Social security
Saskia Montebovi
Introduction
In December 2016, the European Commission proposed amendments to EC Regulations 883/2004 and 987/2009.[1] The aim of the recast regulations is to (more) simple, fair, efficient and clear rules while ensuring that the financial and administrative burden is distributed more fairly among Member States.[2] The underlying aim of the adjustment is to make it easier to (continue to) enjoy freedom of movement. The Commission ‘ s proposal to amend Regulations 883/2004 and 987/2009 has not yet been finally adopted, but it will soon be submitted to experts and Member States for further refinement, analysis and possible reformulations. In this sense, the analysis in this Cross-Border Impact Assessment is an ex-ante analysis of proposals yet to be finalised. The focus of this report is on changes to cross-border social security in the following four areas: long-term care, unemployment benefits, family benefits and social benefits for EU citizens who are not economically active. Two ITEM themes are attached to each of these four areas: European integration and Euroregional cohesion. Thus, the border effects of each measure can be systematically explained.
Proposed changes
An initial analysis focuses on European integration and its connection to the four areas and the proposed changes to them. On long-term care, the extension of the rules – with a separate section, definition and list of care facilities – is welcomed, but the definition seems to need further clarification. With regard to unemployment rules, a number of changes, some of them substantial, have been made. The most significant change is the introduction of the work country principle for frontier workers who are fully unemployed after working for 12 months in one member state. This rule needs further elaboration to distinguish between traditional frontier workers (who live in one country and work for long periods in another, sometimes throughout their career) and other mobile workers (who work for short consecutive periods in different countries or alternate between two countries). The extension of the export of unemployment benefits and the change in the aggregation of unemployment benefits are two other changes related to unemployment, the effects of which seem to be more administrative and time-related for the Netherlands.
With regard to child benefits, a new article has been introduced. This concerns special provisions for income-replacing child benefits for periods when children are growing up. As the Netherlands does not recognise this type of benefit, the direct impact of this is rather limited and is more about the knowledge of the scheme in other member states and possible adjustments in administration systems. The fourth amendment affects social benefits for EU citizens who are not economically active. Regarding this group of citizens’ entitlement to social benefits without having to work or look for work and without sufficient means to support themselves, the preferred approach is to codify a series of ECJ rulings between 2013 and 2016. Member states seem to have different ideas on this. It is still difficult to reach a common position that underlines European integration and also the Free Movement Directive. While there is a desire to prevent abuse of free movement of persons, other European values must also be upheld.
Impact of the proposed changes
The second analysis focuses on Euroregional cohesion and the effects of the proposed amendments. The impact of each amendment on cooperation between Member States and public authorities is also examined. Regarding long-term care, the extended rules provide for an improved legal framework and perhaps better management of cross-border care cases. In the initial phase, the implementation and interpretation of the new rules may lead to some administrative burden or financial costs, but in the long run, duplication of work may be avoided and resources on both sides of the border can be used more efficiently.
A number of proposals are made for the unemployment rules, where the impact is expected to be greater than for some other unemployment rules. The main change also concerns the change from the country-of-residence principle to the country-of-employment principle for frontier workers who are fully unemployed after working for 12 months in one member state. For public authorities, this means an increase in the number of applications in working countries and a decrease in residence countries. Administrative implementation thus shifts more to the country of work for this group of workers, resulting in less burden on the country of residence. However, different rules apply to workers who are not fully unemployed or have not worked for 12 months. The question is whether these border worker regulations will have a positive or negative effect on cooperation in the Euroregion. Consultation, transparent rules and agreements and understanding of each other’s positions will improve cooperation between states, especially between neighbouring countries. Changes to the export regime and the aggregation rule are unlikely to have a major impact, but may lead to administrative changes or burdens. It is uncertain whether this is temporary, but this is expected to be the case.
The new provisions for income-replacement child benefits will have a limited impact on cooperation in the Euroregion, as these rules do not apply to the Netherlands. Regarding the fourth category – social benefits for EU citizens who are not economically active – everything is not yet fully formulated. This jeopardises cooperation between member states because of the different experiences of member states and fears for the future. It would be wise to establish a common position on this point, after further thorough analysis of the possible alternatives in the approach. A common position between Euroregional areas would consistently make it easier to process applications and correctly apply EU rules, which emphasise values such as free movement of persons, equal treatment and sincere cooperation.
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[1] These form the basic and implementing regulations for social security coordination within the EU.
[2] See COM(2016) 815 final, pp. 2-4.