Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 883/2004 on the coordination of social security systems, and determining the content of Annex XI COM(2006) 7 final — 2006/0008 (COD)
Date: 2007-03-14
Institutions: European Economic and Social Committee
Subjects: ESC opinion, EU Member State, social-security benefit, social-security harmonisation

13.7.2007

EN

Official Journal of the European Union

C 161/61

Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the
European Parliament and of the Council amending Regulation (EC) No 883/2004 on the coordina-
tion of social security systems, and determining the content of Annex XI

COM(2006) 7 final — 2006/0008 (COD)

(2007/C 161/18)

On 10 February 2006 the Council decided to consult the European Economic and Social Committee, under
Article 262 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the
Committee's work on the subject, adopted its opinion on 22 February 2007. The rapporteur was Mr Greif.

At its 434th plenary session, held on 14/15 March 2007 (meeting of 14 March), the European Economic
and Social Committee adopted the following opinion by 163 votes to 0 with 5 abstentions.

1. Summary

The EESC believes that it would be advisable to work to
1.1
ensure that the new regulation on the coordination of Member
States' social security systems comes into force as quickly as
possible, which would also involve the draft implementing regu-
lation taking effect without delay and agreement being reached
on the regulation under consideration here, which lays down
the content of Annex XI of Regulation 883/2004.

entries than the equivalent annex (Annex VI) to the current
coordinating Regulation 1408/71.

To facilitate the rapid practical

implementation of the
1.7
basic regulation, the EESC therefore calls on the Member States
to provide their social security institutions, without delay, with
the necessary human and technical resources.

2. Introduction and background to proposed regulation

The EESC is aware that unconditional application of the
1.2
principle of equal
facts, under which national
authorities may not limit themselves to facts occurring in their
own territory, would be accompanied by major consequences
for social security systems.

treatment of

The Community rules on the coordination of national
2.1
social security systems are currently laid down by Regulation
(EEC) No 1408/71 (basic regulation) and its implementing regu-
lation, Regulation (EEC) No 574/72, which have been modified
and updated several times since coming into force over 30 years
ago.

1.3
The EESC acknowledges therefore that certain entries in
Annex XI concerning particular facts in Member States are
necessary to ensure that there is no conflict between national
rules and the text of Regulation 883/2004. The Committee
requests, however, that the entries do not proliferate and that
their number is kept to a minimum by ensuring that specific
entries are in fact necessary for the implementation of the coor-
dination rules in the relevant Member State and adhere to the
proportionality principle.

1.4
For the EESC, it is especially important to emphasise that
under no circumstances should the process of coordination lead
to a situation whereby entries included in Annex XI work to the
disadvantage of the public.

1.5
In the EESC's view, the approved entries do not present
any obvious problems, either for insured persons moving from
one country to another or for businesses and social security
institutions. The benefits of coordination for recipients must not
be undermined by the entries.

1.6
The EESC acknowledges the successful efforts of all those
involved to simplify Annex XI. As a result, it contains far fewer

2.1.1
These regulations are intended to define the necessary
measures for the persons covered to travel, stay or reside in
another Member State without losing their social security enti-
tlements.
Insured persons who move from one country to
another should not suffer any disadvantage and should not be
treated worse than insured persons who remain in one country.
To ensure that rights are safeguarded, the regulations lay down
the practicalities of coordination and also the different proce-
dures to meet specific needs in the various branches of social
security.

Regulation 1408/71 is to be replaced by Regulation (EC)
2.2
883/2004 of the European Parliament and the Council, which
was adopted on 29 April 2004.

Article 89 of new Regulation 883/2004 provides that
2.2.1
a further regulation shall lay down the procedure for its imple-
mentation, which will replace the current implementing Regu-
lation 574/72. This implementing regulation (1), which was
published in draft form on 31.1.2006, is currently being exam-
ined in the European Parliament and the Council and has
already been the subject of a separate EESC opinion (2).

(1) OJ C 318, 23.12.2006.
(2) Opinion of the European Economic and Social Committee on the
Proposal for a Regulation of the European Parliament and of the Council
laying down the procedure for implementing Regulation (EC) No 883/2004
on the coordination of social security systems COM(2006) 16 final —
2006/0006 (COD). Rapporteur: Mr Greif. OJ C 324, 30.12.2006.

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2.2.2
Only after the implementing regulation has come into
force can Regulation 883/2004 be applied and its numerous
simplifications, clarifications and improvements in the area of
social security coordination, which have already been approved,
take effect for all users. Until then, Regulation 1408/71 and its
implementing Regulation 574/72 remain fully in force.

2.5.2
Before the implementing regulation comes into force,
the content of Annex XI must be determined by the European
Parliament and the Council. The finalisation of Annex XI is
therefore a further condition for the application of the new
rules on coordination. The legal basis for the regulation is Arti-
cles 42 and 308 of the EC Treaty. These articles stipulate that
implementation requires unanimity in the Council in conjunc-
tion with the codecision procedure in the European Parliament.

2.3
Recital 41 of Regulation 883/2004 states that ‘it is neces-
sary to lay down special provisions which correspond to the
special characteristics of national legislation in order to facilitate
the application of the rules of coordination.’ And it is these
special provisions for the application of the legislation of the Member
States that are contained in Annex XI of Regulation 883/2004,
which is the subject of this opinion.

2.3.1
The basic Regulation 883/2004 therefore lays down
the basic rules of coordination. The implementing regulation is
a form of ‘user manual’ for the basic regulation and lays down
rules on matters of a more administrative nature. Annex XI of
Regulation 883/2004 contains specific rules, adapted to the
legal systems of individual Member States, in order to facilitate
the smooth application of the new coordination rules.

Annex XI therefore serves to ensure that the social
2.3.2
security systems of individual states and the coordination rules
are not at odds with one another. Certain rules peculiar to
national systems must be safeguarded through entries included
in Annex XI, so as not to impede coordination. Annex XI
should therefore serve to ensure a smooth interaction of
national and Community legislation with regard to the coordi-
nation of social security systems in Member States.

2.4
There will be a separate section in Annex XI for each
Member State. The scope of the entries for individual Member
States will vary widely and depends upon national legislation.

2.5 When the new coordinating Regulation 883/2004 was
adopted in 2004, provisionally Annex XI was left completely
blank. It was agreed at the time that its contents would be deter-
mined in a subsequent regulation. This regulation now exists in
draft form (3).

2.5.1
Annex XI relates not only to Regulation 883/2004
itself, but also to the implementing regulation. The three texts
cannot be considered separately. Accordingly, Annex XI is being
examined in the Council Working Group on Social Issues along-
side those parts of the implementing regulation that are relevant
to it. Both draft regulations submitted by the Commission in
January 2006 will therefore be discussed in the Council at the
same time.

(3) COM(2006) 7 final.

2.6
On 24 January 2006, the Commission put forward a
proposal amending certain points in Regulation 883/2004 and
laying down the content of Annex XI. The proposal came about
following consultation with Member States. The amendments to
specific points in Regulation 883/2004, which is still not applic-
able, are based upon the fact that some of the questions which
requested be included in Annex XI were
Member States
acknowledged to be of a horizontal nature, so that the rules on
these questions should cover all Member States. By including
them in the basic regulation, there is no need for similar entries
from several Member States in Annex XI.

3. General and specific comments of the EESC

3.1
The EESC has already welcomed the new rules on the
coordination of Member States' social security systems in several
opinions as an important step towards improving freedom of
movement in the Union, and is particularly pleased about the
expansion of the scope to cover more matters and persons, the
simplification of
the current rules and also all measures to
improve cooperation between social security institutions.

3.1.1
The EESC believes that it would be advisable to work
to ensure that the new coordinating regulation comes into force
as quickly as possible, which would also involve the draft imple-
menting regulation taking effect without delay and agreement
being reached on the content of Annex XI. In that connection,
the EESC calls upon all stakeholders to press ahead as quickly as
possible with the outstanding examination of the draft imple-
menting regulation and also of the regulation under considera-
tion here, which lays down the content of Annex XI (4).

Furthermore,

3.1.2
the EESC has already stipulated in its
opinion on the implementing regulation that any period of time
foreseen between the final adoption of the implementing regu-
lation and its entry into force must under no circumstances
exceed the six months envisaged in the Commission draft (5).

(4) Most recently also requested in the EESC opinion on Social security
schemes for employed and self-employed persons (Rapporteur: Mr Rodríguez
García-Caro), OJ C 24 of 31.1.2006 and the EESC opinion on the
Proposal for a Regulation of the European Parliament and of the Council
laying down the procedure for implementing Regulation (EC) No 883/2004
on the coordination of social security systems COM(2006) 16 final —
2006/0006 (COD). Rapporteur: Mr Greif. OJ C 324, 30.12.2006.

(5) OJ C 324, 30.12.2006, rapporteur: Mr Greif — point 4.4.1.

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3.2 Member States may request that entries be included in
Annex XI so that certain sensitive national rules can be main-
tained. The basis for this is, first and foremost, the comprehen-
sive equal treatment of facts laid down in Regulation 883/2004,
under which Member States must in principle take account of
all
facts and events with legal effects in the area of social
security occurring in another Member State as though they had
taken place in their own territory (6).

Equal

facts means,

for example,

treatment of

3.2.1
that
drawing a pension from a social security institution in another
Member State must have the same legal effects as drawing a
pension in one's own Member State. And should, for instance,
having an accident in your own Member State result in you
being able to draw an incapacity benefit, then this benefit must
also be provided should you suffer an accident
in another
Member State.

3.2.2
In the past, the European Court of Justice has nearly
always decided in favour of a broad interpretation of equal treat-
ment of facts in order to guarantee the protection of migrant
workers. In the current draft of Regulation 1408/71, there is no
general equal treatment of facts, only rules for certain specific
cases. Where no specific rules exist, the matter has occasionally
been brought before the Court of
Justice. For example, the
Court found it to be inadmissible when the length of time for
which orphan allowance can be claimed may only be extended
on the basis of military service completed within the relevant
Member State (7), or when periods of incapacity are taken into
account in an old-age pension only if the person concerned was
subject to the laws of the relevant Member State when he/she
became incapable of working (8).

3.2.3
The EESC is aware that unconditional application of
the principle of equal treatment of facts, under which national
authorities may not limit themselves to facts occurring in their
own territory, would be accompanied by major consequences
for social security systems. Furthermore, recitals 9 to 12 of
Regulation 883/2004 show that limits are set to the equal treat-
ment of facts. For example, ‘care should be taken to ensure that
the principle of assimilation of facts or events does not lead to
objectively unjustified results or to the overlapping of benefits
of the same kind for the same period’ (recital 12). And recital 11
stipulates that ‘The assimilation of facts or events occurring in a
Member State can in no way render another Member State
competent or its legislation applicable.’

treatment of

In order to eliminate undesired effects arising from the
3.2.4
equal
facts, horizontal waivers applicable to
several Member States were included in the basic regulation
(883/2004). Specific undesired effects on the system of one

(6) See Article 5 of Regulation 883/2004.

Equal treatment of benefits, income, facts or events:
‘Unless otherwise provided for by this Regulation and in the light of
the special implementing provisions laid down, the following shall
apply:
(a) where, under the legislation of the competent Member State, the
receipt of social security benefits and other income has certain
legal effects, the relevant provisions of that legislation shall also
apply to the receipt of equivalent benefits acquired under the
legislation of another Member State or to income acquired in
another Member State;

(b) where, under the legislation of the competent Member State,
legal effects are attributed to the occurrence of certain facts or
events, that Member State shall take account of
like facts or
events occurring in any Member State as though they had taken
place in its own territory.’

(7) Case C-131/96, Mora Romero, [1997], ECR 3676.
(8) Cases C-45/92 and C-46/92, Lepore and Scamuffa, [1995], ECR 6497.

Member State can be prevented by including an entry in
Annex XI.

Annex XI is based upon the contributions of Member
3.3
that
States. There are certain provisions on specific facts
Member States cannot introduce or leave in force at national
level without there being a potential conflict with the text of
Regulation 883/2004. Annex XI should therefore ensure that
the points in the regulation relating to particular Member States
are adapted in a way that enables a smooth application in indivi-
dual Member States.

is key to the

Given that it might contain quite a number of entries,
3.3.1
Annex XI
implementation of Regulation
883/2004. The EESC acknowledges that certain entries are
necessary but requests that the entries do not proliferate and
that their number is kept
to a minimum by ensuring that
specific entries are in fact necessary for the implementation of
the coordination rules in the relevant Member State and adhere
to the proportionality principle. For the EESC, it is especially
important to emphasise that under no circumstances should the
process of coordination lead to a situation whereby entries
included in Annex XI work to the disadvantage of citizens.

3.3.2
The EESC is aware of the complexity of the issues to
be settled here, but in spite of this requests that the pursuit of
vested interests should not lead to any further delay in the appli-
cation of the new rules, particularly in view of the fact that the
Council must decide unanimously and in accordance with the
codecision procedure in the European Parliament.

3.4
Even during the consultations on Regulation 883/2004,
Member States were asked to submit proposals aimed at
ensuring the smooth application of the individual provisions.
Member States put forward some 150 proposals for entries to
be included in Annex XI. The Commission evaluated the propo-
sals and discussed them with officials from the relevant Member
In the end, about 50 were incorporated into the
States.
proposed annex. This process led to the drafting of the annex
which now appears in the Commission proposal under discus-
sion here. A final assessment of the entries in Annex XI and the
corresponding chapters
in the implementing regulation is
currently being carried out in the Council Working Group on
Social Issues.

3.4.1
Given the complexity of the material, which covers
questions of detail in the social legislation of individual Member
States, the EESC will not comment in detail on specific entries.
On first sight, the approved entries do not, in the EESC's view,
present any obvious problems, either
insured persons
moving from one country to another or for businesses and
social security institutions.

for

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Furthermore, it also seems clear why most of the entries
3.5
were not
included in
included: Some proposals were not
Annex XI, either because of redundancy or because of incom-
patibility with Regulation 883/2004. Some of the other propo-
sals for entries in Annex XI have become proposals for amend-
ments to Regulation 883/2004. These proposals are not specific
to a country but are of a general nature.

3.5.1
These proposed amendments to Regulation 883/2004,
which have also been incorporated into the draft regulation,
ensured that Annex XI did not include several similar entries for
various Member States. This keeps the annex shorter and the
overall regulation clearer.

Article 1 of the draft regulation is an example of this
3.5.2
it
consolidation of horizontal matters. The
contains are relevant to many Member States and are therefore
logically added as amendments to the regulation itself, rather
than as a large number of entries in Annex XI.

clarifications

3.5.2.1
Article 1 (1) amends Article 14 of Regulation
883/2004 on voluntary insurance or optional continued insurance.
On the basis of this new provision, all Member States may
stipulate in their national legislation that voluntary insurance in
their own social security system, under which residence or
previous employment in that Member State is a condition for
voluntary insurance, is only possible if at an earlier stage the
person had been insured in the system of that Member State on
the basis of activity as an employed person. Without such a
possible waiver, anyone who had resided or worked anywhere
in the European Union could take out voluntarily insurance in
this Member State by virtue of the comprehensive equal treat-
ment of facts laid down in Article 5 of Regulation 883/2004.
As voluntary insurance under the systems of certain Member
States confers some real advantages, unconditional access could
these Member
lead to the destabilisation of
States, and therefore present serious problems for
insured
persons there. It was therefore agreed that all Member States
may stipulate that previous employment is a prerequisite for
voluntary insurance.

the systems of

3.5.2.2
883/2004 on award of benefits.

Article 1(3)

amends Article 52 of Regulation

— For the sake of completeness, it should be mentioned here
the proposed Commission text was revised during

that
examination in the Council.

— According to the provisional partial agreement reached in
the Council, systems in which periods of time are not taken
into account when calculating the amount of an entitlement
should not use the pro-rata-temporis method of calculation,
provided they are referred to in Annex VIII of Regulation
883/2004.

— This includes defined contributions schemes, as referred to

in the original Commission document.

3.5.3
Other horizontal matters were taken into account in
the proposal for the implementing regulation. These are first
and foremost proposals of a technical nature. The entries in
Annex XI should therefore be limited to specific measures for
individual Member States.

3.6
The EESC acknowledges the successful efforts of all those
involved to simplify Annex XI. As a result, it contains far fewer
entries than the equivalent annex (Annex VI) to the current
coordinating Regulation 1408/71.

3.6.1
Building on this, due consideration should go on being
given, in particular with regard to any future requests for entries
from Romania and
to be included in Annex XI
Bulgaria, which are in the process of joining the EU), as to
whether the matter is of a horizontal nature which should more
logically be addressed in the basic regulation or in the imple-
menting regulation.

(inter alia,

The amendment applies to all Member States and stipulates the
cases in which the so-called pro-rata-temporis method is not used
to determine the amount of the entitlement (9).

— The aim is to ensure in all cases that insured persons who
move from one country to another are treated no worse
than those who remain in one country.

(9) Under the pro-rata-temporis method, a person's part pension from his/
her own Member State is calculated on the basis of a pro-rata calcula-
tion. First of all, a credited calculation is made on the basis that the
person concerned spent all insured periods in his/her own country. The
part pension that this person receives from his/her own country is then
calculated as the percentage of this credited pension that corresponds
to the share of the total period of insurance spent in his/her own
country. However, there are cases where the calculation based upon
insured periods spent in one's own country (independent benefit) is
always higher than the entitlement based upon the pro-rata calculation.
These cases are referred to in Annex VIII. Under these circumstances,
the competent institution may waive the calculation of the pro-rata
entitlement.

This is the case for example with the protection clauses that
exist under the state welfare systems of numerous Member
States, to help people who have suffered in their social security
situation for political or religious reasons or for reasons of their
descent (10), or even the special rules for people injured in war,
former prisoners of war, victims of crime and terrorism or
those who have suffered at the hands of a former totalitarian
regime. Such protection clauses, while they offer the protection
of social security (e.g. health insurance, pensions) or compensa-
tion payments to specific groups of individuals, are as a rule not
part of the social security system. It would therefore be appro-
priate if the basic regulation were to include an article on this
subject too, applicable to all Member States, so as to exclude
altogether from the regulation those provisions which provide
for state entitlements or compensation but do not come under
the social security system.

(10) See entry No 5 from Austria in Annex XI.

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3.6.2
At the same time, the EESC calls upon experts in indi-
vidual Member States to examine in detail the legislation of
their respective countries in the light of the new rules on coor-
dination. Further entries should be included in Annex XI wher-
ever there might be problems for the smooth application of
Regulation 883/2004. If national social security legislation is at
odds with the coordinating rules, this could lead to a large
number of proceedings being brought before the ECJ.

4. Further remarks on coordination

4.1
Cross-border mobility in Europe is right at the top of the
EU agenda. Effective coordination in the area of social security
is essential if EU citizens are to make use of it. They rightly
expect practical benefits from Community cooperation.

4.2
The EESC believes that the Commission and Member
States should, in that connection, strengthen measures to raise
awareness among all potential users of the regulation of the
arrangements for and advantages of the coordination of social
security systems. The Committee believes that the necessary
preparations for this should be made without delay. Existing
tools for providing advice on the subject of mobility (11) should
be publicised more widely and strengthened.

Brussels, 14 March 2007.

4.3
In this connection the EESC has also pointed out that
staff employed in social security institutions must be prepared
in good time for the new rules and all the supporting arrange-
ments. It is essential that staff in the Member States receive
instruction and training in this area.

To facilitate the rapid practical

4.4
implementation of the
basic regulation, the EESC therefore calls on the Member States
to provide their social security institutions, without delay, with
the necessary human and technical resources. The existing
instruments available to stakeholders and users at national level
— in particular the existing TRESS networks, which bring
together the interested parties and stakeholders in the Member
States (12) — should be used to carry out an appropriate evalua-
tion of the practical implementation of this regulation in indivi-
dual Member States once it enters into force.

4.5
The EESC reserves the right to return to the practicalities
of coordination in a separate own-initiative opinion. The
opinion should,
the
extent to which the public are actually able to profit from
intended benefits (associated, amongst other things, with the
European Health Insurance Card) in the area of cross-border
mobility.

in particular, provide an assessment of

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

(11) See, inter alia: The Community provisions on social security — Your

rights when moving within the European Union:
http://ec.europa.eu/employment_social/emplweb/publications/publi-
cation_en.cfm?id=25;
and also the MISOC database on the social security systems of the
Member States:
http://ec.europa.eu/employment_social/social_protection/missoc_en.
htm.

(12) Training and Reporting on European Social Security (see also: http://

www.tress-network.org/).