 1.59 in 2013 to 1.68 by 2030 and further to 1.76 by 2060 for the EU as a whole.
However, during the same period, the proportion of young people (aged 0-19) is projected to remain fairly constant by 2060, while the total
age-dependency ratio (people aged below 20 and aged 65 and above over the population aged 20-64) is projected to rise from 64.9% to
94.5% . European Commission: The 2015 Ageing Report: Economic and Budgetary Projections for the 28 EU Member States (2013-2060):
Graph I.1.2.
EN 131 EN
still, a recent OECD Working Paper366
concluded that public spending on family cash benefits is
significantly associated with an increase in the total fertility rate. The fertility rate is projected to rise
from 1.59 in 2013 to 1.64 by 2020 in the 2015 Ageing Report. Moreover, the fertility rate is projected
to increase over this period in nearly all Member States, with the exception of France.
Intra-EU cross-border workers (i.e. working in a Member State other than the Member State of
residence) are the main group of persons concerned by the export of family benefits. Compared to
2010, the number of cross-border workers increased sharply in absolute terms, but in relative terms
(as percentage of the employed population) it has stayed at a relatively stable level of some 0.6% of
the working population. It moved only from 0.5% of the employed population in 2006 to 0.7% of the
employed population in 2014.367
There is no indication that the relative level of cross-border workers
will change considerably between now and 2020. In the 2015 Ageing Report we even read a projected
negative growth of the number of employed persons (20-64) over the projection period (2013 to 2060.
However, between 2013 and 2020 the number of employed persons would increase by 4.4 million
persons (aged 20 to 64): this would result in a projected increase of 26,500 cross-border workers
(+2.1%) between 2013 and 2020 (assuming that 0.6% of the labour force continues being employed as
a cross-border worker).
EU mobile workers appear to have relatively fewer children compared to native workers (0.31
compared to 0.48 children in 2014).368
While this may reflect the reality that EU citizens are more
likely to be mobile when they do not have dependents, it is notable that the average for EU mobile
workers has increased compared to 0.25 in 2004. In addition, statistics show a 39% increase in the
number of permits issued to children wishing to join an EU citizen (18.756 in 2008 compared to
26.076 in 2013).369
This may imply that as the economic outlook in the EU improves that EU mobile
parents will be less inclined to seek work in a different Member State while leaving their children
behind (at least in the longer-term). Supporting this assumption is the projections for greater levels of
female labour market participation370
as mothers are more likely to relocate as a family to the Member
State of work, while men are proportionately more likely to work remotely from the country where
their partners and children reside. 371
In this way it may be anticipated that the instances of export of family benefits may reduce in the
longer term as more mobile workers relocate with their families and because of the expected static or
even reduced mobility flows. Likewise, in cases of frontier workers, increased levels of labour market
participation by parents is likely to increase instances where the Member State of residence of the
child has primary responsibility for payment of family benefits. This trend may increase the numbers
of cases of export by the secondary competent Member State but reduce the level of benefits paid.
Such trends are likely to result in a clearer alignment between the place of residence of the child and
Member State with primary responsibility for payment of Family Benefits in a manner which may
reduce the perception of unfairness due to the export of family benefits albeit that ongoing pressures
created by the age-dependency ratio may in part counteract the impact of these trends. In conclusion,
the total spending on family benefits might increase slightly based on the assumption that is
associated with the minor increase in fertility rate, but there is no indication that spending related to
the export of family benefits will change in relative terms between now and 2020.
366
Adema, W., Ali, N. and Thévenom, O. (2014), ‘Changes in Family Policies and Outcomes: Is there Convergence?’, OECD Working
Papers, No. 157, OECD Publishing.
367
Fries-Tersch, E. and Mabilia, V. (2015), Annual report on statistics on intra-EU movers, Network Statistics FMSSFE, European
Commission.
368
Analysis per household with two working age adults . A child is defined as a person aged 0-14, while a working age adult is defined as a
person aged 15-64 years. Eurostat Labour Force Survey.
369
There are no reliable data to compare numbers of EU mobile citizens who reside in a different household to their children and the trend in
number of permits serves as a proxy for the reunification intentions of families. Eurostat First permits issued for family reasons by reason,
length of validity and citizenship [migr_resfam]
370
European Commission: The 2015 Ageing Report: Economic and Budgetary Projections for the 28 EU Member States (2013-2060):
Graph I.2.4 shows The total participation rate of women (for the age group 20-64) in the EU is projected to increase by 6 pp compared with
1 pp for men.
371
See Renee Luthra, Lucinda Platt & Justyna Salamońska, Migrant diversity, migration motivations and early integration: the case of Poles
in Gemany, the Netherlands, London and Dublin (LEQS Paper No. 74/2014) and further research cited.
EN 132 EN
Labour market participation of women
Labour Market Participation for women is increasing rapidly with ILO predicting a participation rate
of close to 75% in EU28 by 2020.372
Likewise, in cases of frontier workers, increased levels of labour
market participation by parents is likely to increase instances where the Member State of residence of
the child has primary responsibility for payment of family benefits (already based on current LFS data
in a households where a couple is living with children, 64% of parents are both economically active
compared with 25% where only one parent is working). This trend may increase the numbers of cases
of export by the secondary competent Member State but reduce the level of benefits paid per case of
export by that Member State. Such trends are likely to result in a clearer alignment between the place
of residence of the child and Member State with primary responsibility for payment of Family
Benefits in a manner which may reduce the perception of unfairness described above.
However, in light of this trend of increased parents' labour market participation combined with the
trend of the ageing population and increased family-carer responsibilities it will be increasingly
important that there are flexible family policies to facilitate ongoing participation in the labour market
during period of child-raising (and other caring obligations) and that barriers to such participation are
minimised. Therefore the number and importance of child raising allowances is expected to increase
and without common approach to classifying those benefits the problem of inconsistent treatment of
families, uneven distribution of burden between Member States and of infringement proceedings will
persist.
Delays in processing of family benefits
It is anticipated that reported delays in the processing of applications for family benefits will be
reduced by the recent adoption of the decision F2 by the Administrative Commission for Social
Security Coordination which imposes maximum time limits for responding to requests for information
and by the launch of the Electronic Exchange for Social Security Information (EESSI) scheduled for
launch by the end of 2016 with a deadline for full implementation in all Member State by the end of
2018 which will introduce common structured electronic documents and a uniform procedure for all
national authorities to follow when processing claims for family benefits.373
It may also be assumed that there will be some improvement in public perceptions towards EU mobile
citizens' access to family benefits arising from co-existing initiatives outside the scope of this review
such as the Communication on Free movement of EU Citizens and their families: five actions to make
a difference (COM(2013)837final) and ongoing research and communication initiatives by the
Commission such as the development of annual data collection and reporting on the level of export of
family benefits among Member States (including as a percentage of national expenditure on family
benefits) as compared to expenditure on family benefits in kind for children resident in a Member
State will elucidate the debate.374
7.2.5. Objectives for review of existing coordination rules on export
As with all elements of this review exercise, the general policy objective of this initiative is to
continue the modernisation of the EU Social Security Coordination Rules by further facilitating the
exercise of citizens' rights while at the same time ensuring legal clarity, a fair and equitable
distribution of the financial burden among the institutions of the Member States involved and
administrative simplicity and enforceability of the rules.
In relation to family benefits in particular, this is reflected in the need to examine the reasons for
perceptions of unfairness concerning the current rules on family benefits both in relation to fair
treatment of mobile families and the balance of financial burden between Member States and to
examine if there is a need to change the rules in order to counteract the risk of unilateral actions by
some Member States. It also reflected in the need to ensure clarity in the rules as they apply to child-
372
ILO, Economically Active Population Estimates and Projections.
373
Annex VI, p17.
374
See also Socio-economic inclusion of migrant EU workers in 4 cities¸ European Commission (2015).
EN 133 EN
raising allowances recognising the current inconsistent treatment of such benefits by different
Member States which creates uncertainty for citizens and competent institutions and consequent
difficulties in enforceability. In recognition of the current administrative complexity and delays in
processing family benefits, an important criterion in assessing all options under consideration will be
the need for administrative simplicity and clarity.
In addition to the general objective the specific objectives in the field of family benefits are defined
as follows:
• To ensure a clear and transparent link between the Member State issuing family benefits and
the recipients of those benefits;
• To reduce barriers or disincentives to parents' ongoing participation in the labour market;
• To ensure family benefits are processed as efficiently as possible.
7.3. What are the various options to achieve the objectives concerning export of family
benefits
There will be no specific option proposed for the problem of delays in processing claims for family
benefits, as it is anticipated that this issue will be resolved horizontally and through measures already
envisaged outside the scope of this initiative.
A number of policy options have been identified to meet the objectives set out in Section 7.2.5. These
span from non EU-action all the way to creating specific changes to the legal framework375
. Whenever
a combination of options is possible, this is indicated.
375
As the problems relate to the application of Regulation (EC) Nos 883/2004 and 987/2009, all legislative options concern a
change to these Regulations.
EN 134 EN
7.3.1. Option 0: Baseline Scenario:
Family benefits are exported to another Member State at the level of the competent Member State
(=State of activity of the worker). They are conceptualised as benefits for the entire family and
therefore are not regarded as individualised rights but may be transferrable between either parent who
satisfies the conditions of entitlement. In cases of overlapping entitlement to family benefits, the rules
of priority apply.
Example376
1.B: Peter works in Member State A (a country with a higher cost of living) and Marie, his
non-working spouse, resides with their children in Member State B (which has a lower cost of living).
Peter is entitled to Member State A's family benefits at the same amount as if his family were residing in
Member State A. Member State B will not pay a differential supplement because the level of family benefits
under its national legislation is lower than that provided in Member State A. Either Peter or Marie can make the
claim for family benefits from Member State A.
Example 2.B: Anna works in Member State B (a country with a lower cost of living) and David, her non-
working spouse, resides with their children in Member State A (which has a higher cost of living). Anna is
entitled to Member State B's family benefits at the same amount as if her family were residing in Member State
B. If the family is also entitled to benefits in Member State A, Member State A will also pay a differential
supplement up to the level of family benefits provided under its national legislation. Either Anna or David can
make the claim for family benefits from Member States A and B.
376
The same two examples will be used to present differences in the options for adjusting the level of family benefits. The assumption is that
a country with a higher cost of living has also a higher level of family benefits and vice versa.
EN 135 EN
7.3.2. Option 1: Adjustment to standard of living
Option 1 proposes that the amount of exported family benefits would be adjusted according to the
standard of living in the Member State of residence of the child(ren) in two variants (Options 1a and
1b).
In developing this option the Commission has identified a risk that such an option may be
incompatible with primary law if it were to be applied to family benefits to which a citizen (and in
particular a worker) has an autonomous right existing outside the scope of the Regulation. Therefore it
is proposed that option 1a and 1b would only apply to the export of non-contributory based family
benefits where there is no pre-existing right of export under national law. 377
This safeguard is
important as it may exceed the scope of Article 48 TFEU to propose measures that would increase the
disparities arising from the absence of harmonisation between national legislation in a manner that
may have negative ramifications for mobile workers. 378
7.3.2.1. Option 1a: Adjustment to standard of living: upwards and downwards
The amount of exported family benefits would be adjusted upwards and downwards according to the
living standard in the Member State of residence of child(ren). First, the standard of living between
the primary competent Member State and the Member State where the child resides would be
compared.379380
Second, this coefficient would be applied to the amount of family benefits payable
under the national legislation of the primary competent Member State. In a case, where both parents
are in employment, the Member State with secondary competence may also apply the coefficient
when calculating the differential supplement. Such an approach would reflect the practice applied for
adjustment of remuneration (and in certain cases family allowances) of EU civil servants deployed in
service outside Belgium and Luxembourg.381
Example 1.1a: Peter would receive family benefits from Member State A adapted to the living standard in
Member State B and therefore a lower amount than under the current rules. If the amount of family benefits in
Member State B is lower than the amount in Member State A (the "adjusted amount"), Member State B will
pay nothing.
Example 2.1a: Anna will receive family benefits from Member State B increased to reflect the living standard
in Member State A. If there is also entitlement to family benefits in Member State A, and their level remains
higher than the "adjusted amount" paid by Member State B, Member State A will be required to cover the
difference by paying a supplement.
7.3.2.2. Option 1b: Adjustment to standard of living: only downwards
377
This follows the judgment in Petroni, C-24/75, EU:C:1975:129 approved in Jerzak, C-279/82, EU:C:1983:228 which provides that
according to Articles 45 and 48 TFEU, which constitute the basis of the coordination, “limitation may be imposed on migrant workers to
balance the social security advantages which they derive from the Community regulations and which they could not obtain without them”,
but the Regulations may not withdraw or reduce the social security advantages that derive from the legislation of a single Member State.. On
the application of this principle on the differential supplement of family benefits, see the judgment in Dammer, C-168/88, not available,
paragraph 21 . See Annex VI.
378
Judgment in Pinna v Caisse d'allocations familiales de la Savoie, C-41/84, EU:C:1986:1, paragraph 21 . It is to be noted that in this case,
the CJEU ruled that a provision the preceding Regulation, that permitted France to pay the family benefits granted by the Member State of
residences of the children instead of the family benefits they granted to children residing in France was unlawful because it gave rise to an
indirect discrimination on grounds of nationality and that the right to freedom of movement was at stake if the migrant worker received less
than the national workers just because his or her spouse and children remained in the Member State of origin . While there are grounds to
distinguish Option 1a from Pinna as it proposes adjustment not substitution of benefits and sets objective criteria for ensuring benefits are
linked to protective needs irrespective of the place of residence, the CJEU's findings must be given due weight.
379
For example, using data compiled by Eurostat . It could be argued that the basket of goods taken for these general statistics is not
specifically tailored to the needs of a child, however it could be challenging to develop a more specific and regularly updated source of
information.
380
It could be argued that the basket of goods taken for these general statistics is not specifically tailored to the needs of a child, however it
could be challenging to develop a more specific and regularly updated source of information.
381
Under the Articles 64 and 67(4) of Regulation No 31 (EEC), 11 (EAEC), laying down the Staff Regulations of Officials and the
Conditions of Employment of Other Servants of the European Economic Community and the European Atomic Energy Community (OJ 45,
14.6.1962, p. 1385, as amended); the last publication can be found for the period beginning with 1.7.2014 in OJ C 444, 12.12.2014, p. 10. In
relation to family allowances, this adjustment only applies if the allowance is directly paid to a person other than the official to whom the
custody of the child is entrusted. The model of the EU Staff Regulations could not be applied directly as calculations are based on a
coefficient compared to the standard of living in Belgium and Luxembourg not the factor of 100 for the EU-28.
EN 136 EN
The amount of exported family benefits is adjusted downwards only according to the cost of living
standard in the Member State of residence of child(ren). The level of benefit would be limited to the
amount provided by the competent Member State. Under this option, a Member State would never
pay more than the maximum amount under its national legislation. In cases of overlapping
entitlement, the State of residence of the child(ren) will be required to pay a differential supplement in
relation to the difference between the "adjusted amount" paid by the primary competent Member State
and the amount payable under its own national legislation.
Example 1.1b: Peter would receive Member State A's family benefits adapted to the living standard in Member
State B and therefore a lower amount than under the current rules. If the amount of family benefits paid in
Member State B is lower than the amount paid by Member State A (the "adjusted amount"), Member State B
will pay nothing.
Example 2.1b: Anna will receive family benefits from Member State B to the maximum rate permitted under
national law of Member State B irrespective of the fact that the living standard in Member State A is higher. If
there is also entitlement to family benefits in Member State A, and their level remains higher than the "adjusted
amount" paid by Member State B, Member State A will be required to cover the difference by paying a
supplement.
The same principles in relation to compatibility with Articles 45 and 48 TFEU set out above also
apply in relation to Option 1b.
7.3.3. Option 2: State of residence of the child always has primary competence
This option determines new order of priority as follows: 1) country of residence of the child; 2) the
country of work; and 3) country of pension. The country of residence of the child has primary
responsibility to pay the full amount of family benefits to which the entitlement exists under its
national rules. The country of work would top up this amount if the level of family benefits would be
higher there.
The principle of priority for the Member State of Residence of the child already exists under the
current rules in cases of overlapping rights on the same basis (e.g. where two parents work in different
Member States). This option extends this principle to cases where only one parent is in work and is
employed in another Member State. The rationale for this proposal is that in the case of family
benefits, almost all national legislations are residence based. Therefore it is hoped that the inversion of
the priority rules may mean a simpler situation for families in which payments may be processed
more quickly.
Example 1.2: Marie will receive family benefits from Member State B. If Peter is also entitled to benefits in
Member State A, the family would receive a differential supplement from Member State A. The family overall
receives the same amount as under the current rules but the division of costs between Member State A and
Member State B is different.
Example 2.2: David will receive family benefits from Member State A. As the amount of family benefits in
Member State B is lower than in the Member State A, Member State B will pay nothing. The family overall
receives the same amount as under the current rules but the division of costs between Member State A and
Member State B is different.
7.3.4.1 Horizontal Option: Different coordination rules for child-raising allowances: greater
emphasis on individual rights and different treatment under the anti-overlapping rules
This section sets out a number of horizontal options, which may be applied in isolation or in
conjunction with any of the options above. As there are no synergies or inter-dependencies between
the impacts it is intended to assess the impact of these options separately.
It should be made clear that these options relate solely to the right to claim a social security benefit
intended to wholly or partially replace income during periods of child-raising. The option does not
EN 137 EN
propose to create or extend rights to parental leave which may separately exist under the Parental
Leave Directive,382
national legislation or collective agreement.
7.3.4.2 Different coordination rules for child-raising allowances calculated by reference to
salary or professional income: greater emphasis on individual rights and mandatory
derogation from the anti-overlapping rules
Salary-related child raising allowances (or any salary-related components of a benefit which
comprises of both salary-related and flat rate elements) would continue to be exportable as family
benefits, but would be treated as individual and personal rights which may only be claimed by the
parent who is subject to the applicable legislation in question (not by other members of their family).
In addition, it is proposed that no anti-overlapping rules would apply to such benefits meaning that
they would be payable in full to the parent concerned.
Where under national legislation, parents are permitted to share a salary-related child raising
allowance, the parent who is subject to applicable legislation is entitled to the allowance for the
maximum duration permitted under national legislation.383
However, where a family receives a
salary-related child raising allowance in more than one Member State, national authorities will be
entitled to "off-set" periods of entitlement in another Member State from the overall duration of the
benefit (although not the amount).
Example 1.3a: Peter and Marie live with their child in Member State A (which has a child raising
allowance calculated by reference to salary). Marie is a national worker of Member State A. Peter is a
posted worker from Member State B. (Member State B has a flat rate allowance). Member State A is the
primarily competent Member State because this is the place of residence of the child. When Marie takes leave
to take care of her child she is able to claim the child-raising benefit from Member State A. Peter has no
entitlement to salary-related component of the child-raising benefit from Member State A. If Peter claims the
child-raising allowance from Member State B, Member State B cannot into account the salary-related benefit
from Member State A's child-raising allowance in calculating the level of supplement Peter is entitled to.
Example 2.3a: David lives and works in Member State A. Anna his wife lives in Member State A but
works in Member State B. Both Member State A and Member State B have salary-related child-raising
allowances. Member State A is the primary competent Member State because this is the place of residence of
the couple's children. David is able to claim salary-related child-raising benefit during periods he has taken
leave to take care of their children. According to Member State A's legislation, each parent is individually
entitled to 13 weeks of salary-related child raising allowance. However, as Anna is unable to claim the
allowance under Member State A's legislation, David is entitled to 26 weeks of salary-related child-raising
benefit (assuming national entitlement conditions are satisfied). Anna is separately entitled to salary-related
child-raising benefit under Member State B's law. However, if Anna makes a claim for salary-related child-
raising benefit during the same period as David, Member State B will be entitled to take into account periods
of benefit that David has already claimed in calculating the length of period of leave although Member State B
may not deduct amounts already paid by Member State A when calculating the level of benefit payable to
Anna.
7.3.4.3 Different coordination rules for all-child raising allowances (flat rate and salary-
related): greater emphasis on individual rights and mandatory derogation from the anti-
overlapping rules.
As a variation to the horizontal option described above, it could also be considered to extend the
horizontal option A so it applies to all child-raising allowances regardless of whether they are
calculated by reference to salary/professional income or are awarded on a flat-rate basis.
382
2010/18/EU
383
taking into account restrictions that may separately exist to the labour law right to parental leave under the Parental Leave Directive
2010/18/EU
EN 138 EN
Example 1.3b: Marie will receive the full amount of child-raising allowance but Peter will have no entitlement
to child-raising allowances from Member State A. Member State B cannot take into account any of the child-
raising allowance paid by Member State A when calculating the level of child-raising allowance Peter is entitled
to.
Example 2.3b: David and Anna will be treated in the same way as under example 2.3a
7.3.4.4 Different coordination rules for all-child raising allowances (flat rate and salary-
related): greater emphasis on individual rights and optional derogation from the anti-
overlapping rules
As a further variation to the horizontal options described above, it could also be considered to provide
that child-raising allowances (either salary-related only or salary-related and flat-rate) should be
treated as individual and personal rights which may only be claimed by the parent who is subject to
the applicable legislation in question, however, it is only optional rather than mandatory for a
secondary competent Member State to exempt such benefits from the anti-overlapping rules Such an
approach would allow national administrations greater flexibility to promote flexible child-raising
arrangements in line with national policy objectives of the Member States concerned but the
requirement would not be mandatory.
There will be no requirement to allocate the maximum duration of child-raising allowance permitted
under national legislation to the parent subject to the applicable legislation concerned and
consequently no requirement to "off-set" periods of taken by the other parent under the law of another
Member State.
Example 1.3c: Marie will receive the full amount of child-raising allowance but Peter will have no entitlement
to child-raising allowances from Member State A. Member State B (as secondary competent Member State) will
have a choice whether to take into account any of the child-raising allowance paid by Member State A when
calculating the level of child-raising allowance Peter is entitled to. This choice will be exercised in relation to all
claims for the benefit concerned (not on a case-by-case basis)
Example 2.3c: David will receive 13 weeks of child-raising allowance (the normal period for an individual
parent under Member State A's law), the duration of the child-raising allowance that Anna receives will depend
on the national conditions of Member State B's law.
7.3.5 Discarded option
It was also considered that family benefits would be provided by the Member State of residence of
child(ren) under its national legislation only, i.e. no export of family benefits. 4 Member States
supported this option.384
This option has subsequently been discarded by the Commission on grounds it is considered
incompatible with the Treaty on Functioning of the European Union, in particular as the refusal to
export family benefits has already been ruled contrary to Article 45 TFEU.385
The right to family
benefits is granted to workers by reason of their employment in the Member State of employment.
Refusing to grant them the right to equal treatment as regards entitlement to family benefit would
amount to a violation of primary law.
384
Luxembourg, Malta (in relation to family benefits specific to the social or economic conditions of the Member State), Finland and the
United Kingdom. Annex II.
385
Joined Cases C-4/95 and C-5/95, Stöber and Pereira ECLI: EU: C: 1997:44 (amongst others).
EN 139 EN
7.4. Stakeholder Support
7.4.1 Baseline Scenario
In discussions in the Administrative Commission in March and June 2015, 16 Member States386
were
in favour of maintaining the status quo in preference to adjusting benefits to option 1a or b or 2. In
consultation with stakeholders also indicated the status quo was favoured by a number of national
organisations with responsibility for family benefits such as REIF, SVB, CNAF, CCMSA and
FAMIFED. In the response to the public consultation only 33% of organisations and 31% of
individuals indicated support for legislative change.387
7.4.2 Adjustment to standards of living
7.4.2.1 Option 1a: Adjustment to standards of living: upwards and downwards
Three Member States388
supported this option in the Administrative Commission. NGOs underlined
the unfairness of adaptation, since the workers concerned pay the same taxes, but also the fact that, for
the competent Member State, adapting family benefits may have unintended consequences if the
concerned families were to move to the Member State as a result. In this sense, it was mentioned that
the biggest challenge for local authorities is pressure on public services, and not "benefit tourism".389
Social partners390
pointed out that the right to family benefits should be considered attached to the
worker and not to the place of residence of the family. In their view lowering the family benefits for
mobile workers would in any event constitute unequal treatment.391
In the response to the public
consultation, only a minority of respondents commented on the issue of adjustment of family benefits
to the place of residence of the child. Among those that did there were mixed responses, with some
respondents indicating strong support for this principle and others strong opposition.
7.4.2.2 Option 1b: Adjustment to standards of living: only downwards
No Member States expressly supported this option in the Administrative Commission. Stakeholder
feedback was similar to Option 1a.
7.4.3 Option 2: Member State of Residence of the child always has primary competence
10 Member States392
supported this option as a first or second choice but 9 Member States393
were
expressly opposed to the option in the Administrative Commission. Some social partners emphasized
that the right to family benefits should be considered attached to the worker and not to the place of
residence of the family.394
In the response to the public consultation, only a minority of respondents
commented on the issue of a change to the order of competence so the place of residence of the child
always has primary competence. Among those that did there were mixed responses, with some
respondents indicating strong support for this principle (in particular because they considered it would
improve the simplicity and efficiency of the rules and create a stronger link to the economic
environment where the child resides). However, others expressed strong opposition to the idea of
reducing the link between the Member State of Employment and competence for providing family
benefits.
386
Belgium, Bulgaria, Czech Republic, Estonia, Spain, Croatia, Italy, Latvia, Lithuania, Poland, Portugal, Romania, Slovenia, Slovakia,
Finland and Sweden.
387
A public consultation between July and October 2015 invited citizens and organisations to provide their views on
the main problems linked to the coordination of unemployment benefits, family benefits and posting of workers.
388
Denmark, Ireland and France. Annex II.
389
For example, EURODIACONIA. Annex II.
390
Annex II.
391
For example, ETUC and TUC (Trades Union Congress, United Kingdom).Annex II.
392
Austria, Estonia, Finland, Ireland, Latvia, Luxembourg, Malta, Slovenia, Sweden and the United Kingdom
393
Cyprus, Germany, France, Italy, Netherlands, Poland, Portugal, Romania and Slovakia
394
For example, ETUC and TUC (Trades Union Congress, United Kingdom). Annex II.
EN 140 EN
7.4.4 Horizontal Option: Different Coordination of child-raising allowances
This option was initially not envisaged and was developed in response to the stakeholders'
feedback.395
In March and June 2015, 4 Member States in the Administrative Commission indicated support for an
alternative coordination of salary-related child-raising allowances and action was also recommended
by the FreSsco network of experts (see Annex VI396
).
The Council, the Parliament, the social partners, the Advisory Committee on Equal Opportunities for
Women and Men and other stakeholders have called for developing a comprehensive set of measures
to address women’s under-representation in the labour market and to support more equal sharing of
family responsibilities. In June 2015, EPSCO Council Conclusions15
highlighted that measures could
include improving the provision of childcare and long-term care, flexible working time arrangements,
addressing financial disincentives for both parents (and single parents) to participate in paid work, as
well as supporting smoother transitions for women and men between part-time work and full-time
employment, and between care-related leave periods and employment. The European Social Partners
have also recognised that work-life balance and gender inequality in the labour market remain serious
challenges. They have made "promoting better reconciliation of work, private and family life and
gender equality to reduce the gender pay gap" a priority in their new joint work programme for 2015-
2017.
7.5. What are the Impacts of the Different Options
7.5.1 Introduction
For all of the options assessed, the potentially affected groups are the same. The options are
specifically targeted at mobile EU parents and their children, that is to say: citizens who either work
or reside in a different State to that where their children reside. Hence, it may concern both mobile
workers and frontier workers or other cross-border workers. It may also concern non mobile citizens
and children who have not exercised their right to freedom of movement but who have a parent or
partner (or former partner) who is a mobile citizen.
For the purposes of assessing the impact, a range of criteria has been identified with reference to the
general and specific policy objectives for family benefits and the Commission's Better Regulation
Guidelines. In relation to social impact, the options are assessed against the criteria of clarification;
simplification; protection of rights and impact upon fundamental rights (with reference to the
specific objective this analysis also includes an assessment of the potential impacts of barriers or
disincentives to parents' ongoing participation in the labour market). This analysis draws upon
the findings of the FreSsco Legal Experts report at Annex VI supplemented by the Commission's
Services own analysis and the findings from the stakeholder consultations and the Inter-Service
Steering Group.
In relation to Fundamental rights all options under consideration aim to facilitate the exercise of the
right to engage in work in another Member State (Article 15), as well as to a better protection of rights
for workers who have made use of their right to free movement (Article 45). At the same time the
options seek to ensure the right to equal treatment (Article 21), the best interests of the child (Article
24), rights of the family in particular to reconcile family and professional life (Article 33(2)), the right
to property and social security (Articles 17 and 34).
In relation to the economic impact, the options are assessed against the impact on Member States'
budgets. It has to be noted that 19 Member States and EFTA countries (Belgium, Czech Republic,
395
This option was developed following consultation with Member States in the Administrative Commission in March and June 2015 and
feedback from other stakeholders . See Annex II and Annex VI.
396
SPIEGEL, B. (ed.), CARRASCOSA BERMEJO, D., HENBERG, A. and STRBAN, G., Assessment of the impact of amendments to the
EU social security coordination rules on export of family benefits, Analytical Report 2015, FreSsco, European Commission, May 2015
(Annex VI).
15
2015 EPSCO Council Conclusions on the Gender Pension Gap.
EN 141 EN
Denmark, Germany, Estonia, Ireland, Spain, Latvia, Luxembourg, Hungary, Netherlands, Austria,
Poland, Romania, Slovakia, Finland, United Kingdom, Iceland and Norway) were able to provide data
on the export of family benefits, while 10 (Czech Republic, Germany, Estonia, Latvia, Luxembourg,
Hungary, Netherlands, Austria, Slovakia and Iceland) were able to provide a breakdown of exported
family benefits by primary and secondary competence397
. This entails a number of limitations in the
assessment of the economic impact of option 2 (reversing priority rules) and the horizontal options
(different coordination rules for salary-related child-raising allowances), which will be
presented/discussed in full in the section. In particular, for reasons of practicality, the economic
analysis has also been conducted based on the assumption that all Member States are in full
compliance with the EU social security coordination rules currently in force including in respect of
the most recent jurisprudence of the Court of Justice. It should further be noted that in the absence of
comprehensive data from the Member States, the economic assessment for the horizontal option is
made with reference to ESSPROS figures for parental benefits awarded for children aged 0-3
regardless of whether or not the benefit is indexed to salary or professional income. The estimations
must be construed in light of these limitations. The full studies are attached to this report at Annexes
XI and XIII398
.
The regulatory costs for both public administrations and citizens in relation to Options 1a, 1b and 2
were assessed through a number of interviews with public officials working for administrations
dealing with the export of family benefits (both as primarily competent and secondarily competent
Member States) in six Member States (Germany, Denmark, Netherlands, Poland, Romania and the
United Kingdom). The full study is attached to this report in Annex XVI.399
This assessment also
takes into account the specific objective of faster and more efficient processing of family benefit
claims.
With reference to coherence with the general objective, the options have also been assessed with
reference to their impact upon risk of fraud and abuse and ability of Member States to counteract
such risks and by reference to the objective of achieving equitable burden-sharing between
Member States (corresponding to the specific objective of achieving a clear and transparent link
between Member State paying benefits and recipient). Finally the assessment considers overall
coherence with EU objectives with reference to relevant policies identified at section 1.3 of this
report.
The secondary impacts of the options on mobility flows was estimated on the basis of case studies in
seven Member States (Belgium, Germany, Poland, Romania, Netherlands, Spain and Ireland), with a
target population of one-earner families in which the person entitled to the exportability of child
benefits works and resides in a Member State different from the one where the dependent family
member resides400
. The full study is attached to this report in Annex XVIII. It should be
acknowledged however, that such methodologies are imperfect tools for predicting families'
motivations and migration drivers which in practice are likely to be influenced by a far-wider range of
factors than purely economic influences.
Finally, when looking in particular at economic impact, regulatory costs and secondary impact for
horizontal options a, b and c, it must be noted that these options were developed and refined at a late
stage of the impact assessment process. Therefore, in addition to the limitations already highlighted
due the limitations on data highlighted above, the late development/refinement of the horizontal
options has led to a less detailed assessment of impact, at times only at a qualitative level.
397
P. 6, Annex XI
398
PACOLET and DE WISPELAERE Export of family benefits, Analysis of the economic impact of the options, 2015 (Annex
XIII).
399
Julie Abrahamsen, Monica Lind, Peter G. Madsen, Administrative costs of handling exports of family benefits, 2015 (Annex
XVI).
400
Michele Raitano, Matteo Luppi, Riccardo Conti, Diego Teloni, Secondary effects following a change of regulations on the exportation of
family benefits, 2015 (Annex XVIII).
EN 142 EN
7.5.2 Summary table of the impacts of the options for export of family benefits
Type of impact Clarification Simplification Protection of
rights
Fundamental
rights
Economic
impacts
Regulatory
costs
Risk of fraud
and abuse
Equitable
burden sharing
Member State
Coherence
with EU
objectives
Overall
Effectiveness
Overall
Efficiency
(cost vs
effectiveness
Baseline
Scenario
0 0 0 0 0401
0402
0 0 0 0 0
Option 1a
Adjustment to
standards of
living: upwards
and downwards
- -- --/+ - +/-403
--404
- +/- -- - -
Option 1b
Adjustment to
standards of
living: only
downwards
-- - -- - +405
--406
- ++/- -- - -
Option 2
Member State
of residence has
primary
competence
++ + + 0 +/-407
+/-408
+ +/- + + +
401
€942 m is the budget devoted to exported child benefits in 19 reporting Member States; Annex XIII; Table 9.
402
Cost for handling export of FB is estimated at on average 1.9 man hours per case for the primary competent Member State and at 1.6 man hours per case for the secondary competent Member State this corresponds to
an annual cost in the range of between €40 and €2,000 in selected Member State (variation according to number of cases and labour costs).
403
Overall decrease of €150m (-15.9%) but increase for Member State with lower cost of living.
404
Increase of approx. one man-hour per case.
405
Overall decrease of €156m (-16.6%).
406
As 1a above.
407
Decrease of exported benefits of €420m (-30%) but increase in expenditure of State of residence by up to 120%.
408
Moderate decrease in cases of recovery and overpayments but moderate increase in cases of differential supplement and verification of residence.
EN 143 EN
Horizontal A
Personal rights
to salary-linked
child-raising
allowance
mandatory
derogation from
overlapping
rules
++ + +/- +/- --409
+/-410
+ +/- ++ ++ +
Horizontal B
Personal rights
for all child-
raising
allowance
mandatory
derogation from
overlapping
rules
++ + +/- +/- --411
+/-412
+ +/- ++ ++ +
Horizontal C
Personal rights
for all child-
raising
allowance
optional
derogation from
overlapping
rules
-/+ + +/- +/- --413
+/-414
+ +/- +/- +/- +
409
Estimated Increase in expenditure on exported salary-related child-raising allowances for secondary competent Member State of 62-81%.
410
Moderate decrease in regulatory costs No need to process/ calculate claims on derived rights . Some new tasks to compare benefits in different Member State.
411
Estimated Increase in expenditure on exported child-raising allowances for secondary competent Member State of 58-84%.
412
Same as Horizontal Option a but wider field of application as covers all child-raising benefits.
413
Maximum impact same as Horizontal Option b (but not all Member States will rely upon the derogation).
414
Maximum impact same as Horizontal Option b with added advantage that no need to compare duration of claims in other Member States (but not all Member States will rely upon the derogation therefore information
exchange for differential supplement may continue).
EN 144 EN
7.5.3 Impacts of Policy Option 1a: Adjustment to standard of living: upwards and
downwards
Policy Option 1a: Adjustment to standard of living: upwards and downwards
Social impacts
Clarification - This option is less transparent than the baseline scenario. There
is a significant risk that mobile workers would be less aware of
the level of benefits they are entitled to as the amount of the
family benefit received would be subject to fluctuations
depending on various factors, such as macro-economic criteria
or the country of residence of the children during the life-cycle
of a family benefit claim. This may affect the citizens' ability to
assert and enforce their rights.
Simplification -- In comparison to the baseline, this option is more complex to
apply as it imposes additional obligations for mobile workers
and public administrations to state and verify the Member State
of residence of the children. Possible changes in the Member
State of residence of the children or macro-economic changes
would result in additional administrative obligations for the
mobile worker and public authorities in changes in the amount
of the benefit granted by one and the same Member State.
Protection of rights --/+ This option will result in EU mobile families receiving either a
lower or higher level of family benefits than would normally be
awarded by the exporting Member State depending on the cost
of living in the country where the child resides. It can be
anticipated that the most likely situation is that the family
benefits will be lower. Firstly, because trends in labour mobility
patterns show a bias in mobility from lower wage destinations
towards higher wage destinations. Secondly, because the
existing rules relating to the differential supplement already
ensure that a family will receive a "top-up" from the secondary
competent Member State to the level awarded by that Member
State. This existing provision under the baseline scenario
already mitigates against the potential disadvantage that a
family who resides in a high-cost of living destination but
workers in a lower cost of living destination might otherwise
experience meaning the positive financial impact for the mobile
worker arising from this option are expected to be marginal.
Financial impact +/- The adjustment of the amount of exported family benefits could
decrease the total expenditure on exported family benefits by €
150 million (15.9%). Member States with a higher cost of
living compared to the countries where they currently export
family benefits will experience a reduction in their expenditure
on exported family benefits – by more than 30% in the case if
Germany (€34 million) and Ireland (€4 million), by 13% in the
case of Luxembourg, . By contrast, Member States with a lower
cost of living compared to the countries where they currently
export family benefits will experience an increase in their
expenditure on exported family benefits to a level that is higher
than permitted under their own national rules. This increase
EN 145 EN
would be above 70% for Poland (€ 4 million) and above 40%
for Latvia (€ 50,000)415
, 37% for Estonia, 35% for Slovakia,
21% for Hungary. Extending this analysis to the EU-28, in
principle, all Member States with the exception of Denmark
(the State with the highest index for comparative price levels416
)
would have to raise its family benefits at least in respect of
export of family benefits to a child resident in Denmark.
Impacts on fundamental rights - In the case of a lower adjustment, this option may adversely
affect the right to property (in this case social security benefits)
(Article 17); the right to equal treatment (Article 21) and the
best interests of the child (Article 24) and the right to social
security and social assistance (Article 34) when compared with
the baseline scenario. In particular, compared to the baseline
scenario, workers would receive lower or higher levels of
family benefits that their co-workers even though they pay the
same taxes and social security contributions. Likewise Member
States with a lower cost of living would be required to export
family benefits at a higher rate than is awarded to national
citizens resident within their territory.
Even though there is precedence for deductions from family
benefits in the context of the anti-accumulation rules, the fact
that these options do not guarantee that the family of a mobile
worker will receive a sum at least equivalent to the highest rate
available under the overlapping applicable legislation also gives
rise to concerns of interference with the right to Property under
Article 17.
Other impacts
Regulatory Costs -- This option would increase the administrative burden compared
with the current rules. The running cases would need further
administrative processes as e.g. the updating of the adjustment
factors has to be made on a regular basis (even if national
amounts do not change). Processing times between the claim
being filed and benefit being received could be increased due to
the verification of residence. In addition, as application of
indexation to rights deriving from worker-status or which exist
independently of the application of the Regulation would
violate primary law, there will be additional administrative
tasks, for example, to distinguish between contributory and
non-contributory family benefits in each Member State.
On the basis of the interviews conducted with national
administrations, it is estimated that the administrative tasks as
primarily competent may increase by around one man-hour per
case (+49%), mainly due to the increase in the time devoted to
the calculation of benefits and the reimbursement activities417
:
The total cost will thus increase of a sum ranging from €12,900
in Romania (+300%) to 1,068,100 (+60%) in Germany418
.
The administrative tasks of secondarily competent Member
State, will also increase by around one man-hour per case
(+60%), mainly due to the increase in the time devoted to the
415
Table 13, Annex XIII.
416
http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=tec00120&plugin=1 (last accessed 25 March 2015).
417
Table 3-1, Annex XVI.
418
Tables 3-1, 3-2, 3-3 and 3-4, Annex XVI.
EN 146 EN
calculation of benefits, as it becomes more complex. this will
translate into an increase in the cost per case (ranging from €1.4
in Romania to €58.3 in Denmark).
It is not estimated that this option would increase the
administrative burden for citizens, though longer processing
times of the cases may well have a negative impact in
increasing delays between application and receipt of family
benefits419
.
Risk of fraud and abuse - Families could be tempted to declare that their children live in a
Member State with a higher factor of adjustment (or even in the
Member State with primary competence), as far as the amount
of the benefits would depend on the children’s place of
residence. For the Member State with primary competence, the
children’s place of residence is usually more difficult to
determine than, for example, the place of work, so the risk of
abuse could increase necessitating additional activities by
Member States to counter this risk. Further, the greater
complexity entailed in indexation may increase the risk of
administrative error by public authorities.
Fair burden sharing between
Member States
+/- This option shifts the burden from the Member States with a
higher factor of adjustment, i.e. those where income and costs
are higher, to Member States with lower factors of adjustment.
In particular, it will require Member States with lower costs of
living to export family benefits at a higher rate than payable to
national citizens within their own territory. This shift in burden
is exacerbated due to the effect of the differential supplement.
As compared with the baseline scenario, more Member States
with lower income and costs may be required to pay a
differential supplement than under the current rules. Taking into
account that migration patterns usually are from Member States
with lower living standards to those with higher standards, this
option would probably shift the burden from the latter to the
former. This could result in a certain disruption of the economic
logic that assigns the obligation to pay the family benefits to the
Member State receiving the contributions and taxes.
Mobility -/+ This option could entail a moderate reduction of mobility flows
of one-earner married persons who would move without his/her
family towards Member States with relatively higher cost of
living with subsequent consequences for the skills availability
to those labour markets.420
On a sample of six Member States
when all factors are neutral it may be expected to have the
following impact: Netherlands (-4%), Germany (-3%), Belgium
(-1.%), Spain (-0.9%) and Ireland (-0.7%) – and an increase
towards Member States with relatively lower cost of living –
Poland (3%) and Romania (8%)421
. This would entail
consequent reductions/increases in the budget devoted to
exported family benefits422
.
However, another possible secondary effect could also be that
dependent family members would reunite with the working
419
Page 32, Annex XVI.
420
Annex XVIII.
421
Figure 4.1, Annex XVIII.
422
Figure 5.1, Annex XVIII.
EN 147 EN
partner/parent working in another (with higher living cost)
Member States, which would counterbalance the effects of the
option423
. The impact of such reunification may potentially
have consequences for the education, health, housing and other
systems of the Member State of the economically active citizen.
In the context of the low flows anticipated no estimates have
been carried out for the economic impact of this.
This analysis ignores other variables that may influence a
family's decision about whether or not to relocate and needs to
be viewed accordingly.
Coherence with General, Specific
and wider EU Objectives:
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of
citizens' rights while at the same time
ensuring legal clarity, a fair and
equitable distribution of the financial
burden among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
• Ensure a clear and transparent
link between the Member State
issuing family benefits and the
recipients of those benefits
• Remove barriers or
disincentives to parents'
ongoing participation in the
labour market
• Ensure family benefits are
processed as efficiently as
possible
-- This option achieves a greater correlation between family
benefits and the cost of living in a manner likely to address the
perceptions of unfairness held by some critics. However, it does
not fully achieve the aim of achieving a fair distribution of
financial burden as it disrupts the economic logic that the State
that receives taxes and social security contributions should have
responsibility for paying benefits by transferring the economic
burden from the Member State of Work to the State of
Residence. It also does not achieve a clear and transparent link
between the Member State issuing a benefit and the families in
receipt of such benefits as Mobile workers will receive lower
level of family benefits than nationals notwithstanding the fact
they pay the same level of tax and social security contributions
(conversely Member States with comparatively lower costs of
living may be required to export family benefits at a higher
level than payable to citizens resident on their territory in a
manner likely to be perceived as unfair by nationals of that
State). The option also reduces clarity and legal certainty
compared to the baseline particularly in relation to level of
entitlement and which benefits may be subject to indexation. It
is likely to be administratively burdensome for both citizens
and national authorities to apply. This option may increase
rather than reduce disincentives to parents' ongoing
participation in the labour market during periods of child-
raising (at least in relation to non-contributory benefits) as such
benefits will not only be subject to the anti-accumulation rules
but also subject to reductions based on place of residence of the
child. It may also increase delays in processing family benefits.
7.5.4 Impacts of Policy Option 1b: Adjustment to standard of living: downwards only
Policy Option 1b: Adjustment to standard of living: only downwards
Social impacts
Clarification -- As with Sub-option 1a, and for the same reasons, this option is
less clear or easy to understand than the baseline scenario. In
addition, changes in the relative cost of living between different
Member States means it may be even less clear to workers
whether they can expect family benefits to be exported at the
423
Pp. 33-34, Annex XVIII
EN 148 EN
national level or indexed at a lower level.
Simplification - As with Sub-option 1a, and for the same reasons, this option is
less clear or easy to understand than the baseline scenario.
Protection of rights -- This option is anticipated to have the same social impact as
option 1a, exacerbated further compared to the baseline
scenario because it does not improve the protection of rights of
beneficiaries residing in a Member State with a higher standard
of living and further may increase the lack of clarity concerning
the level of family benefits payable as indexation will not be
applied consistently in all cases
Financial impact + There is expected to be a moderate, decrease of € 156 million
(16.6%) in the expenditure on exported family benefits would
occur. It is predicted that all reporting Member States would
now experience either a reduction or no change to their
expenditure on exported family benefits compared to the
baseline, which will be nearly 40% for Ireland (€ 4.5 million)
and above 30% for Germany (€ 36 million)424
the change is
more negligible for Latvia, Poland, Hungary, Slovakia and the
Czech Republic where the estimated impact ranges from 0-
0.5% (€0-8,230).
Impacts on fundamental rights - This option is anticipated to have the same impact upon
fundamental rights as option 1a, exacerbated further because it
does not improve the protection of rights of beneficiaries
residing in a Member State with a higher standard of living.
Other impacts
Regulatory Costs -- As with sub option 1a and for the same reasons, this option is
more complex to apply, however, the complexity is anticipated
to increase because as opposed to uniformly applying a
standard co-efficient across all Member States, national
administrations will need to analyse in each case whether the
relationship between cost of living requires a Member State to
export the national level of benefit or whether a downward
adjustment should be applied. It is anticipated that these
procedures would fluctuate along with changes to the relative
cost of living across the EU-28. As per option 1a, it is estimated
that the administrative tasks as primarily competent will
increase by around one man-hour per case (+49%), mainly due
to the increase in the time devoted to the calculation of benefits
and the reimbursement activities425
this will translate into an
increase in the cost per case (ranging from €0.8 in Romania to
€58.3 in Denmark). Moreover, a change in the number of cases
of export of family benefits could also occur as a result of the
introduction of this option426
- see also mobility below. The
total cost will thus increase of a sum ranging from €8,700
(+20%) in Romania to 1,063,500 (+60%) in Germany427
.
Administrative tasks as secondarily competent, are also
424
Table 14, Annex XIII.
425
Table 3-1, Annex XVI.
426
Table 3-3, Annex XVI.
427
Tables 3-1, 3-2, 3-3 and 3-4, Annex XVI.
EN 149 EN
expected to increase by around one man-hour per case (+55%),
mainly due to the increase in the time devoted to the calculation
of benefits, as they become more complex: this will translate
into an increase in the cost per case (ranging from €1.4 in
Romania to €58.3 in Denmark).
Risk of fraud and abuse - As with Sub-option 1a, and for the same reasons, this option
may increase incentives for fraud while the greater complexity
may increase the risk of administrative error thereby
necessitating greater action by public authorities to mitigate
these risks.
Fair burden sharing between
Member States
++/- As with option 1a, this option shifts the burden between
Member States due to the effect of the differential supplement.
However, this option would bring a financial relief for the
Member State with a higher factor of adjustment (as they could
reduce their family benefits for children living in Member
States with lower factors of adjustment, while Member States
with lower factors of adjustment would not see any change in
their situation in cases where they have to grant benefits for
children residing in Member States with higher factors of
adjustment.
Mobility +/- Like option 1a, this option could also entail a moderate
reduction of mobility flows of the target population (one-earner
married persons who would move without his/her family)
towards Member States with relatively higher cost of living.
For example, in a sample of six Member States, this is expected
to impact the Netherlands (-4%), Germany (-3.2%), Belgium (-
2.2%), Spain (-0.9%) and Ireland (-1.7%), while no increase
would occur towards Member States with relatively lower cost
of living428
. This would entail reductions (Belgium, Germany,
Spain, Ireland and Netherlands) in the budget devoted to
exported family benefits429
.
However, as per option 1a, another possible secondary effect
could also be that dependent family members would reunite
with the working partner/parent working in another (with
higher living cost) Member States, which, again, would nullify
the effects of the option430
. As stated above, this analysis
ignores other variables that may influence a family's decision
about whether or not to relocate and needs to be viewed
accordingly.
Coherence with General, Specific
and wider EU Objectives
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of
citizens' rights while at the same time
ensuring legal clarity, a fair and
equitable distribution of the financial
burden among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
-- For the same reasons as Option 1a this option is not considered
effective at achieving the General and Specific EU objectives,
while it may be considered generally neutral in relation to the
wider EU objectives, with the exception of the Fresh Start to
address the challenges of work-life balance faced by working
families, where it is considered to be likely to be incoherent
428
Figure 4.1, Annex XVIII.
429
Figure 5.1, Annex XVIII.
430
Pp. 30-31, Annex XVIII.
EN 150 EN
• Ensure a clear and transparent
link between the Member State
issuing family benefits and the
recipients of those benefits
• Remove barriers or
disincentives to parents'
ongoing participation in the
labour market
• Ensure family benefits are
processed as efficiently as
possible
7.5.5 Impacts of Policy Option 2: Member State of Residence of the Child has primary
competence
Policy Option 2: Member State of Residence of the child always has primary competence
Social impacts
Clarification ++ As the Member State which is competent by priority is always
the Member State of residence of the children, it is clear which
Member State has to start granting its benefits and means the
EU rules are aligned with the residence system in place in the
majority of Member States. Many disputes which today’s
coordination could cause (if Member States do not agree on
which Member State is the primarily competent one) could be
avoided.
Simplification + On the one hand this option could be regarded as simpler, as it
is always the same Member State that primary competence.
There is also likely to be a greater stability in order of
competence as the Member State of Residence of the child will
remain competent irrespective of the economic status of their
parents or the place where the parents work. On the other hand,
this option could lead to more cases with differential
supplements than today (if we assume that in general the family
benefits in Member States to which workers migrate are higher
than in the Member State of residence of the children) which
may lead to ongoing delays in families receiving the full
entitlement to family benefits even if benefits from the State of
Residence are processed more rapidly.
Protection of rights + Families will receive the same level of benefits as under the
baseline, but it is expected that benefits which are provided for
by the Member State of residence will be processed more
rapidly. In residence-based systems this will ensure a greater
alignment between the normal rules for entitlement under
national legislation and the EU social security rules. It also in
part responds to the perception of some Member States and EU
citizens that the State that should have primary responsibility
for paying family benefits is the one where the children reside
(although the obligation remains for the Member State of
Employment to pay a differential supplement where the level of
benefits in this State may be higher).
EN 151 EN
Financial impact +/- This option will have the effect of shifting the financial burden
from the Member State of work to the Member State of
residence in cases of export where only one parent in a EU
mobile family is economically active (in cases where both
parents are economically active the place of residence of the
child already has priority under the current rules). It is
estimated that, because of a shift of the expenditure from the
Member State of residence of the worker towards the Member
State of residence of the children, a decrease of approximately
€213 million (approximately 29%) in the expenditure on
exported family benefits could occur.431
However, there would
also be an increase in the expenditure of the Member State of
residence of the child by up to 120%.432
A case study analysis of the impact on two of the main flows of
exported family benefits for which data are available, notably
from Luxembourg to France (33% of reported total expenditure
for export of family benefits) and from Germany to Poland
(11% of reported total expenditure for export of family
benefits): the application of this option to these flows would
result in a reduction in the expenditure for Luxembourg (€60
million) and Germany (€25 million), and an increase in that of
France (€60 million) and Poland (€25 million)433
.
Impacts on fundamental rights 0 The proposed changes to the rules of priority engages
consideration of the right to equal treatment (Article 21), as a
workers in the State of Employment will receive lower benefits
compared to national workers in that Member State. This may
give rise to concerns about discrimination in particular in
relation to Member States with either tax and contribution
based systems or solely contribution based systems. However,
there is already precedence for the Member State of Residence
of the Child to assume priority in the case of overlapping
entitlement on the same basis (both in the case of economic
activity and pension rights). This solution may still be
considered proportionate in the context of the legitimate aim to
reduce accumulation of benefits particularly as the family will
receive the same level of benefits overall and so the right to
property (Article 17) and the rights of the child (Article 24) are
respected.
Other impacts
431
This estimation is subject to limitation as only 10 Member States were able to provide a breakdown of exported family benefits according
to primary and secondary competence.
432
The predictions of increased expenditure by the Member State of residence of the child may be over-estimated as it has not been possible to
take into account the existence of means-tested criteria applied by some family benefits in predicting the likely increase in expenditure.
Annex XIII Table 26.
433
Figures 8 and 9, Annex XIII.
EN 152 EN
Regulatory Costs +/- Although not fully supported by the qualitative interviews434
conducted with national administrations, in general, this option
is likely to reduce regulatory costs for national authorities as it
provides greater certainty for which Member State has primary
competence and therefore takes away the obligation under the
current rules of this Member State to grant provisional benefits
in the event of dispute of competences.435
This also safeguards
that not so many cases of recovery of overpayments will occur
(which is often the case today when the final competence
differs from the provisional competence and thus overpayments
have to be recovered (Article 6(5) and Title IV, Chapter III of
Regulation (EC) No 987/2009) and which may entail
administrative burden.
However, on the other hand, it is anticipated that this option
may result in more cases of the need to calculate a differential
supplement than under the current rules (taking into account the
incentives for mobility from lower wage to higher wage
destinations of employment). Furthermore, this option may
increase the importance of verifying the child's place of
residence (currently only required in cases of overlapping
benefits on the same basis – estimated as being 64% of cases436
)
for both national authorities and citizens.
437
On the basis of the interviews conducted with national
administrations, it is estimated that the administrative tasks as
primarily competent will increase by around one man-hour per
case (50%).438
This will translate into an increase in the cost per
case ranging from €0.6 in Romania to €58.3 in Denmark, and
an increase of the total cost ranging from €5,600 (+13%) in
Romania to €642,700 (+37%) in Germany439
. Looking at
administrative tasks as secondarily competent, these will also
increase by around 0.8 man-hours per case (47%), mainly due
to the increase in the time devoted to the calculation of benefits,
as it becomes more complex440
. This will translate into an
increase in the cost per case ranging from approximately €0.6 in
Poland to €50 in Denmark, and in an approximate increase of
the total cost ranging from €3,500 (+81%) in Romania to
€214,800 (+12%) in Germany441
.
Risk of fraud and abuse + The Member State of residence will check the family in the
same way as any other family resident there. Usually checking
and evaluating the situation is easier in the same Member State
than abroad and also if all residents are subject to the same
checking procedures. Problems experienced under the baseline
scenario, where sometimes the work of a parent in another
434
It is acknowledged that there is some tension between the data indicated here and the assessment outlined below . This divergence is a
consequence of the qualitative nature of the assessment and the fact the assessment was based on the model of a two parent family in
which only one parent was economically active rather than blended results involving blended results from a wider range of families
including with two economically active parents.
435
Article 60(4) of Regulation (EC) No 987/2009.
436
Estimation based on EU-28 averages for labour market participation in two adult households with at least one child under 14
(LFS 2014).
437
During the consultation of the Administrative Commission in June 2015, five Member States raised concerns that this may increase
administrative burden (Cyprus, Germany, Netherlands, Romania and Slovakia). The FreSsco legal experts have also noted potential
challenges with determining habitual residence of children Annex VI, p32-33.
438
Table 3-1, Annex XVI.
439
Table 3-2, Annex XVI.
440
Table 3-5, Annex XVI.
441
Table 3-6, Annex XVI.
EN 153 EN
Member State has not been reported would no longer be an
issue, as the Member State of residence is the competent one in
all cases.
Fair burden sharing between
Member States
+/- This option shifts the burden in cases of only one working
parent abroad from the Member State of work to the Member
State of residence. In case of a residence-based scheme this
could be regarded as fairer, as already without the Regulation
all residents would be entitled to the benefits. This would
change if the State of residence has a contributory scheme and,
has to grant also benefits for persons not contributing to the
scheme. This could result in a certain disruption of the
economic logic that the Member State receiving the
contributions and taxes pays the benefit.
Mobility
0
As this option envisages a redistribution of competence for
funding between Member States, with no change in the benefits
paid to the recipients, it is not envisaged that it would entail any
mobility change442
.
Coherence with General, Specific
and wider EU Objectives
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of
citizens' rights while at the same time
ensuring legal clarity, a fair and
equitable distribution of the financial
burden among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
• Ensure a clear and transparent
link between the Member State
issuing family benefits and the
recipients of those benefits
• Remove barriers or
disincentives to parents'
ongoing participation in the
labour market
• Ensure family benefits are
processed as efficiently as
possible
+ Option 2 introduces legal clarity and simplicity for families and
public administrations by establishing a closer alignment
between the EU rules and national legislation which generally
require residence of a child as a condition of entitlement for
family benefits. The rights of families are respected as they will
receive the same level of benefits as under the current rules.
The rules create a clear and transparent link between the
Member State issuing a benefit and the families in receipt of
such benefits while retaining the rights deriving from the
Member State of Employment. However, it may be regarded as
less effective in achieving the general objective of fair and
equitable distribution of financial burden between Member
States as the effect of this option is to redistribute financial
burden away from the Member State of economic activity
(which receives a mobile worker's tax and social security
contributions) towards the Member State of Residence. In
relation to cases where national administrations are not
currently required to investigate residence of the child (cases of
one economically active parent one economically inactive
parent) there may be a slight increase in administrative burden
which may in the short term contribute to delays for family
members. This option is neutral in relation to wider EU
objectives including the Fresh Start to address the challenges of
work-life balance faced by working families.
7.5.6 Impacts of Horizontal Policy Option a: Different coordination rules for salary-related
child-raising allowances: mandatory derogation from anti-overlapping rules
Horizontal Option a: Different coordination rules for salary-related child-raising allowances: mandatory
derogation from anti-overlapping rules
Social impacts
442
Page 25, Annex XVIII.
EN 154 EN
Clarification ++ A parent claiming a child-raising allowance will always be
entitled to the full level of benefit permitted under national
legislation regardless of whether the State where he or she
works has primary or secondary competence for family
benefits. The question of who has entitlement to claim such
benefits is also clarified as it becomes clear there are no derived
rights reducing the number of disputes over this issue. This
provides greater clarity for parents and national authorities
compared with the baseline.
However, some parents may find the application of anti-
overlapping rules to the maximum duration of child-raising
allowances difficult to understand
Simplification + This option is simpler to administer for both parents and public
authorities compared with the baseline scenario as such benefits
are no longer subject to the anti-accumulation rules so the level
of benefit to be awarded will be aligned with calculations under
national legislation. In addition, the prohibition of claims on the
basis of a derived right will means benefits will be calculated
on the basis of actual salaries or professional income earned in
the competent Member State. It will no longer necessary to
undergo a hypothetical assessment of potential earnings in that
State.
Protection of rights +/- Under this option, salary-related child raising allowances would
be exempt from the anti-accumulation rules, thereby having the
advantage that workers would not experience deductions from
entitlement under the applicable legislation of the Member State
with secondary competence even if the other parent was
receiving similar benefits from the Member State with primary
competence. In such cases, parents may receive more in
benefits than under the current rules in a manner that removes
existing disincentives from sharing child-raising
responsibilities.
However, this option also provides that salary-related child
raising allowances would be treated as individual and personal
rights which may only be claimed by the parent who is subject
to the applicable legislation in question (not by other members
of their family). This may have the consequence that some
parents currently in receipt of such a benefit as a derived right
would no longer have entitlement (although would retain
entitlement to any flat-rate child-raising allowances or flat-rate
components). The maximum adverse impact could be up to
40% of the number of entitled persons.443
However, as only a
limited number of Member States are currently complying with
the requirement to recognise derived rights to employment-
related family benefits444
the adverse effects are likely to be
limited in practice.
443
Table 27 Annex XIII – based on a case-study, the number of incoming-cross border workers who live in a household with one other adult
and at least one child aged less than 15.
444
Only four Member States who have child-raising allowances recognise claims based on derived rights Annex XXV, p14.
EN 155 EN
Financial impact -- Member States with secondary competence may be required to
pay more than under the current rules because they will be
required to pay a salary-related child-raising allowance in full
as they will no longer be entitled to take such benefits into
account when calculating the differential supplement.
In the absence of comprehensive information on exported child-
raising benefits from the Member States445
, analysis has been
conducted using ESSPROS data for Member State expenditure
on parental benefits for children aged 0-3. This analysis
suggests that this option will lead to an average increase in
expenditure of 62% for those Member States who provide a
child-raising benefit calculated wholly or partially with
reference to salary or professional income exporting benefits to
the EU-28 (increasing to an average increase of 81% if only the
Member States of residence which have an salary-related child-
raising benefit are selected).446
The extent of the increase may
range from 37% (46%) in Slovenia to 210% (432%) in
Sweden.447
It should be noted that this analysis is based on the
assumption all Member States concerned are fully complying
with the EU social security rules and is made with reference to
ESSPROS figures for parental benefits awarded for children
aged 0-3 regardless of whether or not the benefit is indexed to
salary or professional income or is classified as a family benefit
for the purposes of the EU social security rules. The estimations
must be construed in light of these limitations.
More widely it may also be anticipated that excluding salary-
related child-raising allowances from the anti-accumulation
rules will increase the level of export for Member States with
flat-rate child when acting as the secondary competent Member
State. Using the same model of calculation the increase in
expenditure compared to the status quo in this case is on
average 58% (increasing to an average increase of 84% if only
the Member States of residence which have a salary-related,
flat-rate or mixed type child-raising benefit are selected).448
A case study on export by Germany as secondary competent
Member State of its parental allowance (Elterngeld) to a family
of two working parents with two children residing other
Member States that also have a salary-related child-raising
allowance assuming that such a family is in receipt of the
average personal net income for that Member State (one at
100% and the other at 67% of the average wage) anticipates the
increase in Germany's expenditure would range from 24% to
Poland (increase from €383 to €476) to more than 250% in the
445
Only four Member States were able to provide a detailed breakdown of levels of export per benefit type including data on child raising
allowances (Germany, Latvia, Hungary and Romania).
446
Annex XIII Table 24a Average calculated with reference to ESSPROS figures for 13 Member States (Bulgaria, Croatia, Estonia, Finland,
Germany, Greece, Hungary, Latvia, Lithuania, Romania, Slovenia, Spain and Sweden . No data was available for Austria, Denmark Italy or
Portugal). This analysis assumes that pursuant to the judgment of the CJEU in Wiering446
that a differential supplement should only be
calculated by reference to family benefits "of the same kind" that the secondary competent Member State will only make reference to other
income-replacement benefits when calculating entitlement to another income-replacement benefit.
447
Annex XIII Table 24a This analysis is based on the assumption all Member States concerned are fully complying with the EU social
security rules and is made with reference to ESSPROS figures for parental benefits awarded for children aged 0-3 regardless of whether or
not the benefit is indexed to salary or professional income . The estimations must be construed in light of these limitations.
448
Table 24b Annex XIII Average calculated with reference to ESSPROS figures for 19 Member States/EEA States (Belgium, Bulgaria,
Croatia, Czech Republic, Estonia, Finland, France, Germany, Greece, Hungary, Latvia, Lithuania, Luxembourg, Norway, Poland, Romania,
Slovenia, Spain and Sweden. No data was available for Austria, Denmark Italy or Portugal).
EN 156 EN
case of Austria (increase from €405 to €1428 paid to the
family).449
It is also to be envisaged that some Member States may make
savings as a result of this option as they will no longer be
obliged to pay salary-related child-raising allowances on the
basis of a derived rights, although once again as a number of
Member States do not comply with the requirement to grant
salary-related benefits on the basis of derived rights the
anticipated savings in this regard are limited.
Impacts on fundamental rights +/- This option offers superior protection in relation to the rights of
the family (Article 33(2)) to reconcile family and professional
life by reducing potential disincentives to exercising the right to
parental leave. Exempting salary-related child raising
allowances from the anti-accumulation rules ensures the right to
equal treatment in respect of such benefits as it guarantees
mobile citizens working in the Member State of secondary
competence would receive a benefit calculated in the same as
national workers without deductions and in a manner that
promotes the reconciliation of family and professional life.
Likewise the right to property (Article 17) is also respected in
relation to these workers. While it is noted that some parents
may lose entitlement to salary-related child raising allowances
currently awarded as a derived right the rights of the family as a
whole are protected through the preservation of entitlement for
the parent with primary entitlement.
Other impacts
Regulatory Costs +/- In general, this option is likely to reduce administrative burden
for national administrations as Member States will be entitled to
award salary-related child-raising allowances to EU mobile
citizens subject to the applicable legislation in accordance with
the normal rules under national legislation. There will no longer
be a requirement to include such benefits (which can be subject
to fluctuation according to earnings) within the calculation of
the differential supplement nor would there be a need to apply a
hypothetical calculation in relation to a parent who does not
have relevant income or earnings within the competent Member
State but who asserts a derived right to benefits.
However, it may be anticipated that there will be some increase
in administrative tasks for Member States who seek to verify
whether or not a benefit available in another Member State
should be considered a salary-related child-raising allowance or
who wish to exchange information about entitlement to or
claims for salary-related child-raising allowance for the other
parent in another Member State for the purposes of applying
anti-accumulation principles to the duration of a benefit. This
will also entail additional administrative tasks for citizens.
As this option was developed after commissioning the analysis
of regulatory costs at the time of drafting this report it has not
possible to draw direct comparisons with the baseline scenario
in the same manner as with Options 1a, 1b and 2.
449
Table 25 Annex XIII.
EN 157 EN
Risk of fraud and abuse + Removal of derived rights is likely to reduce the risk of fraud
and abuse as Member States will be able to assess and verify
entitlement to salary-related child raising allowances according
to their national legislation and normal procedures. However,
there will be a need to establish clear policies and procedures to
ensure exchanges of information to assess the other parent's
entitlement to a benefit in order to apply anti-accumulation
principles to the duration of a benefit.
Fair burden sharing between
Member States
+/- This option shifts the burden in cases child-raising allowances
to the Member State of work as benefits will be required to be
paid in full and for the maximum duration permitted under
national legislation (except in cases where there is simultaneous
entitlement in another Member State meaning increases to
duration may be limited). However, such a change in burden
may be considered consistent with the economic logic that
assigns the obligation to pay the family benefits to the Member
State receiving the contributions and taxes.
Mobility + This option may have a slight impact on mobility by removing
potential disincentives for parents to move to a different
Member State because of the risks that a change in primary
competence may have a negative impact on the level of their
salary-related child-raising allowances.450
As noted above there
are a range of variables that may influence a family's decision
about whether or not to relocate and this prediction needs to be
viewed accordingly.
As this option was developed after commissioning the analysis
of regulatory costs at the time of drafting this report it has not
possible to draw direct comparisons with the status quo in the
same manner as with Options 1a, 1b and 2.
Coherence with General, Specific
and wider EU Objectives
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of
citizens' rights while at the same time
ensuring legal clarity, a fair and
equitable distribution of the financial
burden among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
• Ensure a clear and transparent
link between the Member State
issuing family benefits and the
recipients of those benefits
• Remove barriers or
disincentives to parents'
ongoing participation in the
labour market
• Ensure family benefits are
processed as efficiently as
possible
++ The horizontal options provide greater protection for mobile EU
parents in the field of child-raising allowances (calculated by
reference to salary/professional income). In general, exempting
these benefits from the application of derived rights and the
anti-accumulation rules is likely to remove disincentives for
parents to share child-raising responsibilities increasing
ongoing labour market participation. Other potential
disadvantages for EU transnational families concerning
duration of a right to benefit are also mitigated (with safeguards
to protect over-compensation of families). This option is also
likely to decrease regulatory costs for public authorities in
administering these benefits by removing the need to calculate
the differential supplement and calculate claims on the basis of
derived rights increasing administrative simplicity and reducing
delays for families in processing claims. By preventing claims
on the basis of derived rights to be made in respect of family
benefits intended to replace an individual worker's income
during periods of child-raising the aim of achieving a clear and
transparent link between the Member State issuing the benefit
and the recipient is achieved. Although there may be an
increase in the economic costs for secondary competent
450
It is to be noted that the Nordic Council of Ministers identified the inconsistent treatment of parental benefits in the Nordic countries
and the application of the anti-accumulation rules to such benefits as a potential cross-border barrier Nordic Council of Ministers, 2012
Freedom of Movement within the Social- and Labour market Area in the Nordic Countries: Summary of obstacles and potential solutions.
EN 158 EN
Member States, such an increase is aligned to costs that would
otherwise be incurred under national legislation. This option
supports the wider EU objectives including in relation to the
Fresh Start on maternity and parental leave.
7.5.7 Impacts of Horizontal Policy Option b: Different coordination rules for all child-
raising allowances: mandatory derogation from anti-overlapping rules
Horizontal Option b: Different coordination rules for all child-raising allowances (salary-related and flat
rate): mandatory derogation from anti-overlapping rules
Social impacts
Clarification ++ The impact would be the same as horizontal option a, although
the advantages would be greater as this would apply to all
child-raising allowances (both salary-related and flat rate)
Simplification + The impact would be the same as horizontal option a, although
the advantages would be greater as this would apply to all
child-raising allowances.
Protection of rights +/- The impact would be the same as horizontal option a, although
the costs and benefits would be greater as this would apply to
all child-raising allowances.
Financial impact -- The financial impact is similar to horizontal option a, however,
the number of Member States affected and the range of
economic costs is likely to be greater as a result of the extension
to all child-raising allowances.
Based on ESSPROS data for Member State expenditure on
parental benefits it may be anticipated that this option will lead
to an average increase in expenditure for secondary competent
Member States with child-raising allowances of 58% exporting
benefits to the EU-28 (increasing to an average increase of 84%
if only the Member States of residence which have an salary-
related, flat rate or mixed child-raising benefit are selected).451
The extent of the increase may range from 32% (43%) in
Luxembourg to 210% (474%) in Sweden.452
Impacts on fundamental rights +/- The impact would be the same as horizontal option a, although
the impact would be greater as this would apply to all child-
raising allowances
Other impacts
Regulatory Costs +/- The impact would be the same as horizontal option a, although
the anticipated reduction in regulatory burden would be greater
451
Annex XIII Table 24b Average calculated with reference to ESSPROS figures for 19 Member States/EEA States (Belgium, Bulgaria,
Croatia, Czech Republic, Estonia, Finland, France, Germany, Greece, Hungary, Latvia, Lithuania, Luxembourg, Norway, Poland,
Romania, Slovenia, Spain and Sweden . No data was available for Austria, Denmark Italy or Portugal).
452
Annex XIII Table 24b This analysis is based on the assumption all Member States concerned are fully complying with the EU social
security rules and is made with reference to ESSPROS figures for parental benefits awarded for children aged 0-3 regardless of whether or
not the benefit is indexed to salary or professional income . The estimations must be construed in light of these limitations.
EN 159 EN
as this would apply to all child-raising allowances (and
conversely the scope of additional administrative tasks to verify
duration of leave taken in another Member State could increase
for both national authorities and citizens)
Risk of fraud and abuse + The impact would be the same as horizontal option a, although
the advantages would be greater as this would apply to all
child-raising allowances
Fair burden sharing between
Member States
+/- The impact would be the same as horizontal option a, although
the benefits would be greater as this would apply to all child-
raising allowances.
Mobility + The impact is likely to be similar to horizontal option a
Coherence with General, Specific
and wider EU Objectives
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of
citizens' rights while at the same time
ensuring legal clarity, a fair and
equitable distribution of the financial
burden among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
• Ensure a clear and transparent
link between the Member State
issuing family benefits and the
recipients of those benefits
• Remove barriers or
disincentives to parents'
ongoing participation in the
labour market
• Ensure family benefits are
processed as efficiently as
possible
++ For the same reasons as horizontal option a this option may be
considered effective at achieving the General and Specific EU
objectives and also the wider EU objectives, the Fresh Start to
address the challenges of work-life balance faced by working
families. Further, as this horizontal option encapsulates both
salary-related and flat rate child-raising allowances it is slightly
more effective at achieving these aims.
7.5.8 Impacts of Horizontal Policy Option c: Different coordination rules for all child-
raising allowances: optional derogation from anti-overlapping rules
Horizontal Option c: Different coordination rules for all child-raising allowances (salary-related and flat
rate): optional derogation from anti-overlapping rules
Social impacts
Clarification +/- The impact would be the similar to horizontal option b,
although the effects would be mixed depending on whether a
member state chooses to disapply the anti-accumulation rules or
not. Some citizens may find this confusing.
Simplification + The impact would be the similar to horizontal option b,
although the effects would be mixed depending on whether a
Member State chooses to disapply the anti-accumulation rules
or not. Some citizens may find this confusing.
EN 160 EN
Protection of rights +/- The impact would be the similar to horizontal option b,
although the effects would be mixed depending on whether a
member state chooses to disapply the anti-accumulation rules or
not. In addition, as this option does not envisage a measure to
ensure that where only one parent in a family is subject to the
legislation of a Member State, that parent shall be able to claim
the allowances for the maximum duration, some mobile
families may face disadvantages in national systems which are
designed to incentivise parents to share child-raising allowances
by limiting the duration that an individual parent can claim a
benefit.
Financial impact -- The maximum impact would be the similar to horizontal option
b, although it may be anticipated that not all Member States
will choose to derogate from the anti-overlapping rules. In cases
where there is no derogation there will be no change from the
baseline.
Impacts on fundamental rights +/- The impact would be the similar to horizontal option b,
although the effects would be mixed depending on whether a
Member State chooses to disapply the anti-accumulation rules
or not
Other impacts
Regulatory Costs +/- The impact would be the similar to horizontal option b,
although the effects would be mixed depending on whether a
member state chooses to disapply the anti-accumulation rules or
not. However, no additional administrative tasks are envisaged
under this option as competent authorities will not be required
to exchange information about the duration of claim for child-
raising allowances taken by a parent in another Member State.
This will also not entail any additional administrative tasks for
citizens.
Risk of fraud and abuse + The impact would be the similar to horizontal option b.
Fair burden sharing between
Member States
+/- The maximum impact would be the similar to horizontal option
b, although it may be anticipated that not all Member States
will choose to derogate from the anti-overlapping rules.
Mobility 0 No material impact on mobility is anticipated as a result of this
measure.
Coherence with General, Specific
and wider EU Objectives
Continue the modernisation of the EU
Social Security Coordination Rules by
further facilitating the exercise of
citizens' rights while at the same time
ensuring legal clarity, a fair and
equitable distribution of the financial
burden among the institutions of the
Member States involved and
administrative simplicity and
enforceability of the rules.
• Ensure a clear and transparent
link between the Member State
issuing family benefits and the
+/- This option has the potential to be just as effective at achieving
the General and Specific EU objectives and also the wider EU
objectives, the Fresh Start to address the challenges of work-life
balance faced by working families as horizontal option b with
slightly increased simplicity as it does not entail any additional
administrative tasks, meaning it is even more simple to apply.
However, as the derogation from the anti-accumulation rules is
optional rather than mandatory in practice it is likely to be less
effective at achieving the goals and the problems identified
concerning disincentives to ongoing labour market participation
may continue to subsist.
EN 161 EN
recipients of those benefits
• Remove barriers or
disincentives to parents'
ongoing participation in the
labour market
• Ensure family benefits are
processed as efficiently as
possible
7.5.9 Conclusions
Based on the above tables, the following preliminary conclusions can be drawn.
The baseline scenario, from a merely administrative point of view, is the easiest option to implement
and it has the support of a large number of stakeholders. It also offers the same or superior levels of
protection to workers and their families as the other options. This option maintains a clear and
transparent link between the Member State issuing a benefit and the place where a mobile worker
pays taxes and social security contributions. It is anticipated in light of the launch of EESSI and
implementation of Decision F2 that efficiency and effectiveness of processing family benefit claims
will also be increased.
Option 1a and 1b may be the most effective options in achieving a greater correlation between family
benefits and the cost of living, however, they do not fully achieve the aim of maintaining a clear and
transparent link between the Member State issuing a benefit and the families in receipt of such
benefits as mobile workers as the transparency of the award of family benefits will be reduced
compared to the baseline particularly in relation to employment-related benefits. These options may
increase rather than reduce disincentives to parents' ongoing participation in the labour market during
periods of child-raising leave in the field of child-raising allowances related to salary or professional
income as such benefits will not only be subject to the anti-accumulation rules but also subject to
reductions based on place of residence of the child. They may also increase delays in processing
family benefits. Workers and their families will generally be provided with an inferior level of
protection compared to the status quo (in particular in relation to option 1b) as workers will receive
lower level of family benefits than nationals notwithstanding the fact they pay the same level of tax
and social security contributions. Therefore not withstanding the potential cost savings (particularly in
the case of option 1b) these considerations these options are not considered the most effective at
achieving the objectives and therefore are not the most efficient options.
Option 2 introduces legal clarity and simplicity for families and public administrations by establishing
a closer alignment between the EU rules and national legislation which generally require residence of
a child as a condition of entitlement for family benefits. However, it may be regarded as less effective
in achieving the general objective of fair and equitable distribution of financial burden between
Member States as the effect of this option is to redistribute financial burden away from the Member
State of economic activity (which receives a mobile worker's tax and social security contributions)
towards the Member State of Residence. The rights of families are respected as they will receive the
same level of benefits as under the current rules although there may be a moderate budgetary impact
for those Member States which currently have secondary competence for family benefits in particular
those that do not currently have to pay the differential supplement because the level of family benefits
in the primary competent Member State is higher. In cases where there is only one economically
active parent, the increase in economic burden for the Member State of residence of the child and
away from the Member State of employment is contrary to the relative distribution of taxes and social
security paid by the family to these Member States. Therefore although in many respects this is an
effective option, in light of the anticipated increase in costs for the Member State of residence of the
child it is not the most efficient.
Horizontal option
EN 162 EN
The horizontal options provide greater protection for mobile EU parents in the field of child-raising
allowances (either calculated by reference to salary/professional income or all types of such benefit),
and by exempting these benefits from the application of derived rights and the anti-accumulation rules
will also decrease regulatory costs for public authorities in administering these benefits and reduce
delays for families in processing claims. By preventing claims on the basis of derived rights to be
made in respect of family benefits intended to replace an individual worker's income during periods of
child-raising the aim of achieving a clear and transparent link between the Member State issuing the
benefit and the recipient is achieved. These options will entail a significant economic impact for
Member States as by disapplying the anti-accumulation rules, Member States with secondary
competence will experience an increase in expenditure of on average increase of 62-81% in relation to
Horizontal Option a and 58-84% for Horizontal Option b. This financial impact may be mitigated by
allowing Member States to derogate from the anti-overlapping rules on an optional basis although this
option is less effective at reducing disincentives to labour market participation. There is therefore a
trade-off between cost and effectiveness. The risk of a loss of protection for parents currently relying
on derived rights to such benefits is assessed as low due to the current low levels of compliance with
the existing EU law requirement to award family benefits calculated with reference to salary or
professional income on the basis of a derived right.
EN 163 EN
8. Overall Conclusion
The key policy objective of this initiative is to continue the modernisation of the EU Social
Security Coordination Rules by further facilitating the exercise of citizens' rights while at the
same time ensuring legal clarity, a fair and equitable distribution of the financial burden
among the institutions of the Member States involved and administrative simplicity and
enforceability of the rules.
This initiative serves to facilitate the exercise of the right to free movement by ensuring the
social security coordination is effective and efficient and therefore does not act as a deterrent
to free movement. It is in the interests of all parties to design co-ordination rules that allow
full exercise of rights of citizens whilst ensuring coordination requirements for both citizens
and Member States are clear and transparent and thereby easy to apply and enforce.
Achieving greater clarity over the social security coordination system is an important step to
face the challenges and controversies that exist over intra-EU mobility and to address
demographic challenges ahead of us.
Achieving a system of social security coordination that responds to the social and economic
reality in Member States has been one of the central drivers for the Commission to continue
the modernisation process of social security coordination that started more than a decade ago.
It is important the rules are fair (in particular in relation to the relative balance of
responsibility between Member States who receive or have received social security
contributions and the obligation to pay benefits) and that perceptions of unfairness are
properly investigated so that they can be addressed where such views are well grounded but
challenged where a perception is misplaced. Further the rules should be efficient in terms of
cost, administrative burden and risk of fraud or administrative error.
Finally the rules should be effective in relation to meeting the overall goals of coordination in
particular safeguarding the continuity of social security protection as citizens move from
from one Member State to another.
This report has carefully reviewed the existing rules, taking into account the views of
stakeholders to identify actions that may be necessary to achieve this overall objective. This
impact assessment report has considered the impact of possible improvements to the rules in
four distinct areas:
• Long-term care benefits
• Unemployment benefits
• Access to social benefits for economically inactive mobile EU citizens
• Family benefits
EN 164 EN
In each area, the Report has identified a number of policy options to address the problems
identified outlined below against the baseline (preferred options identified in yellow).
Overview of Options Per Area
Long Term Care Benefits
Baseline: No specific provisions
for long-term care benefits.
Competent Member State
provides long-term benefits in
cash and reimburses the cost
of benefits in kind provided by
the Member State of residence
Option 1: The competent Member
State provides long-term care
benefits in cash and reimburses the
cost of benefits in kind provided by
the Member State of residence.
New definition of LTC benefits to
facilitate coordination√
Option 2a : Member State of
residence provides all long-
term care benefits (in cash
and in kind) with
reimbursement by the
competent State, at the level
of the state of residence
without supplement by the
competent Member State
Option 2b: As option 2a, but with
supplement by competent Member
State
Unemployment Benefits
Aggregation of
Periods
Baseline: No
minimum
insurance period
to qualify for
aggregation.
Divergent
approach between
MS.
Option 1:
formalisati
on of one-
day rule
Option 2a :
introduction of
minimum insurance
requirement of 1
month
Option 2b:
introduction of
minimum insurance
requirement of 3
months√
Option 3a :
taking account of
previous
earnings having
been insured
less than 1
month
Option 3b: taking
account of previous
earnings having
been insured less
than 3 months
Export of
Unemployment
Benefits
Baseline: Export
for 3 months with
the option to
extend to 6
months.
Option 1: Extend period of export
of UB to minimum 6 months and
possibility of further extension √
Option 2: Extend period of export of UB for duration of
entitlement
Rules for cross-
border workers
Baseline: frontier
workers receive
UBs in Member
State of residence.
All other wholly
unemployed
persons receive
UBs from Member
State of last
activity.
Option 1:
frontier
worker
chooses
where to
claim
Option 2a: state of
last activity pays UB,
and frontier worker
registers there
Option 2b:
state of last
activity pays
UB, frontier
worker can
choose where
to register
Option 3a : state of
last activity only
pays UB after
sufficient (at least 12
months) work
history and frontier
worker registers
there√
Option 3b: state of
last activity only
pays UB after
sufficient work
history and frontier
worker chooses
where to register
Access for economically inactive persons and jobseekers to social benefits
Baseline: Economically
inactive mobile
citizens have no right
to benefits for first 3
months. After 3
months only if
(i)Sufficient
resources(ii)
Comprehensive
sickness coverage
Option 1a Dynamic
reference to
Directive
2004/38/EC in equal
treatment
provisions √
Option 1b Amendment of
Article 4 of Regulation (EC)
No 883/2004 to make a
dynamic reference to the
limitations to equal
treatment in Directive
2004/38/EC and to extend
these limitations by
analogy to other tax-
financed benefits
Option 1c Specific
Reference to Directive
2004/38/EC (SNCBs)
Option 2:
Removing SNCBs
providing
subsistence from
Regulation (EC)
No 883/2004
Option 3:
Administrative
guidance on
interpretation of
Regulation (EC) No
883/2004
Family Benefits
Export of Family
Benefits
Baseline: Family
benefits payable in full
by Member State of
Work including for
children living in
another Member State.
Option 1a: Adjustment to
standards of living:
upwards and downwards
Option 1b: Adjustment to
standards of living: only
downwards
Option 2: Member State of
residence has primary competence
EN 165 EN
Horizontal
Option: Child-
raising
allowances
Baseline: Family
Members have a
derived right to family
benefits. Anti-
overlapping rules apply.
Horizontal Option a:
individual rights for
salary-related child-
raising allowances:
mandatory derogation
from anti-overlapping
rules
Horizontal Option b:
Individual rights for all
child-raising allowances:
mandatory derogation
from anti-overlapping rules
Horizontal Option c: individual
rights for all child-raising
allowances: optional derogation
from anti-overlapping rules
√
Each of these options has been assessed in relation to their social, economic and regulatory
impact as well as their effectiveness and efficiency in meeting the general and specific policy
objectives. An overview of the impact in relation to the preferred options is set out below:
Table - overview of impact of preferred options (impacts grouped per objective)
General Objective Facilitate the exercise
of citizens' rights
Ensure legal clarity and
transparency for
citizens, institutions
and other stakeholders
on coordination rules
applicable to them
Ensure a fair and
equitable distribution of
the financial burden
between Member State
Ensure administrative
simplicity and
enforceability of the rules
Relevant Impact -Protection of rights -Clarification -Financial impact
-Fair burden sharing
-Simplification
-Regulatory Costs
-Risk of fraud and abuse
Long-term care
benefits
+ ++ 0 +
The competent
Member State
provides long-term
care benefits in cash
and reimburses the
cost of benefits in kind
provided by the
Member State of
residence
The inclusion of a
common definition for
long-term care benefits
and uniform criteria for
classifying these
benefits will bring
clarity and consistency
to the system.
Receipt of benefits will
remain subject to
national conditions of
entitlement and so a
move to another
Member State may be
more or less
advantageous
depending on the
allocation of benefits in
kind and cash in the
Member States
concerned.
This option takes into
account the specific
characteristics of long-
term care benefits,
distinguishing them
from sickness benefits
and other branches of
social security, while
maintaining the current
method of
coordination.
No significant economic
impact in comparison to
the baseline is foreseen
as the same rules will
continue to apply.
No fundamental changes
in burden sharing, but
some benefits not
currently coordinated as
Long-Term Care Benefits
could become subject to
the rules. This may lead to
some additional cases of
export, but also
contribute to greater
efficiencies by avoiding
duplication in the
allocation of benefits.
The option will make it
easier for citizens to
identify and understand the
application of the
coordination provisions on
national long-term care
benefits.
Information obligations for
national administrations
will remain the same as
under the baseline
scenario.
The option facilitates the
comparison of benefits in
kind and in cash and could
lead to fewer cases of
duplication and also fewer
disputes between
institutions concerning
reimbursement.
Unemployment
benefits: Aggregation
+ + ++ ++
introduction of
minimum insurance
requirement of 3
months
No substantive loss of
rights. Approximately
10,082 mobile EU
workers will receive
export of
Improved clarity of the
EU rules on
aggregation, elminating
divergent
interpretations
Slight increase of
expenditure for the
Member State of previous
employment, but
corresponding decrease
A uniform interpretation of
the rules on aggregation
will contribute to
simplifying the aggregation
procedure.
EN 166 EN
unemployment benefits
from the Member State
of previous activity
instead of the last State
of activity.
between Member
States.
of expenditure on
unemployment benefits
for Member States of last
activity. Overall decrease
of expenditure amounting
to approximately € 29
million is expected.
A clearer link between the
award of benefits and
contributions paid
diminishes the risk of
random results.
Overall regulatory costs will
remain unchanged.
Unemployment
benefits: Export
+ +
+
0
Extend period of
export of
Unemployment
Benefits to minimum
period of 6 months
and possibility of
further extension for
whole period of
entitlement.
About 24,000 persons
will have the possibility
to retain their rights to
unemployment in case
of job search in another
Member State for a
period of six instead of
three months.
Clearer and uniform
standards for all
persons wishing to take
their unemployment
benefits with them
when looking for a job
in another Member
State.
The extension of the
export period is not
expected to have any
significant financial
impact on the Member
States, either at individual
or aggregate level, as it
only maintains an existing
right to unemployment
benefits in case of job
search in another
Member State.
Extended export reduces
the risk that a jobseeker
has to rely on welfare
benefits from the host
Member State.
Clear and uniform rules
regarding the expot period
will simplify the procedure
for citizens and national
administrations.
The introduction of a
reinforced cooperation
mechanism will reduce the
risk of fraud and abuse by
ensuring that the jobseeker
remains subject to
supervision in the host
State and so cases of non-
compliance with activation
measures may be detected.
Unemployment
benefits: Frontier
Workers
+ + +/- ++
State of last activity
only pays
Unemployment
Benefits after
sufficient (at least 12
months) work history
and frontier worker
registers there. The
current
reimbursement
procedure is
abolished.
This option will result in
greater consistency in
the treatment of
frontier and other cross-
border workers.
It will also contribute
towards an even
stronger link between
benefits and
contributions, creating
better chances for the
worker to reintegrate
into labour market.
Clear and uniform rules
for frontier and other
cross-border workers
Across the EU-28, there
will be an increase of 6%
of the overall expenses
for unemployment
benefits from € 416
million to € 442 million.
This is because frontier
workers tend to work in
countries with (on the
average) higher wages
and higher benefits.
It contributes to a shift in
burden sharing as the
cost of the
unemployment benefits
will be reallocated in a
way that is proportionate
to level of contributions
or income tax received.
Clear and uniform rules for
frontier and other cross-
border workers will simplify
the administrative
procedure and thus
facilitate enforcement of
existing rules for citizens.
Additional information
exchanges are needed
between the Member State
of last activity and the State
of residence as regards the
reference period of 12
months. However, in
combination with the
annulment of the
reimbursement procedure,
this option has an overall
positive impact on
administrative burden (-
50%).
Access for
economically inactive
persons and
jobseekers to social
benefits
+ + 0
+
Dynamic reference to
Directive 2004/38/EC
in equal treatment
provisions &
Commission guidance
Greater uniformity in
the application of rules
by Member States and
the ability of citizens to
enforce their rights
The codification of
existing case-law
combined with clear
guidance would clarify
the rights of EU mobile
No direct impact on
Member States' budgets
as this measure simply
reflects codification of the
case-law of the Court.
It will be more
straightforward to verify
rights and obligations.
Costs related to lack of
legal certainty for both
EN 167 EN
thanks to more clarity in
the application of the
CJEU case law, leading
to greater legal
certainty.
citizens and would
enable citizens to make
an informed choice
when exercising their
rights to move to
another Member State.
No direct impact on the
distribution of financial
burden between Member
States.
citizens and public
authorities could be
reduced
Greater visibility to the
existing safeguards in EU
law against "welfare
tourism" may act as a
deterrent to such conduct.
Export of Family
Benefits
0 0 0 0
Baseline: Family
benefits payable in full
by Member State of
Work including for
children living in
another Member
State.
N/A N/A N/A N/A
Horizontal Option:
Child-Raising
Allowances
+/- +/- - +
Different coordination
rues for all child-
raising allowances:
optional derogation
from anti-overlapping
rules
Where Member States
choose to disapply the
anti-accumulation rules,
workers will not
experience deductions
to child-raising benefits
facilitating the right for
both parents to share
child-raising
responsibilities.
However, this
advantage is limited as
not all Member States
will apply the
derogation
A limited number of
family members will
lose entitlement on the
basis of derived rights.
In cases where a
Member State applies
the derogation,
entitlement will be
aligned to national law,
making it clearer for
parents to understand.
However, this
advantage is limited as
not all Member States
will apply the
derogation.
Doubts about who has
entitlement to claim
such benefits are
resolved reducing the
number of disputes
over derived rights.
The maximum financial
impact would be an
average increase in
expenditure on exported
child-raising benefits for
secondary competent
Member States of 84% (in
practice this is expected
to be more limited as not
all Member States will
apply the derogation).
Where applied, there
would be a shift in the
burden to the Member
State of work as child-
raising allowances
benefits will be paid in full
by the secondary
competent Member
State.
The removal of derived
rights is likely to reduce
administrative burden and
the risk of fraud and abuse
as Member States will be
able to assess and verify
entitlement to child raising
allowances according to
their national legislation
and normal procedures.
The likely economic impact on the individual budgets of Member States is set out on the table
opposite. As previously highlighted in the methodology, this analysis is limited to the actual social
security costs for Member States for providing social security benefits. It has not been possible to
analyse the corresponding receipt of 'contributions' (levies earmarked for social security purposes)
into national social security schemes before the contingency occurs. The impact on income taxation is
also left aside, as under Regulation (EC) No 883/2004 only contributions are coordinated, while
general taxation is not. Analysis has been based on administrative data provided by Member States, it
has to be underlined that not all Member States were able to provide data on the different benefits, nor
was all data complete. Therefore analysis is provided to the extent possible. No economic impact has
been provided where it is assumed that these measures are financially neutral as they either do not
confer or limit rights or obligations beyond those already existing under national legislation or EU
law.
EN 168 EN
Indicative budgetary impact of preferred options against baseline scenario, in € ,000, 2013/2014
Long-Term Care Benefits Unemployment Benefits Access to Social Benefits for
Economically Inactive Citizens and
Jobseekers
Family Benefits
The competent Member State
provides long-term care benefits in
cash and reimburses the cost of
benefits in kind provided by the
Member State of residence
Frontier workers: Provide for the
payment of unemployment benefits
by the Member State of last activity
only in situations where the cross-
border worker has worked there for
a sufficiently representative period
(12 months). The unemployed
person shall register with the
employment services in the State of
last activity
Export of Unemployment Benefits:
Extend the period for export of
unemployment benefits to a
minimum period of 6 months (or
end of entitlement period if shorter)
Aggregation of Unemployment
Benefits: Introduction of a
minimum period of insurance or
(self-)employment of three months
before aggregation of
unemployment benefits
The amendment of Article 4 of
Regulation (EC) No 883/2004 to
make reference to the limitations in
Directive 2004/38/EC. This could
be combined with guidance to
provide a more detailed explanation
of the rules.
Status quo with individual rights
for all-child raising allowances (flat
rate and salary-related): and
optional derogation from the anti-
overlapping rules)
Baseline
Annual
expenditure
(in € ,000)
Option
Annual
Expenditure
(in € ,000)
%
change
Baseline
Annual
expenditure
(in € ,000)
Option
Annual
Expenditure
(in € ,000)
%
change
Baseline
Annual
expenditure
(in € ,000)
Option
Annual
Expenditure
(in € ,000)
%
change
Baseline
Annual
expenditure
(in € ,000)
Option
Annual
Expenditure
(in € ,000)
%
change
Baseline
Annual
expenditure
(in € ,000)
Option
Annual
Expenditure
(in € ,000)
%
change
Baseline
Annual
expenditure
(in € ,000)
Option
Annual
Expenditure
(in € ,000)
%
change
BE 66,999 66,999 - 67,478 55,044 -18% n.a. n.a. n.a. 20,466 9,692 -53% n.a. n.a. n.a. 83,567 83,567 -
BG 1,576 1,576 - 236 480 103% n.a. n.a. n.a. 1,319 1,264 -4% n.a. n.a. n.a. n.a. n.a. n.a.
CZ 8,098 8,098 - 1,073 2,102 96% n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 951 951 -
DK 49,694 49,694 - 7,342 11,709 59% n.a. n.a. n.a. 316 117 -63% n.a. n.a. n.a. 24,384 24,384 -
DE 166,721 166,721 - 85,752 70,428 -18% n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 105,760 105,760 -
EE 1,278 1,278 - 309 159 -49% n.a. n.a. n.a. 64 29 -55% n.a. n.a. n.a. 573 573 -
IE 6,832 6,832 - 16,569 14,818 -11% n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11,577 11,577 -
EL 3,839 3,839 - 678 981 45% n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
ES 16,126 16,126 - 23,148 20,162 -13% n.a. n.a. n.a. 6,503 1,953 -70% n.a. n.a. n.a. 11 11 -
FR 41,317 41,317 - 69,820 36,868 -47% n.a. n.a. n.a. 52,962 19,735 -63% n.a. n.a. n.a. n.a. n.a. n.a.
HR 572 572 - 168 182 8% n.a. n.a. n.a. 8 7 -6% n.a. n.a. n.a. n.a. n.a. n.a.
IT 44,820 44,820 - 23,838 19,221 -19% n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
EN 169 EN
CY 711 711 - 513 479 -7% n.a. n.a. n.a. 4 4 0% n.a. n.a. n.a. n.a. n.a. n.a.
LV 485 485 - 24 66 175% n.a. n.a. n.a. 5 3 -42% n.a. n.a. n.a. 107 107 -
LT 1,121 1,121 - 15 59 293% n.a. n.a. n.a. 53 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
LU 129,420 129,420 - 29,501 86,596 194% n.a. n.a. n.a. 525 438 -17% n.a. n.a. n.a. 476,900 476,900 -
HU 1,293 1,293 - 520 640 23% n.a. n.a. n.a. 337 326 -3% n.a. n.a. n.a. 336 336 -
MT 628 628 - 75 79 5% n.a. n.a. n.a. 11 8 -25% n.a. n.a. n.a. n.a. n.a. n.a.
NL 61,883 61,883 - 55,344 65,275 18% n.a. n.a. n.a. 1,824 1,220 -33% n.a. n.a. n.a. 35,622 35,622 -
AT 93,118 93,118 - 16,051 33,257 107% n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 147,323 147,323 -
PL 6,865 6,865 - 594 606 2% n.a. n.a. n.a. 342 220 -36% n.a. n.a. n.a. 3,995 3,995 -
PT 4,572 4,572 - 3,735 4,968 33% n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
RO 5,366 5,366 - n.a. n.a. n.a. n.a. n.a. n.a. 2 1 -33% n.a. n.a. n.a. n.a. n.a. n.a.
SI 1,860 1,860 - 975 1,276 31% n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
SK 1,851 1,851 - 1,463 730 -50% n.a. n.a. n.a. 441 275 -38% n.a. n.a. n.a. 1,545 1,545 -
FI 6,940 6,940 - 1,755 6,633 278% n.a. n.a. n.a. 797 366 -54% n.a. n.a. n.a. 19,359 19,359 -
SE 8,585 8,585 - 2,559 2,100 -18% n.a. n.a. n.a. 773 303 -61% n.a. n.a. n.a. n.a. n.a. n.a.
UK 60,227 60,227 - 6,440 5,919 -8% n.a. n.a. n.a. 43 17 -60% n.a. n.a. n.a. n.a. n.a. n.a.
EU-28 792,797 792,797 - 415,995 441,686 6% n.a. n.a. n.a. 86,794 35,979 -59% n.a. n.a. n.a. 912,010 912,010 -
EN i EN
Based on the preceding analysis of the options against these objectives it follows that:
For long-term care benefits, option 1 is the most efficient and effective option to fulfil the objectives
for long-term care benefits.
By introducing a legal basis for the already applicable rules, this option introduces a regime
appropriate to long-term care benefits, while maintaining continuity with the current system. In
parallel, it achieves legal clarity and transparency on the rules applicable both for citizens and
institutions as well as other stakeholders. Although benefits in kind are provided by the residence
State, costs of all cash and in kind benefits provided are at the expense of the competent Member State
which ensures a fair distribution of the financial burden. This option however will not solve existing
mismatches in case the competent Member State has no benefits in cash and the State of residence has
no benefits in kind.
Option 1 is the most cost-efficient and effective option in facilitating the application of the
coordination rules.
For the coordination of unemployment benefits, the best compromise would be a combination of
option 3a for competence and registration of frontier workers, option 1 for the export of
unemployment benefits, and of option 2b for the aggregation of periods in combination with the
horizontal option regarding the recognition of periods for the purpose of aggregation.
This combination of options would ensure that:
a) The Member State of last activity would remain competent for providing unemployment benefits to
frontier and other cross-border workers in all cases where those persons have been insured there for at
least 12 months, because it can be assumed that this suffices to create a strong link to the labour
market of this State;
b) The Member State of residence becomes competent for those who have not satisfied this
requirement and thus have not established such a strong link;
c) Periods completed in another Member State are only taken into account, where those periods would
also have been considered as periods of insurance in that Member State where they have been
completed;
d) The Member State of last activity becomes competent in all other cases for those who have been
insured there for at least three months as regards the aggregation of periods;
e) The Member State of previous activity becomes competent and has to export the benefit whenever
this condition has not been satisfied;
f) Cash benefits are exported, i.e. are paid to unemployed persons looking for a job in another Member
State than the competent one for an extended period of at least six months in order to provide
sufficient time for an effective job search and increasing access to employment opportunities
throughout the Union.
They are also aligned with the general and specific objectives and wider EU policy objectives on
active labour market policy such as the 2013 citizenship report (COM(2013)269) which as its key
action 1 refers to the proposal to extend the export of unemployment benefits to six months.
For access to social benefits for economically inactive EU mobile citizens and jobseekers the most
efficient option responding to the objectives is the amendment of Article 4 of Regulation (EC) No
883/2004 to make reference to the limitations in Directive 2004/38/EC. To increase the effectiveness
of this option it could be combined with option 3, which would allow for a more detailed explanation
of the rules. This option would increase legal certainty and clarity and transparency while, at the same
time, allowing room for a dynamic interpretation of the Regulation as the case-law of the CJEU
concerning the relationship between the Regulation and the Directive develops.
This option will increase legal clarity and transparency on the rights of economically inactive mobile
EU citizens and jobseekers and also on the extent to which Member States’ social security institutions
EN ii EN
are permitted to limit the equal treatment principle for such persons in relation to access to certain
social benefits. It is anticipated to thereby improve the administrative simplicity and enforceability of
the rules.
For family benefits the most efficient and effective combination responding to the objectives is the
combination of the status quo with the horizontal option c. This combination will ensure that primary
responsibility for family benefits is retained by the Member State of economic activity where a parent
pays taxes and social security contributions in a manner, while the Member State which has secondary
competence will pay a differential supplement if its family benefits are higher. This maintains
protection for family members and upholds the best interests of the child. By introducing the
horizontal option c, it is also possible to protect the individual interests of parents who seek to
maintain a balance between work and family life during periods of child-raising by placing a greater
emphasis on individual rights and supporting those Member States who are actively promoting
flexible and family friendly working practices without imposing this obligation. This option has the
potential to be effective at achieving the General and Specific EU objectives and also the wider EU
objectives, the Fresh Start to address the challenges of work-life balance faced by working families
and is simple to apply. This flexible approach will thereby increasing sustained labour market
participation by parents during periods of child-raising. However, as the derogation from the anti-
accumulation rules is optional rather than mandatory in practice it is likely to be less effective at
achieving the goals and the problems identified concerning disincentives to ongoing labour market
participation may continue to subsist. It is anticipated in light of measures already foreseen outside the
scope of the revision (the launch of EESSI and implementation of Decision F2) that the aim of
improving efficiency of processing family benefit claims will also be achieved.
9. How would the impacts be monitored and evaluated?
9.1. Monitoring indicators
In accordance with the Better Regulation Guidelines, this section provides an outline of the proposed
arrangements for monitoring and evaluation (including the proposed indicators). Final monitoring and
evaluation arrangements will be approved at a later stage.453
Monitoring will take place on two levels. The first level consists of monitoring the implementation of
the proposed action by the Commission at EU Level. In its role as the guardian of the Treaties, the
Commission closely monitors and assists Member States and citizens in the implementation of the EU
social security coordination and of free movement of workers rules by regularly assessing the national
legislations and/or practices in place, investigating potential infringements of EU rules in the Member
States, filing observations in preliminary references made by the national courts on questions on the
interpretation and application of the EU social security rules and responding to individual questions,
complaints, petitions or citizens’ queries. For example, the Commission's Your Europe Advice and
SOLVIT citizens' advice services publish annual reports identifying the number and nature of citizens
concerns on particular topics within EU competence including EU social security coordination.
The second level consists of the monitoring by the Administrative Commission to assess the
application of the proposed changes at national level. The Administrative Commission has the specific
tasks to454
:
453
Better Regulation Guidelines, Section 2.7, p30.
454
Article 72 of Regulation (EC) No 883/2004.
EN iii EN
− facilitate the uniform application of EU law, especially by promoting exchange of experience
and best administrative practices between the Member States;
− foster and develop cooperation between Member States and their institutions in social security
matters and facilitate the realisation of actions of cross border cooperation activities in the area
of coordination of social security systems;
− modernise the procedures for exchanging information and adapting the information flow
between institutions for the purposes of exchanging data by electronic means.
The Commission can request the Member States represented in the Administrative Commission to
report on the effective application of the coordination rules in the Member States, especially on the
close and effective cooperation between the authorities and institutions in different Member States as
one of the key factors for an efficient functioning of the EU rules on the coordination of national social
security systems. It is supported by associated networks such as the informal Social Security
Coordination Communication Network and National Contact Points on Fraud & Error also comprised
of representatives from Member States who are also able to monitor effectiveness of the proposed
measures and identify any potential difficulties in application in specific fields.
Moreover, the Member States are under the obligation to compile statistics on the application of
Regulation (EC) No 883/2004 and (EC) No 987/2009 and forward them to the Secretariat of the
Administrative Commission455
including in relation to the payment of unemployment benefits; on the
coordination of long-term care benefits and the coordination of family benefits to be analysed by the
Network of experts on statistics on Free movement of Workers and Social Security Coordination, a
consortium of HIVA- KU Leuven, Milieu Ltd, IRIS University Ghent, whose tasks is to collect and
analyse the statistical data on an annual basis. Reports are compiled annually on these topics and
published on the DG EMPL website.456
The Administrative Commission may set up working parties and study groups for special problems. A
'Reflection Forum' was set up in June 2014, consisting of a collective brain storming exercise within
the framework of the Administrative Commission on the future challenges for social security
coordination. The discussions in the Reflection Forum will provide a platform for analysing, and
clarifying issues of common concern on an administrative level and for openly discussing them in the
context of social security coordination as part of a wider challenge, irrespective of whether some may
be more controversial than others in their political context. The purpose of the Reflection Forum is to
frame the discussion of the topics, draw parallels between them and identify specific issues that
warrant further action in the future.
The informal Social Security Coordination Communication Network, composed of Member States'
representatives dealing with communication issues on EU social security coordination rules, provides
feedback to the Commission about the challenges faced in communicating EU rules on social security
coordination at national level, and advance proposals in order to improve the quality and availability
of information on EU rules on social security coordination. For instance, the revision of the guides on
Member States national security systems published by the European Commission to make them more
simple, user friendly and adaptable to national website, was based also on a feedback received from
the network. The network can thus play a positive role in monitoring the awareness of the rules on
long-term care, unemployment benefits, family benefits and access of economically inactive citizens
and mobile jobseekers to certain social benefits.
Mechanisms for gathering data in relation to the indicators at both EU level and National Level are
already in place with capacity for informing the review on at least and annual basis and therefore there
is no need for development of new mechanisms for data collection or to envisage that such methods
will entail additional costs for the European Commission or for the Member States to achieve.
455
Article 91 of Regulation (EC) No 987/2009.
456
Publication of reports is at the discretion of the Commission with the exception of sensitive information or any sensitive reference to
single Member States.
EN iv EN
Indicators based on the data collection consortium HIVA, Milieu Ltd, IRIS University Ghent are
foreseen to be monitored on an annual basis, while surveys on the application of the Regulation are
envisaged to be less frequent (every 2-3 years).
9.2. Operational objectives for the preferred policy options and their monitoring
9.2.1 Long-term care benefits
Table 19: Monitoring indicators for Long-term care benefits
Operational objective Indicator Definition/Unit of
Measurement457
Existing data/Sources
Bring legal clarity and
transparency for citizens,
institutions and stakeholders
by introducing a definition for
long-term care benefits, group
the rules under a separate
Chapter and establish a list of
long-term care benefits under
Regulation (EC) No
883/2004.
Complaints from
citizens on Long-term
care benefits
- number of queries and
complaints from citizens and
institutions about difficulties
in exercising their rights.
Yes: Incoming
correspondence Commission
(annually)
EU litigation on LTC No. of national and CJEU
cases on the interpretation of
EU law on long-term care
benefits.
Yes: National Courts/ CJEU
Complaints from
national authorities on
Long-term care benefits
Experiences from national
institutions with the
application of the revised
legal framework.
No: Survey in the
Administrative Commission
Reduce administrative costs
and cases of double payments
by providing clear rules of
when long-term care benefits
in cash and in kind are
provided for the same
purpose and for the same time
frame.
Cases of overlapping
payments
amount of benefits in cash and
the reimbursement for benefits
in kind in Euros.
Yes: Survey in the
Administrative Commission/
Data collection consortium
HIVA, Milieu Ltd, IRIS
University Ghent (annually)
Administrative costs for
public authorities
administrative costs per case
for processing claims for
long-term care benefits in
Member State of residence.
Yes: Survey in the
Administrative Commission/
Data collection consortium
HIVA, Milieu Ltd, IRIS
University Ghent (annually)
Complaints from
national authorities on
Long-term care benefits
Experiences from national
institutions with the
application of the revised
legal framework.
No: Survey by the
Administrative Commission
Reduce the number of
conflict situations between
institutions, resulting in l
individual complaints, and
fewer preliminary or
Complaints from
citizens on Long-term
care benefits
Number of complaints from
citizens about difficulties in
exercising their rights.
Yes: Incoming
correspondence Commission
(annually)
457
The benchmark against which the indicators will be evaluated will be the data of application of Regulation (EC) No 883/2004,
i.e. 1 May 2010.
EN v EN
infraction procedures to be
dealt with by the CJEU.
EU Litigation on LTC No. of national and CJEU
cases on the interpretation of
EU law on long-term care
benefits.
Yes: National Courts/CJEU
9.2.2 Unemployment benefits
Table 20: Monitoring indicators for unemployment benefits
Operational objective Indicator Definition/Unit of
Measurement
Existing data/Sources
Reduce the number of
complaints concerning
access to unemployment
benefits by frontier workers
and cross-border workers
Complaints on coordination
of unemployment benefits by
frontier workers/cross-border
workers
- number of queries and
complaints from frontier
workers/cross-border
workers about difficulties in
exercising their rights
Yes: Incoming
correspondence Commission
(annually)
EU Litigation on UBs for
frontier/cross-border workers
Number of national and
CJEU cases on the
interpretation of EU law on
unemployment benefits for
the frontier and cross-border
workers
Yes: National Courts/ CJEU
Ensure a better correlation
between the level of the
unemployment benefits paid
and the contributions
received for the frontier,
cross-border and mobile EU
citizens
Level of contributions
received vs level of
unemployment benefits paid
overall amounts of
contributions received and
paid per Member State
Yes: Data collection
consortium HIVA, Milieu
Ltd, IRIS University Ghent
(annually)
Increase the number of
persons exporting their
benefits
Number of cases of export of
unemployment benefits
Number of persons applying
for a PD U2
Yes: Data collection
consortium HIVA, Milieu
Ltd, IRIS University Ghent
(annually)
Establish common ground
for extending the period of
export of unemployment
benefits and establish a
systematic cooperation and
control mechanism to
monitor the fulfilment of
rights and obligations by the
unemployed person when
exporting benefits.
Number of exchanges on
control measures between
Member States
Number of exchanges
between Member States in
the EESSI system
concerning the monitoring
of rights and obligations of
unemployed person, report
on delays and other
communication problems
No: Data collection
consortium HIVA, Milieu
Ltd, IRIS University Ghent
(annually)
Concerns/Recommendations
from national authorities on
unemployment benefits
Exchange of (best) practices
between Member States
No: Survey in the
Administrative Commission
(2-3 years)
Number of cases of fraud
and error in field of
unemployment benefits
Reported number of cases of
'fraud and error'
Yes: Annual discussion on
fraud and error in the
Administrative Commission
(annually)
Concerns/Recommendations
from national authorities on
Feedback from
communication activities
Yes: Survey in the Informal
Communication Network
EN vi EN
unemployment benefits (annually)
Concerns from national
authorities on aggregation of
unemployment benefits
Survey on use of PD U2 Yes: Survey in the
Administrative Commission
(annually)
Reduce the number of
complaints and
infringements by
establishing clear rules on
the aggregation of periods
Complaints on aggregation
of unemployment benefits
- Number of Queries and
complaints from citizens
about difficulties in
exercising their rights
Yes: Incoming
correspondence Commission
(annually)
Infringement proceedings Number of Infringement
procedures on aggregation
of
Yes: European Commission
(annually)
Increase the integration of
workers in the insurance
system of a Member State
Unemployed mobile persons
applying for aggregation of
insurance periods
Number of applications for
the aggregation of periods
by wholly unemployed
persons
Yes: Survey in the
Administrative Commission
on Document PD U1
(annually)
Concerns/Recommendations
from national authorities on
unemployment benefits
Exchange of (best) practices
between Member States
No: Survey in the
Administrative Commission
(every 2-3 years)
Reduce administrative costs
for public administrations
between Member States
connected the administrative
cooperation and control
mechanism for monitoring
the fulfilment of rights and
obligations of unemployed
persons who are exporting
their unemployment
benefits.
Administrative costs for
public authorities
For all Member State:
Unemployment rate of
cross-border and frontier
workers, total yearly
expenditure on
unemployment benefits for
frontier and cross-border
workers having worked in
that Member State and
distribution effects between
national and cross-border
workers
No: Survey in the
Administrative Commission
Data collection consortium
HIVA, Milieu Ltd, IRIS
University Ghent (annually)
9.2.3 Access of economically inactive EU citizens and jobseekers to certain social benefits
Table 21: Monitoring indicators for access by economically inactive citizens and
jobseekers to certain social benefits
Operational objective Indicator Definition/Unit of
Measurement458
Existing data/Sources
Reduce the number of
complaints concerning access
to certain social benefits
Complaints from citizens
on access to social
benefits
- number of queries and
complaints from citizens and
institutions about difficulties
in exercising their rights.
Yes: Incoming correspondence
Commission (annually)
EU Litigation on
relationship between
Social Security Rules
and Directive
2004/38/EC
No. of national and CJEU
cases on the interpretation of
EU law on long-term care
benefits.
Yes: National Courts/ CJEU
(annually)
458
The benchmark against which the indicators will be evaluated will be the data of application of Regulation (EC) No 883/2004,
i.e. 1 May 2010.
EN vii EN
Complaints from
national authorities on
access to social benefits
Experiences from national
institutions with the
application of the revised
legal framework.
No: Survey in the
Administrative Commission
(every 2-3 years)
9.2.4 Export of family benefits
Table 22: Monitoring indicators for export of family benefits
Operational objective Indicator Definition/Unit of
Measurement
Existing data/Sources
Ensure greater clarity on
respective responsibilities of
Member States for export of
family benefits to families in a
cross-border situation
Complaints from
citizens on export of
family benefits
- number of queries and
complaints about difficulties
in exercising their rights
Incoming correspondence
Commission (annually)
EU Litigation on Family
Benefits
No. of national and CJEU
cases on the interpretation of
EU law on family benefits
National Courts/ CJEU
(annually)
Increase the number of cases
in which parents are able to
export child-raising benefits
and reduce the number of
complaints concerning their
export ensure clarity and
consistency in applying these
rules
Export of child-raising
allowances
- Survey on export of family
benefits
Yes: Survey in the
Administrative Commission
(annual)
Complaints from
citizens on export of
child raising allowances
Queries and complaints about
difficulties parents experience
in exercising their rights
Yes: Incoming
correspondence to the
Commission (annually)
EU Litigation on child-
raising allowances
No. of national and CJEU
cases on the interpretation of
EU law on the export of child-
raising allowances
Yes: National Courts/CJEU
(annually)
Reduce regulatory costs for
public administrations in
Member States associated
with export of family benefits
Speed of processing
claims
Time needed to respond to
requests for information
No- Survey in the
Administrative Commission
(annually)
-No Monitoring by
Administrative Commission,
Technical Commission and
Executive Board (annually)
Number of exchanges
between Member States
Number of exchanges
between Member States in the
EESSI system, report on
delays or other
communication problems
No - Data collection
consortium HIVA, Milieu Ltd,
IRIS University Ghent
(annually)
EN viii EN
9.3. Evaluation
In addition, the Commission will evaluate the revised legal framework 5 years after its application in
accordance with the Better Regulation Guidelines.
It is anticipated that the Commission submits to the European Parliament, the Council and the
Economic and Social Committee, 5 years after the date of implementation of the amended
Regulations, and every 5 years thereafter at the latest, an evaluation report on the application of the
new instrument.
EN ix EN
10.Annex I: Procedural Information
EN x EN
10.1. Annex I: Procedural Information
The "Revision of Regulation (EC) No 883/2004 and Regulation (EC) No 987/2010" forms
part of the Labour Mobility Package, included in the Commission's 2015 Work Programme.
The lead DG for this initiative is EMPL.
The preparatory work started in 2009 with the establishment of an ad hoc expert group on
long-term care benefits under the auspices of the Administrative Commission for the
Coordination of Social Security Systems.
In 2013 and 2014 the preparatory work on a revision of 883/2004 continued, involving an
impact assessment and a draft proposal for legislation. The proposal was drafted in response
to the 2011 Council’s call for a revision of the rules on unemployment benefits in order to
strengthen the link between contributions and benefits, and in view of the need to respond to
the introduction of a new type of “long-term care benefit” at national level in view of
population change.
An Impact Assessment Steering Group (IASG) was set up to discuss the elements of the
proposal initially scheduled for adoption in Spring 2014 (coordination of long-term care
benefits; export of unemployment benefits; coordination of unemployment benefits for
frontier workers) with representatives of the following Commission’s services: SG, SJ,
ECFIN, MARKT, HOME, ENTR, SANCO, COMM, JUST, RTD, EAC, TAXUD, REGIO
and BEPA. The IASG met six times between June 2012 and November 2013. The minutes of
the IASG meeting of 25 November 2013, as well as comments received on the draft Impact
Assessment Report after the meeting, are annexed to this report in Annex XXIV.
The adoption of the proposal was originally scheduled for spring 2014. However, in view of
the European Parliament elections and the changes in political level playing field, the
initiative was put ‘on hold’ and action to follow it up was left to the new Commission.
Preparatory work was resumed in autumn 2014 and continued throughout 2015.
An Inter-Service Steering Group (ISSG) was set up on 19 December 2014 to discuss the
Labour Mobility Package, and concerned the following elements of the proposal: coordination
of family benefits, aggregation of unemployment benefits, and access to special non-
contributory cash benefits for economically inactive persons, with representatives of the
following Commission’s services: SG, EMPL, MOVE, JUST, CNCET, ESTAT, HOME,
NEAR, GROW, SJ, ENER, REGIO, TAXUD, SANTE, TRADE. The ISSG met 6 times
between January 2015 and September 2015.
1.1.1 Advice from independent experts
A study supporting the Impact Assessment for the elements of the proposal initially scheduled
for adoption in spring 2014 (coordination of long-term care benefits; export of unemployment
benefits; coordination of unemployment benefits for frontier workers) was carried out by
Deloitte Consulting459
and a final report was delivered on 6 December 2013. Available data
(principally through Labour Force Survey460
and 2012 Ageing Report461
) was used to model
budgetary impacts for all Member States. Further data was collected in a representative
459
Deloitte, Consulting Study for the impact assessment for revision of Regulations (EC) Nos 883/2004 and
987/2009, 6 December 2013. The study can be found in Annex V to this report.
460
To be consulted at: http://epp.eurostat.ec.europa.eu/portal/page/portal/microdata/lfs.
461
To be consulted at: http://ec.europa.eu/economy_finance/publications/european_economy/2012/pdf/ee-2012
2_en.pdf.
EN xi EN
sample of 14 Member States462
, and additional quantitative information to support problem
definition and assessment of options was delivered by the HIVA KU Leuven Research
Institute for Work and Society (HIVA)463
.
Six studies supporting the Impact Assessment for the further elements of the revision
(coordination of family benefits and aggregation of unemployment benefits) were carried out
by a consortium under the lead of Fondazione Giacomo Brodolini464
and by HIVA – KU
Leuven Research Institute for Work and Society (HIVA)465
, and the final reports were
delivered in August 2015. Administrative data from Member States466
and EU available
data467
were used to model economic impact and administrative burden for Member States.
The training and reporting on European Social Security (trESS) network468
of independent
experts in the field of social security coordination evaluated the coordination of long-term
care benefits469
, export of unemployment benefits and coordination of unemployment benefits
for frontier workers470
and the potential legal impacts of the revision of Regulation (EC) No
883/2004 with regard to coordination of long-term care benefits471
. These three studies were
presented in 2011 and 2012 to the Administrative Commission for the Coordination of Social
Security Systems. The evaluations looked into the current legal framework of coordination of
long-term care and unemployment benefits, identified the challenges that stem from the
application of the current EU rules in these areas and identified possible areas for
improvement.
The network of independent experts in the fields of free movement of workers and social
security coordination in the European Union (FreSsco) evaluated the potential legal impacts
of the Revision of Regulation (EC) No 883/2004 with regard to the coordination of family
benefits472
, the aggregation of unemployment benefits473
, and access to special non-
462
See Annex IV for a complete list of the analytical models used in preparing the impact assessment
463
Pacolet, J. & De Wispelaere, F., Additional analysis for the partial revision for the provision on social security
coordination in Regulation (EC) No 883/2004, November 2013 (Annex IX) and Pacolet, J. and De Wispelaere,
F., Analysis of the characteristics and the duration of employed activity by cross-border and frontier workers for
the purposes of coordinating unemployment benefits, November 2013 (Annex X).
464
Julie Abrahamsen, Monica Lind, Peter G. Madsen, Administrative costs of handling exports of family benefits, 2015 (Annex XVI);
Katrine Julie Abrahamsen, Monica Lind, Peter G. Madsen , Administrative costs of handling aggregation of periods or salaries for
unemployment benefits, 2015 (Annex XVII); Michele Raitano, Matteo Luppi, Riccardo Conti, Diego Teloni, Secondary effects following a
change of regulations on the exportation of family benefits, 2015 (Annex XVIII); Michele Raitano, Matteo Luppi, Riccardo Conti, Diego
Teloni, Secondary effects following a change of regulations on the aggregation of periods or salaries for unemployment benefits, 2015
(Annex XIX)
465
PACOLET and DE WISPELAERE Export of family benefits, Analysis of the economic impact of the options, 2015 (Annex XIII); Pacolet,
J. & De Wispelaere, F, Aggregation of periods or salaries for unemployment benefits - Analysis of the economic impact of the options, 2015
(Annex XIV);
466
PACOLET and DE WISPELAERE, Export of Family Benefits: Report on the Questionnaire on the Export of Family Benefits, 2015
(Annex XI), PACOLET and DE WISPELAERE, Aggregation of periods or salaries for unemployment benefits, HIVA-KU Leuven, 2015
(Annex XII)
467
EUROSTAT, LFS
468
www.tress-network.org.
469
trESS Think Tank Report 2010, Analysis of selected concepts of the regulatory framework and practical
consequences on the social security coordination, to be consulted at: http://www.tress
network.org/tress2012/EUROPEAN%20RESOURCES/EUROPEANREPORT/ThinkTank_SelectedCncepts_Final_140111.pdf and the
trESS Think Tank Report 2011, Coordination of long-term care benefits-current situation and future prospects, to be consulted at:
http://www.tress-network.org/tress2012/EUROPEAN%20RESOURCES/EUROPEANREPORT/trESSIII_ThinkTankReport-
LTC_20111026FINAL_amendmentsEC-FINAL.pdf.
470
trESS Think tank report 2012, Coordination of Unemployment Benefits, to be consulted at: http://www.tress-
network.org/tress2012/EUROPEAN%20RESOURCES/EUROPEANREPORT/trESS_ThinkTankReport2012.pdf.
471
trESS Analytical Study 2012, Legal Legal impact assessment for the revision of Regulation 883/2004 with regard to the coordination of
long-term care benefits, to be consulted at: http://www.tress-
network.org/tress2012/EUROPEAN%20RESOURCES/EUROPEANREPORT/trESS_Analytical%20Study%202012.pdf
472
SPIEGEL, B. (ed.), CARRASCOSA BERMEJO, D., HENBERG, A. and STRBAN, G., Assessment of the impact of amendments to the
EU social security coordination rules on export of family benefits, Analytical Report 2015, FreSsco, European Commission, May 2015
(Annex VI)
473
FUCHS, B. (ed.), GARCIA DE CORTAZAR, C., BETTINA, K. and PÖLTL, M., Assessment of the impact of amendments to the EU
socials security coordination rules on aggregation of periods or salaries for unemployment benefits,
EN xii EN
contributory cash benefits for economically inactive persons474
. The three studies were
completed in June 2015.
Technical amendments to the EU coordination rules
Outside the scope of this impact assessment report, but included in the revision package are a
number of proposals for technical amendments to the EU coordination rules. These
amendments aim to bring clarification to a number of coordination provisions, but not to
substantially revise them. These amendments will not have a substantial impact and hence
their estimated effects will be explained in explanatory notes to the legislative proposal.
Moreover, the package will also include a 'periodic update' of the Regulations to reflect
developments in national legislation that have an effect on the coordination of social security
systems in the EU. The aim is to ensure legal certainty for institutions and citizens by making
technical amendments the wording of EU provisions or by amending certain annexes. This is,
for instance, the case where a benefit ceases to exist in a Member State and has to be deleted
from a specific annex to the EU Regulation, or where a wording of a specific article has to be
corrected or clarified to avoid misinterpretation.
The proposals for these technical amendments are based either on the proposal of a Member
State, or a group of Member States, or of the Commission services. They were discussed and
agreed by at least of qualified majority of Member States in the Administrative Commission
on the Coordination of Social Security Systems.
Finally, the revision package will include a proposal for a governance change concerning the
procedure to amend the country-specific annexes to the coordination Regulations, with which
the Commission proposes a simpler and faster legislative procedure to adapt the annexes. This
element of the proposal is not expected to have social, economic or environment impacts and
is therefore also excluded from the scope of this impact assessment. Its limited effects will be
outlined in an explanatory note to the proposal.
Further details concerning the Technical Amendments are contained in Annex XX.
Analytical report 2015, FreSsco, European Commission, June 2015 (Annex VII)
474
LHERNOULD, J.-P. (ed.), EICHENHOFER, E., RENNUY, N., VAN OVERMEIREN, F. and WOLLENSCHLÄGER, F., Assessment of
the impact of amendments to the EU social security coordination rules to clarify its relationship with Directive 2004/38/EC as regards
economically inactive persons, Analytical Report 2015, FreSsco, European Commission, June 2015
EN xiii EN
11.Annex II - Stakeholder consultation
EN xiv EN
As the preparatory work for the "Revision of Regulation (EC) No 883/2004 and Regulation
(EC) No 987/2010" began in 2009, stakeholders were consulted on several occasions on the
different elements which are now subject to revision:
6. Member States were consulted on coordination of long-term care benefits, export of
unemployment benefits, aggregation of unemployment benefits, coordination of
unemployment benefits for frontier workers, export of family benefits and access to
special non-contributory cash benefits for economically inactive persons, within the
framework of the Administrative Commission for the Coordination of Social Security
Schemes (Administrative Commission).
7. National administrations were also consulted via a specialised online survey on the
coordination of long-term care benefits, export of unemployment benefits and
coordination of unemployment benefits for frontier workers. Also, a group of national organisation in
charge of the payment of family benefits sent a position paper.
8. Social partners were consulted on the coordination of long-term care benefits,
coordination of unemployment benefits for frontier workers and export of unemployment
benefits in the framework of the Advisory Committee for the Coordination of Social
Security Systems, and on the coordination of family benefits, long-term care benefits, and
unemployment benefits during a dedicated hearing.
9. NGOs were consulted on the coordination of family benefits, long-term care benefits, and
unemployment benefits during an ad-hoc consultation workshop.
10. Two online consultations were also launched, one on the coordination of long-term care
benefits, export of unemployment benefits and coordination of unemployment benefits for
frontier workers; the other one on the coordination of unemployment benefits and the
coordination of family benefits.
It has to be noted that the different consultations presented different degrees of specifity in
relation to the options assessed, and due to the high level of complexity of some topics, and
the late definition of some options, some consultations have been kept very wide (e.g. the
publis consultation on aggregation of unemployment benefits; export of family benefits and
social security coordination rules on the posting of employed and self-employed persons). A
summary of these consultations is given in the sections below.
1. Member States
Discussions with the Member States on coordination of long-term care benefits, export of
unemployment benefits and coordination of unemployment benefits for frontier workers took
place at the meetings of the Administrative Commission for the Coordination of Social
Security Systems475
in the period 2009 to 2013.
In relation to the coordination of long-term care benefits, during the Working Party of the
Administrative Commission on the revision of EU provision on coordination of long term
care benefits and unemployment benefit of 10 October 2013, Member States delegations
(some representing their governments' positions, other sharing their opinions as experts)
expressed their views on the options under consideration. A majority of delegations supported
the creation of a specific definition and/or specific chapter and/or list of benefits
475
While all Member States are represented at the meetings of the Administrative Commission for the Coordination of Social Security
Systems, not all delegations necessarily have taken the floor during the several discussions on the different options.
EN xv EN
(Luxembourg, Spain, Italy, Portugal, Lithuania, Poland, Belgium, Malta, Sweden, Czech
Republic, Hungary and Latvia explicitly supported the option, whilst Austria, Germany,
France, Ireland, Slovenia, Slovakia and Greece, without taking definite position, supported
some elements of this option or did not object it). Others were in favour of the status quo
(Belgium, Greece, Spain, Hungary, Malta, Poland, Sweden, Estonia as well as the United
Kingdom and France without declaring their definite position).
A specialised questionnaire was also launched by the Commission at the beginning of 2012
on the coordination of long-term care benefits: on the basis of a report476
prepared in 2012 by
the trESS (Training and Reporting on European Social Security) Network, Member States
were asked to describe their policy approach with regards to persons in need of LTC, to assess
a new definition for LTC benefits, to identify further challenges than those presented in the
report.
To the question whether the Regulation shoud be amended to better coordinate LTC benefits,
MS answered as follows:
• Open to any solution: Hungary, Finland;
• There should be a separate Chapter for LTC benefits (including also a definition and
elaborated list): Luxembourg, Austria, Greece, Slovakia, Ireland, Portugal, Czech
Republic, Lithuania, and Slovenia.
• Special rules for LTC benefits (irrespective of the place – new chapter or Sickness
Chapter): Netherlands.
• No change of the existing system of coordination: Poland, Sweden, France.
• All benefits should be regarded as benefits in kind: Denmark.
• No coordination as sickness benefits: Estonia.
• Competence only of the MS of residence: Austria (if safeguarded that no differential
payments or subsidiary competence of any other MS – some parameters are elaborated
in the note), Lithuania.
• Always the first MS which grants LTC benefits should remain competent is not
acceptable: Czech Republic, Lithuania.
• LTC benefits should not be coordinated as pensions: Lithuania, Romania (as invalidity
benefits).
• Benefits granted to the carer should be regarded as income and so Title II should apply
to the carer: Poland, Ireland (also the existing system seems to focus more on direct
benefits than on the provision of services), Hungary.
• A detailed list for the application of Article 34 of Regulation (EC) No 883/2004
should be made: Poland, Bulgaria, Lithuania, France.
• Rights to LTC benefits should be treated as individual rights: Slovenia.
Other remarks:
• Whatever solution is sought, it must be stable, easy to administer and transparent for
the citizens, and social tourism must be avoided: Austria.
• Further rulings of the CJEU should be awaited: Finland.
• An introduction of a specific equalisation of claims for LTC benefits: Poland.
• Special rules for LTC benefits should be included in the Sickness Chapter: Italy.
476
trESS Network, Legal impact assessment for the revision of Regulation 883/2004 with regard to the coordination of long-term care
benefits; Analytical Study 2012, available at: http://www.tress-
network.org/tress2012/EUROPEAN%20RESOURCES/EUROPEANREPORT/trESS_Analytical%20Study%202012.pdf
EN xvi EN
• Another possibility would be to follow the same principles as under the Family
Benefits Chapter: Czech Republic.
• There should be a non-exhaustive list of LTC benefits: Spain.
• First the work should focus on the application of Article 34 of Regulation (EC) No
883/2004 and on the various CJEU rulings concerning LTC: Lithuania.
• Article 66 (2) of Regulation (EC) No 987/2009 has to be amended to allow for
reimbursement of LTC benefits via a separated liaison body: France.
• A better coordination seems to be necessary (it is not yet clear which one): Belgium.
Finally, to the question as whether all LTC benefits should be coordinated in the same way
(i.e. one set of coordination rules), or should it be still possible to coordinate them under
different Chapters, MS answered as follows:
• All LTC benefits and schemes should be coordinated under one Chapter:
Luxembourg, Denmark, Finland, Greece, Bulgaria, Portugal, Czech Republic, Spain,
Slovenia, France, Netherlands, Romania.
• Open to both solutions: Finland.
• LTC benefits should be inserted in Article 3 of Regulation (EC) No 883/2004:
Luxembourg.
• There should be a more elaborated list of all the LTC benefits covered by the new
coordination: Luxembourg.
• LTC benefits should remain coordinated as today under the various chapters of
Regulation (EC) No 883/2004: Italy, Hungary (new coordination only for the rest not
covered by these special chapters), some MSs refer to some of these cases explicitly.
• Social assistance benefits cannot be coordinated as other LTC benefits: Austria (at
least this has to be further examined), Poland, Germany (this also applies to LTC
benefits for victims of war), Slovakia, Lithuania.
• Special family allowances for handicapped children shall remain coordinated as
family benefits: Austria, Latvia; same opinion concerning medical care allowances for
children and supplement to family benefits which are treated as family benefits:
Poland.
• LTC benefits granted under the accidents at work and industrial diseases scheme
should remain coordinated under the relevant chapter, as this is more favourable for
the persons concerned: Austria, Germany, Latvia.
• Benefits which up until now have been regarded as invalidity benefits cannot be
treated as LTC benefits: Poland, Germany.
• Benefits in kind and in cash should not be coordinated in the same way: Estonia,
Slovakia.
• A better coordination seems to be necessary (it is not yet clear which one): Belgium.
In relation to the coordination of unemployment benefits for frontier workers, during the
Working Party of the Administrative Commission on the revision of EU provision on
coordination of long term care benefits and unemployment benefit of 10 October 2013,
Member States delegations (some representing their governments' positions, other sharing
their opinions as experts) expressed their views on the options under consideration:
• 8 delegations were in favour of maintaining the status quo (Germany, Ireland,
Denmark, Switzerland, Netherlands, Austria, Greece, Slovakia);
• 1 in favour of introducing an option to choose between receiving unemployment
benefits from the country of last activity and residence (Hungary);
EN xvii EN
• and 9 in favour of providing unemployment benefits for all workers from the state of
last activity (Czech Republic, Spain, Poland, Italy, Romania, Slovenia, Luxembourg,
France, Malta).
In relation to the export of unemployment benefits, during the Working Party of the
Administrative Commission on the revision of EU provision on coordination of long term
care benefits and unemployment benefit of 10 October 2013, Member States delegations
(some representing their governments' positions, other sharing their opinions as experts)
expressed their views on the options under consideration:
• 9 delegations supported the current provisions (Germany, Spain, Netherlands, Greece,
Austria, Denmark, Ireland, France, Belgium);
• and 6 delegations supported the option for a right to export for at least 6 months (PT,
Slovenia, Malta, Slovakia, Romania, Italy)
In relation to export of family benefits, during a Reflection Forum within the framework of
the Administrative Commission meeting on 10-12 March 2015, Member States' delegations
(sharing their opinions as experts) expressed their views on the options under consideration:
• a significant majority of delegations favoured maintaining the status quo for ensuring
that family benefits were exported at the same rate payable in the state of employment
(Bulgaria, Switzerland, Czech Republic, Estonia, Spain, Finland, Croatia, Italy,
Lithuania, Lithuania, Latvia, Poland, Portugal, Romania, Sweden, Slovakia and
Slovenia)477
;
• a minority of delegations favoured adjustment of the amount of family benefits to
reflect the living standards in the Member State of Residence of the child (Denmark,
France, Ireland and Norway);
• a similar minority of delegations favoured the option of no export of family benefits in
some or all cases (Austria, Luxembourg, Malta, UK).
In light of the feedback from national experts following consultation within the Reflection
Forum of the Administrative Commission, the Commission has developed a new option
concerning the priority rules for the payment of family benefits. During a second meeting on
23-25 June 2015, the new option according to which the Member State of residence of the
child should always be primarily competent to award family benefits was discussed:
• ten delegations indicated support for this option as a first or second choice (Austria,
Estonia, Finland, Ireland, Latvia, Luxembourg, Malta, Sweden, Slovenia, UK)
although Sweden indicated they preferred changes in classification of benefits before
considering changes in priority and the UK indicated their support for this option was
conditional on not having to pay the differential supplement;
• nine delegations were expressly opposed to the new option (Cyprus, Germany, France,
Italy, Netherlands, Poland, Portugal, Romania, and Slovakia);
• the most popular option remained maintaining the status quo, which is supported by
17 delegations.
In the discussions concerning export of family benefits, a number of delegations raised
concerns about the application of the family benefit rules to child-raising allowances. This
concern was expressed by Denmark, Finland, Austria and Sweden. The development of the
477
Belgium also expressed support for the status quo in a written note sent to the Commission
EN xviii EN
horizontal option was developed at a later stage as a result of the feedback from Member
States and other stakeholders.
In relation to the aggregation of unemployment benefits, during a Reflection Forum within
the framework of the Administrative Commission meeting on 10-12 March 2015, Member
States delegations (sharing their opinions as experts) expressed their views on the options
under consideration. The discussion revealed widely divergent views of the delegates with a
slight majority, however, favouring the maintenance of the status quo. However, some
delegations had rather strong views on the issues (in particular Denmark and Greece, who had
submitted notes in favour of the 'three-month' option), whereas others were more flexible or
declared that they could support more than one option:
• option 1 (maintenance of status quo) was supported by the following delegations:
Germany, Czech Republic, Poland, Italy, Portugal, Bulgaria, Estonia, Slovakia,
Belgium, Croatia, Slovenia;
• option 2.a (aggregation only after working one month) was supported by:
Luxembourg, Finland;
• option 2.b (aggregation only after working three months) was supported by: Greece,
Denmark, Malta, Austria, Luxembourg, France, Lithuania, Luxembourg, Romania,
UK, Latvia, Ireland.
The supporters of the one-day rule (option 1) rather focused on the needs of (returning)
migrant workers and felt the need to ensure that there are no gaps in their protection. The
supporters of option 2 (aggregation only after one or three months of work) rather focused on
the needs of their institutions and wanted to ensure that unemployment benefits are only paid
to those who had made a "substantial" contribution to their own schemes.
In relation to the debate concerning the method of calculation of unemployment benefits:
• the majority of delegations were in favour of maintaining the status quo (i.e. benefits
should be calculated solely on the basis of salaries earned in the competent MS) (Czech
Republic, Ireland, Portugal, Bulgaria, Estonia, Slovakia, Romania, Latvia, Hungary,
Poland, France, Slovenia, Croatia, Lithuania and Italy) – however, a number of
delegations caveated their position to make clear it may vary depending on the policy
adopted in respect of aggregation. For example, some pointed out that a strengthening of
the precondition for aggregation (three-month rule) would make a change of the
calculation method superfluous;
• in relation to those Member States who were open to change in the current rules (so that
the calculation of unemployment benefits would also take into account salaries earned in
another MS), the positions of delegations regarding the policy options concerning were
less clear, because many favoured such a change without time limitation. Open for such a
change were the following delegations: Denmark, Greece, Germany, Malta, UK, Finland,
Netherlands, Luxembourg, Italy, Austria.
The supporters of the status-quo as regards the calculation of unemployment benefits felt the
need to ensure that benefits are paid quickly without additional administrative complications.
The supporters of a change, i.e. of also taking into account foreign salaries for the calculation
of benefits, felt that this would lead to fairer results.
During a second meeting on 23-25 June 2015, delegations were consulted on how to deal with
the coverage of unemployed persons in case of introduction of a waiting period for the
aggregation of unemployment benefits:
EN xix EN
• three delegations (Poland, Portugal, Hungary) expressed concerns about the risk of a gap
in protection for mobile workers;
• six Member States (Austria, France, Greece, Ireland, Malta and Romania) all of whom
supported the introduction of a 3 month period of insured employment to qualify for
aggregation proposed that the gap should be addressed by extending the application of
Article 65(5)(a) to mobile workers who have worked for less than 3 months in the country
of new employment allowing them to "reactivate" entitlement in the former country of
employment. This proposal was opposed by the delegates from Germany, Spain, Sweden,
Hungary and Portugal. The UK delegate also had concerns about the practicalities;
• three delegations (Czech Republic, Germany, Sweden) were opposed to specific
coordinating measures to address the gap because the numbers of potentially affected
unemployed persons were very low and any changes to the rules to address the gap would
be administratively burdensome to apply and may risk mobile workers being treated more
favourably than nationals.
In relation to non-contributory cash benefits providing for a minimum subsistence level,
during a Reflection Forum within the framework of meeting of the Administrative
Commission meeting on 23-25 June 2015, Member States delegations (sharing their opinions
as experts) expressed their views on the options under consideration:
• nine delegations (Czech Republic, Germany, France, Lithuania, Latvia, Luxembourg,
Netherlands, Sweden and UK) made clear that they preferred to wait for the outcome of
the judgments of Alimanovic and Garcia Nieto before any firm action is taken;
• eight delegations (Malta, Hungary, Italy, Poland, Portugal, Finland, Lithuania and Spain)
favoured the status quo as a first or second choice;
• four (Spain, Finland, Hungary, Sweden) expressed support for the status quo accompanied
by administrative guidance;
• twelve delegations supported the option of amending Article 4 as a first or second choice
(Austria, Belgium, Czech Republic, Germany, Estonia, France, Hungary, Ireland,
Lithuania, Latvia, Poland, UK) although there was no general consensus on the changes
needed and some of these views are provisional as it includes Member States who were in
favour of awaiting the outcome of the pending court cases before adopting a fixed
position;
• finally, two delegations favoured the option of excluding SNCBs from scope of Social
Security Regulation (Estonia and Ireland).
2. National administrations
A web-based survey among the responsible national public authorities and other key actors
with regard to the coordination of unemployment benefits for frontier workers, the export of
unemployment benefits and the coordination of long-term care benefits was launched in
December 2012 by Deloitte consulting.
In relation to the coordination of unemployment benefits for frontier workers, 43% of all
respondents think that the competent Member State should be the one in which the person last
worked and paid social security contribution, even if a person lives in another Member State.
About 27% of the respondents favour a right of choice for workers to claim their
unemployment benefits either in the country of last activity or the country of residence. About
25% say that the country of residence should be the competent Member State, even if a person
last worked and paid social contributions in another Member State. Applying a country-by-
EN xx EN
country analysis, the results are slightly different with regard to the 2nd and 3rd preferred
option. In 11 countries (Cyprus, Czech Republic, Finland, France, Hungary, Italy, Latvia,
Malta, Netherlands, Portugal, Slovenia), the most popular option among public authorities is
that unemployment benefits should be provided by the Member State in which the person last
worked and paid social security contributions, even if he/she lives in another Member State.
In several of these countries, there is also strong support for the option where workers would
have a right of choice with regard to where to claim their unemployment benefits. The reasons
why respondents say to favour this option are: it would put an end to the reimbursement of
unemployment benefits between Member States and it is fairer that the Member State which
receives the social security contributions is also competent to provide the unemployment
benefits. However, several respondents warn that this option entails risks of abuse/fraud. The
country of residence may lack an incentive to check the legitimacy of the benefits provided by
the competent country and to follow-up the unemployed person during the job-seeking
process. In 9 countries (Austria, Belgium, Denmark, Germany, Ireland, Luxembourg, Spain,
Sweden, Switzerland), most public authorities are in favour of the Member State in which the
person lived being the competent Member State, even if he/she last worked and paid social
security contributions in another Member State. These countries are also generally against a
thorough revision of the coordination rules. In 5 countries(Czech Republic, Estonia, Romania,
Slovakia, UK), the most popular option is that a person should be allowed to choose to claim
the benefit either in the Member State of last employment or in the Member State where the
person lived (if these Member States are different).
In relation to the export of unemployment benefits, almost 45% of all respondents are in
favour of giving the possibility of “exporting unemployment benefits” (going to another
country to look for a job while continuing to receive the unemployment benefits from the
competent institution) until the end of the person’s entitlement to unemployment benefits,
according to the rules of the Member State which provides them. 34% of all respondents
would like to maintain the current period of export of 3 months with a possible extension of
the export of unemployment benefits to 6 months. About 12% would like to extend the period
of export in the entire EU to at least six months.
Analysing the replies on a country-by-country basis, the results look differently. The current
rule of a three-month period of export with a possible extension to 6 months is the most
chosen option among public authorities in 11 countries (Austria, Belgium, Cyprus, Denmark,
Estonia, Finland, France, Germany, Lithuania, Luxembourg, Netherlands, Switzerland). In 9
countries (HU, Italy, Latvia, Malta, Poland, Romania, Slovakia, Slovenia, Spain, UK),
exporting the unemployment benefit until the end of the person's entitlement to
unemployment benefits, according to the rules of the Member State which provides them, is
the most preferred option. Only in one Member State (PT), public authorities favour a general
period of export of minimum 6 months.
52% of all respondents think that the export of unemployment benefits could lead to increased
risk of misuse or abuse of rights. This is also the opinion of most public authorities in 15
Member States. 79% of this group of respondents think that the risk of misuse or abuse of
rights is particularly high when the unemployment benefits would be provided until the end of
a persons’ entitlement to unemployment benefits, according to the rule of the Member State
which provides them. 33% of the respondents also believe that there would be an increased
risk of abuse if the period of export would be generally extended to minimum 6 months.
EN xxi EN
45% of the respondents do not think that misuse or abuse of rights is a risk in cases of export
of unemployment benefits. This is also the most dominant position among public authorities
in 8 countries.
Public authorities, who believe that the export of unemployment benefits could lead to
increased risk of misuse of rights, propose the following mitigation measures to reduce this
risk:
• The receiving Member State should feel more responsible for jobseekers who have
exported their unemployment benefit from another Member State. Agreements should be
made between Member States about the control and the provision of active assistance to
jobseekers (HU, Austria, Czech Republic, Ireland, Italy, Lithuania, Netherlands, Poland,
Portugal and Slovenia). However, more control of jobseekers by the guest Member State
will also increase the administrative burden and costs on Member States (Denmark).
• Some Member States say that the keeping the period of export generally limited to
maximum 3 months will limit the risk of abuse and misuse of rights. Extension may be
possible, if there is a high probability that the jobseeker will find work at short term
(Austria, Belgium, Ireland). Several Member States would like to enhance the role of the
receiving Member State in providing information to the competent Member State about
the chances of a person to find a job at short-term, so that the competent Member State
can take a well-argumented decision about extending the period of export in a specific
case (BE, Estonia, Czech Republic and France).
o All jobseekers who have exported their unemployment benefits should be obliged
to report about their job seeking activities to the competent Member State (Czech
Republic, Germany, Malta, Lithuania and France). Some countries are in favour of
monthly reporting by the jobseeker to the competent institution (Germany, Malta
and Lithuania); other Member States say that a 3-monthly reporting would be
sufficient (FR).
o One respondent suggests making language courses compulsory in the "guest"
country, as language is often the most important barrier to integration in the labour
market. Also reducing the height of unemployment benefit over time could
provide an incentive to jobseekers abroad to actively apply for a job.
o In the long-run, it should be possible to introduce an EU-Job pass for every EU citizen
which contains his/her social data. Every public employment service should be able
to access these data, based on a single European social database (Germany,
Netherlands).
When people are exporting their unemployment benefit abroad, 40% of the organisations that
deal with claims for exportation of unemployment benefits say that they receive information
about the status of these job-seekers from the country of residence, but only on request. About
19% automatically receives information from country of residence. About 10% of the
respondents say that this information is not needed. The majority of these respondents cannot
say if these job-seekers (who exported their unemployment benefit) had found a job.
In relation to the coordination of long-term care benefits, 17% of the national
administrations and social security institutions would like to keep the current coordination
rules for long-term care benefits. About 28% of the respondents believe that people should be
treated equally in the Member State where they are insured and should not have their care
benefits reduced if they move to another Member State.
EN xxii EN
The options where a person in need of care is treated equally in the Member State where he is
insured or where he/she lives are considered by national administrations as the best ones to
stimulate free movement of persons. The current coordination rules are seen as the worst
option to stimulate mobility of persons.
In terms of social security coverage, national administrations have a preference for the option
in which a person in need of care is treated equally in the Member State where he/she lives
and receives LTC benefits there in accordance with national legislation. Also the option
where a person receives care benefits in cash from the Member State of residence,
supplemented by the Member State of insurance in case of more advantageous conditions
(top-up).
Making the competent Member State fully responsible for the provision of the LTC benefits is
seen as the best option to ensure a fair share of the financial burden between Member States.
Almost half of the national administrations are of the opinion that all costs for LTC benefits
should be borne by the competent Member States (where the migrant person is insured).
About one third prefers a system where those costs are shared between the Member State of
residence and the competent Member State. The latter option however is seen as the most
burdensome in terms of administration.
Views of national organisations in charge of the payment of family benefits
On 7 October 2015, a group of five national organisations in charge of the payment of family
benefits from Belgium, France and the Netherlands478
, issued a position paper in relation to
the possible revision of rules on the export of family benefits, strongly supporting the status
quo.
3. Social partners
In relation to the coordination of long-term care benefits, export of unemployment
benefits and coordination of unemployment benefits for frontier workers, social partners
were consulted in the framework of the Advisory Committee for the Coordination of Social
Security Systems on 24 October 2013.
ETUC (European Trade Union Confederation) noted that in this work the Commission should
take into account the experience of cross-border workers – the ETUC has found that these
workers are often the first to lose their jobs during an economic downturn and can then be
refused unemployment benefits in their Member State of residence. The ETUC's research
showed this to be a persistent and spreading problem. ETUC also noted that the current
Regulations do not cater sufficiently for certain groups of mobile workers, like apprentices.
ETUC also expressed surprise at questions in the public consultation on whether the current
regime was abused by migrant workers, given that the document was aimed at finding out
how the rights of migrant worker can be improved.
BUSINESS EUROPE commented on the need to strike the right balance taking account of
potential costs to Member States and businesses. BUSINESSEUROPE considered that
unemployment benefits should be time-limited for those seeking employment in another
Member State, and deciding the specific time period left as a national competence.
478
CCMSA – Caisse centrale de la Mutualité sociale agricole, CNAF – Caisse Nationale des Allocations familiales and REIF –
Représentation des institutions françaises de Sécurité sociale auprès de l’UE (France); FAMIFED (Belgium); and SVB - Sociale
Verzekeringsbank (The Netherlands)
EN xxiii EN
ETUC underlined the pressing need to focus on defending and improving the rights of
workers. In particular, if a mobile worker has been employed and paid contributions in
another Member State to that in which they are resident, it seems right that the Member State
of last activity should pay their unemployment benefits.
A dedicated hearing with social partners was also organised on 10 June 2015 to allow for
collecting views on the coordination of long-term care benefits, export of unemployment
benefits, aggregation of unemployment benefits, coordination of unemployment benefits
for frontier workers, export of family benefits, and access to special non-contributory
cash benefits for non-active mobiel EU citizens.
Employers generally referred to the importance of finding the right balance between
promoting labour mobility and combatting fraud.
BUSINESSEUROPE stated, during the workshop and in written statements, that respecting
the equal treatment principle and ensuring access to information is key. The package should
take a comprehensive approach by also addressing issues like e.g. linguistic skills and
EURES. The difference in perspectives between origin and destination countries was also
underlined. They also suggested that sectoral approaches may be necessary. Mobile workers
should not have access to unemployment benefits after one day of work and article 61 of
Regulation 883/04 should be adapted. In relation to export of unemployment benefits, there is
no change needed in the current period of export of unemployment benefit for a minimum of
3 months. BUSINESSEUROPE recognised the link with the sustainability of social protection
systems and the need to combat fraud and abuse. The Dano case was welcomed as a
clarification in this respect.
CEEP (European Centre of Employers and Enterprises providing Public Services) stressed the
importance of combating fraud and insuring the sustainability of systems.
UEAPME (European Association of Craft, Small and Medium-sized Enterprises) stated,
during the meeting and in written contributions following the meeting, that the provision that
the export of unemployment benefits to a second Member State can take place for 3 months
(and optionally extended to 6 months, Art. 64.c) should remain and not be extended.
UEAPME considers it important that workers are activated to find a job in the Member State
of destination as soon as possible, in the interest of both employers and the unemployed. In
relation to the coordination of unemployment benefits for frontier workers, UEAPME does
not consider the current situation, where an exception is made to the principle that the country
of employment is normally responsible for the payment of unemployment benefits, as
problematic since a real frontier worker has generally a stronger relationship with the country
of residence than the country of employment, which provides good grounds for this Member
State to pay the benefits. In relation to the aggregation of unemployment benefits, UEAPME
would be in favour of introducing a minimum waiting period in the Member State of last
employment before entitlement to social security coverage and notably access to
unemployment benefits in that Member State. In relation to export of family benefits,
UEAPME considers that the principle of the country of employment being responsible for the
payment of family benefits should be maintained. However, if this family lives in another
Member State, UEAPME considers it fair to adapt the amount of benefits to the cost of living
in that Member State.
EFCI (European Federation of Cleaning Industries) stressed the need to promote mobility of
apprentices and the establishment of national systems of apprenticeship to fight youth
unemployment.
EN xxiv EN
PEARLE (Performance Arts Employers Association Europe), during the meeting and in a
written contribution, emphasised that employers in the live performance sector are confronted
with specific issues on social security and posting and need instruments such as one-stop-shop
or national centres where they can obtain guidance to comply with the requirements in
different countries.
DA (Confederation of Danish Employers) mentioned that electronic data exchange can also
be used to combat issues like lacking payments of contributions in the country of origin.
CEC (Confederation of European Managers), during the meeting and in a written
contribution, highlighted the necessity to make sure that public authorities designated for the
enforcement of the different provisions (and limitations to the enjoyment of benefits) apply
rigorously the current legislation and adopt all necessary measures to ensure that workers no
longer satisfying the conditions set by legislation are excluded from the benefits.
The trade unions warned that caution should be applied when discussing so-called 'social
security tourism' and possible abuses as it might end up in some unilateral action of Member
States that are not in line with EU law. Before engaging in a debate on a possible change of
the rules, proper analysis should be conducted to assess if the problems are a result of
shortages in implementation, or problems that call for legislative action. A holistic approach
should be applied to tackle issues such as possible unequal treatment, involuntary mobility
and brain drain.
ETUC, during the meeting and in a written statement, stressed the need to base the discussion
on labour mobility on proper analysis instead of copying populist propaganda from some
Member States. On the coordination of unemployment benefits for frontier workers, ETUC
supports the possibility for frontier workers and/or mobile workers who are seeking new
employment in another Member State to receive their unemployment benefit for up to six
months. On the export of unemployment benefits, ETUC supports the possibility to pay
between three and six months. In relation to the aggregation of rights and the level of salary
which should be calculated for the unemployment benefit, ETUC is of the opinion that full
entitlement to unemployment benefits should be assured and that qualifying periods could be
accumulated across Member States. In relation to long-term care benefits, ETUC is of the
opinion that a rights based approach to long term care across the EU is urgently needed and
calls upon the EU institutions to develop a coherent approach to long term care. In general,
ETUC underlined that the principle of full equal treatment in the host country is
indispensable, and considers it unacceptable if amendments to the Regulation would touch
upon this principle and are guided by the concept of residence. ETUC also stated that if
exceptions are considered they should be limited to cases which constitute clear abuses and
must be based on sufficient evidence about abuses and / or for reasonable motivations.
TUC (Trades Union Congress, UK) highlighted that the right to family benefits is attached to
the worker and not to the place of residence of the family. In their view lowering the family
benefits for mobile workers would in any event constitute unequal treatment.
EFBWW (European Federation of Building and Woodworkers) stated that the proposals by
the Commission appeared to focus mainly on some national concerns about "benefit tourism",
and it underlined that only European problems, and not national ones, should be addressed at
European level.
4. NGOs
EN xxv EN
Representatives from 11 NGOs479
were consulted in relation to the coordination of long-
term care benefits, export of unemployment benefits, aggregation of unemployment
benefits, coordination of unemployment benefits for frontier workers, export of family
benefits, and access to special non-contributory cash benefits for non-active mobiel EU
citizens during a meeting on 17 June 2015.
Participants highlighted the importance for the Commission of looking at the definition of
worker, of ensuring that existing gaps in social security protection for mobile citizens are
addressed, and of strengthening the collection of statistics on intra-EU mobility. They also
acknowledged the importance of addressing the issues in the current debate on labour
mobility to avoid that free movement becomes an even more contentious issue that it already
is. However, they insisted on the importance of preserving the principle of equal treatment,
especially for those more vulnerable.
Also, participants underlined the importance of adopting non-legislative measures, arguing
that several barriers to free movement of workers linked to social security coordination are the
result of incorrect/non application of existing rules, or to the fact that the cooperation between
Member States, envisaged by the 2010 reforms of SSC rules, has not been strengthened
enough yet.
Access to the labour market for mobile EU workers and jobseekers was mentioned as a
specific issues that the Commission needs to look at: specific examples were provided by
participants about administrative barriers (notably for jobseekers in Scandinavian countries),
and recognition of professional qualifications was also mentioned as a barrier. Also, the issue
of destitution of migrant workers was mentioned as a major issue, often resulting in
homelessness.
In relation to unemployment benefits, participant expressed their support to the extension of
the period of their exportability, in view of the time needed to find a job, and of existing
administrative barriers.
In relation to export of family benefits, some participants recognised the need for some
compromise in view of the position of some MS opposing export, which would entail the
(dynamic) adaptation of exported family benefits to the living conditions of the country where
the children of the workers reside. Others underlined the unfairness of adaptation, since the
workers concerned pay the same taxes, but also the fact that, for the competent MS, adapting
family benefits may prove anti-economical if the concerned families were to move to the MS
as a result. In this sense, it was mentioned that the biggest challenge for local authorities is
represented by pressure on public services, and not by "benefit tourism".
In relation to long-term care benefits, participants expressed support to the idea of creating a
specific chapter for their coordination, underlining that they should be exportable, but also
warning against endangering the important link between healthcare and social care.
Written contributions were also received from EURODIACONIA, recommending to extend
the duration of the export of unemployment benefits; and from ECAS, recommending to
provide explicitely for the exportability of long-term benefits; to extend the duration of the
export of unemployment benefits; to ensure full respect for the principle of equal treatment
give in the reform of the rules on family benefits.
479
European Citizen Action Service (ECAS); European Disability Forum; Conference of European Churches; EURODIACONIA;
Confederation of Family Organisations in the European Union; Advice on Individual Rights in Europe; Friedrich-Ebert-Stiftung; European
Anti Poverty Network; European Solidarity Network; Europeans Throughout the World; l’Association Européenne de la Pensée Libre;
EN xxvi EN
5. Public consultations
a) EU Citizenship Report
Relevant results of the public consultation on the extenstion of the right to unemployment
benefits in the framework of the EU Citizenship Report480
have also been taken into account
with regard to the export of unemployment benefits.
b) Online consultation on the coordination of long-term care benefits and
unemployment benefits (export of unemployment benefits and coordination of
unemployment benefits for frontier workers)
The European Commission launched an online consultation on the coordination of long-term
care benefits and unemployment benefits (export of unemployment benefits and coordination
of unemployment benefits for frontier workers) on 5 December 2012 to which 299 replies
were received. 199 of the replies received were from individuals and 100 on behalf of an
organisation or as specialists. Both individuals as well as organisations (including Member
States' authorities, trade unions and non-governmental organisations and private companies)
from the EU and EEA-EFTA States replied to the public consultation.
The content of these replies has been taken into account in the overall analysis and included in
the statistics whenever possible (they did not contain full replies to all questions in the
consultation). Not all respondents gave full replies to the consultation and the replies are only
reflected in the results to the extent that a reply was received to a particular question.
By nationality, Spanish were the most numerous among individual respondents, accounting
for 26.6% of the responses. No replies were received from persons from Cyprus, Denmark,
Iceland, Luxembourg and Malta.
Stakeholder category Number of replies Percentage
National administration 67 67%
Social partner / Trade union 19 19%
Civil society / Non-
governmental organisation
11 11%
Company 2 2%
Unknown 1 1%
Coordination of unemployment benefits
In relation to the coordination of unemployment benefits, the consultation provided some
evidence of the diversity of opinions among individuals and different types of stakeholders.
National administrations often had different opinions than the social partners, trade unions,
480
Action 1 in the Report from the Commission to the European Parliament. The Council, the European Economic and Social Committee
and
the Committee of the Regions, EU Citizenship Report 2013: EU citizens: your rights, your future, COM (2013) 269 final. See
http://ec.europa.eu/justice/citizen/files/eu-citizen-brochure_en.pdf.
EN xxvii EN
civil society and non-governmental organisations. The combination of all opinions allows for
a comprehensive view of the current system of coordination of unemployment benefits in the
EU, including what are perceived to be the main problems and shortcomings perceived, and
what the possible options are for reform.
Almost half of the respondents (49%) were in favour of giving the unemployed person the
right to choose to claim unemployment benefits in the Member State of last employment, or
in the Member State where the person lived during his/her last period of employment (where
these Member States were different). The second most commonly chosen option (40% of the
individual respondents) was that the unemployed person should have to apply for
unemployment benefits in the Member State where he/she last worked and paid contributions,
even if he/she lived in another Member State. In third most commonly chosen option (far
behind the first two in terms of percentage of respondents), selected by 7% of the participants,
was the option where unemployed workers should claim unemployment benefits in their
country of residence, even if they last worked and paid social security contributions in another
Member State.
Options
Number
of replies
% of
Individual
replies
The Member State where the person last worked
and paid social security contributions, even if
he/she lived in another Member State.
72 40,22%
The Member State where the person has lived,
even if he/she last worked and paid social
security contributions in another Member State.
13 7,26%
The person should be allowed to choose to
claim the benefit either in the Member State of
last employment or in the Member State where
the person has lived (if these Member States
were different).
87 48,60%
Other solution 7 3,91%
Individuals and organisations at large shared some views with regard to which Member State
should be the Member State competent for the provision of unemployment benefits. Only a
small share of both groups (and, within organisations, of each type of stakeholder) considered
that the country of residence should be the competent Member State. Individuals were rather
divided between preferring a right of choice for mobile workers (49% of replies) and making
the country of last activity competent (40%). The same two options were clearly preferred by
organisations, but in reverse order. National administrations (47% of them) and civil society
organisations and NGOs (78%) were more often in favour of making the country of last
activity competent, while social partners and trade unions (47%) preferred the right of choice
option).
EN xxviii EN
With regard to the export of unemployment benefits, individuals favoured the export until the
end of the person’s entitlement (59%) of them. This option also received support among
organisations (34% of national administrations and 56% of civil society organisations and
NGOs), although less than the maintenance of the current rules, which were the preferred
option by national administrations (42% of them) and social partners and trade unions (76%).
One option received less support across the respondents (export for at least six months).
Options
Number of
replies
% of
Individual
replies
For three months, with a possible extension up to six
months (the current situation under EU law)
43 24,02%
For at least six months 28 15,64%
Until the end of the person's entitlement to
unemployment benefits, according to the rules of the
Member State which provides them
105 58,66%
Other solution 3 1,68%
Therefore, for both questions making the country of residence competent for paying
unemployment benefits an export unemployment benefits for at least six month where the
least preferred options and opinions were fairly divided among two other options.
Coordination of long-term care benefits
A total of 127 individual responses and 45 responses on behalf of national authorities, an
organisation or as a specialist were received for the part covering the coordination of long-
term care benefits. The results of the public consultation highlight the diversity of opinions
regarding the Member State competent for providing long-term care benefits. Opinions on
these questions varied both across individuals and among stakeholders.
a) Individuals' replies
For individuals, the preferred option was for entitlements to be equal to those in the country of
insurance (39%), but two other options (namely: entitlement to be equal to those in the
country of residence; maintenance of the current rules) gathered almost 20% of the support.
Options where the introduction of a supplement to the long-term care cash benefits is foreseen
gathered respectively: 14% if benefits provided by the competent State and 6% if provided by
the Member State of residence.
Opinions on the competent Member State and on the
level of LTC to be provided
Number of
requested
records
%
Requeste
d
records(1
27)
Should continue receiving benefits as it is today
(depending on the Member States' legislation the person
23 18,11%
EN xxix EN
Opinions on the competent Member State and on the
level of LTC to be provided
Number of
requested
records
%
Requeste
d
records(1
27)
might end up in a win or in a lose situation).
Should be treated equally in the Member State where
he/she is insured and should not have his/her care
benefits reduced if he/she moves to another Member
State.
49 38,58%
Should be treated equally in the Member State where
he/she lives and receive the care benefits there
(including the cash benefits), in accordance with the
national legislation.
25 19,69%
Should get care benefits in cash from the Member State
of insurance, supplemented by the Member State of
residence in case of more advantageous conditions (top-
up).
18 14,17%
Should get care benefits in cash from the Member State
of residence, supplemented by the Member State of
insurance in case of more advantageous conditions (top-
up).
8 6,30%
Other solution 4 3,15%
b) Replies by national administrations, social partners, NGOs and other organisations
Opinions among organisations481
were also divided. The most-selected option was that the
current rules be maintained (supported by 36% in total), but based largely on national
administrations’ opinions (they accounted for 75% of these replies).
Considered per type of stakeholders, the current rules were the preferred option by national
administrations (53% of replies). Preference among social partners and trade unions were
quite spread among the different options, with some slight preference for the entitlements to
be equal to those in the country of insurance. Civil society organisations and NGOs also
showed some divergent opinions among them, with the most often-selected option for the
entitlement to be equal to those in the country of residence. More insights could not be gained
directly from the consultation, since there was no possibility to elaborate on the arguments for
selecting each option.
481
Including national authorities, social partners, NGOs and other types of organisations.
EN xxx EN
There was consensus among respondents on behalf of organisations that all costs for care
benefits provided to an insured person should be borne by the Member State where the
migrant person is insured for healthcare or long-term care (67 %)482
.
Option
A
Option
B
Option
C
Option
D
Option
E
Option
F
National administration 12 4 2 3 1 1
social partner / trade
union 2 4 2 1 3 0
civil society / non-
governmental
organisation (NGO)
1 2 4 1 0 0
Company 0 0 1 0 0 0
unknown 1 0 0 0 0 0
Total 16 10 9 5 4 1
Total (%) 35,56% 22,22% 20,00% 11,11% 8,89% 2,22%
c) Online consultation on the aggregation of unemployment benefits and on the export
of family benefits
DG EMPL launched an online consultation on the coordination of unemployment benefits
(aggregation rules) and on the coordination of family benefits (export rules), which ran from
15 July 2015 until 7 October 2015483
.
307 responses have been received from 199 individuals and 108 organisations (public
authorities; workers' organisations; NGOs; employers; SMEs; companies; think-tanks…)
from 25 Member States. Hereunder an overview of the outcome of the consultation.
Export of family benefits
As it can be seen in the table below, around a third of the respondents believe that the current
rules on the export of family benefits should be changed.
482
This question was not included in the part of the questionnaire addressed to the individuals.
483
http://ec.europa.eu/social/main.jsp?catId=333&langId=en&consultId=16&visib=0&furtherConsult=yes
EN xxxi EN
A number of comments and proposals for possible changes of the rules on the export of
family benefits were also made:
• Mixed views on indexation to country of residence of child
• Member State of residence of child should be competent
• Harmonisation/Unification of European Social Security Schemes
• Improvements to the accessibility and simplicity of scheme
• Improved speed of processing of claims
• Special provisions for single parents and family breakdown/remarriage
• Concerns about inter-dependency between between social security and taxation
• Clarification of certain concept e.g. "benefits of the same kind"; "family members";
"mainly dependent on the insured person" distinction between family benefits and SNCBs
Aggregation of unemployment benefits
As it can be seen in the table below, more than a third of the respondents believe that the
current rules on the aggregation of unemployment benefits should be changed.
EN xxxii EN
A number of comments and proposals for possible changes of the rules on the aggregation of
unemployment benefits were also made:
• General support for concept of minimum qualifying period (3 months to 5 years) before
aggregation provided former MS pays benefit
• General support for extension of period of export for benefit (6+6 months)
• Some support for right of choice for where to claim unemployment benefits
• Proposal that EU should harmonise/unify unemployment benefits
• Benefits to be calculated on the entirety of qualification period
• Improved accessibility of information
• Mandatory deadlines for administrative procedures
• Robust procedures to combat fraud
EN xxxiii EN
12.Annex III Who is affected and how
EN xxxiv EN
The Annex is based on the preferred options (see section 8. of the main report) and presents
the practical implications for individuals and public administration that will be the most
affected by the initiative.
Long-term care benefits
The preferred option consists of coordination, following the same logic as with sickness
benefits, but adding clarifications. The competent Member State provides long-term care
benefits in cash and reimburses the cost of benefits in kind provided by the Member State of
residence. This legislative proposal would have no impact on rights as such: it would merely
reflect the already-applied rules on sickness, while complementing the sickness rules with
some specific rules that take account of the characteristics of long-term care benefits.
a) Public administration
The information obligations for administrations under this option will remain unchanged. The
option could reduce disputes between institutions. In an initial phase the new legal definition
and the in-or exclusion of long-term care benefits in the definition can increase the
administrative burden for Member States and impact the exchange of information between
Member States. In the long term, the clarification would save time and money spent per case
by the Member States, especially in light of increasing demand for long-term care benefits.
b) Individuals
The clarification will enable EU mobile citizens to receive all the long-term care benefits to
which they are entitled while exercising their right to free movement. It will also contribute to
expediting the process by which persons that require care receive the benefits to which they
are entitled, by removing much of the uncertainty or conflicts on the part of the Member
States involved over the status of the various long-term care benefits.
Unemployment benefits
Competence for paying unemployment benefits to frontier and other cross-border workers
EN xxxv EN
The competence for paying unemployment benefits will switch from the State of residence to
the State of last activity, if the frontier and other cross-border workers have worked in that
State for more than 12 months.
a) Public administration
The number of cases handled by the employment services in the State of last activity can be
expected to increase while it will decrease in the State of residence. Except for the changes in
the number of cases, no further changes in the administrative procedures/tasks are expected in
comparison to baseline under which – as a rule – this information is anyway required for the
purpose of determining whether the qualifying period for a right to benefits under the
legislation of the State residence had been completed.
This option may result in more cases of export, whenever a frontier worker for whom the
competence has switched from the State of residence to the State of last activity prefers to
focus the search for employment in the State of residence and therefore wants to register with
the employment service located in that State. The administrative procedures for the export of
unemployment benefits are established and therefore the only change expected inthis respect
is the potential number of cases.
b) Individuals
The length of insured employment will be certified by means of the PD U1 and this will also
enable the worker and the employment services to determine the competent institution. There
will be no need for them to provide additional information.
Aggregation of periods of insurance or (self-)employment
Mobile workers will no longer be able to rely on the aggregation of periods completed in the
Member State of previous activity if they have worked for less than three months in the
Member State of last activity. However, in this situation, the Member State of previous
activity becomes competent. This means that the competence for paying unemployment
benefits will switch from the State of last activity to the State of previous activity for mobile
workers who have workerd less than 3 months in the State of last activity.
a) Public administration
The number of cases handled by the employment services in the State of previous activity can
be expected to increase while it will decrease in the State of last activity. The employment
services will also have to take the necessary measures to provide for an export of their
unemployment benefit to the Member State of last activity (e.g. provide the person with a
Portable Document U2), while the employment service in the Member State of last activity
will assume the task of assisting the worker in finding new employment. They will also have
EN xxxvi EN
to assume the task of informing the employment services in the Member State of previous
activity whenever a mobile worker registers with them, who has not yet been insured for the
required minimum period of three months.
This option may result in more cases of export, whenever a mobile worker has not completed
the required three-month period in the Member State of last activity. As the administrative
procedures for the export of unemployment benefits are established, this would be the only
change expected.
b) Individuals
There is no change for the individuals as they continue to register in any case of
unemployment with the employment service of the Member State of last activity. It is then the
task of this institution to determine, whether it can provide the benefits based, if necessary, on
aggregation or whether it has to refer the case to the employment service of the Member State
of previous activity.
Export of unemployment benefits
The period for export of unemployment benefits is extended to a minimum period of 6 months
with possibility of further extension up to the end of the entitlement period.
a) Public administration
The employment services in the competent State can be expected to have to handle more
situatoinis in whichthe unemployment benefit is exported. This does not necessarily result in
an increase of the administrtaive burden, as they do not have to assume the task of controlng
the person duringthe export period. As before, they will have to provide the unemployed
persons with a Portable Document U2 and inform him or her about the duties to fulfil in the
State to which they intend to go in order to look for employment.
The employment services in the Member State to which the unemployed person went in order
to look for employment will have to register those persons and assist them in their job-
searching activities. Moreover, the reinforced cooperation mechanism will require them to
report regularly on a monthly basisto the competent institution on the follow-up of the
unemployed person’s situation, in particular whether the latter is still registered with the
emplyoment services and is complying with organised checking procedures.
b) Individuals
EN xxxvii EN
Unemployed persons have to register with the employment service of the State to whichthey
went in order to look for employment and provide all relevant information as this has been the
case so far. The only change is that the export can be granted for longer periods than before.
Access for economically inactive mobile EU citizens and jobseekers to certain social
benefits
The preferred option is the amendment of Article 4 of Regulation 883/2004 to make reference
to the limitations in Directive 2004/38/EC. This option will merely codify existing case-law.
a) Individuals
For economically inactive EU mobile citizens and jobseekers this option would facilitate them
to make an informed choice when exercising their rights to move to another Member State. At
the same time it is likely to reduce litigation costs and legal advice costs.
b) Public administration
For administrations this option is likely to reduce litigation costs and legal advice costs as
well as the number of requests for benefits.
Family benefits
a) Individuals
The baseline scenario would have no direct impact on citizens and require no additional
procedural steps. However, the introduction of a pan-European Electronic Exchange for
Social Security Information (EESSI) is likely to increase the speed and efficiency of
processing time to the benefit of citizens.
The horizontal option c is in general likely to entail reduced administrative procedures for
claimants as where the derogation is applied the process will be aligned to normal national
procedures resulting in a predictable level of income, meaning citizens will be subject to
EN xxxviii EN
fewer unexpected changes arising from periodic adjustments in benefit levels in another
Member State with a reduced risk of recovery procedures. However, as it will be at the
discretion of Member States whether or not they choose to disapply the anti-accumulation
rules, these benefits will not be experienced by all families. Families will claim on the basis
of the parent with direct entitlement meaning there is a simpler procedure with no need to
supply data for hypothetical calculation of salary (although a small number of parents will
lose derived rights).
b) Public administration
In relation to the baseline scenario, it is already anticipated that regulatory burdens may be
mitigated by the implementation of EESSI, including the adoption of consistent protocols for
administering exchanges of information on export of family benefits. The Administrative
Commission Ad-Hoc Working Group for establishing the definition of data to be exchanged
electronically under EESSI in the field of family benefits is currently working on stream-
lining processes. The Structured Electronic Document (SED) F001 – Request for determining
competences and F002 Reply for determining competences have been developed for
establishing competence. Specific exchanges may also be applied where there is a need for
detailed information on periods of employment and contribution or medical information
related to family benefits for a child or young person with a disability or health condition.484
In relation to the horizontal option c, Member States will be entitled to award salary-related
child-raising allowances to EU mobile citizens subject to the applicable legislation in
accordance with the normal rules under national legislation regardless of whether they have
primary or secondary competence for awarding family benefits. In particular, the secondary
competent Member State will no longer be required to include such benefits (which can be
subject to fluctuation) within the calculation of the differential supplement. Thereby
simplifying the calculation procedure and avoiding need for periodic adjustments relating to
changes in the families circumstances or salary or the need to arrange recovery of any
overpayment that might arise from delays in communicating such changes of circumstance.
There will no longer be any need to apply a hypothetical calculation in relation to a parent
who does not have relevant income or earnings within the competent Member State but who
asserts a derived right to benefits resulting in considerable simplification for those public
administrations who recognise benefits on the basis of a derived right.485
However, it may be anticipated that there is some increase in administrative tasks for Member
States who seek to verify whether or not a benefit available in another Member State should
be considered a child-raising allowance.
484
EESSI Business Use Case: FB_BUC_01_Determine Competences
485
In practice only four Member States recognise entitlement to child-raising allowances calculated with reference to salary or professional
income on the basis of derived rights. Annex XXV p14