Common Position (EC) No 7/2005 of 15 November 2004 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to adopting a regulation of the European Parliament and of the Council amending Council Regulations (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 (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71
Date: 2004-11-15
Institutions: Council of the European Union
Subjects: approximation of laws, case-law (EU), established right, free movement of workers, self-employment, social security, social-security benefit, wage earner

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COMMON POSITION (EC) No 7/2005

adopted by the Council on 15 November 2004

with a view to adopting Regulation (EC) No …/2005 of the European Parliament and of the
Council of … amending Council Regulations (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 (EEC) No 574/72 laying down the procedure for implementing Regu-
lation (EEC) No 1408/71

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EURO-
PEAN UNION,

(2)

(2005/C 38 E/02)

Having regard to the Treaty establishing the European Com-
munity, and in particular Articles 42 and 308 thereof,

Having regard to the proposal from the Commission,

(3)

Having regard to the opinion of the European Economic and
Social Committee (1),

After consulting the Committee of the Regions,

Acting in accordance with the procedure laid down in Article
251 of the Treaty (2),

Whereas:

(1)

Certain amendments should be made to Regulations
(EEC) No 1408/71 (3) and (EEC) No 574/72 (4), in order
to take account of recent developments in the case law
of the Court of Justice of the European Communities, to
facilitate the application of those Regulations and to
reflect changes in the social security legislation of the
Member States.

(1) OJ C 80, 30.3.2004, p. 118.
(2) Opinion of the European Parliament of 11 March 2004 (OJ C 102
E, 28.4.2004, p. 804), Council Common Position of 15 November
2004 and position of the European Parliament of .......
(not yet
published in the Official Journal).

(3) OJ L 149, 5.7.1971, p. 2. Regulation updated by Regulation (EC)
No 118/97 (OJ L 28, 30.1.1997, p. 1), last amended by Regulation
(EC) No 631/2004 of the European Parliament and of the Council
(OJ L 100, 6.4.2004, p. 1) and repealed with effect from the date of
entry into force of the implementing regulation by Regulation (EC)
No 883/2004 of the European Parliament and of the Council (OJ L
166, 30.4.2004, p. 1); Regulation to be repealed from the date of
application of Regulation (EC) No 883/2004 of the European Parlia-
ment and of the Council (OJ L 166, 30.4.2004, p. 1).

(4) OJ L 74, 27.3.1972, p. 1. Regulation as last amended by Regulation
(EC) No 631/2004 of the European Parliament and of the Council
(OJ L 100, 6.4.2004, p. 1).

In order to take account of recent developments in case
judgments should be drawn,
law,
the conclusions of
Johann Franz Duchon v.
particularly in the cases of
Pensionsversicherungsanstalt der Angestellten (5)
and
Office national de l'emploi v. Calogero Spataro (6).

judgments

The
in Friedrich Jauch v. Pensionsver-
sicherungsanstalt der Arbeiter and Ghislain Leclere,
Alina Deaconescu v. Caisse nationale des prestations
familiales (7), concerning the classification of special non-
contributory cash benefits require, for reasons of legal
safety, that the two cumulative criteria to be taken into
account be specified so that such benefits can feature in
Annex IIa to Regulation (EEC) No 1408/71. On this
basis, there is a case for revising the Annex, taking into
account legislative amendments in the Member States
affecting this type of benefits, which are subject
to
specific coordination given their mixed nature. In addi-
tion, it is important to specify the transitional provisions
relating to the benefit which was the subject of the judg-
ment in the Jauch case in order to protect the rights of
beneficiaries.

(4)

On the basis of the case-law relating to the relationships
between Regulation (EEC) No 1408/71 and the provi-
sions of bilateral social security agreements, it is neces-
sary to review Annex III to that Regulation. The entries
in part A of Annex III are only justified in two cases:
where they are more favourable to migrant workers (8),
or where they relate to specific and exceptional situa-
tions, usually linked to historical circumstances. In addi-
tion,
it is not appropriate to accept entries in part B
except where exceptional and objective situations justify
a derogation from Article 3(1) of that Regulation and
from Articles 12, 39 and 42 of the Treaty (9).

(5) Judgment of 18 April 2002 in Case C-290/00 [ECR] 2002 I-3567.
(6) Judgment of 13 June 1996 in Case C-170/95 [ECR] 1996 I-2921.
(7) Judgments of 8 March 2001 in Case C-215/99 [ECR] 2001 I-1901

and 31 May 2001 in Case C-43/99 [ECR] 2001 I-4265.

(8) The principle of the most favourable treatment has been recalled by
the European Court of Justice in its Judgments of 7 February 1991,
Case C-227/89 [ECR] 1991 I-323; of 9 November 1995, Case C-
475/93 [ECR] 1995 I-3813; of 9 November 2000, Case C-75/99
[ECR] 2000 I-9399; and of 5 February 2002, Case C-277/99 [ECR]
2002 I-1261.

(9) Judgment of 30 April 1996, Case C-214/94 [ECR] 1996 I-2253;
Judgment of 30 April 1996, Case C-308/93 [ECR] 1996 I-2097;
Judgment of 15 January 2002, Case C-55/00 [ECR] 2002 I-413.

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(5)

(6)

there

should be

In order to facilitate the application of Regulation (EEC)
No 1408/71,
certain provisions
concerning, on the one hand, civil servants and persons
treated as such and, on the other, members of the travel-
ling or flying personnel of an undertaking which oper-
ates international transport services for passengers or
goods by rail, road, air or inland waterway, and also to
specify the methods for determining the average amount
to take into account in the context of Article 23 of that
Regulation.

The revision of Annex IIa to Regulation (EEC) No
1408/71 will
lead to the removal of some existing
entries and, taking into account legislative amendments
in some Member States, to the inclusion of certain new
entries. In the latter case, it is then for these Member
States to consider the need for transitional arrangements
or bilateral solutions to address the situation of persons
whose acquired rights may be affected as a consequence,

HAVE ADOPTED THIS REGULATION:

(ii) solely specific protection for the disabled, closely
linked to the said person's social environment in
the Member State concerned, and

(b) where the financing exclusively derives from compul-
sory taxation intended to cover general public expendi-
ture and the conditions for providing and for calcu-
lating the benefits are not dependent on any contribu-
tion in respect of the beneficiary. However, benefits
provided to supplement a contributory benefit shall
not be considered to be contributory benefits for this
reason alone; and

(c) which are listed in Annex IIa.’;

3. Article 7(2)(c) shall be replaced by the following:

‘(c) certain provisions of

security conventions
social
entered into by the Member States before the date of
application of this Regulation provided that they are
more favourable to the beneficiaries or if they arise
from specific historical circumstances and their effect
these provisions are listed in
is limited in time if
Annex III.’;

Article 1

4. Article 9a shall be replaced by the following:

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

‘Article 9a

1. Article 3 shall be amended as follows:

Prolongation of the reference period

(a) in paragraph 1, the words ‘resident in the territory of

one of the Member States’ shall be deleted;

(b) in paragraph 3,

the words ‘and the provisions of
conventions concluded pursuant to Article 8(1)’ shall
be deleted;

2. Article 4(2a) shall be replaced by the following:

‘2a.
This Article shall apply to special non-contributory
cash benefits which are provided according to legislation
which, because of its personal scope, objectives and/or
conditions for entitlement has characteristics both of the
social security legislation referred to in paragraph 1 and of
social assistance.

contingency insured against

If the legislation of a Member State subordinates recogni-
tion of entitlement to a benefit to the completion of a
minimum period of insurance during a determined period
preceding the
(reference
period) and lays down that periods during which benefits
were paid under the legislation of that Member State or
periods devoted to child-rearing in the territory of that
Member State shall extend this reference period,
the
periods during which invalidity or old-age pensions or
sickness, unemployment,
industrial accidents at work or
occupational disease benefits were paid under the legisla-
tion of another Member State and periods devoted to
child-rearing in the territory of another Member State shall
also extend this reference period.’;

“Special non-contributory cash benefits” means those:

5. Article 10a(1) shall be replaced by the following:

(a) which are intended to provide either:

(i) supplementary, substitute or ancillary cover against
the risks covered by the branches of social security
referred to in paragraph 1, and which guarantee
the persons concerned a minimum subsistence
income having regard to the economic and social
situation in the Member State concerned; or

‘1.
The provisions of Article 10 and of Title III shall not
apply to the special non-contributory cash benefits referred
to in Article 4(2a). The persons to whom this Regulation
applies shall receive these benefits exclusively in the terri-
tory of the Member State in which they reside and under
the legislation of that State, in so far as these benefits are
mentioned in Annex IIa. Benefits shall be paid by, and at
the expense of, the institution of the place of residence.’;

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6.

in Article 23, the following paragraph shall be inserted:

the provisions of this Regulation. This shall also apply to
other benefits pursuant to Article 78.

The provisions of paragraphs 1 and 2 shall also
‘2a.
apply where the legislation applied by the competent insti-
tution provides for a specific reference period and this
period coincides, where appropriate, with the whole or
part of the periods completed by the person concerned
under the legislation of one or more other Member States.’;

7. Article 35(2) shall be deleted;

8. Article 69(4) shall be deleted;

9. the following Articles shall be inserted:

‘Article 95f

Transitional provisions relating to Annex II, section I,
under
and
“R. AUSTRIA”.

GERMANY”

headings

“D.

the

Annex II,

the headings

section I, under

1.
“D.
GERMANY” and “R. AUSTRIA”, as amended by Regulation
(EC) No …/2005 of the European Parliament and of the
Council of.... amending Council Regulations (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 (EEC) No 574/72 laying down the procedure for
implementing Regulation (EEC) No 1408/71 (*), shall not
establish any
to
1 January 2005.

the period prior

entitlement

for

the

Any period of insurance and, where appropriate, any
2.
residence
period of employment,
under
to
1 January 2005, shall be taken into consideration in deter-
mining acquired rights in accordance with the provisions
of this Regulation.

a Member State prior

self-employment or

legislation of

6.
If an application referred to in paragraph 4 or 5 is
submitted within two years from 1 January 2005, the
rights acquired under this Regulation shall have effect from
that date, and the provisions of the legislation of any
Member State concerning the forfeiture or limitation of
rights may not be invoked against the persons concerned.

If the application referred to in paragraph 4 or 5 is
7.
submitted after the expiry of the two-year period after 1
January 2005, rights which have not been forfeited or
barred by limitation shall have effect from the date on
which the application was submitted, except where more
favourable provisions of the legislation of any Member
State apply.

Article 95g

Transitional provisions relating to the deletion,
in
Annex IIa, of the entry relating to the Austrian care
allowance (Pflegegeld).

In the case of applications for care allowances under
Austrian federal
law (Bundespflegegeldgesetz) submitted
not later than 8 March 2001 on the basis of Article 10a(3)
of this Regulation, this provision shall continue to apply as
long as the beneficiary of the care allowance continues to
reside in Austria after 8 March 2001.

(*) OJ L…’.

10. Annexes II, IIa, III, IV and VI shall be amended in accord-

ance with Annex I to this Regulation.

Article 2

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

3.
Subject to the provisions of paragraph 1, a right shall
be acquired under this Regulation even where it relates to
a contingency that occurred prior to 1 January 2005.

1. Article 4(11) shall be deleted;

2. the following Article shall be inserted:

4.
Any benefit that has not been awarded or that has
been suspended on account of the nationality or the resi-
dence of the person concerned shall, at the latter's request,
be awarded or resumed from 1 January 2005, provided
that the rights for which benefits were previously awarded
did not give rise to a lump-sum payment.

5.
The rights of persons to whom a pension was
awarded prior to 1 January 2005 may, on the application
of the persons concerned, be reviewed, taking account of

‘Article 10c

Formalities laid down in the event of the application of
the Regulation to civil servants and
Article 13(2)(d) of
persons treated as such.

For the application of Article 13(2)(d), the institution desig-
the Member State
nated by the competent authority of
whose legislation is applicable shall issue a certificate stating
that the civil servant or the person treated as such is subject
to its legislation.’;

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3. Article 12a shall be amended as follows:

(a) the title shall be replaced by the following:

‘Rules applicable in respect of the persons referred to in
Article 14(2) and (3), Article 14a(2) to (4) and Arti-
cle14c of the Regulation who normally carry out an
employed or self-employed activity in the territory of
two or more Member States.’;

(b) the introductory sentence shall be replaced by the

following:

‘For the application of the provisions of Article 14(2)
and (3), Article 14a(2) to (4) and Article 14c of the
Regulation, the following rules shall apply:’;

(c) the following paragraph shall be inserted:

‘1a. Where, in accordance with Article 14(2)(a) of the
Regulation, a person who is on the travelling or flying
personnel of an international transport undertaking is
subject to the legislation of the Member State in whose

territory the registered office or place of business of the
undertaking, or the branch or permanent establishment
employing him, is located, or where he resides and is
predominantly employed, the institution designated by
the competent authority of
that Member State shall
issue, to the person concerned, a certificate stating that
he is subject to its legislation.’;

4. Article 32a shall be deleted;

5. the Annexes shall be amended in accordance with Annex II

to this Regulation.

Article 3

This Regulation shall enter into force on the day following that
of its publication in the Official Journal of the European Union.

Article 1(9), as far as Article 95f of Regulation (EEC) No 1408/
71 is concerned, Annex I points (1)(a) and (1)(b) and Annex II
points (2) and (4) shall apply from 1 January 2005.

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

Done at Brussels, …

For the European Parliament

The President

…

For the Council

The President

…

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ANNEX I

The Annexes to Regulation (EEC) No 1408/71 are hereby amended as follows:

1. Annex II shall be amended as follows:

(a) In section I, under the heading ‘D. GERMANY’, the text shall be replaced by the words: ‘does not apply’.

(b) in section I, under the heading ‘R. AUSTRIA’, the text shall be replaced by the words: ‘does not apply’.

(c) section II shall be amended as follows:

(i) under the heading ‘G. SPAIN’, the word ‘None’ shall be replaced by the following:

‘Childbirth allowances (one-off cash benefits for the birth of the third child and subsequent children and one-
off cash benefits in the event of a multiple birth)’;

(ii) under the heading ‘H. FRANCE’, the text shall be replaced by the following:

‘Birth or adoption grant (early childhood benefit)’;

(iii) under the heading ‘W. FINLAND’, the text shall be replaced by the following:

‘Maternity package, maternity lump-sum grant and assistance in the form of a lump-sum intended to offset
the cost of international adoption pursuant to the Maternity Grant Act’;

(d) in section III, under the heading ‘D. GERMANY’, point (b) shall be deleted;

2. Annex IIa shall be replaced by the following text that includes, unchanged, the entries as set out in the 2003 Act of

Accession:

‘ANNEX IIa

SPECIAL NON-CONTRIBUTORY CASH BENEFITS

Article 10a

A. BELGIUM

(a) Income replacement allowance (Law of 27 February 1987)

(b) Guaranteed income for elderly persons (Law of 22 March 2001).

B. CZECH REPUBLIC

Social allowance (State Social Support Act No 117/1995 Sb).

C. DENMARK

Accommodation expenses for pensioners (Law on individual accommodation assistance, consolidated by Law No 204
of 29 March 1995).

D. GERMANY

Basic subsistence income for the elderly and for persons with reduced earning capacity under Chapter 4 of Book XII
of the Social Code.

E. ESTONIA

(a) Disabled adult allowance (Social Benefits for Disabled Persons Act of 27 January 1999).

(b) State unemployment allowance (Social Protection of the Unemployed Act of 1 October 2000).

F. GREECE

Special benefits for the elderly (Law 1296/82).

G. SPAIN

(a) Minimum income guarantee (Law No 13/82 of 7 April 1982);

(b) cash benefits to assist the elderly and invalids unable to work (Royal Decree No 2620/81 of 24 July 1981);

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(c) non-contributory invalidity and retirement pensions as provided for in Article 38(1) of the Consolidated Text of

the General Law on Social Security, approved by Royal Legislative Decree No 1/1994 of 20 June 1994;

(d) allowances to promote mobility and to compensate for transport costs (Law No 13/1982 of 7 April 1982).

H. FRANCE

(a) supplementary allowances of the special invalidity fund and the old age solidarity fund (Law of 30 June 1956,

codified in Book VIII of the Social security code);

(b) disabled adults' allowance (Law of 30 June 1975, codified in Book VIII of the Social security code);

(c) special allowance (Law of 10 July 1952, codified in Book VIII of the Social security code).

I. IRELAND

(a) Unemployment assistance (Social Welfare (Consolidation) Act 1993, Part III, Chapter 2);

(b) old-age (non-contributory) pension (Social Welfare (Consolidation) Act 1993, Part III, Chapter 4);

(c) widow's (non-contributory) pension and widower's (non-contributory) pension (Social Welfare (Consolidation)

Act 1993, Part III, Chapter 6 as amended by Part V of the Social Welfare Act 1997);

(d) disability allowance (Social Welfare Act 1996, Part IV);

(e) mobility allowance (Health Act 1970, Section 61);

(f) blind pension (Social Welfare (Consolidation) Act 1993, Part III, Chapter 5).

J. ITALY

(a) Social pensions for persons without means (Law No 153 of 30 April 1969);

(b) pensions and allowances for the civilian disabled or invalids (Laws No 118 of 30 March 1974, No 18 of 11

February 1980 and No 508 of 23 November 1988);

(c) pensions and allowances for the deaf and dumb (Laws No 381 of 26 May 1970 and No 508 of 23 November

1988);

(d) Pensions and allowances for the civilian blind (Laws No 382 of 27 May 1970 and No 508 of 23 November

1988);

(e) benefits supplementing the minimum pensions (Laws No 218 of 4 April 1952, No 638 of 11 November 1983

and No 407 of 29 December 1990);

(f) benefits supplementing disability allowances (Law No 222 of 12 June 1984);

(g) social allowance (Law No 335 of 8 August 1995);

(h) social increase (Article 1 (1) and (12) of Law No 544 of 29 December 1988 and successive amendments).

K. CYPRUS

(a) Social Pension (Social Pension Law of 1995 (Law 25(I)/95), as amended);

(b) severe motor disability allowance (Council of Ministers' Decision Nos 38.210 of 16 October 1992, No 41.370 of

1 August 1994, No 46.183 of 11 June 1997 and No 53.675 of 16 May 2001);

(c) special grant to blind persons (Special Grants Law of 1996 (Law 77(I)/96), as amended).

L. LATVIA

(a) State Social Security Benefit (Law on social assistance of 26 October 1995);

(b) allowance for the compensation of transportation expenses for disabled persons with restricted mobility (Law on

social assistance of 26 October 1995).

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M. LITHUANIA

(a) Social pension (Law of 1994 on social pensions);

(b) special transport compensation for the disabled who have mobility problems (Law of 2000 on Transport

Compensation, Article 7).

N. LUXEMBOURG

Income for the seriously disabled (Article 1(2), Law of 12 September 2003), with the exception of persons recognised
as being disabled workers and employed on the mainstream labour market or in a sheltered environment.

O. HUNGARY

(a) Invalidity annuity (Decree No 83/1987 (XII 27) of the Council of Ministers on Invalidity Annuity);

(b) non-contributory old-age allowance (Act III of 1993 on Social Administration and Social Benefits);

(c) Transport allowance (Government Decree No 164/1995 (XII 27) on Transport allowances for persons with severe

physical handicap).

P. MALTA

(a) Supplementary allowance (Section 73 of the Social Security Act (Cap. 318) 1987);

(b) age pension (Social Security Act (Cap. 318) 1987).

Q. NETHERLANDS

(a) Disablement Assistance Act for Handicapped Young Persons, of 24 April 1997 (Wajong);

(b) supplementary Benefits Act of 6 November 1986 (TW).

R. AUSTRIA

Compensatory supplement (Federal Act of 9 September 1955 on General Social Insurance – ASVG, Federal Act of 11
October 1978 on social insurance for persons engaged in trade and commerce – GSVG and Federal Act of 11
October 1978 on social insurance for farmers – BSVG).

S. POLAND

Social pension (Act of 29 November 1990 on social assistance).

T. PORTUGAL

(a) Non-contributory State old-age and invalidity pension (Decree-Law No 464/80 of 13 October 1980);

(b) non-contributory widowhood pension (Regulatory Decree No 52/81 of 11 November 1981).

U. SLOVENIA

(a) State pension (Pension and Disability Insurance Act of 23 December 1999);

(b) income support for pensioners (Pension and Disability Insurance Act of 23 December 1999);

(c) maintenance allowance (Pension and Disability Insurance Act of 23 December 1999).

V. SLOVAKIA

Adjustment of pensions as the sole source of income (Act No 100/1988 Zb.).

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W. FINLAND

(a) Disability allowance (Disability Allowance Act, 124/88);

(b) childcare allowance (Child care Allowance Act, 444/69);

(c) housing allowance for pensioners (Act concerning the Housing Allowance for Pensioners, 591/78);

(d) labour market support (Act on Unemployment benefits 1290/2002);

(e) special assistance for immigrants (Act on Special Assistance for Immigrants, 1192/2002).

X. SWEDEN

(a) Housing supplements for persons receiving a pension (Law 2001:761);

(b) financial support for the elderly (Law 2001:853);

(c) disability allowance and care allowance for disabled children (Law 1998:703).

Y. UNITED KINGDOM

(a) State Pension credit (State Pension Credit Act 2002);

(b) income-based allowances for jobseekers (Jobseekers Act 1995, 28 June 1995, Sections 1, (2)(d)(ii) and 3, and

Jobseekers (Northern Ireland) Order 1995 of 18 October 1995, Articles 3(2)(d)(ii) and 5);

(c) income Support (Social Security Act 1986 of 25 July 1986, Section 20 to 22 and Section 23, and Social Security

(Northern Ireland) Order 1986 of 5 November 1986, Articles 21 to 24);

(d) disability living allowance (Disability Living Allowance and Disability Working Allowance Act 1991 of 27 June
1991, Section 1, and disability living allowance and disability working allowance (Northern Ireland) order 1991
of 24 July 1991, Article 3);

(e) attendance allowance (Social Security Act 1975 of 20 March 1975, Section 35, and Social Security (Northern

Ireland) Act 1975 of 20 March 1975, Section 35);

(f) carer's allowance (Social Security Act 1975 of 20 March 1975, Section 37, and Social Security (Northern Ireland)

Act 1975 of 20 March 1975, Section 37).’;

3. Annex III shall be amended as follows:

(a) the following paragraph shall be introduced on top of the Annex under ‘General comments’:

‘3. Account being taken of the provisions of Article 6 of this Regulation, it is to be noted that the provisions of
bilateral Conventions which do not fall within the scope of this Regulation and which remain in force
between Member States are not listed in this Annex, inter alia, provisions providing for aggregation of insur-
ance periods fulfilled in a third country.’;

(b) in part A, the following points shall be deleted:

points 2, 3(b), 5, 6, 7, 8, 9, 13, 16, 17, 19, 22, 23, 24, 48, 50, 51, 52, 53, 54, 58, 61, 62, 64, 69, 71(a) and (c),
73(a) and (b), 74, 75, 83(a), (b), (c), (d), (e), (f), (g), 85, 88, 89, 111, 112, 113, 114, 118, 121, 122, 124, 127,
128, 129, 130, 131, 132, 136, 139, 140, 145, 146, 147, 148, 149, 153, 156, 157, 159, 162, 163, 164, 165,
169, 172, 173, 175, 178, 179, 184, 188, 190, 193, 194, 195, 237, 238, 240, 243, 244, 245, 265, 270, 271,
272, 274, 277, 278, 279, 288, 289, 299, 300;

(c) in part A, point 3(a) (Belgium – Germany) shall be replaced by the following:

‘Articles 3 and 4 of the Final Protocol of 7 December 1957 to the General Convention of that date, as in the
Complementary Protocol of 10 November 1960 (reckoning of insurance periods completed in some border
regions before, during and after the Second World War)’;

(d) in part A, point 67 (Denmark – Finland) shall be replaced by the following:

‘Article 10 of the Nordic Convention on Social Security of 15 June 1992, concerning coverage of extra travel
expenses in case of sickness during stay in another Nordic country making a more expensive return travel to the
country of residence necessary’;

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(e) in part A, point 68 (Denmark – Sweden) shall be replaced by the following:

‘Article 10 of the Nordic Convention on Social Security of 15 June 1992, concerning coverage of extra travel
expenses in case of sickness during stay in another Nordic country making a more expensive return travel to the
country of residence necessary’;

(f) in part A, point 71(b) (Germany – Greece) shall be replaced by the following:

‘Articles 8(1), (2)(b) and (3), 9 to 11 and Chapters I and IV, in so far as they concern these Articles, of the
Convention on unemployment insurance of 31 May 1961, together with the note in the minutes of 14 June
1980 (reckoning of insurance periods for unemployment benefits in case of transfer of residence from one State
to another)’;

(g) in part A, point 72 (Germany – Spain) shall be replaced by the following:

‘Article 45(2) of the Social Security Convention of 4 December 1973 (representation by diplomatic and consular
authorities)’;

(h) in part A, point 73 (Germany – France) of paragraphs (c), (d), (e) and (f) shall be replaced by the following:

‘(a) Complementary Agreement No 4 of 10 July 1950 to the General Convention of the same date, as in Supple-
mentary Agreement No 2 of 18 June 1955 (reckoning of periods of insurance completed between 1 July
1940 and 30 June 1950);

(b) Title I of the said Supplementary Agreement No 2 (reckoning of periods of insurance completed before 8

May 1945);

(c) Points 6, 7 and 8 of the General Protocol of 10 July 1950 to the General Convention of the same date

(administrative arrangements);

(d) Titles II, III and IV of the Agreement of 20 December 1963 (social security in the Saar)’;

(i) in part A, point 79 (Germany – Luxembourg) shall be replaced by the following:

‘Articles 4, 5, 6 and 7 of the Treaty of 11 July 1959 (reckoning of insurance periods completed between
September 1940 and June 1946)’;

(j) in part A, point 83 (Germany – Austria) of paragraphs (h) and (i) shall be replaced by the following:

‘Article 1(5) and Article 8 of the Convention on Unemployment Insurance of 19 July 1978 and Article 10 of the
Final Protocol to this Convention (granting of unemployment allowances to frontier workers by the previous
State of employment) shall continue to apply to persons who have exercised an activity as a frontier worker
on or before 1 January 2005 and become unemployed before 1 January 2011’;

(k) in part A, point 90 (Germany – United Kingdom) of paragraphs (a), (b) and (c) shall be replaced by the

following:

‘(a) Articles 7(5) and 7(6) of the Convention on social security of 20 April 1960 (legislation applicable to civi-

lians serving the military forces);

(b) Articles 5(5) and 5(6) of the Convention on unemployment insurance of 20 April 1960 (legislation applic-

able to civilians serving the military forces)’;

(l) in part A, point 142 (Spain – Portugal) shall be replaced by the following:

‘Article 22 of the General Convention of 11 June 1969 (export of unemployment benefits)’;

(m) in part A, point 180 (Ireland – United Kingdom) shall be replaced by the following:

‘Article 8 of the Agreement of 14 September 1971 on social security (concerning the transfer and reckoning of
certain disability credits)’.

(n) in part A, point 267 (Netherlands – Portugal) shall be replaced by the following:

‘Article 31 of the Convention of 19 July 1979 (export of unemployment benefits)’.

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(o) in part A, point 298 (Finland – Sweden) the text shall be replaced by the following:

‘Article 10 of the Nordic Convention on Social Security of 15 June 1992, concerning coverage of extra travel
expenses in case of sickness during stay in another Nordic country making a more expensive return travel to the
country of residence necessary’;

(p) in part B, the following entries shall be deleted:

2, 3, 5, 6, 7, 8, 9, 13, 16, 17, 19, 22, 23, 24, 48, 50, 51, 52, 53, 54, 58, 61, 62, 64, 67, 68, 69, 71, 72, 73,
74, 75, 79, 82, 83, 85, 88, 89, 90, 111, 112, 113, 114, 118, 121, 122, 124, 127, 128, 129, 130, 131, 132,
136, 139, 140, 142, 145, 146, 147, 148, 149, 153, 156, 157, 159, 162, 163, 164, 165, 169, 172, 173, 175,
178, 179, 180, 184, 187, 188, 190, 193, 194, 195, 237, 238, 240, 243, 244, 245, 265, 267, 270, 271, 272,
274, 277, 278, 279, 288, 289, 290, 298, 299, 300;

4.

in Annex IV, section B shall be amended as follows:

(a) under the heading ‘D. GERMANY’, the text shall be replaced by the following:

‘Farmers' old-age insurance (Alterssicherung der Landwirte)’;

(b) under the heading ‘J. ITALY’, the text shall be replaced by the following:

‘Pension insurance schemes for (Assicurazione pensioni per):

— medical practitioners (medici)

— pharmacists (farmacisti)

— veterinarians (veterinari)

— nurses, medical auxiliaries, children's nurses (infermieri, assistenti sanitari, vigilatrici infanzia)

— psychologists (psicologi)

— engineers and architects (ingegneri ed architetti)

— surveyors (geometri)

— solicitors (avvocati)

— economists (dottori commercialisti)

— accountants and business experts (ragionieri e periti commerciali)

— employment consultants (consulenti del lavoro)

— notaries (notai)

— customs agents (spedizionieri doganali)

— biologists (biologi)

— agricultural technicians and scientists (agrotecnici e periti agrari)

— sales representatives (agenti e rappresentanti di commercio)

— journalists (giornalisti)

— industrial technicians (periti industriali)

— actuaries, chemists, agronomists, foresters, geologists (attuari, chimici, dottori agronomi, dottori forestali,

geologi)’;

(c) under the heading ‘R. AUSTRIA’, the text shall be replaced by the following:

‘Pension schemes of pension institutions of liberal profession associations (Kammern der Freien Berufe)’;

5. Annex VI shall be amended as follows:

(a) Under the heading ‘C. DENMARK’, point 6 (b) shall be deleted.

(b) under the heading ‘C. DENMARK’, the following text shall be added:

‘11. The temporary benefit for unemployed persons who have been admitted to the “flexible-job” scheme
(ledighedsydelse) (Law No 455 of 10 June 1997) is covered by Title III, chapter 6 (Unemployment benefits).
As regards unemployed persons going to another Member State, Articles 69 and 71 of this Regulation will
be applicable when this Member State has similar employment schemes for the same category of persons.’;

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(c) under the heading ‘D. GERMANY’, points 3, 11 and 17 shall be deleted and the following points shall be added:

‘24. For the calculation of the theoretical amount referred to in Article 46(2)(a) of the Regulation, in pension
schemes for liberal professions, the competent institution shall take as the basis, in respect of each of the
years of insurance completed under the legislation of any other Member State, the average annual pension
entitlement acquired during the period of membership of the competent institution through the payment
of contributions.

25. Article 79a of the Regulation shall apply mutatis mutandis to the calculation of orphans' pensions and

increases or supplements in respect of children from pension schemes for liberal professions.’;

(d) under the heading ‘H. FRANCE’, the text in point 7 shall be replaced by the following:

‘Notwithstanding Articles 73 and 74 of this Regulation, the housing allowances and the supplement for child-
care of the parents' choice (early childhood benefit) shall be granted only to persons concerned and to members
of their families residing in French territory.’;

(e) under the heading ‘I. IRELAND’, point 11 shall be deleted;

(f ) under the heading ‘R. AUSTRIA’, the following points shall be added:

‘8. For the calculation of the theoretical amount

this Regulation
concerning benefits or parts of benefits of a pension scheme of the liberal profession associations (Kammern
der Freien Berufe), financed exclusively by the funded scheme method or based on a pension account
system, the competent institution shall take into account, in respect of each month of insurance completed
under the legislation of any other Member State, capital in proportion to the capital actually accrued in the
pensions scheme concerned, or considered to have accrued in the pension account scheme, and the number
of months of the insurance periods in the pension scheme concerned.

in accordance with Article 46(2)(a) of

9. Article 79a of the Regulation shall apply mutatis mutandis to the calculation of orphans' pensions and
increases or supplements to pensions in respect of children from a pension scheme of the liberal profession
associations (Kammern der Freien Berufe).’;

(g ) under the heading ‘Y. UNITED KINGDOM’, the text shall be amended as follows:

(i) in point 2(b), points (i) and (ii) shall be replaced by the following:

‘(i) a spouse or former spouse where a claim is made by:

— a married woman, or

— a person whose marriage has terminated otherwise than by the death of the spouse; or

(ii) a former spouse, where a claim is made by:

— a widower who immediately before pensionable age is not entitled to widowed parent's allowance,

or

— a widow who immediately before pensionable age is not entitled to widowed mother's allowance,
widowed parent's allowance or widow's pension, or who is only entitled to an age-related widow's
pension calculated pursuant to Article 46(2) of the Regulation, and for this purpose “age-related
widow's pension” means a widow's pension payable at a reduced rate in accordance with section
39(4) of the Social Security Contributions and Benefits Act 1992.’;

(ii) point 22 shall be deleted.

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ANNEX II

The Annexes to Regulation (EEC) No 574/72 are hereby amended as follows:

1.

in Annex 2, under the heading ‘X. SWEDEN’, point 2 shall be replaced by the following:

‘ 2. For unemployment benefits:

Inspektionen för arbetslöshetsförsäkringen (Swedish Unemployment Insurance

Board)’;

2.

in Annex 4, under the heading ‘D. GERMANY’, the following point shall be added:

‘9. Pension schemes for liberal professions:

Arbeitsgemeinschaft Berufsständischer Versorgungseinrichtungen, Köln’;

3. In Annex 10, under the heading ‘C. DENMARK’, point 1 first indent shall be replaced by the following:

‘1. For the purposes of applying Articles 10c, 11(1), 11a(1), 12a, 13(2) and (3), 14(1), (2) and (3) of the imple-

menting Regulation: Den Sociale Sikringsstyrelse, København’;

4.

in Annex 10, under the heading ‘R. AUSTRIA’, point 1 shall be replaced by the following:

‘1. For the application of Article 14(1)(b), Article 14a(1)(b) and Article 17 of the Regulation:

Bundesminister für soziale Sicherheit, Generationen und Konsumentenschutz (Federal Minister for Social Security,
Generations and Consumer Protection), in agreement with the respective public administration with regard to
special schemes for civil servants and in agreement with the respective pension institution with regard to pension
schemes of the liberal profession associations (Kammern der Freien Berufe)’;

5. Annex 11 shall be deleted.

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STATEMENT OF THE COUNCIL'S REASONS

I. INTRODUCTION

On 27 August 2003, the Commission submitted to the Council a proposal for a Regulation of the
European Parliament and of the Council 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).

The Economic and Social Committee delivered its opinion on 10 December 2003.

Acting in accordance with Article 251 of the Treaty, the European Parliament delivered its first reading
opinion on 11 March 2004.

The Commission subsequently presented on 30 April 2004 its amended proposal, wholly accepting
the four amendments adopted by the European Parliament.

The Council accepted three of these amendments in full and one as regards the substance.

In accordance with Article 251(2) of the EC Treaty, the Council adopted its common position on 15
November 2004.

II. OBJECTIVE

The purpose of the Regulation is to update Regulations (EEC) No 1408/71 (1) and No 574/72 (2) to
take account of changes in national legislation and to clarify the legal situation with regard to certain
articles of these regulations. It takes account of recent developments in the case-law of the European
Court of Justice, in particular those rulings concerning special non-contributory cash benefits, which
are non-exportable if they meet specific criteria and are entered in Annex IIa of Regulation (EEC)
No 1408/71. The Regulation also takes account of rulings concerning the relationship between the
Regulation and the provisions of bilateral social security agreements, which will continue to apply if
they meet the requirements for inclusion in Annex III of the Regulation.

III. ANALYSIS OF THE COMMON POSITION

1. European Parliament amendments

The European Parliament adopted four amendments to the Commission proposal.

All of these amendments were incorporated into the amended Commission proposal as they stood.

2. Council's position on the European Parliament's amendments

The Council could accept in full the following three amendments:

— Amendment 1 which seeks to insert into the list of special non-contributory cash benefits, as
contained in Annex IIa to Regulation (EEC) No 1408/71, a benefit provided by Spanish legisla-
tion: ‘mobility allowance to cover transport costs’. The Council could accept this amendment
since this benefit fully meets the revised criteria laid down in the common position (i.e., it must
be ‘intended to provide solely specific protection for the disabled, closely linked to the said
person's social environment in the Member State concerned’);

(1) Council 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.

(2) Council Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71.

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— Amendment 2 which seeks to insert into the list of special non-contributory cash benefits, as
contained in Annex IIa of Regulation (EEC) No 1408/71, a benefit provided for by Irish legisla-
tion: ‘mobility allowance’. The Council could again accept this amendment as it also fully meets
the revised criteria laid down in the common position;

— Amendment 3 which seeks to insert in the list of special non-contributory benefits, as contained
in Annex IIa to Regulation (EEC) No 1408/71, a benefit provided by UK legislation: ‘income
support’. The Council also accepted this amendment as it fully meets the revised criteria in the
common position.

The Council also accepted, subject to redrafting, the principle underlying an oral amendment of
the Parliament which seeks to invite Member States to take measures to ensure that the prejudicial
effects of certain amendments made to the list of benefits in Annex IIa (in particular when a benefit
becomes non-exportable due to its inclusion in the Annex) are mitigated, with regard to persons
who previously received these benefits, through transitional arrangements or bilateral solutions
(see recital 6).

IV. ARTICLE 1(5) OF THE COMMISSION PROPOSAL

Article 1(5) of the Commission proposal aims to amend Article 33(1) of Regulation (EEC) No 1408/71
to specify that the deduction of sickness and maternity contributions may be carried out on all
pensions paid to pensioners if national legislation so provides.

The Council has decided not to incorporate this part of the Commission proposal into its common
position while awaiting the entry into force of Regulation (EC) No 883/2004 on the coordination of
social security systems.

The Council accepts the need for balance between contributions deducted and the cost of benefits paid,
as envisaged by Article 33(1) of Regulation (EEC) No 1408/71. The possibility of deducting contribu-
tions on the basis of all the pensions paid to a pensioner derives from this principle. However, in the
context of the process of reform and simplification of Regulation (EEC) No 1408/71, and recalling the
agreement that the modalities of application of Article 5 (assimilation of facts) in relation to Article 30
(contribution by pensioners) of the simplified Regulation (EC) No 883/2004 would be provided for in
the implementing Regulation, the Council considers that it would be premature to take such a measure
at the present time. However, the Council also considers that it must be clear that it is not possible to
levy on the basis of national legislation more contributions than would be the case if the person
concerned was receiving all the pensions under the legislation of that Member State.

V. SPECIFIC ISSUES RELATING TO ANNEX IIA OF COUNCIL REGULATION (EEC) NO 1408/71

The Commission proposal sought, inter alia, to amend Article 4(2a) and Annex IIa of Council Regu-
lation (EEC) No 1408/71 which relate to special non-contributory benefits, in the light of recent juris-
prudence of the European Court of Justice with regard to the classification of 'special non-contributory
benefits', namely the Judgments of 5 March 1998 in case C-160/96, Molenaar v Allgemeine Ortskranken-
kasse Baden-Wurttemberg (ECR 1998 I-843), 8 March 2001 in case C-215/99, Friedrich Jauch v Pensions-
versicherungsanstalt der Arbeiter (ECR 2001 I 1901) and the judgment of 31 May 2001 in case C-43/99,
Ghislain Leclere, Alina Deaconescu and Caisse nationale des prestations familiales (ECR 2001 I-4265).

Special non-contributory benefits can be defined as being half-way between ‘conventional’ social
security benefits and social assistance. Annex IIa contains the list of such benefits which are granted to
persons exclusively in the territory of the Member State in which they reside, under the terms of
Article 10a of Regulation (EEC) No 1408/71 (and are therefore not ‘exportable’ when such persons
move to another Member State).

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In order to facilitate the free movement of persons within the European Union, the Commission
proposed that this list should be streamlined and that a number of benefits currently listed in Annex
IIa of Council Regulation (EEC) No 1408/71 should be removed from the list in accordance with the
Court of Justice's jurisprudence.

The Council unanimously agreed with the revised criteria for classification of the entries in this Annex
as set out in the amended version of Article 4(2a) of the Regulation, detailed in the common position.
These criteria are identical to those included in the text of Article 70 of Regulation (EC) No 883/2004
on the coordination of social security systems for the purposes of the corresponding Annex in that
Regulation (Annex X). To assist in the objective application of these criteria, it was proposed that the
application of Article 4(2a) should aim to ensure that:

— benefits of the same type which share identical or equivalent features should be categorised in the

same way to ensure consistent and coherent treatment;

— if a benefit is not regarded as a ‘special’ non-contributory benefit, the appropriate system of coordi-

nation under Article 4(1), if any, should be specified.

The Council also sought to agree criteria for the inclusion of entries in Annex IIa and to identify some
key characteristics of disability schemes which would assist in the classification of such schemes as
providing ‘solely specific protection for the disabled’. On the basis of the above approach, unanimous
agreement could be reached on classifying the vast majority of Annex IIa entries, resulting in a substan-
tial streamlining of the Annex.

However, unanimous agreement could not be reached on the Commission's proposal to remove
certain specific entries from Annex IIa. The Member States concerned did not accept that the criteria
proposed should be used to define benefits which were appropriate for listing in Annex IIa. These
Member States wanted to maintain their entries in the Annex as they regarded them as fulfilling the
requirements of Article 4(2a) and they considered that current European Court of Justice jurisprudence
did not justify their removal from the Annex.

In order to allow for the adoption of the Regulation in view of the significant progress made overall,
the Council agreed to maintain these entries in Annex IIa pending future European Court of Justice
jurisprudence which could clarify the relevant criteria and subsequently entail revision of the Annex.

In this context, the Commission made a statement to the Council's minutes stressing that the list of
entries might need to be revised on the basis of new jurisprudence from the European Court of Justice,
in particular in relation to the benefits concerned. The Commission stated that it reserved the right to
seize the Court and to present a proposal, if necessary, to revise the list of entries in Annex IIa, based
on the findings of the Court.

The Council also agreed that the issue of coordination of benefits for the disabled including, in particu-
lar, those which are removed from Annex IIa of Regulation (EEC) No 1408/71, either in application of
European Court of Justice jurisprudence or under this Regulation, should be further considered, taking
into account the objectives of Article 42 of the Treaty, with a view to specific proposals being
submitted before the end of 2005.

VI. CONCLUSION

The Council considers that its common position both fulfils the key aims of the Commission's original
proposal and, by incorporating the amendments mentioned in Section III of this statement, to a large
extent takes into account the opinion of the European Parliament in first reading.