CELEX: 51979PC0172
Language: en
Date: 1979-04-06
Title: PROPOSAL FOR A COUNCIL REGULATION amending Council Regulations (EEC) Nos 1408/71 and 574/72 on the application of social security schemes to employed persons and their families moving within the Community#PROPOSAL FOR A COUNCIL REGULATION amending the Annexes to Regulations (EEC) Nos 1408/71 and 574/72 on the application of social security schemes to employed persons and their families moving within the Community (submitted to the Council by the Commission)

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 ---pagebreak---            COMMISSION OF THE EUROPEAN COMMUNITIES
                                                             COM(79)172 final
                                                             Brussels , 6 April 1979
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                                 PROPOSAL FOR A COUNCIL REGULATION
                       amending Council Regulations ( EEC ) Nos 1408/71
                                and 574/ 72 on the application of
             social security schemes to employed persons and their families moving
                                        within the Community
                                 PROPOSAL FOR A COUNCIL REGULATION
                       amending the Annexes to             Regulations ( EEC )
                Nos 1408/71                   : and 574/72 ■                   on the
             application of social security schemes to employed persons and their
                                families moving within the Community
                         ( submitted to the Council by the Commission )
CQM ( 79 ) 172 final
 ---pagebreak---                                                                ANNEX I
Proposal for a Council Regulation amending Regulations ( EEC ) Nos . 1408/71
and 574/72 on the application of social security schemes to employed persons
and their families moving within the Community
The Council of the European Communities
Having regard to the Treaty establishing the European Economic Community , and
in particular Articles 2, 7 and 51 thereof ,
Having regard to Council Regulation ( EEC ) No . 1408 / 71 of 14 June 1971 on
the application of social security schemes to employed persons and their fa­
milies moving within the Community ( 1 ), as last amended by Regulation (EEC )
No 2595/77 ( 2 ), and in particular Article 97 thereof ,
Having regard to Council Regulation ( EEC ) No . 574/ 72 of 21  March 1972
fixing the procedure for implementing Regulation ( EEC ) No . 1408/ 71 on the
application of social security schemes to employed persons and their families
moving within the Community ( 3 ), as last amended by Regulation ( EEC ) No .
2595/77 ,
Having regard to the proposal from the Commission drawn up after consulting
the Administrative Commission on Social Security for Migrant Workers ,
Having regard to the opinion of the European Parliament ( 4 ),
Having regard to the opinion of the Economic and Social Committee ( 5 ),
( 1 ) O.J. No . L 149 , 5.7.1971 , p. 2 .
( 2 ) O.J. No . L 302 , 26.11.1977, p. 1 .
( 3 ) O.J. No . L 74 , 27.3.1972 , p. 1 .
 (4)
( 5)
 ---pagebreak---                                        - 2 -
Whereas experience of the operation of Regulation ( EEC ) No . 1408/71 and ( EEC )
No . 574/72 has shown the need to make some improvements to the rights of
migrant workers ; whereas , consequently , conscientious objectors who are
called up or recalled for civilian service and who are in respect thereof
assimilated to persons performing military service for certain benefits
should benefit under Regulation ( EEC ) No . 1408/71 ;
Whereas it is necessary for persons covered by agreements concluded under
Article 17 of Regulation ( EEC ) No . 1408/71 to be provided with documentary
evidence indicating the legislation of which Member State is applicable in
their case ;
Whereas it is necessary to remove the practical difficulties confronting a
worker , other than an international transport worker, who normally pursues his
activity in the territory of two or more Member States ;
Whereas provision should be made to simplify the procedures laid down by
Regulation ( EEC ) No . 574/ 72 to be followed in order that a worker tempo­
rarily posted to another Member State may obtain benefits in kind in
respect of sickness , maternity , accident at work or occupational disease .
Whereas , by virtue of Article 121 of Regulation ( EEC ) No . 574/72 , the Annexes
to thet Regulation must be amended by a Regulation adopted by the Council
acting on a proposal from the Commission ;
Whereas the adoption of such a Regulation by the Council consists , in regard
to the modification of certain of those Annexes , in taking account of decisions
taken by each Member State concerned or by the two Member States concerned
or by the competent authorities of those States ; whereas it is therefore
desirable to have recourse to a simpler procedure ;
Whereas it is appropriate to amend the said Article 121 so as to make it
possible for Annexes 1 , 4 , 5 , 6 , 7 and 8 of Regulation ( EEC ) No . 574/72 to be
amended by means of a Regulation adopted by the Commission at the request of
the Member State or States concerned or their competent authorities ;
Whereas , moreover , the said Article 121 provides that the Annexes to Regu­
lation ( EEC ) No . 574/ 72 form an integral part of the latter ; whereas , mutatis
mutandis , the same applies in regard to the Annexes to Regulation ( EEC ) No .
1408/ 71 ; whereas Article 95 of the latter Regulation should therefore be
amended accordingly ,
has adooted this Regulation :
 ---pagebreak---                                         - 3 -
                                      ARTICLE 1
    Regulation ( EEC ) No . 1408/ 71 Is hereby amended as follows :-
1 , Article 13 ( 2)(d ) shall be amended to read as follows :-
    "( d ) A worker called up or recalled for service in the armed forces of a
           Member State or civilian service in a Member State shall retain the
            status of a worker and shall be subject to the legislation of that
           State ; if entitlement under that legislation is subject to the com­
           pletion of insurance periods before entry into or release from such
           military or , as the case may be , civilian service , insurance periods
            completed under the legislation of any other Member State shall be
           taken into account , to the extent necessary , as if they were insu­
           rance periods completed under the legislation of the first State".
2 - ( a ) In Article 95 , after the heading , there shall be inserted the following
          paragraph :-
          "( 1 ) The Annexes to this Regulation shall form an integral part
                 thereof" .
    ( b ) The present text of Article 95 shall be numbered " 2 ".
 ---pagebreak---                                         ARTICLE 2
Regulation ( EEC ) No . 574/72 is hereby amended as follows :-
( a ) In the sub-heading to Title III , for the figure " 16 " there shall be
      suhsituted the figure " 17 ".
( b ) The heading to Article 11 shall be amended by the addition 11 , after the
      words " Formalities in the case of posting elsewhere " , of the following :
      "pursuant to Article 14 ( l)(a ) and ( 2 ) and in the case of agreements
      concluded under Article 17 of the Regulation ".
( c ) Article 11(1 ) shall be replaced by the following :-
      " 1 . A certificate testifying that a worker shall remain subject to the
            legislation of a Member State up to a specified date shall be issued
            by the institution designated by the competent authority of the
            Member State whose legislation is to remain applicable ,
            ( a ) at the request of the worker or his employer in cases referred
                  to in Article 14 ( l)(a ) and ( 2 ) ( a ) of the Regulation ;
            ( b ) in cases where Article 17 of the Regulation applies ".
After Article 12 there shall be inserted the following Article :-
                                      " Article 12 a"
Rules applicable in respect of a worker other than one employed in inter­
national transport , who normally pursues his activity in the territory of two
or more Member States .
1 . For the purposes of Article 14 ( l)(c)(i ) of the Regulation a worker who
     normally pursues his activity in the territory of two or more Member
     States shall inform the institution designated by the competent authority
     of the Member State on whose territory he resides of this fact .           That
     institution shall issue      him with a certificate testifying that he is
     subject to the legislation of that State and shall send a copy thereof to
     the institution designated by the competent authority of each Member State
     in whose territory an employer has a registered office or place of business
     in which the said worker is employed . This latter institution shall , in so
     far as necessary , send to the institution designated by the competent
     authority of the Member State whose legislation is applicable the infor­
     mation necessary to asses the contributions for which the employer or
     employers and/or the worker are liable by virtue of that legislation .
 ---pagebreak---                                      - 5 -
2 . FOP the purposes of               Article 14 ( 1)(c)(ii ) of the Regulation
    the provisions of paragraph 1 of this Article shall apply by analogy .
    However , the worker in question may obtain the certificate testifying
    that he shall be subject to the legislation of the Member State on whose
    territory the employer or undertaking employing him has its registered
    office or place of business , from the institution designated by the com­
    petent authority of that State , where necessary , through the agency of
    the institution designated by the competent authority of the Member State
    on whose territory he resides".
                                                                        >,
 ---pagebreak---                                             - 6 -
3 . ( a ) The heading to Article 20 shall be amended to read as follows :-
    "Benefits in kind in the case of a stay in a Member State other than the competent
    State-Special case of workers employed in international transport and members of
    thei r fami lies".
    ( b) Paragraph 1 of Article 20 shall be deleted and the remaining paragraphs of
    that Article shall be renumbered 1 to 6 respectively .
    ( c ) The renumbered paragraph 4 of Article 20 shall be amended to read as follows :-
    "4 . In place of the certified statement provided for in paragraph 1 , a worker
    covered by that paragraph may submit to the institution of the place of stay a
    certified statement testifying that the conditions for the acquisition of the
    right to benefits in kind have been satisfied . This certified statement , which
    shall be issued by the competent institution , shall specify in particular , where
    necessary , the maximum period during which benefits in kind may be granted in
    accordance with the legislation of the competent State . In such a case paragraphs
    1 , 2 and 3 shall not apply".
    Cd ) In the renumbered paragraph 6 of Article 20 for the words " paragraphs 1 or 2 "
    there shall be substituted " paragraph 1 ".
    ( e ) In paragraph ( 1 ) of Article 21 , at line 2 , for the word " cases" there shall
    be substituted the word " case".
    ( f ) In paragraph 1 of Article 34 , at lines 3 to 4 , for the reference to "Article
    20(1 ), ( 2 ) and ( 5 )", there shall be substituted the reference , " Article 20(1 ) and
    (4 )".
    ( g ) Paragraph 1 of Article 62 shall be deleted and the remaining paragraphs of
    that Article shall be renumbered 1 to 7 respectively .
    ( h ) In the renumbered paragraph 2 of Article 62 , at lines 3 and 4 , the words " or
    2 " shall be deleted .
     ( 1 ) In the renumbered paragraph 4 of Article 62 , at line 2 , the words " or 2 " shall
    be deleted .
 ---pagebreak---                                        - 7 -
( j ) The renumbered paragraph 5 of Article 62 shall be amended to read as follows :-
" 5 . In place of the certified statement provided for in paragraph 1 , workers co­
vered by that paragraph may submit to the institution of the place of stay a cer­
tified statement as provided for in paragraph 6".
( k ) In the renumbered paragraph 6 of Article 62 , at line 3 , for the words " para­
graphs 1 and 2 " there shall be substituted             " paragraph 1 ".
( I ) At paragraphs 1 and 2 of Article 113 for each reference to " Article 20C2 ) or
Article 62(2 )", there shall be substituted the following reference , " Article 20(1 )
or Article 62(1 )".
 ---pagebreak--- Article 121 shall be amended as follows :-
( a ) In paragraph 2 , for the words "These Annexes" there shall be substitu­
      ted the words "Annexes 2 , 3 , 9 and 10".
( b ) Paragraph 3 shall be replaced by the following:-
      " 3 . Annexes 1 , 4 , 5 , 6 , 7 and 8 may be amended by a Regulation of the
            Commission at the request of the Member State or States
            concerned or their competent authorities".
 ---pagebreak---                                    - 9 -
                                 ARTICLE 3
This Regulation shall enter into force on the day of its publication in the
Official Journal of the European Communities .
This Regulation shall be binding in its entirety and directly applicable
in all Member States .
Done at Brussels              19                   For the Council :
 ---pagebreak---                                                        ANNEX II
                     EXPLANATORY MEMORANDUM
            of the proposal for a Council Regulation
                     amending     Council Regulations ( EEC )
Nos . 1408/ 71                    and 574 / 72 .
            on the application of social security schemes
               to employed persons and their families
                    moving within the Community
 ---pagebreak--- 1.1 Article 13(2)(d ) of Regulation 1408/ 71 In the Federal Republic of Germany
    conscientious objectors who perform a civilian service are treated in the same
    way as persons who perform military service , for the purposesof sickness and
    unemployment insurance as well as for pension insurance ( invalidity , old-age
    and death ).
    The amendment is intended to ensure that persons who perform such civilian
    service may benefit from the provisions of Article 13(2)(d ) which at present
    extend only to a worker who is called up or recalled for service in the armed
    forces of a Member State .
1.2 Article 95 of Regulation 1408/ 71 Articles 95 of Regulation 1408/ 71 and 121 of
    Regulation 574/ 72 fix the procedures to be followed for amending the Annexes
    to those Regulations . In addition . Article 121 provides that the Annexes to Re­
    gulation 574 / 72 form an integral part of the latter . It is obviously the same ,
    mutatis mutandis in respect of the Annexes to Regulation 1408/ 71 .
    So as to avoid ambiguity on this point , it is sought to amend Article 95 of
    Regulation 1408/ 71 .
2.  Articles 11 , 20 and 62 of Regulation 574/ 72 The amendments to Article 11 on
    the one hand and Articles 20 and 62 on the other are to a certain extent inter­
    related and may be conveniently explained together .
    ( a ) In its present form Article 11 provides for the issue of a certificate of
    posting in respect of detached workers indicating that the said workers shall
    remain subject to the legislation of the sending State up to a specified date .
    It is intended that Article 11 should continue to apply in the same way in this
    respect .
    All that the present amendment seeks to achieve is to provide a similar adminis­
    trative procedure as already exists for detached workers for those workers or
    categories of workers who , by virtue of ah agreement concluded under Article 17
    of Regulation 1408/ 71 are to remain subject to the legislation of a Member State .
    ( b ) In their present form Articles 20(1 ) and 62(1 ) make special provision for
    detached workers by presuming that the conditions for acquisition of a right to
    benefits in kind have been satisfied where the certificate referred to in Arti­
    cle 11 has been produced . The institution of the place of stay must within 3 days
    enquire from the competent institution whether the person concerned satisfies the
    conditions for such acquisition . Notwithstanding the presumption mentioned above ,
    benefits in kind may be provided for not more than 30 days unless the competent
    institution confirms that entitlement to benefits in kind exists under its le-
 ---pagebreak---                                     - 2 -
gislation ( see Articles 20(3 ) and 62(3 )). It is felt that this need , subsequent
 to the risk arising , to verify entitlement t6 benefits in kind with the compe­
 tent institution , constitutes an additional and avoidable hurdle . It is there­
 fore proposed that Articles 20 and 62 be amended in such a way that the detached
 worker is made to fall under the provisions of Articles 21 and 62(6 ) ( as amended ),
 respectively . This would have the merit of enabling such persons to be provided
 by their competent institutions with a certificate before leaving that Member
 State where they are insured and which would forthwith prove their entitlement
 to benefits in kind .
 ( c ) The remaining amendments contained to Article 2.1 and 3 of the proposal are
 consequential upon the adoption of the foregoing .
                      ΓΓ
 ---pagebreak--- Article 12a of Regulation 574/ 72-, A worker other than one employed in international
transport who normally pursues his activity in the territory of two or more Member
States - This new provision seeks to establish methods for implementing Article 14
( 1)(c > of Regulation 1408/ 71 in order to deal With difficulties encountered by a
worker who normally pursues his activity in the territory of tw© or more Member
States .
Paragraph 1 is concerned with the case of a worker who in compliance with the pro­
visions of Article 14(1)(c)(i ) of Regulation 1408/ 71 , is subject to the legislation
of the Member State on whose territory he resides .
The administrative procedure envisaged in this provision is intended to improve
the material conditions in which a worker may be made so subject in conformity
with the legislation applicable ; it is also intended to facilitate the collection
of contributions and as a consequence to assure a better protection ot the worker
when he invokes his right to benefit .
Paragraphe 2 is concerned with the case of a worker who in compliance with the
provisions of Article 14(1)(c)Cii ) of Regulation 1408/ 71 , is subject to the le­
gislation of the Member State on whose territory the undertaking or employer
employing him has its registered office or place of business . The procedure en­
visaged for paragraph 1 is also applicable in this case . It is also made explicit
that the certificate to be issued by the institution designated by the competent!
authority of the Member State whose legislation is applicable may be obtained
through the agency of the institution designated by the competent authority of
the Member State on whose territory the worker     resides .
 ---pagebreak---                                               - 4 -
4 . ( a ) Article 121 of Regulation 574/ 72- Article 121 of Regulation 574/ 72 provides that
          the Annexes to that Regulation may be amended , at the request of the Member Sta­
          te or Member States concerned , by a Council Regulation adopted on a proposal from
          the Commission , after having received the opinion of the Administrative Commission .
          With the exception of Annex 9 , the nature of a certain number of these Annexes does
          not justify such a weighty procedure .
          - Annexes 1 to 4 , 7 and 10 make mention of the authorities , institutions , banks
            and bodies responsible for Implementing Community Regulations in each Member
            State and whose designation remains within the competence of that Member State
            alone ;
          - Annex 5 makes mention of bilateral provisions concerning special rules of pro­
            cedure which are applicable in dealings between two Member States or the methods
            of reimbursement between the institutions of two Member States . These bilateral
            provisions are drawn up by common agreement by the Member States concerned ,
            since the relevant provisions of the implementing Regulation provide such pos­
            sibility for the Member States ;
          - the same applies both in respect of Annex 6 which indicates the choice made
            by two Member States in respect of the methods of payment of pensions and pen­
            sions in respect of accidents at work and occupational diseases and also in
            respect of Annex 8 which concerns the methods of payment of family benefits
            in particular cases .
            It is therefore desirable that these Annexes be amended by means of a procedure
            which is simpler and speedier than that of the Council Regulation . Provision
            should be made so as to enable those amendments which are needed , to be effec­
            ted by means of a simple Regulation of the Commission on the basis of informa­
            tion furnished by a Member State or Member States and which result from the
            development of legislative and administrative procedures . However , this new
            procedure cannot be effectively implemented in respect of all the Annexes cited .
            Amendments to Annex 9 must continue to follow the procedure currently used be­
            cause of the object of the provisions which it contains . Those provisions in
            fact deal with matters concerning the coordination to be operated between Mem­
            ber States . That same procedure must also remain for Annexes 2 , 3 and 10 be­
            cause of the particular problems to which amendments give rise .
            It is therefore proposed limiting the application of the new procedure for ef­
            fecting amendments to Annexes 1 , 4 , 5 , 6 , 7 and 8 .
    ( b) The revocation of the present paragraph 3 of Article 121 of Regulation 574/ 72 is
          consequential upon the amendment which is being made to Annex V , C 7 ( Federal
          Republic of Germany ) of Regulation 1408/ 71 .
 ---pagebreak---                                                              ANNEX III
Proposal for a Council Regulation amending the Annexes to Regulations ( EEC )
Nos . 1408/71 and 574/72 on the application of social security schemes to
employed persons and their families moving within the Comnunity
The Council of the European Communities ,
Having regard to the Treaty establishing the European Economic Conmunity ,
Having regard to Council Regulation ( EEC ) No . 1408/71 of 14 June 1971 on
the application of social security schemes to employed persons and their
families moving within the Conmunity ( 1 ), as last amended by Regulation
(EEC ) No . 2595/77(2 ), and in particular Article 95 thereof ,
Having regard to Council Regulation ( EEC ) No . 574/72 of 21 March 1972
fixing the procedure for implementing Regulation ( EEC ) No . 1408/71 on the
application of social security schemes to employed persons and their
families moving within the Community ( 3 ) , as last amended by Regulation
( EEC ) No . 2595/77, and in particular Article 95 thereof ,
Having regard to the proposal from the Commission drawn up after consulting
the Administrative Conmission on Social Security for Migrant Workers ,
Having regard to the opinion of the European Parliament ( 4 ),
Having regard to the opinion of the Economic and Social Ccarmittee ( 5 ) ,
( 1 ) O.J. No . L 149 , 5.7.1971 , p. 2 .
( 2 ) O.J. No . L 302 , 26.11.1977 , p. 1 .
( 3 ) O.J. No . L 74 , 27.3.1972 , p. 1 .
 (4)
 (5)
 ---pagebreak---                                       - 2 -
Whereas account should be taken of changes in the internal financial
administration within the Federal Republic of Germany and also of the fact
that lump-sum contributions for medical treatment on the occasion of
confinement should be considered as benefits in kind ;
Whereas the changes that have been made in United Kingdom legislation make
it necessary to amend Annexes III and V.I to Regulation ( EEC ) No . 1408/71 ,
so as to allow for the taking into account of periods accomplished under
other Member States' legislations for the purpose of satisfying presence
conditions imposed for the receipt of United Kingdom family allowances and
also so as to make special provision for calculating the amount of the
United Kingdom additional component pension ;
Whereas it is appropriate that certain provisions of Annex 5 to Regulation
( EEC ) No . 574/72 be amended to take account of agreements concluded between
Member States ;
Whereas it is appropriate that the procedure for the payment of certain
arrears and other single payments be improved ;
has adopted this Regulation :
 ---pagebreak---                                        Article 1
The Annexes to Regulation (EEC ) No . 1408/71 is hereby amended as follows :-
1 . Annex III , Point I. , United Kingdom .
    For the existing entry at Point I there shall "be substituted the follow­
    ing ! -
    n ( a ) Great Britain .
            Section 15 of the Social Security Act , 1975 ?
            Sections 14 to 16 of the Social Security (Pensions ) Act , 1975 *
      (b ) Northern Ireland .
            Section 15 of the Social Security (Northern Ireland ) Act , 1975 ?
            Articles 16 to 18 of the Sooial Security Pensions (Northern
            Ireland ) Order , 1975 . H
 ---pagebreak---                                          - 4 -
2 . Annex V , Point C. Germany .
     ( a ) For paragraph 7 there shall be substituted the following ! _
    "7 . For the purposes of this Regulation , the lump sum contributions for
           medical treatment granted under German legislation to female insured
           persons and to members of the families of insured persons on the
           occasion of confinement shall be considered as a benefit in kind ".
     ( b ) After paragraph 9 there shall be inserted the following paragraphs­
    "10. Where the costs of benefits in kind which are granted by German
           institutions of the place of residence to pensioners or their
           dependants who are insured with competent institutions of other
           Member States must be refunded in monthly lump sums , such costs
           shall , for the purpose of       financial equalization among institu­
           tions of the German sickness insurance scheme for pensioners , be
           treated as expenditure on German insurance for pensioners * sickness
           benefits ; the lump sums refunded to the German institutions in the
           place of residence by the competent institutions of other Member
           States shall be regarded as receipts which must be taken into
           account in that financial equalization ".
3 . Annex V , Point I. United Kingdom .
    ( a ) There shall be substituted for paragraph 1 the following * -
    "1 . All persons who are "employed earners " within the meaning of the
           legislations of either Great Britain or of Northern Ireland and all
           persons in respect of whom contributions are payable as "employed
           persons " in accordance with the legislation of Gibraltar shall be
           regarded as "workers " for the purposes of Article l(a)(ii ) of this
           Regulation ."
    (b ) In paragraph 2 in each place where the words "the United Kingdom",
           or "United Kingdom" appear , there shall be substituted the word ,
           " Gibraltar ".
    ( c ) Paragraphs ( 4 ) and ( ll ) shall be deleted and the remaining para­
           graphs shall be renumbered accordingly .
 ---pagebreak---                                               - 5 -
(d ) The renumbered paragraph 4 shall be replaced by the following
      "4 ( a ) Where United Kingdom unemployment benefit is paid to a person by-
                  virtue of Article 7l(l)(a)(ii ) or ( b)(ii ) of this Regulation , then
                   for the purpose of satisfying the conditions imposed by United
                  Kingdom legislation in relation to child benefit concerning a
                  period of presence within Great Britain or , as the case may be ,
                  Northern Ireland , periods of insurance or employment accomplished
                  by that person under the legislation of another Member State shall
                                                                        be treated as
                  presence in Great Britain , or as the case may be , Northern Ireland .
           ( b ) Where by virtue of Title II of this Regulation United Kingdom
                  legislation is applicable in respect of a worker who does not
                   satisfy the condition imposed by United Kingdom legislation in
                  relation to child benefit concerning :
                   ( i ) presence within Great Britain, or as the case may be , Northern
                          Ireland , he shall be treated for the purpose of satisfying
                          such condition as being so present ;
                   ( ii ) a period ef presence within Great Britain or as the case may
                           be ,   Northern Ireland , periods of insurance or employment
                          accomplished by that person under the legislation of another
                          Member State shall for the purpose of satisfying such condi­
                          tions be treated as presence in Great Britain , or as the
                          case may be , Northern Ireland .
           ( c ) In respect of claims to family allowances under the legislation
                  of Gibraltar the foregoing provisions of sub-paragraphs ( a ) and
                   ( b ) shall apply by analogy ."
( e ) Sub-paragraph ( b ) of the renumbered paragraph 6 shall be
      replaced by the foil owing
      "( b ) for the purposes of determining whether he was an employed earner
              under the legislation of Great Britain or Northern Ireland or an
              employed person under the legislation of Gibraltar , by disregarding
              his absence from those territories ".
( f ) The renumbered paragraph 10 shall be replaced by the following
      "10 . For the purpose of determining entitlement to benefit in kind pursu­
              ant to Articles 22(l)(a ) and 31 of this Regulation , the expression
               "member of the family" shall mean :
               ( a ) as regards the legislation of either Great Britain or Northern
                      Ireland , any person regarded as a dependant within the meaning
                       of the Social Security Act , 1975 , or as the case may be , the
                       Social '"ecurity ( Northern Ireland ) Act , 1 975 and
 ---pagebreak---              ( b ) as regards the legislation of Gibraltar , any person regarded
                    as a dependant within the meaning of the Group Practice Medical
                    Scheme Ordinance , 1973".
(g) - In the renumbered paragraph 15(l ) at line 4» after the words ,
        •hinder United Kingdom legislation" there shall "be added ,
        "save as provided in paragraph 17 "below".
      – In the renumbered paragraph 15(l)(b ) for the words ,
        "lower earnings limit multiplied by 50",
      there shall be substituted ,
        "level required to make that year a reckonable year within the meaning
        of the United Kingdom legislation governing the crediting of contri­
        butions ".
( h ) After the renumbered paragraph 16 there shall be added the following * -
      "17 ( l ) For the purpose of calculating Tinder Article 46(2)(a ) of this
                  Regulation the theoretical amount of that part of the pension
                  which consists of an additional component under United Kingdom
                  legislation :-
                  ( a ) references in Article 47(l)(fc ) of this Regulation to "wages
                        or salaries , contributions or increases in contributions "
                        shall be construed as meaning surpluses in earnings factors
                        as defined in the Social Security Pensions Act , 1975 » or as
                        the case may be , the Social Security Pensions (Northern
                        Ireland ) Order , 1975 5
                  ( b ) an average of the surpluses in earnings factors shall be
                        calculated by virtue of Article 47(l)(b ) of this Regulation
                        as construed in sub-paragraph ( a ) above by dividing the
                        aggregated surpluses recorded under the United Kingdom
                        legislation by the number of income tax years within the
                        meaning of United Kingdom legislation ( including part income
                        tax years ) completed under that legislation since 6th April ,
                        1978 which occur within the relevant period of insurance .
           ( 2 ) References in Article 46(2 ) of this Regulation to periods of
                  insurance or residence shall be construed for the purpose of
                  assessing the amount of that part of the pension which consists
                  of the additional component under United Kingdom legislation as
                  meaning periods of insurance or residence which have been
                  accomplished since 6       April 1978# w
 ---pagebreak---                                     Article 2
The Annexes to Regulation (EEC ) 574/72 are hereby amended as follows
1 . In Annex 5 » point 3 » Bel gium-France , there shall he inserted after para­
    graph ( e ) the following paragraph : -
    "( f ) The Agreement of 3     October 1977 implementing Article 92 of Regula­
           tion 1408/71 (recovery of social security contributions ). w
2 . In Annex 5 » point 13 » Denmark-Luxembourg, for the words "No convention"
    there shall be substituted the following : -
    "The Agreement of 19       June 1978 concerning the reciprocal waiving of
     reimbursement provided for in Articles 36 ( 3 ) » 63(3 ) and 70(3 ) of the
     Regulation and Article 103(2 ) of the implementing Regulation ( costs in
     respect of benefits in kind for sickness , maternity, accidents at work
     and occupational diseases and costs of unemployment benefit and
     administrative checks and medical examinations )".
3, In Annex 5 » point 16 , Germany-France , after paragraph ( b ) there shall be
    added the following :-
    "( c ) The Agreement of 14 October 1977 concerning the waiving of
           reimbursement provided for in Article 70(3 ) of the Regulation
           ( costs of unemployment benefit )."
4, In Annex        point 21 , Germany-United Kingdom, the following amendments
    shall be made :-
    (i ) The existing paragraph shall be lettered "(a )".
    (ii ) After paragraph ( a), there shall be inserted the following: -
           n(b ) The Agreement of 29     April 1977 concerning the reciprocal
                 waiving of reimbursement of costs as provided for in Articles
                 36(3)f 63(3 ) and 70(3 ) of the Regulation and Article 105(2 )
                 of the implementing Regulation ( costs in respect of benefits
                 in kind for siokness , maternity, accidents at work and
                 occupational diseases and costs of unemployment benefit and
                 costs of administrative checks and medical examinations! "
 ---pagebreak---                                        - 8 -
5 . In Annex 5 , point 29 , Ireland-Netherlands , for the entry "No convention",
    there shall be substituted the following : -
    "The exchange of letters of 28        July 1978 and 10     October 1978 regard­
     ing Articles 36 ( 3 ) and 63 ( 3 ) of the Regulation ( partial reciprocal
     waiving of reimbursement of costs of benefits in kind in respect of
      sickness or maternity, accidents at work and occupational diseases )."
6 . In Annex 6 in the paragraph entitled "General observation" for the words
    "Payments of arrears and other single payments shall be made", there
    shall be substituted "Payments of arrears and other single payments shall
    in principle be made".
7 . In Annex 10, C. Germany, paragraph 7 ( a ), second column , for the refer­
    ence , "Annex 3 Section B ( 2 ) (b )" there shall be substituted the follow­
    ing, "Annex 3 Section C ( 2 ) (b )".
                                    Article 3
This Regulation shall enter into force on the day of its publication in the
Official Journal of the European Communities .
Article 1.2(a ) shall apply with effect from 1 July 1977 .
Article 1.2(b ) shall apply with effect from 1 August 1977 .
Article 1.3 ( a), ( b ), (d ), (e ) and ( f ) in so far as they concern Gibraltar ,
shall apply with effect from 1 April 1973 .
Article 1.3 ( a ), (b ), ( c ) (in relation to the revocation of paragraph 4 of
Annex V.I. of Regulation 1408/71 ), ( e ) and ( f ), in so far as they concern
Great Britain and Northern Ireland , shall apply with effect from 6 April
1975 .
Article 1.3 ( c ) shall apply as regards the deletion of paragraph 11 of
Annex V . I. or Regulation 1408/ 71 with effect from 2 January 1977 .
Article 1.3 (<0,in 8° far as it concerns Great Britain and Northern Ireland,
shall apply with effect from 4 April 1977 .
 ---pagebreak--- Article 1.1 , 3(g ) and ( h ) shall apply with effect from 6 April 1978 .
Article 2.1 shall apply with effect from 1 May 1978 .
Article 2.2 shall apply with effect from 1 April 1973 .
Article 2.3 shall apply with effect from 27 April 1978 .
Article 2.4 shall apply with effect from 28 December 1977 .
Article 2.5 shall apply with effect from 1 April 1973 .
This Regulation shall be beinding in its entirety and directly applicable
in all Member States .
Done at Brussels ,
                                        For the Council :
 ---pagebreak---                                                         ANNEX IV
                         EXPLANATORY MEMORANDUM
               of the proposal for a Council Regulation
concerning the amendment of the Annexes to           Regulations ( EEC )
   Nos . 1408/71                     and 574/72
             on the application of social security schemes
                 to employed persons and their families
                      moving within the Community
 ---pagebreak--- 1.1 Annex III , Point I , United Kingdom
    The United Kingdom legislation of 1971 referred to in the existing
    entry of Annex III has been superseded by the Social Security Act ,
    1975 , "the Social Security Pensions Aot , 1975 » "the Social Security
    ( Northern Ireland ) Act , 1975 and "the Social Security Pensions
    ( Northern Ireland ) Order, 1975 * As from 6th April , 1979 » invalidity
    pensions payable under the new legislation to persons who have
    contributed to the United Kingdom scheme as employed earners will
    consist of two components – a flat–rate basic component and an
    earnings related additional component . The basic qualifying conditions
    for invalidity pension and the nature of the benefit as a whole ,
    remain unchanged . The amendment reflects the changes in United King^-
    dom legislation .
 ---pagebreak--- 1.2 . ( a ) Annex V C. paragraph 7 of Regulation 1408/71
            As a result of amendments to the Reich insurance code ( RVO ) and the
            law concerning sickness insurance for farmers , the lump sum contribu–
            tions now granted are intended to ensure that the examinations
            required for an adequate and effective medical treatment during
            pregnancy and after confinement are undergone . Therefore the present
            reference in paragraph 7 to a lump sum as a contribution "towards
            confinement expenses " is not justified even though there has "been no
            change as regards its "being a "benefit in kind within the meaning of
            Regulation 1408/71 . The lump sum contribution is granted in conjunc­
            tion with the benefit in kind of "medical treatment " and the present
            amendment seeks to reflect this change .
1.2 . ( b ) Annex V C. paragraph 10 of Regulation 1408/71
            In the Federal Republic of Germany since 1st July , 1977 the law
            curbing the cost of health insurance has entered into force ( Kranken–
            versicherungs–Kostendampfungsgesetz ). As a result the internal rules
            for financial equalization between German health insurance institu­
            tions in the sickness insurance scheme for pensioners have been changed
            and there is now a need to modify the accounting procedure and
            financial equalization among the German institutions in cases where
            they have provided benefits in kind on behalf of the institutions of
            other Member States and where the costs of such benefits are required
            to be refunded in a lump sum in compliance with Article 95 of Regul ac­
            tion No 574/72.
            The addition at Annex V C. paragraph 10 seeks to meet that need } it
            is a device to meet the internal accounting procedures of the Federal
            Republic of Germany.
            The amendments affect neither the persons insured nor the institutions
            of the Member States .
 ---pagebreak--- 1.3 . ( a ) Annex Y.I , paragraph 1 of Regulation 1408/71
            The Social Security Act , 1975 and the Social Security (Northern Ire­
            land ) Act , 1975 each introduced new terminology so as to describe
            employed workers who were insured tinder those Acts . The new terminol­
            ogy refers to such persons as "employed earners ". There has , however ,
            been no such change under the legislation of Gibraltar .
            3y up-dating references to national legislation , the present amend­
            ment seeks to facilitate the identification of "workers " insured in
            the United Kingdom schemes for the purposes of Community social
            security law.
1.3.(b ) Annex V.I , paragraph 2 of Regulation 1408/71
            The present entry at paragraph 2 is designed to assist a worker who
            has been employed in a Member State other than the United Kingdom to
            take account of such employment so as to satisfy the United Kingdom 's
            qualifying contribution conditions and thereby benefit from the award
            of credited contributions in respect of periods of incapacity, preg1-
            nancy or unemployment under the United Kingdom legislation in force
            prior to 1975 * Under the Social Security Act , 1975 and "the Social
            Security ( Northern Ireland ) Act , 1975 » these qualifying contribution
            conditions no longer exist and the paragraph has no relevance now -
            for British or Northern Ireland legislation. However, the paragraph
            is still valid in the context of Gibraltar legislation and should be
            retained but amended so as to apply only to Gibraltar .
 ---pagebreak---                                         - 4 -
1.3. ( c ) Annex V.I. paragraph 4 of Regulation 1408/71
           The present paragraph 4 was inserted so as to provide for the special
           residence condition imposed "by Northern Ireland legislation in relar-
           tion to unemployment "benefit . That residence condition was not renewed
           when the Social Security ( Northern Ireland ) Act , 1975 came into force j
           paragraph 4 is therefore now otiose .
1.3. (d ) Annex V.I , paragraph 5 (now renumbered ( 4 )) of Regulation 1408/71
           Under United Kingdom law , the Child Benefit Act , 1975 and the Child
           Benefit ( Northern Ireland ) Order , 1975 provide for the replacement
           of family allowances in Great Britain and Northern Ireland as from
           4th April , 1977 "by a new "benefit which is called "child "benefit ".
           Child Benefit was put into payment at a rate similar to that of the
           former family allowance "but unlike that allowance , child benefit is
           now payable in respect of the first child also .
           The family allowance scheme in Gibraltar remains unchanged .
           The qualifying conditions for child benefit do not require the place
           of birth of a worker , or of the children or dependents to be in the
           United Kingdom . In this respect the family allowance legislation of
           Gibraltar is the same . Paragraph 5 (a ) of Annex V I. is therefore
           now otiose .
           Although , generally, a person cannot acquire entitlement to child
           benefit unless he is in Great Britain or Northern Ireland and has
           been there for more than a stipulated period ( at present 182 days
           in the preceding 5 2 weeks ), this latter condition is deemed to be
 ---pagebreak---          satisfied if the person has started work as an employed earner and
         intends to stay or reside in Great Britain or Northern Ireland for
         182 consecutive days (disregarding up to 28 days of temporary ab­
         sence ). In the generality of cases persons who "become subject to
         United Kingdom legislation "by virtue of Regulation 1408/71 will
         satisfy the "presence test " on that "basis . Problems can arise , how­
         ever, for smaller categories of persons , for example , seasonal workers ,
         frontier workers or other workers who , by virtue of Regulation
         1408/71 , have become subject to United Kingdom legislation ( e.g.
         mariners on a British ship ); such a person may find difficulty in
         satisfying the above-mentioned presence test so as to be able to
         acquire entitlement to United Kingdom child benefit . Similar
         difficulties exist under Gibraltar legislation .
         The amendments proposed develop the existing paragraph 5 (b ) which
         relates only to the case of a person who is subject to United King­
         dom legislation by virtue of Title II of Regulation 1408/71 . It also
         extends the provision to the case of an unemployed person who returns
         to the United Kingdom in the circumstances envisaged in Article 71 (l )
         ( a ) (ii ) or ( b ) ( ii ) and who is thereby entitled to United Kingdom
         unemployment benefit . Such person might well have difficulty in
         satisfying the United Kingdom conditions concerning "the period of
         presence" test in the United Kingdom.
         The unemployed person is thereby allowed to treat periods of insur­
         ance or employment effected in other Member States as presence within
         the United Kingdom so as to satisfy the period of presence test
         imposed by United Kingdom legislation for the purpose of receiving
         its child benefit . This rule is applied by analogy to Gibraltar for
         the purpose of receiving family allowances .
1.3.(e ) Annex V.I , paragraph 7 (now renumbered paragraph 6 ) of Regulation
         1408/71
         The amendment to the renumbered paragraph 6 (b ) has been effected
 ---pagebreak---                                          - 6 -
            for the reasons already given at paragraph 1.3 ( a ) a"bove . The amend­
            ment is purely technical and the purport of the provision will remain
            unaltered .
1.3 . ( f ) Annex Y.I , paragraph 11 of Regulation 1408/71
            As from the 2nd January , 1977 the special arrangements set out in
            paragraph 11 for the calculation of United Kingdom earnings related
            supplements were no longer needed . Earnings related supplements are
            now payable under new United Kingdom legislation "but they are
            calculated "by reference to earnings factors and the provisions now
            contained at the renumbered paragraph 15 of Annex V.I. of Regulation
            1408/71 serve for the purpose of determining such factors .
            Paragraph 11 is therefore being revoked ( see Article 1.3 ( c ) of the
            proposal ).
1.3.(g ) Annex V.I , paragraph 12 ( now renumbered 10 ) of Regulation 1408/71
            The United Kingdom National Insurance Act and legislation on
            accidents at work which are mentioned in the present paragraph 12
            have been repealed and replaced by the Social Security Act , 1975 and
            the Social Security ( Northern Ireland ) Act , 1975 *
            The paragraph has been amended so as to reflect this fact and also
            so as to make precise reference to the relevant Gibraltar legislation .
1.3 . ( h ) Annex V.I , new paragraph 17 of Regulation 1408/71
            Retirement and Widows * Pensions paid under the United Kingdom 's
            Social Security Act , 1975 and Social Security ( Northern Ireland ) Act ,
            1975 are flat–rate ; however , by virtue of that Member State 's Social
            Security Pensions Act , 1975 and Social Security Pensions ( Northern
            Ireland ) Order , 1975 provision is made for improved benefits in
            respect of retirement and widowhood . As from 6th April , 1979 persons
            who have contributed as employed earners ( and the widows of men who
            have so contributed ) will be able to qualify for an earnings related
            pension in addition to the flat–rate pension referred to above .
 ---pagebreak---                              - 7 -
Entitlement to the additional pension will be acquired by the means
of contributions payable at an increased rate as from 6th April , 1978 .
That element of the retirement or widow 's pension which is flat–rate
will be known as "the basic oomponent " and the new element , the
earnings related pension , will be known as "the additional component ".
These two elements will constitute the employed earner 's total
prospective pension entitlement under the United Kingdom social
security scheme . The two elements sure , however , quite distinct both
in regard to their individual characteristics and to their respective
qualifying conditions . For instance the basic component is flat-rate
whereas the additional component is earnings-related } again each
element may be awarded irrespective of whether entitlement exists
for the other .
The distinction is more apparent when one considers the fundamental
differences in the qualifying conditions . The contribution conditions
for the basic component are related to the annual earnings factors
achieved by an employed earner over the whole of his working life ,
It should be stated at this juncture that in the United Kingdom an
employed earner pays , by way of social security contributions , a
statutorily fixed percentage of his income which falls above a certain
threshold and referred to as the lower earnings limit ( as from 6th
April, 1978 the weekly lower earnings limit is £ 17.50 ) and below a
certain ceiling and referred to as an upper earnings limit ( as from
6th April , 1978 the weekly upper earnings limit is £ 120 ). These
contributions are converted annually and by reference to tables into
earnings factors which are then entered on the employed earner 's
insurance record .
So as to obtain entitlement to the basic component retirement or
widow 's pension a minimum number of qualifying years must have been
achieved ( broadly , 9/lOths of the number of years between age 16 and
the date of retirement or death , as appropriate ), in which the
earnings factor has reached at least 52 times the weekly lower
earnings limit . For instance as from 6th April , 1978 "the weekly lower
earnings limit has been £17.50 and on an annual basis this represents
£ 910 i.e. 52x £17.50 . For 1978 the employed earner's earnings factor
must have reached at least £ 910 .
 ---pagebreak---                              - 8 -
When examining the earnings factors achieved during an insurance
career for the purpose of entitlement to a basic pension , the earnings
factors achieved in different years cannot be aggregated in order to
make good a deficiency in the record . The test is therefore conducted
on a year by year basis covering virtually the entire period of a
person 's insurance career .
On the other hand , entitlement to the additional component will be
calculated by reference to the aggregated ajnount of the revalued an­
nual surpluses in earnings factors which the employed earner has
accumulated over his best 20 years of insurance as from 6th April ,
1978 * For this purpose the surplus in any one year will be the amount
by which the earnings factor for the year exceeds that which is
needed for the basic component . Therefore , for example , the maximum
achievable surplus in the year beginning 6th April , 1978 will be
£ 5330.00 , this represents 52 times the weekly upper earnings limit
for that year i.e. 5 2 x £ 120 » £ 6240 , less the £ 910 referred to
above .
The formulae incorporated in the present paragraph 17 ( l ) of Annex V.I.
and which were devised for the basic flat-rate benefit will still be
applicable in respect of that element of the pension } for these
purposes the value of the contributions deemed to be paid in respect
of insurance or residence accomplished as a worker in another Member
State is immaterial , provided the qualifying level of 52 times the
weekly lower earnings limit is reached .
However , it would be inappropriate to apply the formulae in the pre­
sent paragraph 17 ( l ) to the additional component , since the value
of the contributions paid and which lies between the qualifying level
for a basic pension and 52 times the weekly upper earnings limit
will be a vital factor in establishing the amount of the additional
component to which the employed earner is entitled .
So as to enable the United Kingdom authorities to apply Regulation
1408/71 in relation to claims for a prorata entitlement to the addi­
tional component pension in respect of retirement or survivors , parar-
graph 17 has been added .
 ---pagebreak---                                            - 9 -
             Paragraph 17(l)(a ) and ( b ) implement Article 47 ( l ) ( b ) of Regular-
             tion I408/7I when assessing that theoretical amount of the United
             Kingdom additional component pension which would "be payable "by virtue
             of Article 46 ( 2 ) ( a ) of Regulation 1408/71 if all periods accom*-
             plished in all Member States since 6th April , 1978 had been
             accomplished within the United Kingdom .
             Paragraph 17 ( 2 ) is designed to ensure that when periods accom­
             plished in another Member State have been aggregated with those
             completed in the United Kingdom , the assessment of the pension is
             effected only on the basis of periods effected after 6th April ,
             1978 . This is required because the additional component pension is
             only payable in the United Kingdom in respect of periods posterior
             to that date .
1 • 3. ( i ) Annex V.I. t amendments to renumbered paragraph 15 to Regulation
             1408/71
             The first amendment to the renumbered paragraph 15 (l ) is consequen­
             tial upon the addition of the new paragraph 17 . It is intended to
             make clear that paragraph 17 and not paragraph 15 is to be used for
             the calculation of the United Kingdom additional component pension .
             The amendment to paragraph 15 ( l ) (b ) results from a modification to
             United Kingdom domestic legislation . Broadly , the position was that
             up to 6th April , 1978 , one of the conditions for most benefits pay>-
             able under the scheme ( including retirement and widow 's pension )
             was that the earnings factors derived from contributions must not be
             less than the lower earnings limit fixed for the year in question
             multiplied by 50 . It is this condition which paragraph 15 ( l ) (b )
             currently reflects . However , as from the above date the Social
             Security (Pensions ) Act , 1975 and the Social Security Pensions
             ( Northern Ireland ) Order , 1975 impose a factor of 52 instead of 50
             for the purposes of retirement and widows' pensions . Whilst the
             factor of 50 still holds good for other benefits the provision needs
             amending to cater for pensions . The proposed amendment seeks to meet
             this need .
 ---pagebreak---                                         10 -
2.1 .  Annex 5 point 3 . t Belgium-France , to Regulation 574/72
       Under the provisions of Article 92 ( l ) of Regulation 1408/71 contribu­
       tions payable to an institution of one Member State may be collected
       in the territory of another Member State . Article 92 ( 2 ) of the same
       Regulation allows for agreements to be concluded between Member States
       to this end . Such agreements are required by virtue of Article 116 ( l )
       of Regulation 574/72 to be entered in Annex 5 of the aforesaid Regula­
       tion . Belgium and Prance concluded such an agreement on 3rd October ,
       1977 and. Article 2.1 . records that agreement in Annex
2.2 .  Annex 5 point 13 .. Denmark-Luxembourg , to Régulation 574/ 72
       Under the provisions of Articles 36 ( 3 ) f 63 ( 3 ) and 70 ( 3 ) of Regular-
       tion 1408/71 and Article 105 ( 2 ) of Regulation 574/72 Member States
       may, inter alia , reach agreement for the waiving of reimbursement of
       costs incurred by the competent institution of one Member State on
       behalf of another . The provisions cited cover waiver agreements in
       respect of costs incurred for sickness , maternity benefits , accidents
       at work , occupational diseases , unemployment benefits and administra­
       tive checks and medical examinations .
       Under the provisions of Articles 104 ( 2 ) and 105 ( 2 ) of Regulation
       574/72 where such agreements are reached they require to be entered in
       Annex 5 of the aforesaid Regulation ,
       Article 2 . 2 recites an agreement of 19th June , 1978 concluded between
       Denmark and Luxembourg and which provides for waiver of reimbursement in
       respect of costs incurred for benefits in kind provided in cases of
       sickness , maternity and accidents at work and occupational diseases ,
       and costs of unemployment benefit and administrative checks and
       medical examinations .
2 . 3. Annex 5t point 16 ., Germany-France , to Regulation 574/72
       Article 2 . 3 recites an agreement of 14th October , 1977 concluded
       between France and the Federal Republic of Germany concerning the
       waiving of reimbursement of costs of unemployment benefit .
 ---pagebreak---                                       - 11 -
2.4 .   Annex 5 point 21 ., Germany-United Kingdom , to Regulation 574 /72
        Article 2 . 4 recites an agreement of 29th April , 1977 concluded
        "between the Federal Republic of Germany and the United Kingdom concern­
        ing the waiving of reimbursement of costs in respect of "benefits in
        kind for sickness , maternity , accidents at work and occupational
        diseases and of costs of unemployment "benefits and costs of adminis­
        trative checks and medical examinations .
2.5 . Annex 5 point 21 ., Ireland-Netherlands , to Regulation 574/72
        Article 2 . 5 recites an exchange of letters dated 28th July , 1978 and
        10th October , 1978 between Ireland and the Netherlands concerning
        partial waiving of reimbursement of costs in respect of benefits in
        kind for sickness , maternity , accidents at work and occupational
        diseases .
2.6 .   Annex 6 to Regulation 574/72
        The object of the proposed amendment at Article 2 . 6 is both to
         simplify and speed up the procedure for payment of arrears and other
         single payments to beneficiaries . The present situation is that where
        a beneficiary is resident in the territory of one Member State and is
        entitled to the payment of arrears or a single payment from another
        Member State , that payment is made through one of the liaison bodies
        mentioned at Annex 4»
        This method is justified in cases where , for the settlement of claims
        for refunds made by the Member States of residence , deductions are
      • made from amounts of pensions payable by the institution of another
        Member State . Such procedure is provided for in Article 111 of Regula­
        tion 574/72 .
        However , where no such refunds are due , there seems no valid reason
         for insisting that the payment be made through those liaison bodies
         listed in Annex 4 » On the contrary , such insistence may well result
         in delaying payment to beneficiaries because channels have to be gone
         through which might be avoided . Also it may be added that the extra
         administrative work involved in using liaison bodies is unnecessary.
 ---pagebreak---                                     - 12 -
      For these reasons it is proposed that the possibility should exist of
      obviating the need to use liaison "bodies in sill cases .
2.7 . Annex 10 C. Germany , paragraph 7 ( a )» of Regulation 574/72
      On the occasion of the adhesion of the new Member States , Regulation
      574/72 underwent a series of amendments . Those amendments were
      included in Council Regulation 878/73 ( l ) and at Article 1.35 thereof ,
      inter alia , the section heading in respect of the Federal Republic of
      Germany was changed from "B. Germany" to "C. Germany". Due to an over­
      sight a similar reference at paragraph 7 ( a ), second column , of the
      new Annex 10 C. was not also carried out . The present modification con­
      tained at Article 2.7 seeks to rectify this situation . The modifica/-
      tion concerns only the Federal Republic of Germany .
      ( 1 ) O.J. No . L 86 of 31.3.1973 , page 1