Amended proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on coordination of social security systems (presented by the Commission pursuant to Article 250(2) of the EC Treaty)

1998/0360 (COD)

Amended proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on coordination of social security systems

1. Background

Regulation (EEC) No 1408/71 makes provision for the coordination of Member States' social security schemes in order to protect the rights of persons moving within the European Union.

It has been amended many times since being adopted in 1971 in order to take account of changes to national legislation, improve certain provisions, remedy deficiencies or cover the situation of particular categories of persons. Furthermore, certain provisions require clarification in order to avoid interpretation problems, as evidenced by the large number of judgments on coordination issues delivered by the Court of Justice. The goal pursued by coordination must also be adapted to changes in the European Union as a whole. Coordination rules are not just intended to ensure free movement for employed persons; they are also increasingly about protecting the social security rights of all persons moving within the European Union. Coordination must therefore be seen from the perspective of European citizenship and the building of a Social Europe.

On 21 December 1998 the Commission therefore presented a proposal for a Regulation to simplify and modernise the coordination rules contained in Regulation (EEC) No 1408/71.

At its plenary part-session of 3 September 2003, the European Parliament adopted 47 amendments to the Commission's proposal.

2. Examination of amendments

The Commission agrees to incorporate amendments 3-10, 12-19, 21-26, 28-32, 34, 35, 37, 39, 46-48, 50 and 52-56 into its amended proposal as they stand. It can accept amendment 11 in part. It can also accept combined amendments 51 and 44 in part. It cannot accept amendments 38, 40, 45 and 49.

2.1. Amendments accepted by the Commission

2.1.1. Amendment 3

The amendment limits the scope of the Regulation, in terms of persons covered, to nationals of EU Member States, stateless persons and refugees. In view of the adoption on 14 May 2003 of the Regulation extending the provisions of Regulation (EEC) No 1408/71 to nationals of third countries [1], the amendment is acceptable.

[1] Council Regulation (EC) No 859/2003 of 14 May 2003 (OJ L 124, 20.5.2003).

2.1.2. Amendments 4 and 32

The purpose of these amendments is to include paternity benefits in the scope of the Regulation. As this constitutes modernisation, the amendments are acceptable.

2.1.3. Amendment 5

The amendment removes the condition regarding residence in the territory of a Member State, which is currently required for the provision on equal treatment to be applied. It thus allows application of the provision on equal treatment to be extended and is therefore acceptable.

2.1.4. Amendments 6-8, 24-26, 28-30, 37 and 39

These amendments make the Commission's proposal clearer and more precise. They are therefore acceptable to the Commission.

2.1.5. Amendments 9 and 10

These amendments flesh out the conditions for maintaining conventions entered into prior to the entry into force of the Regulation and for allowing Member States to conclude conventions with each other. They are acceptable to the Commission.

2.1.6. Amendment 12

Amendment 12 adds a provision to limit the combination of benefits of the same kind for one and the same insurance period. It is acceptable, as it restricts the undue granting of benefits.

2.1.7. Amendments 13-19 and 21-23

The purpose of these amendments is to clarify various definitions, add new definitions that are needed, and remove a number of superfluous definitions. They are therefore acceptable to the Commission.

2.1.8. Amendment 31

Amendment 31 deletes the derogations concerning the legislation applicable to personnel employed by diplomatic missions and consular posts. It is acceptable in that it serves the purpose of simplification, in other words the removal of derogations for specific categories of insured persons.

2.1.9. Amendments 34 and 35

The purpose of amendment 34 is to entitle persons staying in a Member State other than the competent State to benefits in kind which become medically necessary (without constituting an emergency). This amendment is favourable to insured persons, as it removes the requirement that benefits in kind are to be provided during a stay in another Member State only in an emergency. For this reason it is acceptable to the Commission. Amendment 35 is also acceptable as it repeals a provision which amendment 34 renders superfluous.

2.1.10. Amendment 46

Amendment 46 adds a recital emphasising the need to provide for coordinating rules for contractual provisions which complement or replace social security legislation in order to allow aggregation of periods of insurance and the waiving of residence clauses. The addition of such a recital is acceptable to the Commission.

2.1.11. Amendment 47

Amendment 47 emphasises the fact that the principle of equal treatment is of particular importance for frontier workers, who reside in a Member State other than the competent State. It is therefore acceptable to the Commission.

2.1.12. Amendment 48

The purpose of amendment 48 is to add a recital on the need for greater convergence between the coordination of social security schemes and certain rules contained in agreements on double taxation. It is acceptable to the Commission.

2.1.13. Amendment 50

The Commission can accept amendment 50, which entitles the members of a frontier worker's family to benefits in kind in the competent State.

2.1.14. Amendment 52

The purpose of amendment 52 is to ensure that Member States' institutions cooperate in order to find solutions to problems affecting a person or group of persons which derive from the application of the Regulation. This amendment respects the limits in terms of the coordination of social security schemes and is therefore acceptable to the Commission.

2.1.15. Amendment 53

Amendment 53 reflects Court of Justice case law [2]. On the one hand, it is consistent with the Court's interpretation that direct assumption by the competent insurance institution of the cost of out-patient treatment provided in a Member State other than that in which a person is insured should not be subject to prior authorisation. On the other hand, the Court has ruled that prior authorisation may be imposed, subject to certain conditions, for in-patient treatment. The amendment also requires the patient's medical condition to be taken into account when deciding whether or not to authorise travel to another Member State to receive treatment. It is therefore acceptable to the Commission.

[2] Judgment of 12 July 2001, C-157/99 (Smits and Peerbooms); judgment of 13 May 2003, C-385/99 (Müller-Fauré/Van Riet).

2.1.16. Amendment 54

Amendment 54 means that retired frontier workers can obtain health care in their Member State of residence or in the Member State where they were last employed. The Commission can accept this amendment, as it improves the rights of retired frontier workers.

2.1.17. Amendment 55

Amendment 55 introduces a more complete definition of special non-contributory cash benefits, taking account of Court of Justice case law adopted since the Commission presented its initial proposal. It clarifies the conditions which benefits must meet in order to be declared non-exportable. The amendment is also consistent with the Commission's proposal tabled on 31 July 2003 concerning the list of special non-contributory cash benefits. It is therefore fully acceptable to the Commission.

2.1.18. Amendment 56

The Commission's proposal is that unemployed frontier workers should receive unemployment benefits from the State where they were last employed rather than, as at present, their State of residence. Luxembourg has a very large number of frontier workers who live in Belgium, Germany or France. A sudden change to the present rule could have substantial financial consequences for Luxembourg. The introduction of a transitional period for Luxembourg, as proposed in this amendment, is therefore very reasonable.

2.2. Amendments which the Commission can accept in part

2.2.1. Amendment 11

The Commission can partly accept amendment 11, which requires Member States to make a number of declarations relating to the scope of the Regulation. The Commission can accept the spirit of this amendment, although it would appear to be too inflexible in that it obliges Member States to make declarations by a fixed date. The Commission can therefore accept the first paragraph of the amendment, together with a second paragraph reading: "These notifications shall be forwarded to the Commission on an annual basis, and their contents shall be published in the Official Journal of the European Union".

2.2.2. Amendments 51 and 44

The purpose of combined amendments 51 and 44 is to delegate additional tasks in terms of coordination of social security systems to the Administrative Commission. The Commission cannot accept this amendment in as far as it requires the Administrative Commission to draw up proposals to the Member States (point bc of the amendment). This task would be outside the scope of coordination of social security systems. Furthermore, the purpose of this amendment (to take account of the special situation of frontier workers) is already covered by the other two points of the amendment (ba and bb), which are acceptable to the Commission since they respect the coordination limits.

2.3. Amendments which the Commission cannot accept

2.3.1. Amendments 38 and 40

According to amendments 38 and 40, in order to be eligible for cash benefits, frontier workers must submit to examination and reintegration measures in accordance with the legislation of the competent State.

The Commission could accept the spirit of these amendments, but their place would be in an implementing regulation rather than here. The Commission therefore cannot accept them as they stand.

2.3.2 Amendment 45

Amendment 45 obliges institutions to exchange information on proposed changes to legislation, including taxation legislation. The Commission cannot accept this amendment, which goes beyond the scope of coordination.

2.3.3. Amendment 49

The purpose of amendment 49 is to add a recital stipulating that when the Member State of employment applies its legislation it must do so in full respect and mutual recognition of relevant regulations in the worker's Member State of origin. The explanation of the amendment also states that it refers in particular to family law. The Commission cannot accept this amendment, as it goes beyond the scope of coordination of social security systems.

3. Conclusion

Pursuant to Article 250(2) of the EC Treaty, the Commission amends its proposal for a Regulation as outlined above.