Life certificates as barrier of free movement of pensioners

Pensioners who emigrate from the Netherlands within the EU and wish to continue to receive their pension must periodically send in a life certificate to various Dutch institutions. By doing so, they prevent the pension from being paid out unduly after death. In practice, this means that a pensioner, with or without reduced mobility, has to travel to competent authorities several times a year at their own expense in order to have the correct documents authenticated. This administrative hassle is caused by differing submission moments for receiving the life certificate between the Dutch Social Insurance Bank (SVB) and pension funds during the year.

Great inconvenience

The recovery of unduly paid pensions is a complex and burdensome process, which makes it important for authorities to prevent undue payments by means of life certificates. Pensioners not only have to deal with the costs of submitting life certificates several times a year, but also with differing delivery methods per institution: digital or on paper, by mail or registered mail. In addition, in order to obtain validated proof, a pensioner may have to travel to an embassy or other authority several times a year at their own expense. Depending on the number of pension funds that the pensioner has to deal with and the number of submission moments, this can be a major inconvenience, especially for the elderly with mobile disabilities.

Obstacle to European freedom of movement

The life certificate forms also a large contrast between pensioners inside and outside the Netherlands. In the Netherlands, a pensioner’s death is automatically shared with pension authorities, after which the pension is terminated. This doesn’t automatically happen abroad, so that emigrants who have built up an old-age pension (AOW) or supplementary pension, can claim this only if they send a life certificate to SVB and/or pension funds.

It follows from settled case law of the European Court of Justice (e.g. the Kohll, Martens, Turpeinen or Pusa cases) that national legislation which disadvantages certain persons who are nationals of the country solely because they have exercised their right to move and reside freely in another Member State constitutes a restriction on the freedoms enjoyed by every citizen of the Union. In the case of life certificates, free movement rights cannot develop in their full effect, since the pensioner is hindered in the exercise of those rights by legislation of his State of origin (the Netherlands) which penalises him by virtue of the fact that he has exercised free movement rights. In the light of European Citizenship and European freedom of persons and taking all the elements into account, that obligation to submit a life certificate may be regarded as an obstacle to European freedom of movement rights.

Automated data exchange

In line with ITEM’s proposal, the Pension Federation has decided to recommend its members  to harmonise the submission moments with SVB’s policy, so that a pensioner only needs to submit a life certificate once a year. In addition, discussions are currently taking place in the pension sector on ways for further improvement of the life certificate process. The sector is also working on further digitisation and automated data exchange, which means fewer and fewer life certificates will be needed in the future. To this end, the Registry for Non-Residents (RNI) may proof useful. This database includes people who live abroad, but still have a certain relationship with the Dutch government, such the pension system in this case. The RNI shows from whom the SVB has received a life certificate, but the database doesn’t yet give full exclusion. Pensioners from a number of countries, such as Australia, Belgium, Germany and Suriname, less frequently and sometimes not at all have to send life certificates because these countries have a so-called reduced risk of not informing on cases of death. Automated exchange of personal data or periodic life certificate requests provides the right data for the RNI. Pension providers can consult the RNI in these cases as well.

Practical implementation: app from ABP

Pension fund ABP recently announced an app for proof of being alive. This app allows retired ABP participants who receive benefits from ABP abroad to forward their life certificate. Authentication then takes place via the proof of identity and a QR code, which is sent by e-mail or post. The app is expected to become available towards the end of this year.

Expertise centre ITEM welcomes this digital innovation, which is in line with the recommendations made earlier. “Obstacles to cross-border mobility do not only lie within national legislation itself but also arise from administrative obligations such as those mentioned below. This is a significant step in favour of the right for mobile persons to move freely and without hindrance within the European internal market”, says PhD student Sander Kramer.

File exchange with foreign sister organizations by SVB

On 18 September Dutch Minister Koolmees answered parliamentary questions about the possibility for pensioners abroad to pass on their proof of life via an app. In his answer he sates that the Sociale Verzekeringsbank (SVB) aims to ensure that in time a large proportion of Dutch AOW/Anw beneficiaries living abroad will no longer have to submit an annual life certificate. To this end, the SVB is setting up a file exchange with foreign sister organisations. In cases where these exchanges are sufficiently stable and actualised, the client does not have to prove that he or she is alive. As a result, the obligation to submit the proof of life for persons residing in these countries concerned is abolished. This is something that ITEM has fought for in the past. The SVB expects to be able to achieve this for 70% of AOW/Anw beneficiaries living abroad. For the remaining clients, the SVB will continue with the periodic paper proof of life, with the option of using the app instead of the paper proof in due course. Incidentally, the latter applies worldwide.