REPORT FROM THE COMMISSION TO THE COUNCIL 2006-2008 Report on the financial situation of the Community unemployment benefit scheme for former members of the temporary staff and contract staff who are unemployed after the termination of their service in a European Union institution
Date: 2010-08-31
Institutions: European Commission
Subjects: EU institution, contract staff, financial management, report, servant (EU), social-security benefit, termination of employment, unemployment insurance

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EUROPEAN COMMISSION 

Brussels, 31.8.2010 
COM(2010) 449 final 

REPORT FROM THE COMMISSION TO THE COUNCIL  
2006-2008 Report on the financial situation of the Community unemployment benefit 
scheme for former members of the temporary staff and contract staff who are 
unemployed after the termination of their service in a European Union institution 

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REPORT FROM THE COMMISSION TO THE COUNCIL 

2006-2008 Report on the financial situation of the Community unemployment benefit 
scheme for former members of the temporary staff and contract staff who are 
unemployed after the termination of their service in a European Union institution 

SUMMARY 

Under Article 28a(11) and Article 96(11) of the Conditions of Employment of Other Servants 
of the European Communities (CEOS), every two years the Commission must present a report 
to the Council on the financial situation of the Community unemployment benefit scheme and 
the Special Unemployment Fund. This report sets out the situation for the period 2006-2008; 
however, in the interests of comparability with the previous report, the 2005 figures are also 
given as a matter of course. 

The current financial situation of the Unemployment Fund is satisfactory from an accounting 
perspective  as  its  accumulated  reserves  increased  from  €9 205 000  at  the  end  of  2005  to 
€16 160 000 at the end of 2008.  

However,  the  new  CEOS,  which  entered  into  force  on  1 May  2004  with  the  creation  of  the 
category  of  member  of  the  contract  staff,  made  significant  changes  to  the  rules  on 
contributions to the Fund, the population covered and the eligibility criteria. As a result, the 
scheme went through a transitional stage in 2005-2008 and did not yet seem to have reached a 
stable operating speed by the end of that period, particularly as regards the changing number 
of future beneficiaries. Regular monitoring is therefore necessary. 

With  the  creation  of  the  category  of  member  of  the  contract  staff  and  the  growth  in  EU 
agencies, contributions to and payments by the Fund had in fact doubled by 2008 compared to 
what they were in 2005. Receipts rose sharply in 2006 and more gradually in 2007 and 2008, 
while  payments  increased  mainly  in  2007  and  2008.  This  time-lag  meant  that  the  annual 
surplus rose from €755 000 in 2005 to €3 410 000 in 2006 and €2 275 000 in 2007, which in 
2008 was then converted, in financial terms, into a slight deficit of €330 000.  

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1. 

REGULATORY FRAMEWORK  

1.1. 

Description of the scheme 

The  entry  into  force  of  the  new  Staff  Regulations  on  1 May  2004  put  an  end  to  the  old 
scheme, which ran from 1985 to April 2004. 

The old scheme covered temporary staff against the risk of unemployment when they left the 
service.  The  Community  unemployment  allowance  was  paid  in  addition  to  any  national 
benefits  that  former  staff  could  claim.  Temporary  staff  who  had  worked  a  minimum  of  six 
months  could  claim  benefits  for  up  to  two  years.  The  top-up  Community  unemployment 
allowances had both a lower limit and an upper limit. Neither limit had ever been changed. 
Cover  under  the  Community  health  insurance  scheme  (5.1%  of  the  unemployed  person’s 
reference basic salary) was met by the Unemployment Fund. 

If  the  member  of  the  temporary  staff  so  requested,  the  old  scheme  continued  to  apply  for  a 
transitional period for people who were already unemployed and for contracts which had been 
concluded before 1 May 2004 and would end after that date. 

The  new  scheme  -  applicable  since  May  2004  -  also  provides  unemployment  cover  for  the 
new category of contract staff. 

This entitlement is now limited to a third of the period actually spent working as a member of 
the temporary or contract staff, and may not exceed 36 months. The upper limit (which only 
applies  from  the  seventh  month  of  unemployment),  and  the  lower  limit  for  temporary  staff, 
have  been  revised.  There  are  also  upper  and  lower  limits  for  contract  staff,  but  they  are 
different  from  those  for  temporary  staff.  They  will  be  adjusted  annually  from  now  on  (like 
salaries). 

1.2. 

Legal references 

–  Article  28a  of  the  Conditions  of  Employment  of  Other  Servants  of  the  European 
Communities  (CEOS)  introduced  by  Article  33  of  Council  Regulation  No 2799/85  of  27 
September 1985 (OJ L 265, 8.10.1985); amended by Council Regulation No 723/2004 of 
22 March 2004 (OJ L 124, 27.4.2004). 

–  Commission  Regulation  No  91/88  of  13  January  1988  laying  down  provisions  for 
implementing  Article  28a(2)  of  the  Conditions  of  Employment  of  Other  Servants  of  the 
European Communities (OJ L 11, 15.1.1989). 

–  Commission Rules of 14 July 1988, common accord having been recorded by the President 
of  the  Court  of  Justice  of  the  European  Communities  on  4  July  1989,  laying  down  the 
detailed  arrangements  for  applying  the  provisions  relating  to  the  grant  of  the 
unemployment  allowance  to  members  of  the  temporary  staff,  implementing  Article 
28a(10)  of  the  Conditions  of  Employment  of  Other  Servants  of  the  European 
Communities. 

–  Article 96 and Article 5 of the Annex to the Conditions of Employment of Other Servants 
of the European Communities introduced by Council Regulation No 723/2004 of 22 March 
2004 (OJ L 124, 27.4.2004). 

–  Annual regulations on the adjustment of salaries, pensions and other allowances. 

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2. 

THE FINANCIAL SITUATION OF THE UNEMPLOYMENT FUND 

The situation of the Unemployment Fund is set out below in two different ways. In the first 
point  (“Accounting  situation”)  the  figures  are  set  out  as  they  appear  in  the  accounts:  a 
financial operation is listed for the year in which it was entered in the accounts (“Accounting 
situation”).  However,  some  receipts  and  payments  relate  to  operations  which  began  in  the 
year preceding the entry. In the second point (“Financial situation”) the figures are set out in 
line with the accrual accounting system. To this end, the entries must be listed under the year 
in which they originated.  

2.1. 

Accounting situation: 2005-2008 operating results and accumulated balances 

Table 1 gives a summary of receipts and payments as entered in the accounts and the resulting 
current balance. 

The  amounts  recorded  under  “unemployment  allowances”  systematically  include  the  basic 
unemployment allowance, any family allowances and, for the original scheme only, the effect 
of  the  weighting.  Any  social  benefits  received  at  a  national  level  (including  unemployment 
benefits, family allowances, sickness benefits, maternity benefits, etc.) are deducted. 

Contributions  to  the  Community  sickness  insurance  scheme  (JSIS)  are  covered  in  their 
entirety  by  the  Community  unemployment  scheme  (5.1%  of  the  unemployed  person’s 
reference basic salary). Personal contributions to the JSIS are not deducted from Community 
unemployment benefit. 

TABLE 1

UNEMPLOYMENT FUND - ACCOUNTING SITUATION -
Operating result (2005-2008)

DESCRIPTION

A. Payments
1. Unemployment allowances
2. JSIS contributions

Total payments
B. Receipts
1. European Commission
2. European Parliament
3. European Ombudsman
4. Council of Ministers
5. Court of Justice
6. Court of Auditors
7. Economic and Social Committee
8. Committee of the Regions
9. Agencies and Offices

2005
EUR

2006
EUR

2007
EUR

2008
EUR

a
b

5 264 751.97
659 104.95

5 086 221.18
541 882.56

7 277 351.67
114 433.38

10 583 794.51
1 460 168.26

d=a+b

5 923 856.92

5 628 103.74

7 391 785.05

12 043 962.77

e
f
g
h
i
j
k
l
m

2 110 681.51
1 241 365.82
31 205.04
185 739.79
634 018.19
195 702.12
125 482.95
121 444.29
2 032 624.27

3 363 455.21
1 554 274.75
42 023.30
205 057.05
677 879.58
220 056.91
144 281.81
127 089.22
2 744 847.03

4 081 629.15
1 439 364.01
46 861.06
202 188.15
701 984.82
176 775.35
140 338.16
118 342.71
3 413 446.78

4 531 993.81
1 320 043.73
40 855.64
211 178.46
663 944.98
176 144.10
113 030.61
89 003.88
4 021 233.21

Total receipts

n=Σe-m 6 678 263.98

9 078 964.86

10 320 930.19

11 167 428.42

C. Accounting corrections

o

122.83

153.51

-446.48

1 159.05

D. Current balance

p=n-d+o

754 529.89

3 451 014.63

2 928 698.66

-875 375.30

The Unemployment Fund uses two management instruments for its receipts and payments: a 
current  account  for  receiving  payments  and  paying  allowances,  and  a  number  of  term 
accounts for investing surpluses accumulated in the current account. 

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The first part of Table 2 shows operations on the current account; the second part of the table 
shows  the  income  from  the  term  accounts,  as  well  as  the  movements  between  the  two 
accounts. The third part shows the total accumulated surpluses for the two accounts. 

TABLE 2

UNEMPLOYMENT FUND - ACCOUNTING SITUATION -
Trend in accumulated balance (2005-2008)

DESCRIPTION

I. Current account
A. Current account balance on 1/1
B. Current balance

C. Investment of surpluses (-) and
   Recovery of funds invested (+)

2005
EUR

2006
EUR

2007
EUR

2008
EUR

b
a

c
c

663 371.07
754 529.89

0.00
600 000.00

2 017 900.96
3 451 014.63

968 915.59
2 928 698.66

1 997 614.25
-875 375.30

-4 500 000.00
0.00

-1 900 000.00
0.00

0.00
0.00

D. Current account balance on 31/12 d=a+b+c

2 017 900.96

968 915.59

1 997 614.25

1 122 238.95

II. Fixed term investments 

E. Financial investments on 1/1
F. Payments from (+) and 
   into (-) current account
G. Interest
H. Banking operations

e

f
g
h

7 620 850.76

-600 000.00
165 441.77
-43.00

7 186 249.53
4 500 000.00

11 905 352.99
1 900 000.00

14 361 095.19
0.00

219 263.46
-160.00

555 695.52
46.68

679 276.42
370.67

I. Financial investments on 31/12

i=

7 186 249.53

11 905 352.99

14 361 095.19

15 040 742.28

III. Accumulated surplus

j=d+i

9 204 150.49

12 874 268.58

16 358 709.44

16 162 981.23

The  surplus  increased  by  40%  in  2006  and  23%  in  2007.  It  fell  by  1%  in  2008.  With  an 
accumulated  surplus  of  almost  €16.2  million  in  2008,  the  current  situation  of  the  Fund  is 
therefore satisfactory from an accounting perspective. 

Table 3 and diagram 1 also list the accumulated five-year balances mentioned in the previous 
report and thus show the trend of the cumulative balance in the long term (1985-2008). 

TABLE 3

UNEMPLOYMENT FUND - ACCUMULATED BALANCE - Operating result (1989-2008)

DESCRIPTION

1989
EUR

1994
EUR

1999
EUR

2004
EUR

2005
EUR

2006
EUR

2007
EUR

2008
EUR

Current account

Investments
Total

257 078

386 573

1 037 493

663 371

2 017 901

968 916

1 997 614

1 122 239

2 263 758

4 676 893

9 328 799

7 607 437

7 186 250

11 905 353

14 361 095

15 040 742

2 520 836

5 063 466

10 366 292

8 270 808

9 204 151

12 874 269

16 358 709

16 162 981

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Diagram 1: Unemployment Fund
Accounting situation - accumulated balance

Investments

Current account

20 000 000

15 000 000

10 000 000

5 000 000

0

1989

1994

1999

2004

2005

2006

2007

2008

Year

2.2. 

Financial situation: 2005-2008 operating results 

Some of the receipts entered in the accounts at the start of year N are amounts deducted from 
salaries at the end of year N-1, and some of the unemployment allowance payments made and 
entered  at  the  start  of  year  N  cover  periods  of  unemployment  at  the  end  of  year  N-1.  In 
accordance  with  the  principles  of  accrual  accounting,  these  accounting  entries  should  be 
entered in year N-1.  

Table 4 and diagram 2 show receipts and payments according to this principle and therefore 
indicate  the  Unemployment  Fund’s  annual  “financial”  situation  as  regards  receipts  and 
payments. 

TABLE 4

UNEMPLOYMENT FUND - FINANCIAL SITUATION - 
Operating result (2005-2008)

DESCRIPTION

A. Payments
1. Unemployment allowances
2. JSIS contributions

2005
EUR

2006
EUR

2007
EUR

2008
EUR

a
b

5 264 751.97
615 303.77

5 080 747.95
531 939.45

7 428 758.42
699 909.32

11 011 432.53
1 012 543.75

Total payments

d=a+b

5 880 055.74

5 612 687.40

8 128 667.74

12 023 976.28

B. Receipts
1. European Commission
2. European Parliament
3. European Ombudsman
4. Council of Ministers
5. Court of Justice
6. Court of Auditors
7. Economic and Social Committee
8. Committee of the Regions
9. Agencies and Offices

e
f
g
h
i
j
k
l
m

2 126 994.82
1 205 134.80
31 205.04
185 739.79
633 950.62
195 702.12
127 381.43
121 444.29
2 007 383.77

3 351 028.04
1 505 654.56
42 023.30
205 057.05
677 879.58
220 056.91
142 383.33
127 089.22
2 751 030.14

4 081 632.35
1 439 364.01
47 101.38
203 245.29
702 149.61
177 709.62
141 025.23
118 923.40
3 450 859.66

4 531 990.61
1 452 093.77
45 518.52
212 010.04
731 878.65
176 669.29
124 584.11
98 392.56
4 319 259.26

Total receipts

n=Σe-m 6 634 936.68

9 022 202.13

10 362 010.55

11 692 396.81

C. Accounting corrections

o

122.83

153.51

-446.48

1 159.05

D. Current balance

p=n-d+o 

755 003.77

3 409 668.24

2 232 896.33

-330 420.42

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Diagram 2: Unemployment Fund - Financial situation - 
Trend in receipts and payments (2005-2008)

14 000 000.00
12 000 000.00
10 000 000.00
8 000 000.00
6 000 000.00
4 000 000.00
2 000 000.00
0.00

Receipts

Payments

2005

2006

2007

2008

Year

Receipts increased sharply in 2006 compared with the previous year (36%) and continued to 
grow in 2007 (15%) and 2008 (12%). Payments fell in 2006 (-5%) and increased sharply in 
2007 (45%) and 2008 (48%). This time-lag between receipts and payments led to substantial 
surpluses  in  2006  and  2007  but  a  slight  deficit  in  2008.  This  deficit  is  offset  by  interest  on 
investments. Diagram 3 sets out the current balance and the interest for 2005-2008. 

Diagram 3: Current balance and interest (2005-2008)

4 000 000

3 000 000

2 000 000

1 000 000

0

-1 000 000

Current balance

Interest

2005

2006

2007

2008

Year

This  trend  in  receipts  and  payments  is  largely  due  to  the  creation  of  new  agencies  and  the 
introduction since 2004 of a new category of staff: contract staff employed for a fixed period 
(maximum three years). The recruitment of contract staff over the period 2004-2007 led to an 
increase in receipts with no immediate effect on payments, whereas when the first contracts 
came  to  an  end,  giving  the  right  to  an  unemployment  allowance,  payments  increased 
considerably from 2007. 

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2.3. 

Financial situation: breakdown of payments and receipts by institution and for 
all the agencies in 2005-2008 

Table 5 provides a breakdown of payments and receipts by institution and for all the agencies. 

The  first  part  of  the  table  gives  absolute  figures,  the  second  part  the  percentages  for  each 
institution and all the agencies as a proportion of total payments and receipts. 

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TABLE 5 

Year
Description
INSTITUTION  

I. In Euro

A. European Commission

B. European Parliament

C. European Ombudsman
D. Council of Ministers

E. Court of Justice

F. Court of Auditors

G. Economic and Social Committee
H. Committee of the Regions

I. Agencies

Total

II. As a % of the total

A. European Commission
B. European Parliament

C. European Ombudsman
D. Council of Ministers

E. Court of Justice
F. Court of Auditors

G. Economic and Social Committee

H. Committee of the Regions
I. Agencies

Total

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UNEMPLOYMENT FUND - FINANCIAL SITUATION
Breakdown of payments and receipts by institution (2005-2008)

2005

2006

2007

2008

Payments

Receipts

Payments

Receipts

Payments

Receipts

Payments

Receipts

3 210 946.10

2 126 994.82

2 340 522.01

3 351 028.04

4 365 642.75

4 081 632.35

6 462 045.50

4 531 990.61

970 392.73

1 205 134.80

735 850.83

1 505 654.56

14 480.86
30 604.00

138 047.90

70 128.81

427 156.84
188 211.92

830 086.58

31 205.04
185 739.79

633 950.62

195 702.12

127 381.43
121 444.29

0.00
0.00

246 113.33

45 083.51

290 816.99
196 412.96

42 023.30
205 057.05

677 879.58

220 056.91

142 383.33
127 089.22

884 197.13

22 913.44
422 087.68

346 817.49

46 898.95

259 964.67
354 684.97

1 439 364.01

1 248 878.68

1 452 093.77

47 101.38
203 245.29

702 149.61

177 709.62

141 025.23
118 923.40

12 140.98
386 075.29

467 809.42

69 454.36

399 696.69
335 101.34

45 518.52
212 010.04

731 878.65

176 669.29

124 584.11
98 392.56

2 007 383.77

1 757 887.76

2 751 030.14

1 425 460.68

3 450 859.66

2 642 774.02

4 319 259.26

5 880 055.74

6 634 936.68

5 612 687.40

9 022 202.13

8 128 667.74

10 362 010.55

12 023 976.28

11 692 396.81

% of payments

% of receipts

% of payments

% of receipts

% of payments

% of receipts

% of payments

% of receipts

54.6%
16.5%

0.2%
0.5%

2.3%
1.2%

7.3%

3.2%
14.1%

32.1%
18.2%

0.5%
2.8%

9.6%
2.9%

1.9%

1.8%
30.3%

41.7%
13.1%

0.0%
0.0%

4.4%
0.8%

5.2%

3.5%
31.3%

37.1%
16.7%

0.5%
2.3%

7.5%
2.4%

1.6%

1.4%
30.5%

53.7%
10.9%

0.3%
5.2%

4.3%
0.6%

3.2%

4.4%
17.5%

39.4%
13.9%

0.5%
2.0%

6.8%
1.7%

1.4%

1.1%
33.3%

53.7%
10.4%

0.1%
3.2%

3.9%
0.6%

3.3%

2.8%
22.0%

38.8%
12.4%

0.4%
1.8%

6.3%
1.5%

1.1%

0.8%
36.9%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

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