dr. Saskia Montebovi

Introduction

In December 2016, the European Commission proposed amendments to EC Regulations 883/2004 and 987/2009.[1] The purpose of the recast regulations is to create (more) simple, honest, efficient, and clear rules, while ensuring that the financial and administrative burdens are shared amongst Member States more fairly.[2] The underlying aim of the update is to make it easier for all employees to enjoy or to continue to enjoy free movement. The Commission’s proposal to amend Regulations 883/2004 and 987/2009 has not yet been definitively adopted, but it will soon be put forward to experts and Member States for further refinement, analysis, and any reformulations. The analysis contained in this cross-border impact assessment is, in that sense, an ex-ante analysis of proposals which have yet to be finalised. The focus of this report is on the amendments to cross-border social security in the four following areas: long-term care, unemployment benefits, family benefits, and social benefits for EU citizens who are not economically active. There are two ITEM themes tied to each one of these four areas: European integration and Euregional cohesion. Thus, the border effects of each measure can be explained systematically.

Proposed amendments

An initial analysis centres on European integration and the link to the four areas and the proposed amendments thereto. With regard to long-term care, the extension of the rules – with a separate section, definition, and list of care provisions – is welcomed, but the definition still seems to require clarification. With regard to the unemployment rules, a number of amendments, some far-reaching, have been made. The most significant amendment is the introduction of the country-of-work principle for frontier workers who are entirely unemployed after having worked in a single Member State for twelve months. This rule still merits further thorough investigation so as to differentiate traditional frontier workers (those who live in one country and work for long periods in another, sometimes for their entire career) from other mobile workers (those who work for short, consecutive periods in different countries or alternate working between two countries). The extension of the export of unemployment benefits and the amendment to the aggregation of unemployment benefits are two other amendments concerning unemployment, the effects of which for the Netherlands appear to be more administration-related and time-bound.

With regard to child benefits, a new article has been introduced. This concerns special provisions for income-replacement family benefit for child-raising periods. Given that the Netherlands does not recognize this type of benefit, the direct impact of this is rather limited and it is more about the knowledge of the regulation in other Member States and any modifications to the administration systems. The fourth amendment affects social benefits for EU citizens who are not economically active. With regard to the claim which this group of citizens wishes to make for social benefits without needing to work or be looking for work and without sufficient means to support themselves, the preferred method is to codify a series of judgments by the Court of Justice between 2013 and 2016. The Member States seem to have different ideas about this. There is still difficulty in achieving a community position that underlines European integration and, equally, the free movement directive. While there is a desire to prevent abuse of the free movement of people, other European values must also be upheld.

Effects of the proposed amendments

The second analysis focuses on Euregional cohesion and the effects on the proposed amendments. The effect of each amendment on cooperation between the Member States and government bodies is also examined. With regard to long-term care, the expanded rules provide for an enhanced legal framework and perhaps also better management of cross-border care cases. In the initial phase, the implementation and interpretation of the new rules could well result in some administrative burden or financial costs, but in the long run a duplication of efforts can be prevented and resources can be used more efficiently on both sides of the border.

The unemployment regulations are subject to a number of proposals, with the effect expected to be greater than for a number of other unemployment rules. The most significant change also relates to the switch from the country-of-residence principle to the country-of-work principle for frontier workers who are entirely unemployed after having worked in a single Member State for twelve months. For government bodies, this means an increase in the number of applications in the countries of work and a decrease in the countries of residence. The administrative implementation therefore shifts more towards the country of work for this group of workers, resulting in less of a burden for the country of residence. However, other rules apply to workers who are not entirely unemployed or have not worked for twelve months. The question is whether these frontier worker regulations will have a positive or negative effect on cooperation in the Euregion. Consultation, transparent rules and agreements, and understanding each other’s viewpoints will improve cooperation between states, specifically between neighbouring countries. Amendments to the export scheme and the aggregation rule probably won’t have a huge influence, but could result in administrative changes or burdens. It is not certain whether this is temporary, but this is expected to be the case.

The new provisions for income-replacement family benefits for child-raising periods will have a limited effect on cooperation in the Euregion, given that these rules do not apply to the Netherlands. As for the fourth category – social benefits for EU citizens who are not economically active – everything has yet to be fully formulated. This jeopardizes cooperation between the Member States because of the different experiences of Member States as well as fears for the future. It would be sensible to determine a common position on this point, after thoroughly analysing the potential alternatives in the approach further. A common position between Euregional areas would make it consistently easier to handle applications and correctly implement EU rules which underline values such as free movement of people, equal treatment, and sincere cooperation.

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[1] These form the basic and implementing regulations for the coordination of social security within the EU.

[2] See COM(2016) 815 final, p.2-4.