WRITTEN QUESTION E-2604/00

by Carlos Ripoll y Martínez de Bedoya (PPE-DE) to the Commission

(1 August 2000)

Subject: Social security

1. What Community legislation applies to social security schemes in the Member States?

2. What is the hierarchy among social security agreements with respect to the rules in force?

3. What regulations govern the payment of retirement benefits for employees and self-employed workers who have been covered by the legislation of two or more Member States?

Answer given by Ms Diamantopoulou on behalf of the Commission

(13 September 2000)

1. There are no standardised social security provisions for the European Community. Each Member State is, therefore, the competent authority to legislate in this field (in order to determine, for example, the criteria for membership of schemes or the value of benefits), while respecting the principles of Community law.

The Community provisions applicable to EU citizens, stateless people and refugees who are, or have been, insured under the social security legislation of one or more Member State(s), and to members of their families, come into play only in order to coordinate national social security systems. Most of these provisions are in Regulation (EEC) No 1408/71(1) and its implementing Regulation (EEC) No 574/72(2) and they are designed to remove barriers to the free movement of the people concerned. To this end, the provisions guarantee that these people are treated no less favourably than nationals who have not exercised their right to free movement, that they are able to enjoy the social security benefits for which they have qualified under the legislation of one country, even if they are moving around within other Member States and that any insurance periods they have completed in another Member State are taken into account in the qualifying period or in calculation of benefits. The general principle is that one social security system should apply (usually the legislation of the country where the person is working).

2. Under Article 6, Regulation (EEC) No 1408/71 replaces, subject to certain provisions in the Regulation (e.g. Annex III), the provisions of any social security convention as defined in Article 1(k), binding either two or more Member States exclusively [Article 6(a)] or at least two Member States and one or more other States, where settlement of the cases concerned does not involve any institution of one of the latter States [Article 6(b)].

The Court of Justice has repeatedly ruled replacement to be mandatory and applicable, even in cases where the social security conventions are more advantageous to the person covered(3).

The Court of Justice considers that replacement does not allow of any exceptions save for the cases expressly referred to by the Regulations, unless the effect of the entry into force of the Regulations would be for a worker to lose the social security advantages s/he had previously had when exercising the right to free movement under national legislation either alone or in combination with international social security conventions between one or more Member States or under bilateral social security conventions in force(4).

However, that principle cannot apply in so far as, when the benefits were set under Regulation (EEC) No 1408/71 for the first time, a comparison had already been made of the advantages resulting from the Regulation and the convention, respectively, whose outcome was that it was more advantageous to apply the Regulation than the convention(5).

3. The system under Regulations (EEC) 1408/71 and (EEC) 574/72 guarantees that the rights of workers who have completed their professional careers in more than one Member State will not be affected by the fact that they have exercised their right to free movement. If an insurance period is not sufficient for a person to qualify for a pension under the legislation of a given Member State, insurance periods completed in other Member States will also be taken into account. Furthermore, pension rights are calculated on the basis of all the systems of legislation which have been applicable to the person concerned, to ensure his/her interests are served, because each competent institution in each Member State concerned is obliged to pay either the national pension or the pro-rata pension, depending on which amount is more advantageous to the worker. Each of these old-age benefits is then paid wherever the person concerned is living or staying, within the territory of the European Economic Area, without being subject to any reduction, modification or suspension.

(1) Council Regulation of 14 June 1971, on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community (OJ L 149, 5.7.1971) (latest consolidated version: Council Regulation (EC) No 118/97 of 2.12.1997 (OJ L 28, 30.1.1997)).

(2) Council Regulation of 21 March 1972 fixing the procedures implementing 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 (OJ L 74, 27.3.1972).

(3) Judgment of 7 June 1973, Walder (82/72, Rec. p. 599) and judgment of 9 November 1995, Thévenon (C475/93, Rec. p. I-3813).

(4) Judgments of 7 February 1991, Rönfeldt (C-227/89, Rec. p. I-323) and Thévenon as above.

(5) Judgment of 7 May 1998, Gomez Rodríguez (C-113/96, Rec. p. I-2461).