Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) amending Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community and Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71` (98/C 73/09)

On 11 September 1997 the Council decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Social, Family, Educational and Cultural Affairs, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 13 November 1997. The rapporteur was Mr Angelo.

At its 350th plenary session (meeting of 10 December 1997), the Economic and Social Committee adopted the following opinion by 104 votes in favour, 3 against and 4 abstentions.

1. Introduction

Regulations (EEC) No 1408/71 and (EEC) No 574/72 were consolidated in a single official text by Regulation (EC) No 118/97, and were amended and updated by Regulation (EC) No 1290/97.

The present proposal seeks mainly to amend the two regulations on the basis of the amendments which Regulation (EC) No 3095/95 made to Article 95 of Regulation (EEC) No 574/72.

The proposal is also designed to update the regulations to take account of changes in national legislation and certain bilateral conventions concluded between Member States.

2. General comments

2.1. The Committee welcomes the amendments which update the rules for applying of social security schemes to the various categories of insured persons. The Committee also supports the proposals which, while not providing specific updating, nevertheless simplify and clarify situations that have led to implementing difficulties.

2.2. A clear and reliable reference framework in this area will make it easier for the persons concerned to move within the EU. This will further one of the basic principles of the Union, namely the free of movement of persons.

2.3. Here the Committee is pleased to note - while not yet entering into details - that the Commission has also issued a proposal for the initial regulation of transfer of supplementary pension rights. This will complement the rules on statutory schemes laid down in Regulation (EEC) No 1408/71, which the present proposal updates and amends.

2.4. Comprehensive rules are needed on the transfer of all pension rights, whether statutory or supplementary. Supplementary schemes have been growing steadily in recent years, especially among more highly skilled persons who are more likely to move around. It is to be hoped that real progress can now be achieved in removing obstacles to mobility.

3. Analysis of the proposed amendments

3.1. General point

3.1.1. Article 95 of Regulation (EEC) No 574/72 regulates the refund on benefits in kind provided under health and maternity insurance to pensioners and to members of their families who do not reside in a Member State under whose legislation they receive a pension and are entitled to the benefits in kind concerned.

3.1.2. The refund is paid as a lump sum. Until Regulation (EC) No 3095/95 entered into force, the sum was calculated on the basis of the average cost per family. Article 2 of Regulation (EC) No 3095/95 made it possible to determine an average cost per person, thereby bringing the lump sum closer to the real cost of the benefit.

As well as making the amendments necessitated by the new system for calculating the lump-sum reimbursement (which in practice becomes a lump-sum reimbursement per person), the proposal also seeks to regulate certain situations where the relations between the institutions of the Member States are unclear.

3.1.3. It should be borne in mind that where a lump sum is not provided, the refund on benefits in kind (hospitalization, etc.) is related to the effective cost and made on the basis of the legislation of the country of residence of the pensioner.

In contrast, the relations between the institutions of the state of residence and those of the state responsible for the pension are regulated on the basis of the lump-sum system.

There is always a difference (whether large or small) between effective costs and a lump-sum repayment, because the cost of benefits in kind differs from one Member State to the next. Hence the concern to limit such imbalances as far as possible.

3.2. Article 1: amendments to Regulation (EEC) No 1408/71

The Commission proposes to amend Articles 29 and 31. These concern cases where benefits in kind are received by members of the family of a pensioner who are resident (Article 29) or are staying (Article 31) in a Member State other than the one in which the pensioner resides.

3.2.1. Amendment of Article 29(1)(a)

This establishes the new principle that if the family member resides in the Member State which is responsible for paying the pension (the 'competent state`), the benefits in kind are provided by that state and the cost is borne by it, even if the pensioner resides in another state.

This contrasts with the existing legislation, which obliges the state of residence of the pensioner to pay the benefits to family members who reside in the competent state.

3.2.2. Amendment of Article 31(a)

The amendment to Article 95 of Regulation (EEC) No 574/72 also provides for lump-sum repayment to the state of residence of family members, if this is not the state of residence of the pensioner. If family members are staying in another state, reimbursement of the effective cost of benefits in kind will in future be made by their state of residence, rather than (as at present) by the state of residence of the pensioner.

It should be noted that - in contrast to the new Article 29 - this will also apply when the family member is staying in the competent state.

3.2.3. Amendment of Annex I (Part I), Annex II (Part II), Annex IIa, Annex IV and Annex VI

These amendments simply update the annexes, so as to align them with changes in the legislation of the countries concerned. They are essentially formal amendments and do not require particular comment.

3.3. Article 2: amendments to Regulation (EEC) No 574/72

After amending Regulation (EEC) No 1408/71, the Commission proposes to amend certain articles of the implementing regulation. These too follow on from the amendments which Regulation (EC) No 3095/95 made to Article 95 of Regulation (EEC) No 574/72.

3.3.1. Amendment of Article 29(1), (2) and (5)

The Commission proposes to specify that the obligations refer to family members who reside in the same Member State as the pensioner.

3.3.2. Amendment of Article 30 (heading and paragraphs 1, 3 and 5)

These amendments follow directly from those made to Article 29 of Regulation (EEC) No 1408/71 regarding the new situation of pensioners' family members who reside in the competent state. Both the heading of the article and the conditions to be fulfilled are altered accordingly. A new paragraph also has to be added at the end. Its wording is taken from another new provision.

3.3.3. Amendment of Article 31(3)

This stipulates that when family members are staying in another Member State, the formalities which formerly were the responsibility of the institution of the pensioner's place of residence will now be conducted by the institution of the family members' place of residence.

3.3.4. Amendment of Article 93(1) and (2)

Following other amendments, this provides for deletion of the references to Article 29(1) of Regulation (EEC) No 1408/71.

3.3.5. Amendment of Article 95(1) and (3)(b)

Article 95 - the amendment of which triggered the amendments being discussed here - also has to be amended. This is because it is necessary to add a reference to Article 29(1), so that the benefits subject to lump-sum refunds will include those enjoyed by family members who do not reside in the state of residence of the pensioner.

3.3.6. Amendment of Annexes 1, 2, 3 and 4

These too are formal amendments, mainly due to changes in the names of the institutions concerned. They require no special comment.

3.3.7. Amendment of Annex 9

Certain sections are amended, mainly in order to add references to bilateral agreements that have been concluded in the interim.

3.3.8. Amendment of Annex 10

Here too, certain sections are amended, mainly due to changes in the names of the institutions concerned.

3.4. Article 3 - Date of entry into force of the regulation

4. Conclusions

4.1. The Committee welcomes the amendments as they constitute an essential update and facilitate implementation by establishing more precise rules on related issues which could give rise to dispute. However, the Committee asks that a clearer and more detailed explanatory memorandum be provided in future, so as to make it easier to understand the purpose of each provision.

Brussels, 10 December 1997.

The President of the Economic and Social Committee

Tom JENKINS