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 (Miscellaneous Amendments 1998)
Date: 1998-09-30
Institutions: European Commission
Subjects: Community migration, migrant worker, self-employment, social security, wage earner

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 30.09.1998 
COM(1998) 547 final 

98/0285 (CNS) 

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 

(Miscellaneous Amendments 19981 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

relating  to  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 (Miscellaneous amendments 1998). 

I.  INTRODUCTION 

Regulations (EEC) No  1408/71 and No 574/72 were updated by Regulation"(EC) No 118/97» 
and last amended by Regulation (EC) No 1606/982. 

The purpose  of this proposal  is to  update these Community  Regulations to take account  of 
changes to national legislation, certain bilateral agreements concluded between Member States 
and the possibility of amendments to the Annexes of the implementing Regulation being made 
by the Commission. 

H.  COMMENTS ON THE ARTICLES 

Article 1 

Amendments to Regulation (EEC) No 1408/71 

1.  Amendments to Chapters 3 and 8 

The  present  Chapter  8 provides  for  common  rules  in  respect  of  orphan's  pensions 
and  family  allowances  for  orphans.  Given  that  interpretation  of this Chapter  by the 
Court3  gives  rise to  problems  of an  interpretational  and  administrative  nature,  it is 
proposed to transfer  orphan's pensions to Chapter  3 and to apply the rules provided 
for in Chapter 8 only to family allowances for orphans. The Regulation thus  follows 
the method  already adopted  for  orphan's pensions arising from a special  scheme for 
civil servants. 

2.  Amendment of Annex lia 

Annex lia lists the special non-contributory benefits granted to persons exclusively in the 
territory of the Member State in which they reside, in accordance with Article 10a of the 
Regulation. These are social security benefits directly linked to the economic and social 
environment of the Member State concerned. 

m  view  of  the  changes  made  to  Portuguese  legislation  concerning  some  non-
contributory benefits, family benefits and others, it is necessary to amend some items in 
section "L. PORTUGAL". The proposed amendments simply update the existing list in 
this section and are therefore not an extension of the list. 

1  OJL  28, 30.1.1997. 

2  OJL  209, 25.7.1998. 

3 

Judgment of 11 June 1991, Case C-251/89 ATHANASOPOULOS, Ground No 20 [1991] ECR1-2839; 
judgment of 27 February  1997, Case C-59/95 BASTOS MORI ANA [1997] ECR 1-1071. 

3. 

Amendment of Annex VI 

Annex  VI  lists  the  special  procedures  for  applying the  legislations  of  certain Member 
States. 

a) and b)  Amendment  of  section  "G.  IRELAND"  and  amendment  of  section  "O. 

UNITED KINGDOM" 

The  proposed  amendment  introduces  a  specific  rule  of  priority  for  family 
allowances where there is only one person employed.  In principle, Article 73 
of  Regulation  1408/71  would  be  applicable,  and,  consequently,  only  the 
Member  State  in whose  territory  the  employment  is  carried  out  would  be 
responsible  for the  payment  of benefits.  However,  legislation  in the  United 
Kingdom (Northern Ireland) and in Ireland guarantees entitlement to Family 
Credit (UK) and Family Income  Supplement (IRL) to people who  carry out 
employment  in  the  territory  of  the  other  Member  State.  Rules  of  priority 
should  therefore  be  drawn up  in the  event  of  cumulation  of  entitlement  to 
family  benefits  under  the  legislation  of  the  United  Kingdom  and  Ireland 
through the exercising of a professional activity in the territory of one of these 
two Member States. 

Article 2 

Amendments  to Regulation  (EEC) No  574/72 

1 

Amendment of Article 122 

Article  122 contains special provisions concerning the amendment of certain Annexes to 
the implementing Regulation. 

The purpose of the proposal  is to  extend the Commission's  authority to  amend all the 
Annexes  to  Regulation  (EEC)  No  574/72  at  the  request  of  the  Member  State  or 
Member  States  concerned  or their competent  authorities,  and  after  the  opinion  of the 
Administrative  Commission  has  been  obtained.  In  the  past,  amendments  to  these 
Annexes  accounted  for  the  bulk  of  the  proposals  for  Miscellaneous  Amendments  to 
Regulation  574/72.  In  order  to  facilitate  the  amendment  procedure,  the  Commission 
should  be authorised  to  amend not only  Annexes  1, 4,  5,  6,  7  and  8,  as  is  the  case at 
present, but all the Annexes to this Regulation. It should also be taken into account that, 
firstly, the  purpose  of  amending  these  Annexes  is  simply  to  incorporate  into  a 
Community  instrument  decisions  taken  by  the  Member  States  concerned  or  their 
competent authorities and, secondly, the provisions contained in these Annexes have no 
direct influence on the determination of the rights of individuals. 

2. 

Amendment pf Anosx 5 

Annex 5 refers to the implementing provisions of bilateral conventions which remain in 
force. An amendment is to be made to this Annex. 

The  proposed  amendment  to  heading  43  results from the  signing  of  an  agreement 
between  the  competent  authorities  in  Spain  and  Italy  on  the  definition  of  late 
reciprocal claims and the setting up of a new procedure to  simplify  and improve the 
reirnbursernent of actual and lump-sum expenditure. 

3. 

Arne<idmcitt of Annex  \0 

Annex 10 fats the institutions and bodies designated by the competent authorities. 

a)  Amendment of section "E. FRANCE" 

The proposed amendment to point 5 is a result of the administrative reorganisation 
in-France concerning the examination  of applications for  the extension  of postings 
or special postings. 

III. 

JUSTIFICATION  FOR THE  PROPOSAL FOR A REGULATION WITH 
REGARD TO THE  PRINCIPLE OF SUBSIDIARITY 

This proposal for  a Council Regulation conforms to the principle of subsidiarity as regards 
the two underlying criteria, namely necessity and proportionality,  as specified  in Article 3b 
of the European  Community Treaty. 

On  the  one hand,  Article  51  requires  the  Council  to  adopt  such  measures  in the field of 
social  security  as are  necessary  to  provide  freedom  of movement  for  workers  within  the 
Community.  The  coordination  of  national  social  security  schemes  therefore  falls 
exclusively  within  the  competence  of  the  Community.  On  the  other  hand,  a  binding 
legislative instrument,  in the form  of a regulation,  is clearly proportionate to the  objective 
pursued,  i.e. ensuring effective  freedom  of movement. This is why the Council has chosen 
such an instrument  as being the most appropriate means of achieving this objective. 

IV.  APPLICATION  IN THE  COUNTRIES  OF THE  EUROPEAN  ECONOMIC 

AREA 

Freedom  of  movement  for  persons  is  one  of  the  objectives  and  principles  of  the 
Agreement  on  the  European  Economic  Area  (EEA),  which  entered  into  force  on 
1 January  19944.  In Chapter  1 of Part  111  on the free  movement  of persons,  services and 
capital,  Articles  28,  29  and  30  are  devoted  to  the  free  movement  of  workers  and  self-
employed  persons.  Article  29  more  specifically  reiterates  the  principles  set  out  in Article 
51 of the EC Treaty  relating to  social  security for  persons moving within the Community. 
Consequently,  this proposal  for  a Regulation,  if adopted,  must  be  applied  to  the member 
countries of the EEA. 

OJ L 1, 3.1.1994, as amended by Decision of the EEA Joint Committee No 7/94 of 21 March 1994 
(OJL 160,28.6.1994). 

Proposal for a 
COUNCIL REGULATION  ( EO 

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 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Articles 51 and 235 thereof, 

Having  regard  to  the  proposal  from  the  Commission5,  presented  after  consulting  the 
Administrative Commission on Social Security for Migrant Workers, 

Having regard to the Opinion of the European Parliament6, 

I laving regard to the Opinion of the Economic and Social Committee7, 

Whereas it is appropriate to  make certain  amendments to Council  Regulations (EEC) No 
1408/71  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 
Community8  and  No  574/72  of  21  March  1972  laying  down  the  procedure  for 
implementing  Regulation  (EC)  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 Community9; whereas these amendments are linked to  changes which Member 
States have made to their social security legislation; 

Whereas  the  application  of  Chapter  8  to  orphan's  pensions  raises  problems  of 
interpretation  and  administration,  and  it  is in  the  interests  of  the  persons  concerned  for 
orphan's pensions to be calculated in accordance with the provisions of Chapter  3 of Title 
III, rather than on the basis of the provisions of Chapter 8; 

Whereas it seems appropriate to amend  section  "L. PORTUGAL" of Annex  lia  in order  to 
take into account the changes made to Portuguese legislation; 

Whereas a new point should be added to section  "G. IRELAND" and another to section "O. 
UNITED KINGDOM" of Annex VI in order to take into account the specific rules of priority 
in the event of cumulation of entitlement to family allowances under United Kingdom and Irish 

OJ L  149, 5.7.1971, p. 2. Regulation as updated by Regulation (EC) No  118/97 (OJ L 28, 30.1.1997) 
and last amended by Regulation (EC) No 1606/98 (OJ L 209, 25. 7.1998). 

9 

OJ L 74, 27.03.1972, p.  1. Regulation as updated by Regulation (EC) No  118/97 (OJ L 28, 30.1.1997) 
and last amended by Regulation (EC) No 1290/97 (OJ L 176, 4.7.1997). 

legislation through the exercising of a professional  activity in the territory of one of those two 
Member States; 

Whereas the provisions  contained  in the Annexes  to  Regulation  (EEC)  No  574/72  have no 
direct influence on the determination of the rights of individuals; 

Whereas  it  should  be  possible  for  all  the  Annexes  to  Regulation  (EEC)  No  574/72  to  be 
amended by a Regulation adopted  by the Commission at the request of the Member State or 
Member  States  concerned  or  their  competent  authorities,  after  the  opinion  of  the 
Administrative Commission has been obtained; whereas in actual fact the purpose of amending 
these Annexes is simply to incorporate  into  a Community  instrument  decisions taken  by the 
Member States concerned or their competent authorities; 

Whereas  it  is necessary  to  amend  section  "43. SPAIN-ITALY"  of Annex  5  to  Regulation 
(EEC) No 574/72; 

Whereas, as a result of the administrative reorganisation in France concerning the examination 
of  applications  for  the  extension  of postings  or  special  postings,  section  "E.  FRANCE"  of 
Annex  10 to Regulation (EEC) No 574/72 should be amended accordingly; 

Whereas,  in  order  to  attain  the  objective  of  free  movement  for  workers  in  the  field  of 
social  security,  it  is  necessary  and  appropriate  to  amend  the  rules  relating  to  the 
coordination  of  national  social  security  schemes  through  a  Community  legal  instrument 
that is binding and directly applicable in each Member State; 

Whereas this is consistent  with  the provisions  of the third  paragraph  of Article  3b of the 
Treaty, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EEC) No  1408/71 is amended as follows: 

1.  Article 44(3) is replaced by the following: 

"3.  This  Chapter  shall  not  apply  to  increases  in  or  supplements  to pensions  in 
respect of children granted in accordance with the provisions of Chapter 8. " 

2.  Article 78( 1) is replaced by the following: 

"1.  The term  'benefits ', for  the purposes  of  this Article,  means family  allowances 
and, where appropriate, supplementary or special allowances for  orphans. " 

3.  Article 79(1 ) is replaced by the following: 

"/.  Benefits,  within  the  meaning  of  Articles  77  and  78,  shall  be  provided  in 
accordance  with  the  legislation  determined  by  applying  the provisions  of  those 
Articles  by the institution responsible for  administering such legislation and at  its 
expense, as if the pensioner or the deceased had been subject only to the legislation 
of  the  competent State.  However, if  that  legislation provides  that  the acquisition, 
retention or  recovery of  the right  to  benefits shall  be dependent  on  the  length of 
periods  of  insurance, employment, self-employment or residence, such length shall 
be determined taking into account, where appropriate, the provisions  of Article 45 
or, as the case may be, Article  72. " 

4. 

In Annex Ha, section "L. PORTUGAL" is replaced by the following: 

"L.  PORTUGAL 
a) non-contributory family  allowance for  children  and  young  persons  and  the 
associated additional  sum  payable for  disability  (Decree-ljaw No  160/80 of 
27.5.1980,  as amended by Decree-Ixiw No 133-C/97 of 30.5.1997); 

b) non-contributory allowance for  attending a  special  educational establishment 
(Decree-Law No 160/80 of 27.5.1980, as amended by Decree-Law No 133-C/97 
of 30.5.1997); 

c)  non-contributory orphan's pension  (Decree-Law No  160/80  of  27.5.1980,  as 

amended by Decree-Law No 133-C/97 of 30.5.1997); 

d) non-contributory state  old-age and  invalidity pension  (Decree-Law  No 464/80 

of 13.10.1980); 

e)  non-contributory allowance for  care provided  by a third party  (Decree-Law No 
160/80 of 27.5.1980,  as amended by Decree-Law No 133-C/97 of 30.5.1997); 
(Regulatory  Decree  No  52/81  of 

f)  non-contributory  widow's  pension 

11.11.1981)." 

5.  Annex VI is amended as follows: 

a) the following point is added to section "G. IRELAND": 

"//.  Entitlement to family  income supplement granted solely under the legislation 
of Ireland shall he suspended where,  over the same period and in respect of the 
same member of the family, family benefits are payable solely under the legislation 
of the United Kingdom or up to the amount of those benefits pursuant to Articles 
73, 74, 77 or 78 of the Regulation". 

b) the following point is added to section "O. UNITED KINGDOM": 

"21.  Entitlement to family credit granted solely under the legislation of the  United 
Kingdom  shall be suspended,  where,  over the same period and in respect of the 
same member of the family, family benefits are payable solely under the legislation 
of Ireland or up to the amount of those benefits pursuant to Articles 73, 74, 77 or 
78 of the Regulation". 

Article 2 

Regulation (EEC) No 574/72 is amended as follows : 

1.  Article 122 is replaced by the following: 

"Article 122 

Special provisions concerning the amendment of the Annexes 

The Annexes  to  the  implementing  Regulation may  be  amended  by  a  Commission 
Regulation  at  the request of  the Member State or Member States concerned  or their 
competent authorities,  and after the opinion of the Administrative  Commission  has been 
obtained". 

2.  Annex 5 is amended as follows: 

a) 

under  heading  "43.  SPAIN  -  ITALY",  the  word  "None" is  replaced  by  the 
following: 

"7he Agreement of 21 November  1997 concerning Article 36(3) of the Regulation 
(reimbursement of sickness and maternity benefits in kind) and Articles 93, 94,  95, 

7 

100 and  102(5) of  the  implementing Regulation (procedures for  the  refund of 
sickness and maternity insurance benefits and late claims). " 

3.  Annex -10 is amended as follows: 

In section "E. FRANCE", point 5 is replaced by the following: 

"5.  For the purposes of allying  Article  14(l)(b),  Article  J4a(l)(b)  and Article 17 of 
the Regulation: 

Centre de  sécurité sociale  des travailleurs migrants  (Centre for  the Social  Security 
of Migrant Workers),  Paris". 

Article 3 

This Regulation shall enter into force on the first day of the month following its publication in 
the Official  Journal of the European Communities. 

This Regulation shall be binding in its entirety and directly^pplicable in all Member States. 

Done at Brussels, 

For the Council 

The President 

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