Coordination of social security systems to be strengthened

On 20 November, the European Parliament’s Committee on Employment and Social Affairs approved a modernised system of social security coordination. The new regulations are intended to strengthen the rights of around 14 million mobile workers, as well as the unemployed and economically inactive people. However, the Committee only partially took up the proposals of the EU Commission and instead introduced amendments that many MEPs outside the committee disagree with.

The full text of the report is available here. See also the positions taken by the German National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) and the German Social Accident Insurance (DGUV) from 2017.

The Member States continue to be responsible for their national social security systems and their rules on benefits and contributions. However, the coordination arrangements ensure the portability of social entitlements and benefits across national borders and that mobile citizens are not disadvantaged in terms of their social security rights. 

Posted workers

In general, cooperation between Member States is to be improved through new provisions to speed up the exchange of information and prevent errors and abuses. The aim is to close loopholes which allow fraudulent ‘letterbox’ companies to send their workers to other EU countries and to prevent the illegal authorisation of posted workers. 

Postings should be a maximum of 18 months (an initial 12-month term with a possible extension of six months). The amended provision requires posted workers to be subject to the legislation of the Member State where the employer is established for a period of at least three months before the date of posting in order to receive benefits in the Member State where their employer is established. 

The non-replacement clause in Regulation 883/2004, which prevents a person from being sent to replace another posted worker or another posted self-employed worker, should be deleted. Instead, the proposal foresees that the cumulative duration of the sending periods should be taken into account in the case of a replacement of posted workers. Furthermore, after reaching the maximum duration of posting, workers or self-employed persons should not be able to be posted by the same companies to the same Member State until three months after the last posting period.

For portable A1 documents, the forwarding period granted to the issuing institution to provide the requesting institution with all necessary evidence will be increased from 20 working days, as proposed by the Commission, to 25 working days. 

Unemployment benefits

In the area of unemployment benefits, frontier and cross-border workers should be able to choose whether they would like to receive benefits from the Member State of residence or from the Member State of last work activity. In addition, the period for exporting unemployment benefits should be increased from three to six months, with a possible extension until the entitlement to benefits expire. This makes it easier for an unemployed person to find a job in the other EU country. 

Family benefits

Family benefits for persons who stop working to raise a child should be distinguished from other family benefits and considered as personal benefits for the parent concerned. Eastern European workers who leave their children in their home country should also receive the same family benefits as workers who pay their taxes and social security contributions in their respective EU countries. 

Long-term care benefits

In the field of long-term care benefits, the Committee agreed with provisions to avoid any gaps in protection for those concerned and to provide legal clarity and transparency. Long-term care benefits for insured persons and their family members should, in principle, continue to be coordinated according to the rules governing sickness benefits. The updated rules take into account the specificities of long-term care benefits and the needs of both economically inactive and active people. 

What next?

On the basis of the Committee report, the majority of MEPs approved a mandate in plenary on 11 December 2018 to enter into a trilogue negotiation with the Council and the EU Commission.