Communication from the Commission to the European Parliament pursuant to the second paragraph of Article 251(2) of the EC Treaty concerning the common position of the Council on the adoption of a Regulation of the European Parliament and of the Council amending 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 and Council Regulation (EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 1408/71 (miscellaneous amendments)
Date: 2004-11-16
Institutions: European Commission
Subjects: free movement of workers, self-employment, social security, social-security benefit, social-security harmonisation, wage earner, worker (EU)

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.11.2004 
COM(2004) 752 final 

2003/0184 (COD) 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT 

pursuant to the second paragraph of Article 251(2) of the EC Treaty 

concerning the 

common position of the Council on the adoption of a Regulation of the European 
Parliament and of the Council amending 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 and Council Regulation 
(EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 
1408/71 (miscellaneous amendments) 

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2003/0184 (COD) 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT 

pursuant to the second paragraph of Article 251(2) of the EC Treaty 

concerning the 

common position of the Council on the adoption of a Regulation of the European 
Parliament and of the Council amending 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 and Council Regulation 
(EEC) No 574/72 laying down the procedure for implementing Regulation (EEC) No 
1408/71 (miscellaneous amendments) 

1. 

BACKGROUND 

Date of transmission of the proposal to the EP and the Council 
(document COM(2003) 468 final — 2003/0184 COD): 

31 July 2003. 

Date  of  the  opinion  of  the  European  Economic  and  Social 
Committee: 

10 December 2003. 

Date of Parliament's opinion at first reading: 

Date of transmission of the amended proposal: 

Common position adopted 

11 March 2004. 

22 April 2004. 

15 November 2004. 

2. 

OBJECTIVE OF THE COMMISSION PROPOSAL 

Regulation  (EEC)  No  1408/71  and  the  relevant  Implementing  Regulation  (EEC)  No  574/72 
ensure the coordination of Member States' social security schemes in order to protect the rights 
of people moving within the European Union. 

On 31 July 2003 the Commission presented a proposal for amendment of these Regulations. 
The  proposal  seeks  to  update  these  Community  Regulations  in  order  to  take  account  of 
changes in national law and to clarify the legal position concerning certain Articles of the said 
Regulations. It also seeks to take account of recent developments in the case law of the Court 
of  Justice  of  the  European  Communities,  in  particular  rulings  concerning  the  identification 
criteria for special non-contributory cash benefits subject to specific coordination (which are 
non-exportable if they meet the above-mentioned criteria and are entered in Annex IIa of the 
Regulation),  as  well  as  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). 

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3. 

COMMENTS ON THE COMMON POSITION 

3.1 

General comments 

The  common  position  of  the  Council,  adopted  unanimously  in  accordance  with 
Article 42 EC, maintains the essential aspects of the Commission’s proposal, which 
relates principally to two points: 

•  Revision  of  the  list  of  special  non-contributory  cash  benefits  in  Annex  IIa  to 
Regulation  (EEC)  No  1408/71  on  the  basis  of  the  criteria  laid  down  in  Article 
4(2a) of the Regulation, taking account of Court of Justice case law. Although the 
Council  has  been  unable  to  agree  on  the  list  of  benefits  proposed  by  the 
Commission in its proposal, the number of benefits (benefits which, owing to their 
special features, are the subject of specific coordination and are paid only in the 
territory  of  the  Member  State  in  which  the  beneficiary  resides)  retained  in  the 
Annex  as  per  the  common  position  has  been  very  much  reduced  compared  with 
the  present  list.  Furthermore,  depending  on future  Court  of  Justice  case  law,  the 
Commission reserves the right to table a new proposal to revise Annex IIa so as to 
ensure uniform treatment of all comparable benefits. 

•  Revision  of  Annex  III  to  the  Regulation,  which  lists  the  bilateral  conventions 
remaining applicable after entry into force of Regulation (EEC) No 1408/71. This 
list has been reduced significantly, also on the basis of criteria established by the 
Court of Justice, cf. Article 7(2) of the Regulation. 

3.2 

Amendments made by the European Parliament at first reading 

At the plenary part-session on 11 March 2004, the European Parliament adopted four 
amendments  which  the  Commission  has  incorporated  in  full  into  its  amended 
proposal of 22 April 2004. 

These four amendments are also included in the common position of the Council. 

The oral amendment has been taken into account in recital 6 of the common position, 
which invites Member States to take measures to ensure that the prejudicial effects of 
certain  amendments  made  to  the  list  of  benefits  in  Annex  IIa,  specifically  when  a 
benefit becomes non-exportable due to its inclusion in the Annex, are mitigated with 
regard to persons who previously received these benefits, possibly by introducing a 
transition period. 

Amendments 1, 2 and 3 have been included in Annex I, section 2), headings G Spain, 
I Ireland and Y United Kingdom, as the benefits concerned are perfectly consistent 
with the criteria laid down in Article 4(2a) of the Regulation. 

3.3 

New provisions introduced by the Council, and the Commission's position 

3.3.1 

Annex I, section 2) of the common position – Special non-contributory cash benefits 
listed in Annex IIa to Regulation (EEC) No 1408/71 

The Council has agreed on the list of non-contributory cash benefits to be included in 
Annex  IIa  on  the  basis  of  the  criteria  laid  down  in  Article  4(2)  of  the  Regulation. 
However,  some  Member  States  (United  Kingdom,  Sweden  and  Finland)  felt  that 

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their benefits1 should be retained in Annex IIa owing to their special characteristics 
distinguishing  them  from  the  other  benefits  deleted  from  the  Annex.  As  a 
compromise, the Council has agreed to retain these benefits in the Annex pending the 
Court  of  Justice’s  findings  on  the  question  of  the  special  characteristics  of  these 
benefits compared with those already examined by the Court and in the light of the 
criteria laid down in Article 4(2) of the Regulation. 

In  a  statement  for  the  Council  minutes,  the  Commission  continues  to  consider, 
having regard to Court of Justice case law and the criteria laid down in Article 4(2) 
of the Regulation, that the benefits concerned should not be included in Annex IIa. It 
therefore reserves the right to refer the matter to the Court of Justice and to present a 
proposal, if necessary, to revise the list of entries in Annex IIa, based on the findings 
of the Court. 

The Commission can accept this solution, as it ensures in the long term the uniform 
and objective treatment of all equivalent benefits. 

It  should  also  be  emphasised  that  criteria  identical  to  those  in  Article  4(2)  of  the 
Regulation  were  applied  when  examining  the  new  Member  States’  requests  for  the 
inclusion of benefits in the Annex during the accession negotiations. For reasons of 
transparency  and  legal  certainty,  the  current  entries  of  the  new  Member  States 
included in the Accession Treaty have also been incorporated. 

Luxembourg’s  “Income  for  the  seriously  disabled”  (Article  1(2)  of  the  Act  of 
12 September  2003)  and  Finland’s  “Special  assistance  for  immigrants”  (Act  on 
special  assistance  for  immigrants,  1192/2002)  have  also  been  added  to  the  Annex. 
These  entries  are  justified  in  that  both  these  benefits  are  intended  to  guarantee  the 
persons concerned a subsistance income and therefore meet the criteria laid down in 
Article 4(2) of Regulation (EEC) No 1408/71. 

3.3.2 

Article 1(3) and Annex I section 3) of the common position – Bilateral conventions 
listed in  Annex III to Regulation (EEC) No 1408/71 remaining applicable after the 
entry into force of Regulation No 1408/71 

The  change  to  Article  7(2)  of  Regulation  No  1408/71  proposed  by  the  common 
position sets out, in line with Court of Justice case law, the conditions under which 
conventions  predating  the  Regulation  may  remain  applicable.  This  is  welcomed  by 
the Commission. 

Annex  III  to  the  Regulation  lists  the  bilateral  conventions  which  meet  these 
conditions and therefore remain applicable.  

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United Kingdom:  
-  Disability  living  allowance  (Disability  Living  Allowance  and  Disability  Working  Allowance  Act 
of 27 June 1991,  section  1,  and  Disability  Living  Allowance  and  Disability  Working  Allowance 
(Northern Ireland) Order of 24 July 1991, section 3).   
-  Attendance  allowance  (Social  Security  Act  of  20  March  1975,  section 35,  and  Social  Security 
(Northern Ireland) Act of 20 March 1975, section 35). 
- Carer’s allowance (Social Security Act of 20 March 1975, section 37, and Social Security (Northern 
Ireland) Act of 20 March 1975, section 37).   
Sweden: disability allowance and care allowance for disabled children (Act No 703 of 1998). 
Finland: child care allowance (Child care Allowance Act, 444/69). 

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As the Regulation takes the place of conventions which predate it and fall within its 
scope,  a  comment  is  added  at  the  top  of  Annex  III  to  the  effect  that  conventions 
which do not fall within the scope of the Regulation and therefore remain in force are 
not included in Annex III. 

The  terminology  used  in  certain  entries  currently  included  in  the  Annex  has  been 
amended  for  the  purposes  of  clarification,  without  changing  the  substance  of  those 
entries. 

3.3.3 

Article  1(1)(b)  of  the  common  position  –  Amending  of  Article  3  of  Regulation  No 
1408/71 

The  amendments  proposed  by  the  Council  in  the  common  position  consolidate  the 
conditions for application of the principle of equal treatment. They are acceptable to 
the Commission. 

3.3.4 

Article 1(5) of the Commission proposal – Amending of 33 of Regulation No 1408/71 

The common position of the Council does not include the amendments to Article 33 
proposed  by  the  Commission.  The  Council  feels  it  is  preferable  to  await  the  entry 
into force of the new simplified Regulation (EC) No 883/2004, which, on the basis of 
Article  5  (assimilation  of  facts)  and  Article  30  (contributions  by  pensioners),  will 
make  it  possible  to  deduct  contributions  on  the  basis  of  all  the  pensions  paid  to  a 
pensioner,  but  necessitates  implementing  provisions  in  the  future  implementing 
regulation (cf. Council statement in the minutes). In a statement for the minutes, the 
Commission reaffirms its intention to include provisions implementing Article 30 of 
the new Regulation No 883/2004 in the new implementing regulation. The Council’s 
position on this point is therefore fully acceptable to the Commission. 

3.3.5 

Article  1(9);  Article  3;  Annex  I,  section  1(b),  section  4(  c),  section  5(c)  and  (f); 
Annex II, section 4) of the common position 

Like  Germany,  Austria  has  also  asked  for  the  removal  of  the  entry  in  Annex  II, 
heading  R  Austria,  which  excluded  certain  special  schemes  for  self-employed 
workers from the scope of the Regulation, pursuant to Article 1(j), fourth paragraph, 
of Regulation (EEC) No 1408/71. The Commission welcomes this initiative, which 
allows  the  provisions  of  Regulation  No  1408/71  to  be  applied  to  these  special 
schemes.  This  measure  necessitates  a  transitional  period,  extended  in  the  common 
position  to  1 January  2005,  which  is  fully  acceptable,  taking  account  of  the  time 
needed to adopt the Regulation. It also requires the introduction of provisions on the 
calculation of benefits and clarification regarding the competent institutions. 

3.3.6 

Annex  I,  section  1(c)(ii)  and  section  5(d),  and  Annex  II,  sections  1  and  3  of  the 
common position 

The amendments made are purely formal and based on a change in the terminology 
used  in  French  legislation  on  family  benefits  and  on  changes  to  the  competent 
institutions in Sweden and Denmark. 

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3.3.7 

Annex I, section 5(b) of the common position – Entry for Denmark 

Following the removal from Annex IIa of the Danish benefit “Temporary benefit for 
unemployed  persons  who  have  been  admitted  to  the  “flexible-job”  scheme  for  12 
months  (ledighedsydelse)”,  it  has  been  considered  necessary  to  include  an  entry  in 
Annex VI requiring this benefit to be coordinated in accordance with the provisions 
of the chapter on unemployment benefits. 

4. 

CONCLUSIONS 

The Commission approves the common position in its entirety, as it meets the objectives of 
the Commission’s proposal and takes account of the European Parliament’s amendments. 

5. 

COMMISSION STATEMENTS 

See annex. 

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ANNEX 

STATEMENTS FOR THE COUNCIL MINUTES 

Commission Statement ad Article 1(5) of the Commission Proposal 

"The Commission envisages including some measures in the implementing Regulation to deal 
with the practical consequences of Article 30." 

Commission Statement ad Annex IIa 

"The  Commission  has  proposed  to  revise  the  list  of  entries  in  Annex  IIa  (in  particular  the 
following  group  of  benefits:  Child  care  allowance  (Finland);  Disability  Allowance  and  care 
allowance  for  disabled  children  (Sweden);  Disability  Living  Allowance;  Attendance 
Allowance; Carer's Allowance (United Kingdom)) and continues to consider that this will be 
necessary in order to meet the criteria of the jurisprudence of the Court and the criteria agreed 
in  the  Council's  Common  Position  on  the  Miscellaneous  Amendments  proposal  of  2003.  It 
entirely reserves therefore its 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." 

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