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New provisions concerning the co-ordination of social security schemes Reg. 883/2004

New provisions concerning the co-ordination of social security schemes Reg. 883/2004. Competences under the Treaty. No harmonisation National competence to define and build social policy schemes remains unchanged, except Ban on discrimination Equal treatment of women and men

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New provisions concerning the co-ordination of social security schemes Reg. 883/2004

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  1. New provisions concerning the co-ordination of social security schemesReg. 883/2004

  2. Competences under the Treaty No harmonisation National competence to define and build social policy schemes remains unchanged, except • Ban on discrimination • Equal treatment of women and men • Free movement of persons, goods and services • Competition and State aid rules • Public procurement Only co-ordination?

  3. What is Co-ordination? • Equal treatment • Export of benefits • Aggregation of periods Legal base in the Treaty – frequent changes! Maastricht: Art. 51 + Art. 235 (self employed) Amsterdam: Art. 42 + Art. 18 (Union citizens) + Art. 308 (self employed) Nizza: Art. 42 + Art. 308 (Union citizens + self employed) + Art. 63 Abs. 4 (third country nationals) European Constitution: Art. III-136 + Art. III-267 (third country nationals)

  4. History Reg. 1408/71 already aged ! Ø does not cover new risks (long term care, child care) Ø centred around gainful activities Ø Parallelism Reg. 1408/71 – ECJ Reg. 1408/71 – Reg. 1612/68 Start: European Council of Edinburgh (1992) SLIM - Simpler Legislation for the Single Market

  5. Start of the work Proposal of the Commission December 1998 Revolutionary changes: Ø open material and personal scope  Ø far reaching equalisation of facts  Ø pro-rata-reimbursement for pensioners  Ø 6 Months export of unemployment benefits  Ø Unemployment benefits for frontier workers by the last state of employment  Ø Always highest amount of family benefits

  6. How far did we get? When will the new Reg. 883/2004 enter into force? on the 20th day after its publication – 27.6.2004  When will 883/2004 apply? From the entry into force of the new Implementing Reg. possible impediments on the way to new Reg. 883/2004   • Elaboration of the new Implementing Reg. • 10 new Member States  Ø Missing Annex X (special non contributory besenfits)  Ø Missing Annex XI (special provisions)

  7. Personal scope of Reg. 1408/71 Employed and self-employed persons, students, if they are nationals of a Member State, refugees or stateless Members of the family irrespective of their nationality Employed and self-employed have to be covered by a national scheme of social security

  8. Personal scope of Reg. 883/2004 All persons covered by a scheme Nearly no influence on social insurance schemes Third country nationals remain excluded • legal base!! Reg. 859/2003 remains applicable -> therefore For third country nationals Reg. 1408/71 remains in force in its present form

  9. Third country nationals Reg. 859/2003 Already applicable – Reg. 1408/71 applies correspondingly Problems: • Third country nationals legally residing in the territory of a Member State • cross border elements Does not apply in relation to DK, special provisions concerning family benefits granted by AT + DE

  10. Schemes “beyond employment” All persons subject to the legislation = all persons covered All schemes covering the risks Invalidity / sickness / death Exemption of victims of war still valid Possible impacts - Annex XI? • Damages caused by officials or military actions • Schemes for victims of crime • Insurance burden provisions

  11. Material scopeReg. 1408/71 Legislation concerning: • Benefits in case of sickness and maternity • Benefits in case of old age, invalidity or to survivors • Benefits in case of accidents at work and occupational diseases • Death grants • Unemployment benefits • Family benefits

  12. Material scope Reg. 883/2004 Not very much innovation New:  • Paternity benefits equivalent to maternity • Pre-retirement benefits • Explicit exemption of advances of maintenance payments • Inclusion of all special schemes for the “Liberal professions” No solution:  • Special provision for long term care benefits • Special provision for child care benefits • Freedom to provide services (patient mobility)

  13. Pre-retirement benefits What exactly is meant? Old age part-time? Not clear because in many Member States benefits to the employer, not to the employee Cases Kutz-Bauer und Steinicke – Working conditions under Dir. 76/207 Therefore not at the same time social security? In any way - No aggregation!

  14. Advances of maintenance payments Cases Offermanns und Humer – AT “Unterhaltsvorschuss” covered by Reg. 1408/71 Problems in case of residence of the child outside the competent state Big success: Advances to maintenance payments excluded from Reg. 883/2004 (Annex I) Therefore no export but equal treatment (Art. 12 EC - Cases Cowan, Martinez Sala)

  15. Long term care benefits Cases Molenaar und Rs Jauch – sickness benefits No special provision Nevertheless hope? • Art. 34 to avoid overlapping; deducting the benefit in kind from the benefit in cash • Annex X – special non contributory benefits – case Hosse; pressure to elaborate a special chapter on co-ordination for such benefits

  16. Long term care benefits - possible ways of co-ordination • Export of cash benefits only through the institution of the place of residence • This institution has the obligation to inform the persons concerned • This institutions deducts the amount of the benefit in kind • Corresponding deduction of reimbursement (special provision in case of lump sums) • Important: Overpayments have to be avoided

  17. Child care benefits No special provision Co-ordination problematic (e.g. child care in DE, mother frontier worker from AT still in employment) • Family-view (like all other family benefits) • Individualised-view ECJ: Family view correct - case Dodl and Oberhollenzer

  18. Special non contributory benefits New Definition (Art. 70): • In case of supplementary, substitute or ancillary coverage – minimum income • In case of benefits solely for the protection for the disabled – link to the social environment Non contributory – no financing by contributions; no problem for supplementary benefits to contributory benefits

  19. Equal treatment of facts New provision (Art. 5): (lit. a): equal treatment of benefits and income – corresponds to Art. 12 (2) of Reg. 1408/71 (lit. b): general equalisation “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.”

  20. Equal treatment of facts Consequences • Danger: e.g. creation of periods of insurance • Therefore: no impact on aggregation (Rec. 10) or on competences (Rec. 11) • Important: one provision for all Member States • ECJ up until now always in that direction • Legal simplification

  21. Equal treatment of factsLimits Example: Child care periods in pension insurance Child care whenever in any Member State? Important: Connection with competence (always state of residence?) Is correction of case Kauer possible? There are only very few possibilities for deviations Important: Annex XI

  22. Aggregation Central uniform provision (Art. 6) In case of voluntary insurance no restriction to persons who have been already gainfully active in that Member State Via equalisation of facts: equivalent periods could be created by foreign periods of insurance Impact e.g. on periods of military or civilian service, School or university studies if equivalent periods under national legislation

  23. Applicable legislation Reg. 1408/71 Insurance only in one Member State allowed – various designations of competent State • place of gainful activity • posting for a maximum of 12 months • prolongation for further 12 months • normally exercise of an activity in more than one Member State -> State of residence • problems in case of termination of the activity • agreement on exceptions

  24. Applicable legislation Reg. 883/2004 Most important changes: • Legislation of the previous state of activity in case of receipt of short term benefits in cash • For all non active persons the legislation of the state of residence applies • 24 months of posting (no E 102 any more) • Normally exercise of an activity in more than one Member State: legislation of State where a substantial part of activity is exercised

  25. Applicable legislation - Problems Unsolved problems: • Retroactive corrections to achieve lawful status • Impact of labour law and workers protection on social security • Obligation of employer without any representation in the state of exercise of the activity to information and to pay the contributions

  26. Sickness benefitsReg. 1408/71 • Benefits in kind under the legislation of the state of residence or stay • No special provisions for entitlement under the freedom to provide services • Benefits in cash under the legislation of the competent state

  27. Sickness benefitsReg. 883/2004 Important amendments (including those brought by Reg. 631/2004 to Reg. 1408/71) • Equalisation of entitlements for all persons (already since 1.6.2004) • European Health Insurance Card (already since 1.6.2004) • More rights for frontier workers • New cost reimbursement provisions • But again no codification of rights under the freedom to provide services

  28. Equalisation of entitlements No difference between employed or self-employed persons / pensioners / stay abroad of employed persons / students / holidays (since 1.6.2004) Entitlement depends on nature of the benefit and the expected length of the stay Direct contact to the service providers (doctors, hospitals) abroad (since 1.7.2004) E 112 authorisation has to be granted if treatment cannot be given within a time-limit which is medically justifiable (Reg. 883/2004)

  29. European Health Insurance Card New since 1.6.2004: EHIC or replacement form States with transition period (AT, IT, LV, LT, MT, NL. PL, PT, SK, HU, UK, CY) – introduction at the latest an 1.1.2006 In many Member States combination with national cards Since 1.6.2004 in any case new E 111; after end of transition period for a Member State: Replacement form

  30. More rights to frontier workers Family members (like active frontier workers) automatic choice between benefits in state of residence or employment –if no restriction in Annex III Retired frontier workers: right to continue treatments already begun in state of employment Retired frontier workers: continued right of choice if frontier worker during 2 years of the last 5 years and entry in Annex V More rights also for pensioners who receive treatment in the competent state – entry in Annex IV

  31. Reimbursement Fight against inequalities especially in case of pensioners Principle: real cost refund Lump-sum of 85 %, state of residence costs of E 112, competent state pays all other benefits Lump-sum of 80 %, if competent state pays all benefits in its territory (Annex IV), E 112 costs by state of residence, competent state pays all other costs of treatment outside the state of residence

  32. PensionsReg. 1408/71 Important principles: • Aggregation for entitlement • If aggregation is necessary: calculation of theoretical amount for all periods and then pro-rata • If aggregation is not necessary: national or pro-rata-pension (highest amount) • Insurance periods < 12 months – other state has to pay • Equalisation of requests

  33. Accidents at work and occupational diseases - Reg. 1408/71 Benefits in kind (e.g. treatment after an accident) – same principles as in case of sickness Accident pensions are paid by the state where the accident occurred or in which the last period of exposition is reckoned Internal pro-rata of costs in case of special lung diseases (sclerogenic pneumoconiosis)

  34. Pensions and accidents at work or occupational diseases - Reg. 883/2004 No major amendments Accident insurance: No pro-rata in case of sclerogenic pneumoconiosis Pensions: Equalisation of requests still open if information is missing Pensions: Anti-Cumulation: partition of deductible amount and not any longer of the amount of the benefit which will be suspended Pensions: Problems with national reforms (funded schemes)

  35. Unemployment benefitsReg. 1408/71 Exportation: max. 3 months; receipt of benefits in previous state of employment for 4 weeks, return, otherwise loss of entitlement Frontier worker: unemployment benefit under legislation of state of residence Seasonal workers: either stay in state of employment, export of unemployment benefit for 3 months or immediately unemployment benefit from state of residence

  36. Unemployment benefitsReg. 883/2004 Exportation: same conditions, but 3 + 3 months Frontier workers: unemployment benefit from state of residence but search of employment also in previous state of employment Seasonal workers and frontier workers: reimbursement of unemployment benefit by previous state of employment: 3 months + 2 months (if insurance 12 months during last 24 months)

  37. Family benefits - Reg. 1408/71 Difference between active persons (all family benefits) and pensioners (only family allowances) Priority of gainful activity over residence Differential amount by state which has not the priority

  38. Family benefits - Reg. 883/2004 Clear new provision, identical for all persons for all benefits – residence is not relevant Clear hierarchy of competences • Gainful active persons • Pensioners • Entitlement only due to residence • In case of entitlements of the same type - residence • Suspended competence: differential amount

  39. Different other amendments by Reg. 883/2004 Also in other fields essential amendments: • Replacement of data exchange by electronic exchange • Collection of contributions and recovery of undue benefits directly applicable

  40. First assessment Has the simplification been successful? • XI in stead of VIII Annexes! • Various possibilities for options in sickness insurance • Complex provisions in the field of unemployment • No solutions for new social risks, unresolved questions • Decisions of ECJ not all transformed + Central provision on equalisation of facts + Central provision on aggregation + Provisions and Annexes simplified + Start for special co-ordination of long term care benefits

  41. Farewell to Reg. 1408/71? No! Complex parallelism of Reg. 1408/71 and Reg. 883/2004 Reg. 1408/71 remains applicable for: • Reg. 859/2003 concerning third country nationals • EEA-Agreement • Agreement on free movement in relation to CH • Reg. 1661/85 concerning Greenland No farewell to Reg. 1408/71 – but farewell to simplification!

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